‘Lean’ is a concept that has been followed in manufacturing for many years, with its roots as far back as Ford Motors in 1913, but most of its development coming from the Toyota Motor Company in the post-war years.
The core idea of Lean is to maximise customer value while minimising waste – a concept that has just as much relevance for IT and service companies as for manufacturers. Hence the increasing appeal of Lean outside of manufacturing – and the growing interest among MSPs.
Lean thrives in process-driven environments. Since the MSP world relies heavily on processes, Lean is highly relevant.
But is ‘Lean’ just another way for business consultants to get a foot in your door? Will it make your life more difficult before it gets better? And how do you go about becoming a lean MSP?
We try to provide some answers in a two-part ‘Look at Lean’, starting with a definition and a summary of the basic principles.
What does Lean mean?
The basic elements of a Lean approach are:
- Waste identification
- Waste reduction
- A policy of continuous improvement (also known as Kaizen)
Kaizen is an essential element of Lean, in that the goal is not to reduce waste on a one-off basis, but to follow an iterative process that drives ongoing improvements.
Why is Lean relevant to MSPs?
Waste is not the prerogative of the manufacturing industry. How long would it take to find instances of wasted time, skills and effort in your own managed services business? Waste adds cost and time and provides no value to the end user.
Accepting wasteful practices can damage your service delivery levels, frustrate your staff and hit your margins. First, however, you need to recognise them as such.
The 8 Wastes of Lean
Lean philosophy identifies 8 wastes. IT Glue has contextualised these for MSPs and I draw on their excellent ebook here to highlight the way these wastes could apply to your own managed services business.
A defect in a manufactured product equates to an error in MSP service or project delivery. It leads to unhappy customers, unhappy staff (as they have to correct the error or redo the work) and an increase in the cost of service delivery that can reduce your margins.
For MSPs this would equate to over-staffing to cover peaks in activity or a sudden rush of service requests. Getting ‘production’ or staffing levels right is not easy to achieve: too few staff on any shift can mean service delivery suffers; too many can cut into margins and leave technicians thumb-twiddling. (Partnering for the delivery of certain services is one way to address this waste – see our recent blog for more details).
‘Over-delivering’ to customers, when helpful conversations morph into free consultancy, can also be considered ‘over-production’ as you are basically providing additional service for the same revenue.
‘Waiting’ waste is easy to spot in manufacturing: the production line grinds to a halt because a part is not available, a machine has broken down or there is a bottleneck ahead.
Any of these sound familiar?
‘Waiting’ waste for MSPs can be viewed as down-time for your customers, measured by the length of time between a customer reporting a problem and the ticket being resolved. This time may or may not be within the customer’s SLA.
For example, bottlenecks may be caused when the skills needed to resolve an issue or complete a task lie only with one or a small number of technicians – who may be on holiday, off sick, working on something else or just overburdened.
‘Waiting waste’ can also result from technicians having to search in multiple places for the information they need to deliver a service to customers.
And it could be caused by a delay in your team starting work on a customer problem. If an issue occurs overnight, for example, and you don’t have anyone on-shift, the issue will not even be looked at until the next morning, when it could already be disrupting your customer’s working day.
4: Non-utilised talent
Using the wrong skill level for the job is wasting the talent available to you. If your skilled engineers are working on low-value, repetitive tasks that are below their pay grade, this is wasted potential: they could be focussing on more complex/in-demand customer projects that are of higher value to the business.
(The other side of the coin, however, is that if you deploy technicians on tasks for which they have not been adequately trained, you risk mistakes or ‘defects waste’ identified above).
The transport of goods around a factory for a manufacturer can be equated to the movement of information around the business and with customers, for an MSP. A smooth, uninterrupted information flow is essential to avoid ‘transport waste’.
For example, if your technicians have to view RMM data in one platform, PSA data in another and passwords in a third to pull together the information they need to help a customer, they are wasting time and effort. The ability to access all the information needed from a central point can go a long way to reducing waste here.
Perhaps more difficult to apply this notion of waste to MSPs, IT Glue relates it to the technology stack, suggesting that there are waste reduction opportunities to be had by streamlining or simplifying your stack. For example, by reducing the number of different products you use, you can reduce the training requirements of your technicians.
Not physical motion in the case of MSPs, but rather the potentially wasteful number of steps needed to carry out certain tasks – or forced adherence to steps in a process that no longer add value. This waste can be reduced by identifying and rectifying any stages in your processes that don’t need to be there.
For MSPs, this could read over-complicating routine processes – or having multiple versions of processes, both of which are wasteful of time and effort.
Time to get Lean?
A commitment to Lean means committing to identifying and reducing wasteful practices in your business. This will clear the way for efficiency gains, which could improve customer service delivery – and produce higher margins.
Look out for my next blog: Embracing Lean – and how partnering can help you deliver some quick wins
Contact us if you would like to find out how partnering with Inbay for NOC and Service Desk can help you to cut out wasteful practices in your own managed services business.