Integrating Lean Principles In Digital Transformation
Digital Transformation and Lean principles are two concepts that are changing the way businesses operate today. The reasons are many – the need to deliver better customer experience, the shift of power from “push” to “pull”, higher customer expectations and intense competition.
How are companies incorporating these into their businesses?
Two Concepts Are Better Than One
Both Lean and digital share the core business principle of driving profitable growth. They can operate independently or in concert. One serves the other. Lean facilitates the adoption of digital technologies by providing a framework for their development; digital acts as a catalyst for facilitating Lean transformations. – Source
I believe an organization needs to be flexible and agile. This is why we recommend and implement Suyati’s 3-phase approach to Digital Transformation which integrates lean methodologies. In this article I will talk about how lean principles, when incorporated using Suyati’s approach of providing frameworks for clients, brings in agility by prioritizing processes and business requirements. Before that, let’s take a look at the 4 main principles in Lean methodology.
The main tenet of this principle is that demand dictates the rate of supply of goods and services. The focus of this principle is to avoid stockpiling and optimize resource capacity. In the context of digital transformation, the pull system allows you to “pull” value through the chain by starting tasks or processes only when the previous step in the chain is executed. This helps in streamlining the process and gives you a forecast about the amount of work that can be processed in a period of time.
One Piece Flow
This principle emphasizes consistency and eliminating wasteful activities from the overall process. While implementing digital transformation, this principle will ensure that information and processes move smoothly without interruption. What is valuable to the customer is identified and every process step is aligned to adding this value one piece at a time. All other wasteful processes are evaluated and eliminated.
Identifying errors or defects as closely as possible to where they occur is the main focus of this principle. This ensures that the issue is resolved at the root and isn’t passed on down the process. Quality issues are thus addressed on the spot, allowing the rest of the process to go on smooth and unhindered.
Takt ensures that a continuous and consistent rhythm is maintained throughout the process of digital transformation. Through the implementation of this principle, it becomes much easier to adapt to changes in customer demand or the needs of the company. By understanding the time taken for each process, improvements can be made in each cycle thus streamlining the whole process.
Here is how we incorporate these lean principles for accelerating your digital transformation.
Integration of Lean principles in Suyati’s 3-phase approach
At Suyati, we have designed a 3-phase approach of providing frameworks for clients. The approach is discussed in detail on our e-book: How to approach digital transformation in 3 steps. In this article, we will look into each step and discuss how lean principles can be integrated into each of them.
Phase 1: DEMONSTRATE and Secure adoption
This phase helps the business “identify high-impact but low-effort opportunities, and develop quick solutions to demonstrate potential to stakeholders.”
Lean UX and Lean Software Development are two methodologies that can be used effectively in implementing this phase. Following the lean principles mentioned above, Lean UX is deployed to obtain feedback and make quick decisions on what would best demonstrate potential to stakeholders (Pull). Then short cycles are designed to create a hypothesis, test it (Zero Defects) and create effective user experiences. Lean UX mimics these rapid and iterative cycles to ensure that data generated can be used in each iteration. Lean Software Development works in tandem and ensures the elimination of waste in software development with fast and constant deliveries (One Piece Delivery and Takt).
Phase 2: SCALE and Align with digital times
The outcome of this phase is to develop “connected systems and digitized operational workflows” that focus on delivering great customer experience. In this phase, efforts are made to pull value through the customer demands by further analysing which projects are actually enhancing customer acquisition and retention (Pull). The Lean Six Sigma method can be employed at this stage. In this method, the performance and outcome of the transformation is optimized by identifying and eliminating the root cause of bugs (Zero Defect). This helps in the standardization of value added processes (One Piece Flow), hereby creating a foundational ecosystem to exploit the potential of digital technologies and build scalable solutions for problems as they occur.
Phase 3: TRANSFORM and Beat competition
This phase focuses on creating a culture of continuous improvement. Having developed a foundation in the first two phases, this phase focuses on building new digital product offerings or enhancing existing products or services to drive new business growth.
Implementing the Lean principles in the 1st and 2nd phase would have given you actionable insights on:
- the amount of work that can be processed in a period of time (Pull)
- the processes that can be eliminated and the most value adding processes for your business. (One Piece Flow)
- automated methods to root out bugs at every level (Zero Defect)
- the optimal time needed for each process (Takt)
Using these insights, a method of continuous improvement can be devised and implemented. Kaizen, a lean tool that aims to reduce costs and increase productivity through continuous improvement, can be implemented at this phase. This tool follows the PDCA (Plan, Do, Check, Act) cycle to foster a culture of improvement through the organization.
The integration of lean principles with Suyati’ s 3-phase approach simplifies, streamlines and enhances digital transformation. If you have questions on how your business can reach full digitalisation potential through this method, feel free to drop a message or get in touch with me.