April 21, 2020

What are the benefits of a Lean Business Model?

What are the benefits of a Lean Business Model?

The key to a lean business model is successfully implementing the right IT solutions and software in all operational processes to streamline business workflows. Not only does this improve the operational efficiency of a business, it also provides a solid base for one to scale any enterprise. This article explains how a lean business model aids in the constant improvements of business operations and IT infrastructure, making business more efficient.

How Does a Lean Business Model Streamline IT functions?

According to Bloomberg, 8 out of 10 entrepreneurs who start businesses fail within the first 18 months. One of the reasons for this was that there was no clear adoption of a lean model in most cases. A lean business model alters or eliminates ineffective practices, recognising and removing unproductive strategies and products therefore improving the business productivity. In terms of IT operational improvement strategies and streamlining business IT functions, a lean business model is centred around the reduction of IT costs, increasing data privacy and security and achieving operational efficiency by removing repetitive tasks and processes. Running a lean business model by streamlining business IT functions significantly benefits both the business and their customers while improving operational efficiency and producing higher quality outputs.
Many businesses are implementing and running a lean business model through their in-house IT team and data warehouse. At the same time, many others take the assistance of outsourced IT Managed Services Providers to streamline the implementation and management of entire business IT infrastructure, security, and networks. End User support is also streamlined through third party IT Managed Service Providers to ensure a consistent and compliant IT policy. This is a huge benefit when mitigating potential business risks due to unforeseen circumstances including natural disasters, staff attrition, and litigation.

Implementing a Lean Business Model

A significant obstacle of the lean business model that numerous businesses must overcome is ensuring that their new model and processes will not adversely impact their clients. Changing teams, products, and services may likely be a profitable move but could affect a significant percentage of customers in the immediate or distant future which may result in serious long-term damage to your company.
The first step for a business looking to execute a lean business model is to find and understand all operational processes and how each one addresses customer needs. Provided this has been completed, the end-to-end processes involved in delivering products and services to customers must then be highlighted and evaluated. Can any part of the process be updated or removed entirely without interrupting the delivery? If the answer is yes, these aspects must be the priority of those responsible for implementing operational change within your organisation.
Technology is usually at the core of a lean business model since it facilitates complicated processes and automates more tedious, manual ones. It also gauges what works and accepts new, more efficient applications as they become available.
However, many IT experts have pointed out that IT software alone is not enough to trigger a lean approach. A digital transformation is required throughout the corporate IT function of an organization. The key to a lean business model, therefore, involves utilising the best combination of software and human skillsets to improve business operations, as well as implementing a scalable IT infrastructure.

Final Thoughts

Overall, the implementation of a lean business model should force an organisation to assess the existing processes and costs in order to create a new working model that is both more efficient and allows the business to increase profitability. Many businesses are looking at reducing IT department overheads by adopting a hybrid in-house / outsourced IT services approach and some go as far as completely outsourcing their corporate IT function to a third-party IT Managed Service Provider.