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Measuring Performance: The use of  Lean in IT services
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Industrial Management.
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Industrial Management.
2012 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Lean  has  become  a  widespread  concept  within  various  industries.  It  originates  from  the  production system  at Toyota  and  focuses  on maximizing  customer  value  and  eliminating  waste.  It has been adopted  throughout  industries  as  a  consequence  of  stiffening  competition  and  higher  customer demands. From Toyota, the concept spread to other car manufacturers  and then further to other manufacturing industries. In recent years, the Lean concept has spread to more intangible settings, initially to service functions within the manufacturing companies and later to pure service oriented industries such as ealthcare, banking, and insurance. Most recently, the concept has been adopted in IT businesses as a mean to gain competitive advantage. A lot of research on the Lean concept has been concerned with issues such as implementation and the operational application of the concept. Even though the purpose of the concept is to increase the operational performance and to deliver high customer value, little emphasis has been put on research related to performance measurement in  a  Lean  service  setting.  While  some  research  regarding  modern  performance  measurement frameworks exists, a weak link is identified between the two research areas (Lean and Performance measurement). 

This study has focused on the specific IT service setting at Tieto and their Lean initiative. The purpose of  this  study  is  to  complement  Tieto’s  Lean  initiative  with  recommendations  related  to  an  area currently not emphasized by Tieto, measuring performance improvements due to their Lean efforts. Tieto  is especially  interested  in the linkage  between  operational  improvements  and the financial outcomes.  This  study  employs  a  holistic  view  in  order  to  gain  a  wide  understanding   of  the organizational   context  and  the  business  in  general.  It  has  been  paramount  for  this  study  to understand the organizational setting, the theoretical concepts, and the interplay between them. 

As a mean of fulfilling the purpose, the case study methodology has been employed throughout this study. The research was initially defined by its objectives and delimitations. Interviews, observations, and  a  content  analysis  contributed  to  the  overall  organizational  knowledge  which  was  deemed crucial  for the  end  result.  The  organizational  knowledge  together  with  the  understanding  of the theoretical concepts and the exploratory benchmark study has been the basis for the analysis and recommendations. 

The study has rendered in recommendations regarding how measurement activities should be designed and employed in Tieto’s Lean setting. This study suggests that a limited focus should be put on general measuring activities in Tieto. More specifically, little focus should be put on attempting to determine a correlation or linkage between the operational improvements and financial outcomes. The study further suggests a separation of the organizational KPIs into steering (operational) KPIs and monitoring (financial) KPIs. This is suggested in order to have operations steer the organizational performance as well as cement the Lean concept within the organization. Overall, a focus should be put on measuring processes rather than financial data.

Place, publisher, year, edition, pages
2012. , 101 p.
Keyword [en]
National Category
Economics and Business
URN: urn:nbn:se:kth:diva-144082OAI: diva2:710908
Available from: 2014-04-16 Created: 2014-04-08 Last updated: 2015-03-31Bibliographically approved

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