Too late for CIOs to get lean and agile?

CIOs hoping to slash their costs by adopting process improvement methods such as 'Lean' and 'Agile' may find they are already too late to generate the savings they hope for.

Such development approaches can reduce waste in IT systems and software development but they won't offer the rapid efficiency gains that finance directors are demanding from their CIOs because the implementation takes too long and is too resource-intensive, according to analyst house Ovum.

With IT budgets tight this year CIOs are looking for any opportunities to cut costs. While there are many different Agile development methods, most emphasise reduced upfront planning, small teams and projects broken up into smaller elements in order to speed up development. Lean methodologies, in contrast, are aimed at identifying and eliminating any inefficiencies and waste in projects.

"A lot of CFOs have heard that process improvement can cut the cost of IT processes, and in the current economic environment, that's very appealing," Dr Alexander Simkin, senior analyst and process improvement specialist in Ovum's IT Services practice, said in a statement.

But what they don't realise is becoming Agile or Lean takes time and requires major change management, according to Simkin.

"If you're starting from a base of traditional processes, these approaches won't provide rapid cost reduction. The efficiency of your processes may even get worse before they get better. CFOs need to know that and it's a CIO's job to educate them," he added.

Organisations that already have an established process improvement programme aimed at waste reduction in IT have a competitive advantage in the current economic situation.

But when the economy eventually improves, the cost-cutting agenda will wane and other priorities such as improving the quality of processes will come to the fore.

"Organisations that are only now seeking to improve their IT processes should consider methods that are optimum now and beyond the recession, that is, that both cut costs and improve quality. Lean Six Sigma is a good choice," Simkin said.

Methods that audit and certify the maturity of an organisation's IT processes such as the Capability Maturity Model Interactive (CMMI) and the International Organisation for Standardisation's ISO 20000 are also attracting renewed interest in the recession, said Ovum, because they provide CIOs with evidence to C-level colleagues that investments in process improvements are providing returns.