Learn how the Lean practices pioneered in the Toyota Production System apply to the Application Development and Maintenance (ADM) of business software. Applying Lean to ADM decreases total cost of ownership and improves business responsiveness and operational dependability.

1. CUTTING IT COSTS BY
APPLYING LEAN PRINCIPLES

2. Cutting IT Costs by
Applying Lean Principles
Dr. Bill Curtis
Senior Vice President & Chief Scientist, CAST
Director, Consortium for IT Software Quality

3. Our Speaker
Dr. Bill Curtis
SVP & Chief Scientist, CAST
Director, Consortium for IT
Software Quality (CISQ)

4. IT Executives Increase Focus on ADM* Efficiency and Cost
IT wants to build and run apps more efficiently but apps are in the way
Percent increase from 2009 to 2010, n=270 n=139
Improve ADM efficiency (e.g., Lean)
Increase outsourcing & offshoring 22
40%
62.5%
IT organizations reporting
that application
Scope projects down to lower cost 20 complexity is too high
Consolidate & virtualize infrastructure -6
Renegotiate vendor contracts -13
31.2%
Reduce service levels -20 IT organizations with
over 2 production
Reduce demand by deferring projects -39 outages per month in
first year after release
Source: McKinsey survey of IT executives, Dec 2009 Source: IDC survey of IT executives, 2008
* ADM – Application Development and Maintenance

5. IT Measures Everything Except the Product
Process Product
Robustness
Plans
Time & Security
Estimates Quality
Duration Performance efficiency
Schedules
Maintainability
Staffing levels
Time / Effort
Costs Requirements
Milestones Effort & Function Size
Deliveries Budget & Scope Earned Value
Functionality

6. Multi-Tier, Multi-Language Applications
Enterprise Applications Middle- User Interface Tier
ware ASP/JSP/VB/.NET
Web
Services
Application Logic Tier
Java, C++, …
Frameworks Struts MVC, Spring
Legacy Applications
CICS
Connector
CICS Monitor (Cobol)
Tuxedo Monitor (C)
Data Management Tier
Batch EJB – Hibernate
COBOL Shell Scripts
Database
Files Databases
Component Quality ≠ Application Quality

7. Applying the Toyota Production System House to Applications
Toyota
Production System
Teamwork &
Just People
In Continuous Improvement
Jidoka
(Built-in
Time Quality)
(Efficient
Process) Waste
Reduction
IT Software Black Box
The Agile Methods community focuses here
CAST focuses here

8. What is Jidoka?
Jidoka – ‘automation with a human touch’
The use of automation to detect defects early
The application of intelligence to eliminate their causes
The elimination of waste caused by defects
Jidoka dates to 1902 when Sakichi Toyoda invented a loom that shut down
quickly when it detected broken threads. This allowed an operator to manage
many more looms without sacrificing quality. His son decided to build cars.
CAST – a premier technology implementing Jidoka in IT
Automated early detection of structural defects
Measures for evaluating productivity and quality
Insight for making continual improvements
Data for making critical executive decisions

9. The Seven Sources of Waste in ADM
Waste (muda) = any activity that absorbs resources without creating value
Waste in
manufacturing Waste in software
Overproduction Unneeded or rarely used features
Inventory Delayed or terminated projects or components
Over processing Non-value adding tasks
Motion Task-switching, unprioritized requests
Conveyance Poor design of continuous global development
Waiting Idle time, unavailable resources or people
Incorrect requirements, incorrect functions,
Defects
structural flaws in the architecture or code
The greatest source of waste in
ADM is rework due to defects

10. How Are Auto Assembly and Application Development Alike?
Mass-Production Auto Assembly
defects defects defects Rework = 25% of effort
Expected path
Expected path
defects defects defects Rework = 40% of effort
Recode
Retest
Recode
Classic Software Development Retest
Sources: J.P. Womack, et al . (1990). The MachineThat Changed the World; R. Dion (1993). IEEE Software, 10 (4), 28-35.

11. Lean Application Management - Applying Jidoka to Software
Lean
Application
Management
Lean Lean Lean
Application Application Application
Development Maintenance Assets
• Remediate defects • Improve changeability • Design-in quality
• Eliminate causes • Reduce defect injection • Tune performance
• Educate developers • Sustain quality • Manage size

12. What has been Achieved When Lean Principles are Applied?
2X reduction in design time
2X reduction in assembly hours
2X reduction in assembly space
3X reduction in assembly defects
Lean Automobile Assembly elimination of rework area
Expected path
Expected path
Best-in-Class Software Development 4X productivity gain
3X increase in reuse
2X shortening of schedule
100X reduction in defects
Sources:
J.P. Womack, et al . (1990). The Car That Changed the World; R. Dion (1993). IEEE Software, 10 (4), 28-35.

13. Jidoka & Lean Application Development
Avoiding causes of
quality problems App Level Lean Application
Structural
3 Analysis
Development
1. Remediate defects
Team training
2. Eliminate causes
Structural
violations
1
quality
3. Educate developers
Architectural and
Remediation coding weaknesses
Require- Code & unit Integration System test
Design
ments test test (UAT)
Require- Code
Design
ments walk-
inspection Items for review checklists,
inspection through
2 Discovery of defect causes,
Early detection and elimination of defects Priorities for improvements

14. Case Study 1: Major US Consumer Bank
Defects per 100 Resource Hours
SW Integration Test
User Acceptance Test
 Retirement services arm of top US Production
consumer bank with more than
$100 Billion in assets
 75 supported application/functions
run by the Business Groups and
Batch Operations
 Very complex technology
environment, grown over 15 years
Cost of Defects per 100 Resource Hours
 Heavily IT intensive business
process – the systems are the
business

15. The Big Problem in Application Maintenance
Much more
Less complex
complex 14% More
Is your code base more complex
3% complex
than 2 years ago?
48%
Source: Improving Software Quality to Drive
Business Agility
Melinda-Carol Ballou, IDC
35%
About
the same
Developing
Documenting the changes Understanding
How do maintenance staff the changes 19% the code
spend their time?
6% 47%
Source: Software Quality: Producing Practical
And Consistent Software
Prof. Mordechai Ben-Manachem
28%
Testing the
changes

16. Jidoka & Lean Application Maintenance
Improve comprehensibility of code
Static analysis of 1
structural quality
Detect new defects before release
2 Added Operations
functions
Quality gate
Manage code quality to targets
Lean Application 3
Maintenance
1. Improve changeability
2. Reduce defect injection
3. Sustain quality

17. Case Study 2: Massive Waste Reduction at Major US Telco
Clear, measured impact in a complex application environment
3500
New Critical Violations
3000 BEFORE CAST
2500 IMPLEMENTATION
Structural 2000
quality 1500
Order Management
1000 Inventory Management
Billing
500 Customer Service
0
R1
R2
R3
R4
R5
R6
R7
R8
R9
R10
R11
R12
R13
R1.1
R1.2
R2.1
R3.1
R7.1
R9.1
R9.2
R14E
R10.1
R10.2
R10.3
R11.1
R11.2
R11.3
700
Defect Volume in QA
600
500
Code
Production 400
Functional
defects 300
200
100 Trend line
0
R1
R2
R3
R4
R5
R6
R7
R8
R9
R10
R11
R12
R13
R1.1
R1.2
R2.1
R3.1
R7.1
R9.1
R9.2
R14E
R10.1
R10.2
R10.3
R11.1
R11.2
R11.3
R8 – CAST Analysis starting point

18. Jidoka & Lean Application Assets
Establish and sustain architecture
Static analysis of 1
structural quality
Fix performance-related flaws
2
Lean Application Manage size of code base
Assets 3
1. Design-in quality
2. Tune performance
3. Manage size

19. Lean Application Management - Applying Jidoka to Software
Lean
Application
Management
Lean Lean Lean
Application Application Application
Development Maintenance Assets
• Remediate defects • Improve changeability • Design-in quality
• Eliminate causes • Reduce defect injection • Tune performance
• Educate developers • Sustain quality • Manage size

20. Value Achieved through Lean Application Management
 Improved application structural quality
 Better applications improve business agility and continuity
 Safer applications to reduce risk
 Improved team productivity management
 Better reuse of frameworks and components  Up to 10% of AD budget
 Objective measurement & KPIs  Up to 10% of AD budget, esp. app outsourcing
 Eradicate waste
 Discover defects earlier 10x savings per defect
 Reduce technical debt  10%+ saving in maintenance cost
 Benchmark then optimize resources  huge maintenance savings potential
“Applying the principles of lean manufacturing to ADM can
increase productivity by 20 to 40 percent while improving
the quality and speed of execution.”
- Ranjit Tinaikar, Principal & Head
NA IT Management Practice

21. CAST Application Intelligence Platform (AIP)
Overview

22. Product - Structural Quality Metrics
Most enterprises measure everything but the product delivered to the business
CAST Application Intelligence Platform (AIP) measures the product itself
Process Product
 Robustness
 Performance
Time & Quality  Security CAST AIP
 Planning Duration &Size  Changeability
 Estimation  Transferability
 Scheduling  Size
 Time Tracking
 Cost Tracking  Requirements
Function &
Effort & Budget
Scope
 Earned Value
 User Acceptance
 Usability

23. CAST Inserts Actionable Visibility
CAST Application Intelligence Center CxO & VP, …
Dashboard, reports
CAST Application
Intelligence PlatformTM
 AI Management Studio
 Knowledge Base
 Approx one thousand rules and
best practices PM, QA, Architects…
 Decade of software engineering  Std enforcement
expertise  Early ID of violations
CAST Application Analysis Engine  Drill down to root cause
CAST Native CAST UA 3rd party
Analyzers (28) scripts analyzers
Delivered Source Code: Dev Teams, Suppliers
 CICS, IMS, COBOL, DB2 z/OS, PL/I  Arch. visibility / Quick wins
 J2EE, .NET and all Major RDBMS  Software engineering expertise
 Web Apps, BI, EAI, C/C++, VB, PB  Continuous training/coaching
 Siebel, SAP, PSFT, OBS, Amdocs

24. Tangible and Measured Value
 Mitigate business risks with improved structural quality
 Better applications for higher business resiliency and continuity
 Risk-proofed projects more likely to deliver business benefits on time
 Make IT and suppliers more productive
 Eliminate waste in ADM
 Prevent coding errors in development: 10x savings in rework per coding error
 Keep technical debt from growing: up to 10% saving in maintenance cost
 Benchmark then optimize resources: maintenance savings potential
 Better reuse of frameworks and components: up to 10% of dev budget
 Reduce waste in operations
 Improve efficiency of large complex transactions & batch processes: up to 5% mips
 Reduce troubleshooting and rollover costs: lower Ops staff overtime
 Apply consistent measurement & KPIs for superior visibility
 Up to 10% of ADM budget, esp. ADM outsourcing
“Applying the principles of lean manufacturing to ADM can increase productivity by 20 to 40
percent while improving the quality and speed of execution.”
- Ranjit Tinaikar, Principal, Head of NA IT Management Practice

25. Market Leader and a Pioneer
250 Global Leaders Rely on CAST
SIsUse/Resell CAST
SIs Resell CAST Industry Groups Engage CAST
Key Influencers Endorse CAST

26. Insurance Carrier Removes Technical Debt and Lowers Costs
 Industry: Insurance Defect Density
 Portfolio statistics 12
10
Defects/KLOC
 Java – 3m LOC
8
 PowerBuilder – 400k LOC
6
 C++ Middleware – 800k LOC
4
 Changes per year 2
 2m LOC changes 0
Year 1 Year 2 Year 3 Year 4 Year 5
 500 kLOC increment in code
Year
base
 About 300 projects Reduction in
defects in four
years of 56%
 Analysis of about 4m LOC performed weekly
 Benefits Measured:
 Defect density reduced 56% in 4 years
 Stabilized maintainability at 2.55
 All new apps at maintainability of 3.5
25

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