• October 16, 2009
  • By Jessica Tsai, Assistant Editor, CRM magazine

Technology Needs to Be Lean and Mean

CHICAGO, October 8, 2009 — With perhaps the exception of Chip Gliedman, vice president and principal analyst at Forrester Research, technology leaders and analysts at his firm's Business Technology Forum 2009 agree that "lean" is, in fact, the new business imperative. Overlapping themes resonated through each session, focusing on how technology must: eliminate waste, earn a seat at the executive table and start talking the language of business, and ultimately, revolve every initiative around the customer.

Most speakers added the disclaimer, "this isn't going to be easy" -- admitting that old habits are hard to break, especially when, for many companies, lean thinking requires a complete cultural change. In her opening keynote, Connie Moore, vice president and research director at Forrester, paralleled both the health and corporate benefits of going lean. She leads by example in both arenas, not only as an expert to business process and application professionals, but Moore claimed to have lost 19 pounds after finding  out she'd be speaking at the forum. Moore defines lean in terms of a trifecta:

Eliminate waste and increase value: Lean requires an understanding from both the strategic (value, especially from the customer's perspective) and operational (eliminate waste) standpoint. Moore recommended starting small at the operational level, and look at what she calls a "toolbox" of areas to uncover: quality, responsiveness, capacity, variability, availability, and production control.

Lean software: According to a Forrester survey, enterprise application owners complain about the high cost of ownership (92 percent), the difficulty to upgrade (82 percent), and the poor cross-functional support (86 percent). Software, she said, has become "bloated" with features, most of which are unused. Software-as-a-service solutions offer a viable alternative to traditional software solutions because, she said, they cost less, are more light-weight, have a fit-to-purpose framework, and have lean processes embodied in the applications. When it comes to lean software, get the most value from the application and "deploy what you need, and no more," Moore said. To that, she concluded, "build incrementally, fail fast, and keep moving."

Move "IT" to "BT": BT, or business technology, requires a change in governance, which means a change in business behavior. Whether it's the CIO, the business process officer, or line of business leader, technology people need to see themselves as part of the business. In other words, "stop measuring in IT terms," Moore said, "start measuring success in business terms."

In his mid-morning keynote, John Swainson, chief executive officer of technology software and solutions company CA, argued that the reason technology hasn't been lean is because it's been trying to keep up with the rapid pace of business. As a result, technology teams haven't had the chance to understand process discipline, and instead, try to solve the problems with more people and more hardware, exacerbating the technological "bloating." Lean technology has to center around "sense and respond," he said, and therefore should be:

  • be just-in-time, not just-in-case; and
  • should perform briskly and perfectly at the moment of truth.

If admitting is the first step, then it's good that 96 percent of technology executives are up front about the fact that their organizations suffer from waste, according to a research conducted by IDG Research Services for CA in June 2009. Waste was identified primarily as:

  • inefficient processes (48 percent);
  • duplication of effort (45 percent);
  • redundant applications (43 percent); and
  • underutilized assets (40 percent).

The afternoon session brought about a different perspective, however. John Rymer, vice president and principal analyst at Forrester Research, surveyed the room to find that 60 percent of attendees believed that packaged applications were lean, while 40 percent did not. To this he remarked that he had his work cut out for him. It didn't help that his colleague and co-presenter Chip Gliedman was among the group that thought packaged applications are lean.

Typically, Rymer explained, packaged apps have been anti-lean for multiple reasons:

  • They're locked down because the vendor controls the parameters of the application;
  • They're inflexible, and therefore expensive to upgrade and customize;
  • They're bloated with more functions than customers need, and constantly expanding with more; and
  • They're targeted to the general user, which takes away from the advantages of a tailored user interface.

The advantages of packaged applications lie in the fact that they take out the burden of having to build a custom application. While there are hopeful signs, Rymer said, citing the advent of trends like SaaS, Web 2.0 workspaces, and standardized platforms (e.g., Java, .Net), packaged apps are locking people into solutions-and in turn, costs-they don't need.

Gliedman, however, argued that because 80 percent of technology operations are largely uniform across all businesses, there's no reason not to go the packaged route-even if that means swallowing lean principles, he said. In fact, Gliedman suggested companies change their processes, instead of the code (i.e., change the company to fit the software). Why customize an application that fits a failing process, he questioned. Packaged apps may be "bulky" and "overbuilt," but they may also be "quicker" and demonstrate a higher level of success. Perhaps they could be leaner, but until they do, he said, "so what?" That's not to say vendors have all the power-they still have a promise to deliver on. "Tighten that promise," Gliedman said. "Make sure you're getting full measure of promise."

Rymer met him halfway, contending that, if anything, an optimal mix between custom development and packaged applications needs to be found, with consideration to lean thinking. Until vendors do become leaner, companies should still focus on changing their buying behaviors to making purchases that promote flexibility.

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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