Introducing Enterprise Services Planning

sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Improving agility
one service at a
time
Anticipating demand
across an ecosystem
of shared services
Enterprise Services
Planning
Scaling the benefits of Kanban
Presenter
David J. Anderson
Swift Kanban
Webinar
18 February 2015

Lean Kanban North America 2015
conference
• “Back to our roots”
• Implementing Kanban
• Looking to the future…
• Enterprise Services Planning

Kanban Coaching Professional
Masterclass
5-day course with David J Anderson
March 2-6, 2015 www.djaa.com/kcpm-031
Hilton Alexandria Mark Center
Learn how to lead successful Kanban initiatives.
Improve service delivery and achieve better customer satisfaction
• Coaching for evolutionary change
• Assuring fitness for purpose
• Using the Kanban Method
• Designing a service-oriented organization
Learn useful improvement models and all of our consulting tools
Forinternalcoaches,
managers,andconsultants

Microsoft XIT Sustaining Engineering
Deferred commitment pull
system coupled to probabilistic
understanding of lead time
• Improved productivity
over 200%
• Greatly improved
predictability
• Shortened lead times by
~90%
Use of Kanban systems is
minimally intrusive for
engineers. Process
methodologies didn’t change
• PSP/TSP remained in
use throughout

Conclusion
Kanban is good for service
delivery

Kanban Method Emerges
Kanban systems aren’t enough
when there is too much
variability in the workflow and
too much heterogeneity of work
types and trouble matching
worker skills & experience
• Now known as a system
liquidity problem
• Visual boards are
introduced
• Kanban limits create
stress & provoke process
improvements
• Multiple classes of service
emerge

Kanban Method Matures
A combination of elements of
Kanban such as system
replenishment, classes of service,
understanding cost of delay,
transparency and metrics start
to change entire company culture
Operations review drives BU
wide improvements and
starts to influence other BUs
within the firm

Conclusion
The Kanban Method is a
management system for
cultural change & improving
organizational maturity

First Kanban Software
Digital Whiteboard application
developed by Darren Davis at
Corbis runs on top Microsoft
Team Foundation Server
Workers run Digital Whiteboard
on their desktop but continue to
use physical boards in parallel

Conclusion
We need software to get good
metrics easily and amplify the
management value of Kanban

Kanban on Big Projects
$11 million budget project with
up to 55 people, 16 month
schedule, approximately 2400
user story scope
2-tiered kanban boards
emerge to visualize parent-
child dependencies in
requirementsIntroduces hybrid of dedicated
teams and floating project
personnel using avatars
• Specialists such as
architects, UX
• Generalists who can help
any team

Conclusion
Kanban is useful on large
projects to improve
predictability.
More guidance on prioritizing
backlogs is required at large
scale.

STATIK
Recognizing the need to teach
people how to get started with
Kanban, training classes adopt
the use of the STATIK exercises
STATIK = the Systems Thinking
Approach To Implementing Kanban
• the method is presented at
conference in 2012
• the acronym will not be
introduced until 2013

Kanban has 3 approaches to scaling
Scaling out a service delivery workflow
 Expand kanban systems both upstream and downstream
Scaling out across a network
 Scale out using the service-orientation concept to build a
network of independently operating but interdependent
services (with a kanban system for each service)
 Control WIP on unbounded queues between services
Scaling by scale-free understanding – apply the principles
& general practices at each level
 Personal / small team
 Tasks completed in hours
 Service delivery / workflow
 Work items e.g. user stories completed in days
 Portfolio
 Projects, MVPs, MMFs completed in months

The Kanban Lens
Learn to view what you do now as a set of services
(that can be improved):
 What to look for…
• Creative work is service-oriented
• Service delivery involves workflow
• Workflow involves a series of knowledge discovery
activities
 What to do…
• Map the knowledge discovery workflow
• Pay attention to how & why work arrives
• Track work flowing through the service

Treat each service separately
Demand
Observed
Capability
Demand
Demand
Observed
Capability
Observed
Capability
Analyze demand & capability for each
service independently
Design a Kanban system for each
service using the STATIK method.
Scale out in a service-oriented
fashion, one service at a time

Anticipating Demand, Allocating Capacity
Demand
Observed
Capability
Demand
Demand
Observed
Capability
Observed
Capability
Looking downstream, you want the
system to help you anticipate and
manage dependenciesLooking upstream, you want the
system to help you anticipate and
manage demand
Combine the two, and across the
organization you smooth flow
end-to-end and help keep
demand in balance with
overall system capability

Scale-free understanding
Eliminating unbounded queues
• Proto-kanban to full
workflow kanban
• Coupling interdependent
network of kanban
systems
Andy Carmichael’s Smallest Possible
Definition of Kanban
See Flow,
Start Here,
With visible work & policies,
validate improvements
Core practices renamed
“general practices” with specific
practices at different scales
• Personal/team Kanban
• Service Delivery /
Workflow Kanban
• Portfolio Kanban

• 2 Days of Learning
Sessions
• Choose Your ½ Day
Workshops
• Risk Profiling – David J Anderson
• Cost of Delay – Don Reinertsen
• Project Management with Kanban
• Cynefin 101 for Portfolio Kanban
• Simple Probabilistic Forecasting
…and more!
• Becoming Data-Driven
• Objective Retrospectives
• Forecasting
• Enterprise Kanban & Lean Startup
• Scrumban
• Kanban Coaching
• Blockers for Improvement
• RBS Project Sizing
• Kanban Academic Research …

Enterprise Services Planning
Enterprise Services Planning is
a new modular 5-day training
program from Lean Kanban
which will be available from
2nd quarter 2015
Kanban is now table stakes. Large
scale benefits are enabled by
implementing Enterprise Services
Planning
Here are two small sections
of the training material
highlighting some planning
& risk management
concepts for scheduling &
sequencing work at project
or portfolio level …

Lean Kanban Training Roadmap
The
Kanban
Method
(2 days)
Intro to
Kanban
(1 day)
Ready Trained
Getting
Started
with Kanban
(2 days)
(5 days)
Ready Trained Ready Trained Ready Training Trained
Train the Trainer (5 days)
Ready Trained Qualified
Coaching Masterclass (5 days)
Ready Trained Qualified
KMP
KMP
KMP
KMP
KMP
KMP
Kanban Proficiency

Moving the conversation away from process improvement
and towards management and decision frameworks
conf.leankanban.com edu.leankanban.com
leankanban.com
“Power in Simplicity”

Essence of the Lean Kanban brand
Pragmatic, actionable evidence-based
guidance!
Something you can take away and
implement next Monday

ESP Training Modules
Module 1 Portfolio Management (Day 1 & 2)
 Strategy, fitness for purpose, KPIs, Cost of Delay, Scheduling,
Sequencing, Portfolio risk, risk hedging, risk profiling, aligning
strategy & capability, strategy review
Module 2 Options, Commitment & Delivery (Day 3)
 Understanding kanban systems, real options, upstream Kanban,
commitment & replenishment, lead time, chance vs assignable
cause variation
Module 3 Project & Demand Management (Day 4)
 Demand analysis, demand shaping, capacity planning, project
forecasting, risk review, labor pool liquidity, workflow liquidity
Module 4 Portfolios, Programs & Dependencies (Day 5)
 Scaling Kanban, dependencies, visualizing dependencies, portfolio
Kanban, stand ups, service delivery reviews, ops reviews

Beta test special offer
Offer an ESP training module and get up to 50% off list
price through end of April 2014
We are looking for a few select clients to test the new
class material
Ideal test clients are medium-sized, privately held firms
or business units of larger publicly companies where the
VP is the sponsor
ESP class material is mostly tried and tested but not in its
current configuration. Beta testing is primarily to check
timing and understand whether the sequencing
facilitates the desired learning outcomes
To order an ESP training beta test, contact Wes Harris,
Commercial Director of David J. Anderson & Associates,
wes@djaa.com

Scheduling

When should we start something?
impact
When we
need it
85th
percentile
Ideal Start
Here
Commitment point
timeJan
10
Nov
11
If we start too early, we forgo the
option and opportunity to do
something else that may provide
value.
If we start too late we risk
incurring the cost of delay
If we pull the work into our kanban
system on Nov 11 we have a 6 out
of 7 chance of on-time delivery

We can study sensitivity to different start dates
impact
When we
need it
50th percentile
Later Start
Here
Commitment point
timeJan
10
Nov
25
If we start as late as November 25
we only have a 50% chance of on-
time delivery
However, the cost of delay incurred
if we deliver within 60 days is
relatively small. We have an 85%
chance of achieving delivery with
acceptable cost of delay
85th percentile

What is the latest we could start?
impact
When we
need it
0th percentile
Very late
start
Commitment point
timeJan
10
Dec
19
If we start as late as December 19
we have 0% chance of on-time
delivery
We have about a 10% chance of a
total loss delivering the promotion
beyond the expiry date of the
opportunity
85th percentile
total loss

To be certain of delivery without incurring any
cost of delay is expensive
impact
When we
need it
98th
percentile
Early Start
Commitment point
timeJan
10
Aug
11
If we are conservative and do not
wish to carry any risk of late
delivery or any risk of incurring an
opportunity cost of delay, then we
must start as early as August 13th.
We must commit to our Spring
Break 2015 promotion during
Summer 2014!!!

Window of opportunity
impact
When we
need it
Earliest Start
timeJan
10
Aug
11
Latest
viable
start
Dec
19
Optimal Start
Nov
11
On August 11st the item becomes
available for selection at Kanban
system replenishment.
The ideal time to start is November
11th.
After December 19th our option to
deliver this item expires and we
would discard it from our pool.

Lead time is perhaps the most
important metric we gain from
kanban systems
Lead time coupled with cost of
delay sensitivity analysis is a key
enabler of deferred commitment
and consensus on when to make
commitments
Lesson

We need tools!
 Existing Kanban software products
largely seek to replicate the
function of a physical board
 They don’t actually help with real
management problems
 Enterprise Services Planning is
easy to understand but laborious to
implement
• No one built a Gantt chart manually!
 A new breed of tools will emerge in
2015 offering ESP support

Tools will facilitate decision making
 ESP software tools will facilitate
the decision making to run the
enterprise
 Assist with commitment &
replenishment
 Assist with risk assessment &
hedging
 Assist with capacity planning
 Facilitate SDRs & Ops Reviews

“The Future of Kanban”
 “Fit for Purpose” service delivery
• Fitness criteria metrics & classes of service
tuned to market segments / source of
customer demand
 Anticipate Demand
• Comprehend WIP limits, staffing levels and
required liquidity levels
 Shape Demand
• Allocate capacity to hedge risk
• Bifurcate demand with risk policies
 Scheduling, Sequencing & Selection
• Intelligent recommendation engine utilizing
risk profiles & risk management policies

Kanban experience reports
• Ultimate
• Software
• BazaarVoice
• web recommendations
app and mobile development
Including…

Thank you!

About
David Anderson is an innovator in
management of 21st Century
businesses that employ creative
people who “think for a living” . He
leads a training, consulting,
publishing and event planning
business dedicated to developing,
promoting and implementing new
management thinking & methods…
He has 30+ years experience in the high technology industry
starting with computer games in the early 1980’s. He has
led software organizations delivering superior productivity
and quality using innovative methods at large companies such
as Sprint and Motorola.
David defined Enterprise Services Planning and originated
Kanban Method an adaptive approach to improved service
delivery. His latest book, published in June 2012, is, Lessons
in Agile Management – On the Road to Kanban.
David is Chairman of Lean Kanban Inc., a business operating
globally, dedicated to providing quality training & events to
bring Kanban and Enterprise Services Planning to businesses
who employ those who must “think for a living.”

Introducing Enterprise Services Planning

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