Reduce Lead Time

Topics: Agile software development, Lean software development, Lean manufacturing Pages: 18 (3561 words) Published: September 8, 2011
Software Management CTO Series


12 Things to Shorten Your Lead Time
Stephan Schmidt

Software Management CTO Series

You may distribute this eBook freely, and/or bundle it as a free bonus with other products, as long as it is left completely intact, unaltered and delivered via this PDF file. You may also republish excerpts as long as they are accompanied by an attribution link back to

Stephan Schmidt

Page 2 of 18

Software Management CTO Series

This eBook will give you insights into how to reduce the lead time of your software development process. In many companies the perception is as follows: why are we so slow? Marketing probably asks you why you have lead times of several months as an IT-department, from their ideas to seeing the feature live. Many companies have large lead times, often unnecessarily large. The good news is: You can shorten them, sometimes by several hundred percent! Why shortening lead time?

4/4 Development [weeks] Buffer [weeks] Money/ Feature/ Week [EUR] Sum [EUR] / year 4 4 $10.000,00 $2.640.000,00 100,00% 2/0 2 0 $10.000,00 $6.500.000,00 246,21%

Shortening lead time is possible, but not easy. So why should you do it? There are many reasons to shorten your lead time. The sooner you get a feature live on your platform, the sooner it will generate money for you (see Table 1). Shortening the lead time from three months to one month means, the feature will earn two additional months of sales. This is the case for every feature that goes live earlier. More money earlier means more money to invest -more investment means a larger market share sooner. Short lead times might mean the difference between being a first mover or not. There are lots of first mover advantages, if you're faster than your competition, your customers will perceive you as the market and innovation leader, not the copy cat. Short lead times differentiate the good from the great. When going short, you will need a lot of discipline. As we'll see shortening lead times means you need to solve many problems that will arise in your process. No more slack. Solving those problems will make you lean and give you cost advantages over your

Table 1 – Comparing a 4 week development, 4 week buffer model with 2 week development, 2 week buffer model. The second makes 246% of the money

Stephan Schmidt

Page 3 of 18

Software Management CTO Series


What is lead time?
"A lead time is the period of time between the initiation of any process of production and the completion of that process. Thus the lead time for ordering a new car from a manufacturer may be anywhere from 2 weeks to 6 months. In industry, lead time reduction is an important part of lean manufacturing." Wikipedia When measuring lead time, software development and IT departments often start the clock when they start to work on a feature. But this is much too late. Take the perspective of your customers. It's necessary to start the clock as soon as your customers in marketing, sales, accounting, back-office have an idea and issue a request. When does the clock stop? Many development processes stop with the last line of code written or the last feature tested. As before perceive the process the way your customers do. The endpoint of feature development is when the idea generates money. This often means when it's deployed to the live system, not earlier. To measure the process from the point of view of your customers, do not optimize locally, optimize the whole process. The process is done when the idea generates value for your customer; it's not done at the end of development or the end of QA. But how to shorten your lead time? This eBook is a step-by-step guide towards shortening lead time. The internet is full with information, blog posts, articles or tweets. Many books exist on the topic of lean production and lean development and some good

Stephan Schmidt

Page 4 of 18

Software Management CTO...
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