Operational resilience has always been a key factor in business success, but not enough businesses consider their ability to take stress in turbulent times until it is too late. Covid-19 has been a huge wake-up call for many, presenting uncertainty and disruption.
In a talk delivered at Emerging Tech Fest, run by Technology Connected and supported by KTN, process and operations experts Gill Knowles and Steph Locke discuss how businesses can use lean processes and new technology to build business resilience.
Identifying wasteful processes
Gill Knowles, co-founder and director of Maisie Bolan Associates, focuses on what businesses need to do before introducing new technology in order not to encode wasteful processes into the new technology processes. She states that to build operational resilience, you need the ability to:
- React quickly to change
- Divert your processes
- Eliminate waste
These learnings are based on the lean manufacturing principals which originated from the Toyota Production System (TPS). The overruling idea is to streamline your processes by eliminating waste. Waste is anything that doesn’t add value to the customer, i.e. anything they are not willing to pay for. There are seven categories of waste defined by the lean principles:
- Defects - broken parts, incorrect data entry
- Transport - moving resources without adding value
- Inventory - excess inventory, which increases storage and depreciation costs
- Waiting - waiting for responses, for equipment to be fixed, etc
- Over-production - producing more parts or paperwork than the next stage is ready to process
- Motion - excess movement of people or machines, e.g. searching for materials or tools
- Over-processing - entering duplicate data, adding features users don’t need
To identify waste, it’s necessary to map out the flow of your existing processes. You can get really granular at this stage, for example, detailing who adds what to a spreadsheet. Next, you can begin to identify steps that fall into the waste categories described, and figure out what you can change to reduce that waste. It's a good idea to do this step before implementing new technology so as not to carry any wasteful processes forward.
Optimising processes with tech
This is where Steph Locke, CEO of Nightingale HQ, steps in. With a focus on helping manufacturers and other businesses become more digitally capable, Nightingale HQ can help you find the technology to improve the ways you do things. But a digital transformation journey is never complete.
You must adopt a mindset for reducing waste and becoming more resilient, and keep repeating this on your search for excellence. You can never stop this journey, as Covid-19 proved, you can never be 100% resilient across all dimensions. Even businesses that were thought of as resilient were hit in unexpected ways. The trick is to adapt well enough in an appropriate direction to become more resilient to that type of change in the future.
The Nightingale HQ approach to improving processes using technology is as follows:
- Identify waste & problems
- Map them out
- Discuss possible improvements
- Put them into action
- Monitor results
Solving problems with technology
Putting this into action is easier said than done, so let’s take a closer look at using tech to solve a problem. We'll work through this chart using the example of a rapidly growing logistics company who needed to find a new way to process business data in order to keep up with demand.
The first step is to consider your requirements for a solution and set a goal based on that, this might be the need to save time or money. Identify appropriate routes to meet these needs. The most important consideration is the internal skills in your business - an excellent technology solution is no good if no one can use it. Taking compliance into account early on helps build a robust solution that meets requirements such as data protection, rather than having to backtrack later.
Next, identify the tech to solve the problem. Create a prototype, which you try out on a sample before a full-scale deploy. Make any changes and adjustments to get it working well on a small scale, then you can scale it out. This process gives you lots of points where you can stop or adjust if it’s not working.
Here's what this process looked like for the logistics company:
- Demand: a faster way to process business data as the company grows
- Goal: free up time
- Idea: use online data instead of spreadsheets
- Internal skills: only one person could deliver this, so it made sense to outsource
- Compliance: GDPR, etc
- Technology: Azure, realtime data
- Prototype: Power BI sample testing against spreadsheets
- Iteration: adjustments made
- Scale: now rolling it out into more sections.
Our change model for AI
The most important rule for implementing AI is to always start with the business goals. There is no point in doing anything if it doesn’t add value. While it might be tempting to start with a wild goal, it makes business sense to consider your existing capabilities and come up with a high priority use case.
As you’re thinking about a first AI project that will solve a problem, you have to consider all of the items in the diagram in green boxes. You may find you have to build up resilience and capabilities in these areas in order to effectively deliver value with your project.
Strategy and governance are key to deploying AI. Define where you want to go, why you want to go there, and how you're going to do it. Consider how you will manage compliance, where you're getting data from, and how you can use data to get a view of your business. From a cultural point of view, you need staff that trust data and who are willing to try new tech.
It becomes clear that the process of adopting AI touches many other areas of business, requiring a carefully planned out implementation process. Once we've identified these areas, we build an action plan, test it out on a small sample, then use our learnings to inform iterations. This then gets repeated across other projects and initiatives.
The final stage is feedback and continual improvement which makes you resilient when things change externally. In the words of Winston Churchill: "To improve is to change, to be perfect is to change often."
Digital transformation for different sized businesses
Effective change rests on the ability to continually improve. Implementing technical changes can be difficult without a strong IT team, which many SMEs lack. But according to Small Business Britain, more than half of businesses have increased their digital skills and added new technology because of the pandemic, with 3 in 4 businesses reporting that increasing their tech had helped their business.
How businesses use tech to scale, improve, and change will certainly vary based on size and type of business. Here's our top advice on building IT resilience in different sized companies.
Small business IT resilience
- Buy or outsource most things (Office 365, CRM, etc)
- Allocate time to getting “digitally savvy”
- Focus on people support
At this level, it pays to get the most out of existing services and begin to build your technical understanding. Learn about the cloud, software as a service (SaaS), and how to work with data. There is existing software to address almost any problem you can think of, so there is no need to build your own IT infrastructure at this stage. It also pays to focus on your people and building their skills, as they are the most critical part of business success. Help your people work more productively on things that add value to your business.
Medium business IT resilience
- Build critical IP
- Use consultants as a centre of excellence
- Tighten your processes
Start thinking about parts of your business that are the most valuable, and how tech can help you improve that intellectual property (IP). Building in a new technical capability could be the step that takes you from being a medium sized organisation to the next level. Now that you have more financial resources, you can use an expert to act as an external centre of excellence to help drive digital adoption inside your business. Finally, you can focus on optimising your processes. As your business grows, you process get more complex, but you can usually refine these back down.
Enterprise IT resilience
- Run speculative projects
- Scale digital & data literacy
- Improve speed & quality
At this level, your main goal should be to be more cutting edge. You should be looking forward and aiming to disrupt yourself before getting externally disrupted. For example, businesses that were focusing on bolstering their supply chains were not hit as hard by the pandemic as they had anticipated a similar issue. Enterprise businesses should be advocating data literacy and data culture among employees which helps them be proactive. Finally, after waste reduction, you can work on the speed and smooth running of processes.
IT is made up of Developers and software engineers. A developer writes code, a software engineer writes code with a focus on quality and robustness. DevOps is a process which takes principals from manufacturing and combines them to get everyone thinking like a software engineer. This reduces the wasteful processes, improves the quality of work, and improves the speed at which value is delivered.
Just as these principals were borrowed from another industry, DevOps can be applied to how your organisation functions, too. Using a DevOps framework, you can apply the kanban system to tracking the daily tasks of your staff, highlight your work in progress, and identify constraints.
Build resilience through your staff
Resilience comes from giving people the time and agency to makes changes. You can enable your staff with digital literacy and investing in tools or training to help them be more productive.
- Online collaboration
- Meeting apps
- No-code apps
Online collaboration and meeting tools have proved vital throughout the pandemic and may change the way we work forever. They have allowed distributed teams to stay connected and allowed businesses to work through uncertain times.
No code apps can enhance productivity by allowing people to work with a simple data-entry app instead of having to update a master spreadsheet for tasks like taking inventory. Microsoft Power Apps is a key tool for setting this up.
These tools require a small investment and do not require any IT people, but can help your staff from day-to-day.
- Self-service insight tools
- Modern Excel
- SaaS tools
Being able to see the data inside your business and being able to understand them to make decisions about problems is critical. You can use self-service tools like Power BI to get a deeper insight into critical measures. Even Excel is very powerful these days and comes with multiple integrations such as CRMs, Mail Chimp, and many others.
SaaS tools such as Google Analytics can also give you excellent insights. It's worth putting in the effort to understand such tools and get the most out of them. This can help you to understand how people are experiencing your website, where people are dropping off, etc.
- SaaS tools
- No-code automation
- Marketing automation
An excellent SaaS for small business is Charlie HR. We use this tool to manage our HR processes. It generates automated emails for holiday approval, helps with employee onboarding processes and other HR bits. You can even check reports to see if staff have taken enough holiday.
You can equip staff with the power of automation without them needing to know any code. While it helps to be digitally savvy, you can use platforms like Zapier, Power Automate and IFTTT to write programs and connect apps without needing to code.
Finally, marketing is a prime sector for automation, and by relying on automation to look after the vital bit of your SME, you can get much more done. You can capture Twitter mentions, respond to queries on Facebook, or repurpose content into quick videos with tools like Lumen5. Marketing is a vital part of getting your business noticed, and these tools can help you improve without big time investments or IT spend.
Operation optimisation tools
Through our Innovate UK funded GoSmarter project, we discovered that many SMEs find it difficult to get on the cloud. We built a set of tools that SMEs can set up with just a few clicks, including FAQ Chatbots and Social Media Listening. Designed to be low cost and high impact, the tools are a sleek way to get started with automation and process optimisation. Get full access to the toolkit as we release more tools:
If you're interested in getting more serious, diving into azure, and optimising your operations with tech, please get in touch.