Changing the Culture: Implementing TQM in an IT Organization Copyright 1992 CAUSE FROM _CAUSE/EFFECT_ VOLUME 15, NUMBER 2, SUMMER 1992. Permission to copy or disseminate all or part of this material is granted provided that the copies are not made or distributed for commercial advantage, the CAUSE copyright and its date appear,and notice is given that copying is by permission of CAUSE, the association for managing and using information resources in higher education. To disseminate otherwise, or to republish, requires written permission.For further information, contact CAUSE, 4840 Pearl East Circle, Suite 302E, Boulder, CO 80301, 303-449-4430, e-mail info@CAUSE.colorado.edu CHANGING THE CULTURE: IMPLEMENTING TQM IN AN IT ORGANIZATION by Samuel J. Plice ABSTRACT: Total Quality Management is a structural system for creating organization-wide commitment to implementing a continuous improvement process for more effectively meeting the needs of customers. At the University of Michigan, the Information Technology Division (ITD) has taken the lead in pursuing TQM. This article describes some of the basic premises of TQM, how it is being implemented within ITD, and what has been achieved so far. ************************************************************************ Sam Plice is Chief Operating Officer of the University of Michigan's Information Technology Division, which provides academic and administrative computing services and telecommunications support. He was Director of Administrative Systems at the University from 1976 to 1991 and has directed the installation of the University telephone system and broadband and fiber networks. As COO, he is responsible for leading the division's operational and developmental activities. He has been a presenter at several CAUSE conferences and has served on the CAUSE Program, Election, and Recognition committees. ************************************************************************ During the last several months, great interest has been generated within the higher education community in Total Quality Management (TQM). Several colleges and universities are now putting TQM programs in place. NACUBO, CAUSE, and EDUCOM are offering seminars in TQM. This focus on quality is borrowed from the industrial sector, where product quality is mandatory if companies are going to meet the challenges of increasing competition. As we all know, TQM concepts have been one of the factors that has led to the success of the Japanese in establishing a lead role in the international economy. These TQM concepts were brought to the Japanese by W. Edwards Deming, who at the age of 91 continues to carry his message to managers both in the United States and abroad. A TQM program was first instituted at the University of Michigan by the University Hospitals about three years ago. Hospitals have been faced with increasing costs, rising approximately 6 percent per year, while revenues have been increasing about 3 percent per year. This, coupled with increasingly restrictive reimbursement regulations and greater competition, meant that costs had to be driven out of the system. While it is not easy to motivate staff to cut costs and increase productivity, it is relatively easy to motivate them to a positive vision of increased quality. Early results were encouraging. Using a quality improvement process developed by Qualtec, a subsidiary of Florida Power and Light, real improvements and savings were made. The time to admit patients was reduced from 120 minutes to 20 minutes with a resulting savings of $250,000 annually. The number of care givers in intensive care units was increased and the cost was reduced by $150,000 per year. Operating room throughput was increased by 33 percent. Delays until discharge after patients were medically ready to leave the hospital were reduced by 0.7 days. As the program continued, there were additional equally impressive results. Currently the hospital can demonstrate $14 million in savings resulting from TQM efforts. The Information Technology Division (ITD) at the University of Michigan wanted to improve its ability to meet user needs, to free up resources for new initiatives, and to be viewed more positively by the University community. Early in 1990, University Information Systems (UIS), a component of ITD, began looking at TQM as a way to improve its service to its client base. This approach caught the interest of the rest of ITD and in the fall of 1990 a formal planning effort began. Significant assistance in understanding how TQM could be implemented was received from the University Hospitals. We were also fortunate in having available to us Dr. Edward Rothman, professor of statistics and co- presenter with Dr. Deming at many TQM seminars. With help from these two sources, a plan was prepared and TQM activities began in earnest late in 1990. We are now more than a year into our TQM program. What is Total Quality Management? Total Quality Management is based on systems thinking. A system is a group of components within an organization that work together for the aim of the organization. For an organization to achieve its aim it must be managed. Management's responsibility is to strive to optimize a system and to keep it optimized. A key element of optimization is to assure that the output of the system meets the requirements of the customer. Quality, then, is defined as meeting valid customer requirements. A system must have an aim, and everyone involved with the system must understand and share this common aim. Every process within an organization must be optimized to achieve the aim of the system and to satisfy valid customer requirements. Thus, Total Quality Management is an all-encompassing approach of managing an organization in an optimal way so that the goods or services it produces meet the needs of the organization's customers. These are all elements of the Deming approach to TQM and it is upon these concepts that ITD's TQM program is based. What skills are needed in the quality improvement process? The focus of the quality improvement process is external--upon the customer. As the people within an organization try to continually improve their service to the customer, they will need to employ people skills and analytical skills. People skills include team-building techniques, brainstorming, nominal group techniques, focus groups, coaching, and mentoring. Analytical skills include flowcharting, checklists, histograms, Pareto analyses, fishbone diagrams, run charts, scatter diagrams, and so forth. The process of migrating from the current management culture to the new management culture will rest upon these tools. How does quality save resources? TQM tries to take work out of the system by eliminating complexity, rework, duplication, and waste. TQM does not rely upon inspection after the fact, but tries to "move quality upstream." If defects can be found early in a process, then rework or waste can be avoided. If the plan or design can be improved, then duplication of effort can be avoided. If there are steps in a process for which there are no customers, then these steps can be eliminated. Resources released by process improvement can be reinvested in new activities and innovation. While this is an important outcome of TQM programs, it is not the primary reason that ITD began its TQM program. The most important aim was to better serve our customers and the institution. Customer focus has become a key ITD value. How did we go about it? ITD is made up of six line units reporting to the vice provost for information technology through the chief operating officer. The directors of each of the six units, plus the vice provost and COO, constitute the senior management of ITD. ITD senior management appointed a planning committee to recommend how ITD should approach TQM. The planning committee, consisting of one member from each line organization within ITD plus Dr. Rothman, recommended the formation of an ITD Quality Council to oversee the process, a steering committee to support the Council, an educational program, and a structure for organizing quality improvement teams (QITs) and task forces. The planning committee became the steering committee; the steering committee and senior management together form the Quality Council. The Council, which began meeting in January of 1991, meets one hour each week. Its purpose is: * To set the direction and demonstrate the commitment to TQM. * To appoint the steering committee. * To select QIT pilot projects and receive recommendations from them. * To agree to support time lines. * To sanction, attend, and support training sessions. * To define target customers. * To refine the operational definitions of TQM within ITD. * To manage the scope of the TQM activities. * To link TQM to ITD's strategic plan. The steering committee meets each week for two hours and provides staff support for the Council, prepares Council agendas, monitors progress, makes recommendations to the Council for Council action, and generally facilitates the work of the Council. Task forces are groups charged with investigating and recommending improvements in organization-wide policies and/or processes. Task forces are appointed by the Council for specific purposes and disband when the purpose has been achieved. So far, three task forces have been appointed: Purpose and Values--to develop a statement of values to be used in guiding all ITD activities and, subsequently, to develop a statement of purpose of ITD that will define a common direction (see page 25). Management Expectations--to provide ITD with a description of what is expected from managers. Personal Work Planning--to develop an approach to employee performance planning and to specify ways that employees may expect to increase their compensation. The recommendations of these three task forces will be of primary importance to the quality improvement process, for in large measure they will define the culture to which ITD is shifting. Quality improvement teams are formed to bring about improvement in a process that the team has identified as needing improvement. A specific seven-step process, developed by Qualtec, is followed to select a theme, determine causes, select and implement countermeasures, measure performance improvement, and effect the changes. All task forces and QITs are led by a trained team leader assisted by a trained facilitator. Team leaders and facilitators are trained by two ITD staff members who, after initial instruction from Qualtec and in consultation with Dr. Rothman, have developed and now teach the training programs on site. As we train more of our staff members as team leaders and facilitators, we can support additional QITs. Members of QITs receive the training they need when they need it by the team leaders. Training The Council and the steering committee believed that it was important for ITD staff members to understand the underlying concepts supporting TQM before being asked to engage in quality improvement activities. A one-day introduction to TQM concepts, called TQM 101, was put together by the ITD staff trainers and approved by the steering committee. The first session was conducted in March 1991. The curriculum for this course consisted of the following: Welcome and Introduction--presented by an ITD senior manager What Does Quality Mean to You?--group exercise Why Change? Why Quality?--presented by an ITD senior manager What is Total Quality?--presented by Dr. Rothman Red Bead Experiment--conducted by Dr. Rothman Deming's System of Profound Knowledge--presented by Dr. Rothman Customer/Supplier--group exercise Introduction to Deming's 14 Points--presented by Dr. Rothman Implementation of the Total Quality Improvement Process (TQIP) within ITD--presented by an ITD senior manager Summary Exercise Questions and Answers--all presenters Up to 100 persons could attend each TQM 101 session. It was presented first to ITD top management, then to middle management, and finally to the rest of the staff. The reason for rolling it out in this fashion was so the manager would be informed of the TQM program before his or her subordinates were, and would be in a better position to answer questions. Not only ITD staff, but many persons outside of ITD attended one of the thirteen sessions presented. A second one-day course, TQM 102, providing elaboration of TQM concepts was presented to approximately half of the ITD staff. The curriculum for this course consisted of the following: Welcome and Introduction--presented by an ITD senior manager Learning Cycle--presented by Dr. Rothman Sense Deception--presented by Dr. Rothman Plan-Do Check-Act (PDCA) Experiment--group exercise Tampering--presented by Dr. Rothman Measurement--presented by Dr. Rothman Systems Thinking--presented by Dr. Rothman Quality Improvement Process--conducted by an ITD facilitator Questions and Answers--all presenters Quality improvement teams Six pilot QITs began operation in September of 1991 with the objective of demonstrating the effectiveness of the Quality Improvement Process. Teams were selected based on the interest expressed by managers and staff members in the various units within ITD. The six teams included the following: (1) The Network Operations Center team is focusing on reducing complexities in the process by which network operational information is obtained. (2) The University Information Systems team is focusing on improving the process for obtaining authorization to access the administrative mainframe. (3) The Research Systems team is focusing on the process for moving electronic mail addresses into the X.500 directory and improving the directory service. (4) The Telecommunications Systems team is focusing on enhancing the accuracy and completeness of voice service orders before they reach the wire pair assignment area. (5) The Instructional Technology Systems team is focusing on the process by which faculty schedule the use of computerized classrooms. (6) The Consulting and Support Services team is just getting started and is looking at the collection and use of statistics pertaining to software consulting services. None of the pilot teams have completed the seven-step cycle as of this writing, although two are quite far along. In general, the enthusiasm among team members is very high and they have applied the skills they have learned to other aspects of their work, thus helping to spread TQM concepts through the organization. Making TQM operational In December of 1991 each ITD unit was asked to select a key production process and to begin to study it from the TQM point of view. Each unit first identified the process to be studied, stated the purpose of the project, who the customers of the process were, and what the quality indicators would be. Baseline run charts were begun and now serve to measure process improvement. In many cases a large amount of statistical information was available about particular processes, but the data did not actually measure indicators of customer satisfaction. For example, data indicating the availability of mainframe services could not really measure whether customers were able to get their work done. By applying the external focus of customer satisfaction, staff members became more aware of the purpose of the process and how it could be improved. What is the expected result? TQM is not a short-term project that will end at some given date in the future. TQM will engender a complete change in the management style and culture of the organization. We expect that ITD's way of doing business will change; there will be a management paradigm shift: * From Managing to Leading. Instead of supervising every aspect of an operation, we must lead the organization by setting the aims, allocating resources, and defining the expectations of each component of the system. * From Control to Coaching. Instead of retaining total control of the operation of a system in management, we must coach our staff in operating the system to best achieve the aim of the system. * From Quantity to Quality. Instead of focusing on the quantity of output, we must focus on the extent to which the output meets the needs of the customer. * From Opinion to Data. Instead of making system changes based on opinion or anecdote, we must make changes based on facts that demonstrate change is needed. * From Resistance-to-Change to Open-to-Change. Instead of imposing change upon the staff, we must allow them to participate in the process by which change is instituted. * From People-as-Commodities to People-as-Resources. Instead of treating people as unknowledgeable interchangeable components, we must recognize that they constitute theknowledge base necessary to operate the system. * From Suspicion to Trust. Instead of being suspicious of each other, we must learn to trust one another as cooperating members of a team. * From Compliance to Commitment. Instead of behaving in a certain manner because we're required to, we must move to behavior resulting from an internal commitment to the team. * From Internal Focus to Customer Focus. Instead of making the aim of the system internal convenience, the aim of the system must be on meeting the needs of the customer. * From Individual to Team. Instead of individuals competing with each other for extrinsic rewards, we must function together as a team for a common purpose. * From Detection to Prevention. Instead of after-the-fact inspection of the output of a system, we must build quality into the system so that errors are prevented from occurring. What is the progress to date? Although none of our QITs have completed their work, nevertheless change is evident. The term "customer" is now heard regularly. Customers, both internal and external, are involved in the decision- making processes; customer needs and quality indicators are common concepts. Meetings are conducted using TQM concepts--Purpose, Agenda, Limits (PAL). Customers are beginning to comment on instances where service levels exceeded expectations. ITD TQM training has served as a model for the campus-wide training program, just now beginning. The ITD staff has reacted very positively to the TQM effort. Evaluations from TQM 101 and 102 have been very favorable. Many persons who were originally critical have become supporters. The six existing QITs have shared the progress of their work on large "storyboards" which are continuously displayed for others to see and to comment upon. Requests to establish additional QITs are beginning to be received by the Quality Council without solicitation. And while we still have critics, they are not impeding our efforts. The one negative comment that we have received most often is a skepticism that the top management of ITD is serious and will follow through. Staff members from all levels (line to top management) wonder if TQM isn't just another fad that will pass and be forgotten. To counteract this skepticism, ITD senior managers have made a point of appearing at each training session to demonstrate their commitment to the quality improvement process. Weekly brown bag lunches open to all ITD staff have been instituted where Dr. Rothman and ITD senior managers make themselves available for questions or discussion about TQM. TQM bulletin boards have been set up in each building housing ITD staff members so current information about TQM activities will be easily accessible. As new team leaders and facilitators are trained we will be able to roll out many more QITs which will increase the visibility of TQM in more areas of ITD. What has been the most difficult aspect of the TQM effort? As mentioned above, TQM is based on systems theory. Every system must have an aim and all functions within that system must be focused on achieving that aim. This means, for example, that the staff must be focused on valid customer needs. This throws into question many current management practices such as performance reviews, merit pay, and management by objectives. These practices create competition among the staff instead of cooperation. Staff members compete with each other for the better performance review and for the better pay increase. The focus becomes how to please the boss, with all the positive and negative connotations that implies. As Dr. Joseph Juran--a noted authority in the field of quality management who worked with Deming in Japan--pointed out years ago, the problems with achieving customer satisfaction lie with the process itself and not with the workers. There is a rule of thumb that 85 percent of problems are with the system and only 15 percent with the people. Individual performance is impossible to evaluate objectively because performance is so much controlled by the system. Yet we continue to do employee evaluations and use them to justify individual pay increases. We do this despite the fact that almost no one is happy with this way of compensating people. University staff find reconciling new TQM-based ideas with long held managerial concepts to be difficult. In facing these issues, one finally begins to understand the profound effect TQM concepts will have on the way we do business. Why is TQM important for IT organizations? Cost pressures on institutions of higher education have been never ending. In response, public colleges as well as private colleges have pushed up tuition as state support has been insufficient to keep up with cost increases. It has become more and more clear that innovation must occur by substitution rather than by the addition of costs. TQM offers a way to drive costs out of existing processes and to free resources for investment in new services. Since information technology organizations are faced with the need for continual updating of hardware and software, TQM becomes important in generating some of the needed resources. Equally important is the emphasis on meeting customer requirements. Recent articles in CAUSE/EFFECT have made a convincing case for the need to reengineer our administrative systems. Persuading administrative offices to forego a departmental approach to systems has not been easy, for there was no convincing argument for a cross-functional approach that was consistent with the organizational culture. TQM, with its external focus on customer requirements rather than an internal focus on office procedures, provides a culture that demands the implementation of cross-functional applications. Applications reengineering and TQM go hand in hand. Conclusion It is abundantly clear that those organizations that are the suppliers of information technology to their institutions have a very difficult time in keeping abreast of the rapid changes in that technology. As technology changes, our structures for delivering computing and networking services will inevitably need to change as well. To be successful in the future, centralized computing departments must find a way to evolve their organizations as the demands of customers evolve. TQM concepts provide a non-disruptive way for the information technology organization to respond to the changing needs of students, faculty, and staff. ************************************************************************ DRAFT ITD STATEMENT OF PURPOSE AND VALUES STATEMENT OF PURPOSE: The purpose of the University of Michigan Information Technology Division is to enhance the University's ability to create and share knowledge through the application of communication and computer technology. We will ensure that the power of information technology is in easy reach of every student, faculty, and staff member. We work with our customers every step of the way. Together we find out what they need, now and in the future, and together we develop information technology services that make the best use of all available University resources. By so doing, the University community and everyone in it will have greater ability to access, process, and communicate information--across the campus, the state, the nation, and the world. * We are a technology service organization. * We work with the campus community to provide consistent, stable, and innovative information technology services focused on the University's instructional and research missions and the administration that supports them. * We encourage easy access to information and sharing of resources to support the work of each student, faculty, and staff member. * We provide shared information technology systems, applications, data, and services where their cost, size, or nature suggests a common resource. * With our customers, we integrate individual, departmental, and institutional systems into a campus-wide information technology infrastructure. * We accept the responsibility to stay informed about the latest developments in information technology and bring that knowledge to the University community for possible integration into campus information technology services. * We strive to be a catalyst on campus to encourage the assessment of new technologies and, where appropriate, encourage their application by students, faculty, and staff members to meet current and future need. * We look for opportunities for collaboration within the University and with peer institutions and industry leaders to contribute to nationwide information technology leadership efforts that mutually benefit all customers of our services and products. * We strive to serve as a national model of technical excellence, service quality, and organizational effectiveness. * We assist and encourage the self-supporting efforts and services of other units on campus, thereby sharing information technology resources across the campus, getting the most out of the information technology resources available from all sources. * We build strong relationships with vendors, to help provide the best, most reliable, and most cost-effective information technology services and products to all of the University community. * We work with our customers to provide the full services they require to effectively use the University's information technology resources. * We communicate effectively about information technology resources, services, and products to all of the University community, including appropriate use and inherent possibilities. * We provide instruction in the use of information technology to make it easy for users to be self-sufficient. STATEMENT OF VALUES: We share these values as we work to achieve our purpose: Service to our customers is our primary focus. Our greatest resource is each other. We treat others with honesty and respect. We practice open, consistent communication. We are committed to teamwork and partnership. We strive for continuous improvement. * We ask our customers what they want, listen to what they tell us, and work together with them to meet their needs and wants. We involve our customers in every aspect of our activities, so they can use that information in their own planning and implementation. * We treat each other and the people we serve in an honest, respectful, reasonable, and caring manner. * We value a supportive work environment that cultivates and nurtures each of us as individuals and as team members. * We value our co-workers. We credit one another for working hard and working well. We celebrate our successes and learn from our mistakes. * We trust each other to do our work well and encourage each other to take initiative in our jobs. We encourage each other to try new assignments to keep our work interesting and develop our careers. * We share information from our area of responsibility or expertise to educate and inform one another. * We are excited about our work and enjoy what we do. * We value the diversity of points of view, backgrounds, and creativity in problem solving as instrumental in reaching the best solutions. We are committed to support the diverse populations of our own organization and the University. We are committed to affirmative action. * Teamwork among staff and management and partnerships with our customers are critical to our success. We learn about and respond to each others' needs as well as our customers' needs. * We respect each other's opinions and actions and work to improve interpersonal communications. * We value effective leadership and work toward consistency in management. We provide training and opportunities for each other to grow in both leadership and team participation. * We continually improve our services by following a cycle of planning, implementation, evaluation, and modification. * We set realistic goals for ourselves that present challenges with reasonable expectations. * We use our resources--human, technical, and financial--efficiently. ************************************************************************ Changing the Culture: Implementing TQM in an IT Organization