How To Think About and Implement Technology in Business
The most common mistake in buying and implementing technology in business is assuming technology will solve problems that are being caused by processes – or the lack thereof.
I worked at General Electric from 1998-2002 when Lean Six Sigma (LSS), a method that relies on a collaborative team effort to improve performance by systematically removing waste and reducing variation, was becoming a big deal under Jack Welch. The LSS way had become a “religion” and the concepts I learned became second nature. I quickly learned that if there are defects in a product or service, it is almost always because of a breakdown in the process – or the lack of one. It is very common, however for managers to think that software will “fix it” when that may not be the case.
While working for a global company that had manufacturing and distribution in over 23 countries, we were able to solve big problems with little to no technology. One of the business units in southeast Asia was losing over $500,000 per year in unaccounted-for inventory loss. This was not the only market experiencing similar issues. At ‘corporate’ there was a lot of discussion around new add-on software for managing warehouses. Each of them was expensive and would take time and effort to implement new technology and train the workforce. Some members of management were even advocating for very expensive ERP systems, priced in the millions.
To make a long story short. I went to the business unit and observed their operating process for handling inventory and how it flowed through the warehouse. Over a weekend, we redesigned the process and with less than $25.00 dollars (tape, plastic envelopes, other supplies) we were able to design a process that improved inventory accuracy by over 99.9%, and the losses in inventory dropped to less than $200 a month. This revised process could still be improved but the improvements needed were able to be added through the software the company already used.
Below are a few concepts from Lean-Six-Sigma as it relates to using technology and that we used to solve the issues:
- The right process will produce the right results.
- Implement only reliable, thoroughly tested technology that serves your people and process.
- First, work out the manual process, and then automate it.
- “Genchi Genbutsu” (“go look, go see”)
These concepts are effective – not just in the operations side of a business but in the strategy and decision-making process as well.
Strategy and Decision Making
I would argue that the most important process that a company has is the ‘Strategy & Decision Making process. This process is the combination of strategy development, business planning, monitoring, and the following short-term and long-term decisions that the senior management team makes. This loop moving from strategy to execution to monitoring/reporting, and back to strategy on a continual basis is the key process within any organization. Just like with operational problems (like the inventory/warehouse problem above) there is a temptation for management to throw technology at the process hoping that it will improve the outcomes.
Using the principles of Lean Six Sigma and applying them to the Strategy & Decision-Making process, I recommend that senior leadership teams do the following as they develop their information systems:
- Design the right process for developing and executing your business strategy.
- Identify what the key operating activities are that your strategy depends on and that create value.
- Identify what information is needed (less is more) to monitor results on a quick feedback loop. (I.e., daily, monthly, quarterly).
- Develop a manual information system process (i.e., Excel, etc.)
- Execute several strategy-execution-feedback cycles on the ‘manual’ system before identifying and implementing technology in your business to further automate the process.
- Identify the right technology for simplifying and automating the information flow.
- Test the new technology.
- Implement technology in the business quickly.
By following this process, a senior leadership team can avoid or minimize the problems that come from trying to solve problems with technology that are driven by a broken process. Many senior leaders will unconsciously push off the hard job of strategy and execution by focusing on the mechanics and tools of information flow. It is better to move quickly and keep focused on strategy and execution by developing the right process – supported by simple temporary manual processes – than to get distracted with technology and implementation.
If you need help assessing the technology and processes in your organization reach out to Amplēo. Our professionals are ready to step in and help your business reach its full potential.