Don’t expand infrastructure, streamline processes
Quint Wellington Redwood, a global independent consulting firm specialising in organising “world class” IT management, clarifies what exactly is lean philosophy and discusses what companies can do to improve their customer value. --- By Michael Ang
About four years ago, Netherland-based Quint Wellington Redwood, a global independent consulting firm specialising in organising “world class IT management, was faced with a major transformational challenge from the tax office in Europe.
From an information technology (IT) point of view, this was a big operation, with over three thousand IT resources at work in Holland’s tax department.
The challenge posed to Quint was how to transform the department for an efficiency gain of over 30 to 40 percent.
“Outsourcing, the usual way to get an efficiency gain very quickly by pushing all the people out to an external contractor, was not applicable because it was a governmental service. The Dutch government would have said they wanted to take care of the people and not just push them out”, says Maurice Boon, Quint Wellington Redwood’s Executive Vice President Consulting and Managing Director (Netherlands).
“So we needed to come up with an approach which could help us to transform that department, and the management that was in charge of those people, to get that that intended gain”, he points out.
In the end, Quint worked with McKinsey to see if they could use the lean philosophy and methodology in IT.
“We noticed that IT nowadays is so much process driven because of cycle, because of stimuli, and the process frameworks, that it might work. If we do this well, if we play this well, if we start using the instruments which lean provide you with, then it might work, and it did”, says Boon.
Following the successful conclusion of that project after 18 months, Quint stepped out. They industrialised the approach used for the tax office and started taking other clients from Spain, Italy, and other places.
Their success was soon seen implemented all over the world, and Quint feels the methodology works better in the Asian context more than anywhere else except for Europe.
“We think about change management, but so many businesses aren’t even familiar with this term. What is change management they ask. We are so much technologically driven, or process driven that we have forgotten about the end customer, and lean is about customer value. It is about efficiency gains, to take out all the waste. Of course, it is also about money; cost effectiveness in balance with customer value”, says Boon.
“I think for Quint if you look at our overall portfolio, one is more about governance sourcing which is a way to add value from an IT or business point of view. This includes efficiency gains and of course, leadership. There is also the lean approach, which is about people and processes.
“This is a nice balance in our portfolio. We will help our clients to improve. It could be by them outsourcing their IT, and starting to manage it well from a governance point of view, or implementing processes and making sure they are mature from a process compliance point of view.
“This gives them the capacity to manage their people, to manage their processes not just from a process management point of view. And lean is all about leadership. It starts with leadership.”
Boon notes that in some cultures or than others managers do not allow their people to stand up. This prevents them from adding value and ultimately will not help the manager or the business.
One such example is the cubicle culture that exists in the US, where everybody sits in cubicles and does not really know what a co-worker is doing.
“This is not how to improve operations, if everybody is working all by himself or herself individually. The value chain is all about working together. This is more in the genes of Asia, of Europeans”, says Boon.
Currently, Quint is helping AIG, the biggest insurance company in the world to change that culture.
Quint is their advisor for lean and process management, now not only in New York and Tokyo, but also commencing in Kuala Lumpur.
Share, not protect intellectual property
According to Boon, Quint also met with AXELOS® recently, and convinced them that lean is not competing with IT, that it’s more of a people process technology.
“It’s the missing component, and they fully agree with this,” he adds.
Boon announces that Quint was on the threshold of launching a global initiative with many of the worlds’ largest training companies to push and position lean as the global standard for people management in IT.
“We just did a management buyout of Quint six months ago and this is one of the biggest changes in the company. We are not here to protect intellectual property (IP), we are here to share IP, and by doing that we can grow the market. Market growth is more interesting for us than protecting IP.”
Boon also says continuous improvement cycles are used to realise customer value, and also within the manufacturing industry.
“IT nowadays is process driven, and you can make the same applicable tools applicable from an IT point of view, you just have to change it a little”, he adds.
Change culture to add customer value
Jeffrey M. Doss, Quint Regional Director Asia says that if you talk about lean IT in its most basic form, many companies in Asia and Malaysia are still not even at the teething stage.
“An IT organisation will have a service catalogue which basically lists out all the services that they provide. Lean comes into it by making those IT services better, faster, more efficient. So lean is more of a culture change, really looking at the people and making sure they understand how they work together in that service”, he points out.
“Most IT organisations in this region still have not defined the service catalogue properly. Their service catalogue is still very infrastructure and technical based. They’re talking about uptime, network, and so on.
“The service catalogue has to align with being able to meet the requirements of the business and help the business grow. IT isn’t just something today that’s just there to make the business work. It has to help the business work well”, he adds.
An example of this which Doss used was in the banking business.
He says that in the past many of us used to have to go to bank branches in order to do almost anything with the bank. Today, so many things have changed with the aid of technology, such as Internet banking. This is how IT has improved the value to the customer.
“The CEO is saying, I need to do things better, faster, and more efficiently, and I need IT to support it. If the CIO is still thinking in terms of “keeping the lights on”, the CEO is not going to be very happy. What lean does, especially in terms of a large organisation, is actually change the view of how you do things”, adds Doss.
In conclusion, Boon advises companies thinking seriously about using lean methodologies to streamline their business by looking into three main areas:
Recycle your business. From a lean point of view you need to reach out to your business to start defining from their business point of view, what the deliverable services will be. So do it from an outside-in instead of inside-in point of view.
Start reaching out to your own people within IT because that is where the knowledge to improve will be. This is about evolving your own people, and creating the kind of improvement cycles with your people, opening up from a managerial point of view and asking for their support in building a strong basis for IT delivery.
Make sure that the proper governance you missed at the start of outsourcing is in place. Without proper governance you still don’t have control. Control is governance; it is not a monitoring system. Governance is in between business and IT.
Source: Malaysian Business