Lean times now require Lean IT for current SME survival
Jeffrey Doss is Regional Director (Asia) of Quint Wellington Redwood, an independent consulting firm focused on providing consultancy and training aimed at optimising IT-intensive processes. He strongly believes in 'daring to challenge' and finds great fulfilment in helping local companies realise the role of IT as their business enabler for sustainability and to achieve greater growth.
The main thrust of corporate media news focusses on large corporations when in truth, it is the small and medium enterprises (SMEs) that are the drivers of the Malaysian economy. This is true in both value-added and employment areas of business.
Ensuring the vitality and durability of SMEs is therefore paramount. In Budget 2015, the government allocated RM14.3 billion to promote SME development, improve credibility and credit standing.
This, however, may not be enough. The economy today has changed from challenging to down-right daunting, even more so for the typical SME.
So what can SMEs do to stay not only afloat, but to move forward during a challenging economic environment? One area which has not been traditional for them to look at is Lean IT. Many IT departments are now being asked to do more with less and nowhere is it felt more resoundingly than in SMEs.
Conceptually, Lean IT is a method for improving the quality of products or services and has to date been proven highly effective. Originally developed by Toyota for the production of motor vehicles, the basic philosophy has now been scientifically applied to many sectors.
Maximising value, cutting waste
Lean IT focuses on maximising customer value and reducing waste. With the mantra that only an end user can determine true value, Lean IT takes the path of continually improving support for the system. The end result will create greater value with less or equal resources.
Obviously SMEs are not smaller versions of large corporations and they have their own areas of focus. Some may be more limited in certain areas than others and the variations may be far and wide. As such, it was more difficult to apply traditional Lean tools to this sector.
For SMEs to be able to make effective use of the five Lean perspectives (see flowchart), considerable changes may have to be made to their current work methodology and concept, for an effective Lean transformation.
A conducive Lean IT approach would ensure the development of attitudes and behaviour befitting a future-oriented and agile organisation. It is all about enabling employees a higher chance of accepting initial changes and allowing them to absorb it and better adapt to future changes.
The Lean IT method builds upon the principles of Lean Manufacturing combined with Six Sigma elements into the IT environment. Results are achieved by focusing on customer value, creating transparency, focusing on results, coaching in Lean leadership and the ability of the staff to learn continuously.
In the preparatory phase, the method entails designing the training of line managers and employees, identifying and organising the conditions, determining the KPIs and creating a familiarisation session with all stakeholders.
An analysis is then performed with respect to the customer, the process, organisation and performance, as well as attitude and behaviour. The results can reveal waste and bottlenecks that are then dealt with on a daily basis. The first version KPI dashboard is also delivered.
During the transformation phase, which consists of several cycles, the process involves focusing on the implementation of improvements, the introduction of Visual Management to allow for transparency and insight and to create a culture where continuous improvement is at the operational core.
The Lean methodology ensures the creation of an organisational culture that can independently and continuously search for and eliminate waste. In a sense, continuous Improvement are being incorporated into the companies DNA.
As Minister of International Trade and Industry (MITI) Datuk Seri Mustapa Mohamed said, SMEs in Malaysia have the potential to contribute a strong 41% to the country's GDP by 2020. With more SMEs embracing the Lean IT method, this goal could be achieved sooner than later.
Source: SME (Small Medium Enterprise) circle