Why Lean is the new business technology imperative #BTF09

I’ve moved from the Gartner BPM summit in Orlando to Forrester’s Business Technology Forum in Chicago, where the focus is on Lean as the new business imperative: how to use Lean concepts and methods to address the overly complex things in our business environment.

Mike Gilpin opened the conference with a short address on how our businesses and systems got to be so bloated that lean has become such an imperative, then Connie Moore took over for the keynote. From the keynote’s description on the event agenda site:

Lean is not a new business concept — but it is enduring. By embracing Lean years ago, Toyota reached No. 1, while rivals GM and Chrysler collapsed into wards of the state. In its broadest sense, Lean seeks to better satisfy customer needs, improve process and information flows, support continuous improvement, and reduce waste. Today’s recession is a clarion call for businesses and government to reexamine and reapply Lean thinking across people, processes, and technology. When maintenance eats 80% to 90% of IT budgets, it’s beyond time to examine Lean approaches — like process frameworks, cloud computing, SaaS, Agile methodologies, open source, or other fresh ideas. And when the sheer complexity of technology overwhelms information workers, it’s time to simplify and understand what workers really need to get their jobs done. And by focusing on Lean now, your organization will be positioned to power out of the recession and move quickly into the next new era of IT: business technology — where business is technology and technology is business.

She started with discussions about how Lean started in manufacturing, and you can see the obvious parallels in information technology. In Lean manufacturing, the focus is on eliminating waste, and everyone owns quality and problems are fixed at the source. Lean software isn’t a completely new idea either, but Forrester is pushing that further to change “information technology” to “business technology”.

Lean is not just operational, however, it’s also strategic, with a focus on understanding value. However, it’s usually easier to get started on it at the operational level, where it’s focused on eliminating waste through improving quality, eliminating non-productive time, and other factors. Lean can be counterintuitive, especially if you’ve been indoctrinated with an assembly line mentality: it can be much more efficient, for example, for individuals or small teams to complete an entire complex task from start to finish, rather than have each person or team perform only a single step in that task.

Moving on to the concepts of Lean software, she started with the results of a recent Forrester survey that showed that 92% think that enterprise software has an excessive cost of ownership (although personally, I’m not sure why they bothered to take a survey on something so incredibly obvious 🙂 ), and discussed some of the alternatives: SaaS such as Google Apps, open source or free software and other lighter weight tools that can be deployed at much less cost, both in licensing costs and internal resource usage. Like Goldilocks, we need to all start buying what’s just right: not too much or too little, in spite of all those licenses that the vendor wants to unload at a discount before quarter-end.

Looking at the third part of their trifecta, there’s a need to change IT to BT (business technology). That’s mostly about governance – who has responsibility for the technology that is deployed – and turning technology back into a tool that services the business rather than some separate entity off doing technology for its own sake. What this looks like in practice is that the CIO is most likely now focused on business process improvement, with success being measured in business terms (like customer retention) rather than IT terms (like completing that ERP upgrade on time, not that that ever happens). Stop leading with technology solutions, and focus on value, flexibility and eliminating waste. You can’t do this just by having a mandate for business-IT alignment: you need to actually fuse business and IT, and radically change behaviors and reporting structures. We’re stuck in a lot of old models, both in terms of business processes and organizational models, and these are unsustainable practices in the new world order.

There were some good questions from the audience on how this works in practice: whether IT can be Lean even if this isn’t practiced elsewhere in the organization (yes, but with less of an effect), what this means for IT staff (they need to become much more business focused, or even move to business areas), and how to apply Lean in a highly regulated environment (don’t consider required compliance as waste, but consider how to have less assembly-line business processes and look for waste within automated parts of processes).