Intelligent Management Inc. was recently invited by the IT department of a large insurance company to teach them about the Theory of Constraints. They read a recent book called ‘The Phoenix Project’ that points to the Theory of Constraints as a solution for radically improving software development and delivery. In this post we look at how the Theory of Constraints can come to the aid of IT departments and software development – DevOps.
The Phoenix Project story
‘The Phoenix Project: a novel about IT, DevOps and Helping Your Business Win’ (by he story of an impossible situation, where an IT firm is experiencing a storm of Undesirables Effects; the sky is falling in, IT is about to be outsourced, business lines are going crazy because there are outages, system crashes, chronic delays, etc. Then, all of a sudden, by following the input of a Board member, solutions are found. The message is: IT must evolve, come out of the ghetto and play a much more relevant role in the life of the organization. Very soon, the natural candidate for a COO position will be somebody from IT but it is critical that the IT professionals get a stronger handle on the business processes as well as the value chain and how IT impacts it. In order to do so, IT must learn from manufacturing the basic concepts of standardization and synchronization; embed quality (documentation and testing) in the development phase and schedule according to a chosen constraint (the Theory of Constraints).
So why should IT use the Theory of Constraints?
The Theory of Constraints (TOC) is famous for covering the basic principles of Synchronous Manufacturing (Drum Buffer Rope and Buffer Management). However, TOC is applicable well beyond the Production Line. The Critical Chain Project Management approach from TOC guarantees fast and reliable delivery of projects based on finite capacity. Over the last 20 years, TOC grew to contain some basic algorithms to manage what is called “instant availability”. The scheduling mechanism for this is called “finite capacity” and it is based on routing and bills of material. It is directly applicable to the chain that links developers-operations-security-QA-Network etc.
The Organization as a Network of Projects
At Intelligent Management, we have been presenting for some years now a new organizational design based on projects. We call it the ‘Network of Projects’. This approach has much in common with DevOps (as well as Agile) that are founded on a view of how an organization should operate. Instead of silos there should be a network; instead of competition for budget allocation, investment should be dictated by the impact on Throughput; instead of local optima, focus should be on global optima. The mantra of DevOps has a large intersection with TOC: Flow-Quality-Involvement – The Three ways. In order to pursue DevOps and Continuous Delivery (CD) IT must see itself as a system, i.e. a network of interdependent processes/projects aimed at a common goal and with a common set of measures and operational measurements. Building “The common environment” advocated by DevOps implies breaking down the silos within IT. Functions/departments are simply centres of competency and the control structure is built starting from how the work is structured, i.e. as network of projects. Projects are scheduled according to finite capacity and work is released in the system only when resources are available; projects are stacked. “The Network Of Projects” is the natural organizational mechanism that allows DevOps to flourish.
Not just physical constraints
One of the difficulties in shifting organizations towards a more systemic model is that physical constraints are not the only kind: there are also Cognitive constraints that can impede our thinking. The path of transformation towards a new kind of organization and the way to implement this change for the benefit of IT can be mapped out, supported and guided through the Thinking Process Tools from the The Theory of Constraints.
These are exciting times for IT and, with the right thinking and the right method, IT will evolve to be the leading force in the life of organizations.
About the Author
Angela Montgomery Ph.D. is Partner and Co-founder of Intelligent Management, founded by Dr. Domenico Lepore. Her new business novel+ website The Human Constraint looks at how Deming and the Theory of Constraints can create the organization of the future, based on collaboration, network and social innovation.