Leveraging LEAN to Increase Business/IT Alignment
- Published: Wednesday, October 29, 2014 08:00
By Paul Hoekstra
As an IT executive and consultant I've seen firsthand that many IT organizations are struggling to deliver relevant services to the business. There's a misalignment between what the CIO is trying to do and what his or her counterparts in sales, customer service, finance, human resources, etc. are trying to do. And what I've seen is that this absence of business / IT alignment often stems from the IT group not having the people or approach to understand the business from an operational point of view.
As a result, I often see situations where, for example, the HR Director goes directly to a cloud provider and simply buys a solution – reducing the IT department's involvement to just doing a security check and integrating the solution for the login. This diminishes the value of IT as an organization, which in turn leads to inefficiencies and ineffectiveness across the entire business.
LEAN is an Ideal Tool for Addressing this Problem
When organizations are looking for ways to reduce inefficiency and ineffectiveness, and simultaneously increase business / IT alignment, I recommend using LEAN. LEAN is an intuitive methodology that:
- Takes an end-to-end look at how work flows through an organization; and
- Exposes quantified inefficiencies and ineffectiveness.
The LEAN techniques are simple yet powerful. It's the right "hammer" for the job!
What You Need to Do
If you want to start using a LEAN process to increase business / IT alignment in your organization, here are the six steps you need to take:
1. Decide where to start – Ideally you will eventually use LEAN to increase alignment with all of the functions within your organization. However, you've got to start somewhere. Find a business partner who is open to the idea and sees that there are inefficiencies and ineffective processes that can be addressed. Once that first project is complete you'll be able to build on your success from there.
2. Map out the business flow – Create a group whose charter is to go out into the organization to study and map out all of the cross-organizational flows of this business group, from beginning to end.
As an example, let's take the "lead to order" flow. The output of this flow – the value created – is that order. You want to map out every step that transpires from the time the lead arrives to the time the order is received. Collect as many metrics as possible, but stay pragmatic.
3. Analyze the flow – Once you have things mapped out, take a close look at each step. The question to ask is always "does this help us get towards that order, or is it just a rework of something we could have fixed upstream or through some other means?" In our example you would be looking for ways to either get to the end point (i.e. the order) faster, or get to a better / higher dollar value order with less effort.
4. Create a joint road map – After you have identified some potential ways to reduce inefficiency and ineffectiveness, you need to work with your counterparts in the business function to decide which of these initiatives you will actually tackle. Keep in mind that it might not make sense to "fix" every one of the problems you identified. You need to look at each idea holistically (i.e. what is best for the company, not just for one department) as well as from the cost/benefit standpoint regarding how it will impact your end goal.
At a minimum, your road map should address the following:
- What initiatives will you undertake?
- How will you fund them?
- What will each organization be responsible for doing?
- What is the agreed-upon timeline?
Keep in mind that the changes that you will be implementing may or may not involve changes in the IT systems. Sometimes the changes will be in the people component of things. It often happens that just gaining a better understanding of what success looks like leads to changes in behavior. For example, if Marketing gains a better understanding of what Sales needs for a well-qualified opportunity, they may realize that they can capture and share information that's readily available but that no one had asked for before. This information might greatly increase the value of the leads, and reduce the time it takes to convert leads into orders. IT could help Marketing capture that information, and Sales could change their processes to make use of it.
5. Execute the plan – Once you have a road map and agreement at the senior level regarding resources and deliverables, the next step is to execute the plan. Because you're linking the initiative back to the desired business outcome, when decisions and trade-offs must be made along the way they can be decided in light of maximizing this desired business outcome.
Using the LEAN process fundamentally changes the way that IT executes projects. Whereas before IT would implement systems that were just IT initiatives, LEAN forces you to look at things from the business perspective instead. Now you're implementing initiatives that will truly bring value to the organization.
6. Measure the outcome – The final step is to measure to see if you have accomplished your stated goals. The beauty of the LEAN process is that it should produce immediate results. Did you reduce inefficiency and ineffectiveness or not?
Gone will be the days when the IT guys say "The system is live, good luck with it!" Now you'll be talking about more orders faster. Have you done that? If so, "Way to go, Marketing, Sales and IT! Together we've done something that will get accolades from the Board and the rest of the company."
Leveraging LEAN for business / IT alignment can be a crucial differentiator for IT organizations. It can lead to pulling in higher value, more interesting projects versus just deploying another cloud system. This in turn will attract higher value IT talent to your organization, so that you can start doing more strategic work and outsource some of the lower level, less value-add activities to third party providers.
About Paul Hoekstra
Paul is a pragmatic leader of IT transformations who gets into the details to lead teams and deliver concrete results. Clients benefit from his 20+ years of international experience translating strategy into executable tactics for implementation, first as a management consultant (Big 4) followed by years "in industry".
Paul brings a very well-rounded perspective, having been responsible for IT value and cultural transformations, business applications implementations, service strategy and operational excellence in a wide variety of industries.
About CIO Professional Services
CIO Professional Services LLC is a top-rated IT (Information Technology) consulting firm, based in the San Francisco Bay Area, specializing in strategic IT consulting and business / IT alignment. Companies come to us seeking assistance with their information technology strategy as well as to source interim CIO / CTO employees or fractional CIO / CTOs.