# Lean training as a driver for microbusinesses’ digital transformation

Prabhjot Singh, Anuragini Shirish, Anaya Kumar, John O’shanahan

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Prabhjot Singh, Anuragini Shirish, Anaya Kumar, John O’shanahan. Lean training as a driver for microbusinesses’ digital transformation. ELEC 2022: 8th European Lean Educators Conference. "Lean, Green & Sustainability", IFIP International Federation for Information Processing, Nov 2022, Galway, Ireland. pp.122-142, 10.1007/978-3-031-25741-4_12. hal-03793754

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# Lean training as a driver for microbusinesses' digital transformation

Prabhjot Singh *

Anuragini Shirish **

Anaya Kumar **

John O'Shanahan ***

* Institut Mines Télécom Business School

** Université Paris-Saclay, Univ Evry, IMT-BS, LITEM, 91025, Evry-Courcouronnes, France.

*** LEAN BPI, Ireland

**Abstract:** Lean management helps to increase the efficiency of microbusinesses by focusing on reducing costs, eliminating waste, and enhancing processes by focusing on customer needs. Practitioners believe that these Lean principles support digital transformation which has become increasingly important for small businesses due to high competition and the need to sustain their business. However, this assumption has not been empirically explored, little recent literature on Lean claims that it can influence digital transformation strategy. In this study, we conducted a focus group to uncover how Lean management programs impacted Microbusinesses' digital transformations. The results from the study reveal that Lean management is closely related to digital transformation efforts, and it enables microbusinesses to add capacity, reduce costs, optimize risks, innovate, and in some cases transform their organization.

**Key words:** Lean principles, Lean management, Digital transformation, Microbusiness, Lean Training, Digital Strategy

## 1. Introduction

Lean management has played a key role in increasing the efficiency of numerous businesses by reducing costs, eliminating waste, and focusing on customer needs to drive process improvement. It helps decision-making by providing a data-based approach, highlighting the tracking of root cause. Lean is often considered as the best way to identify hidden problems and improvement opportunities [1]. Lean is said to facilitate digital transformation (DT) which has become essential nowadays for microbusinesses (MBs). Many companies have implemented lean and experienced the benefit of lean principles in their business. This is also true for microbusinesses, the backbone of our economies, as Lean helps them in identifying issues and areas for improvement. Through Lean management microbusinesses can improve productivity, sales, on-time delivery, product and service quality and facilitate business growth leading to increased employment.

Despite the large and diverse body of literature on Lean management, it has not addressed the impact of Lean on the implementation of a digital transformation strategy [2]. We focus on this gap and ask the following research question.

*RQ: To what extent do Lean principles contribute to digital transformation of micro businesses.*

In order to answer the above research question, we undertook a focus group with a group of MB owner managers (MBOMs) from Ireland, who have previously used Lean management and are also undertaking DT efforts. We use ADROIT, a framework used to assess the value of digital innovations [3] as a theoretical lens for this study. ADROIT stands for: adding revenue or volume; differentiating or increasing willingness-to-pay; reducing costs; optimizing risks;
innovating by generating and deploying knowledge and other capabilities; and transforming business models, priorities, and processes through a digital project. This study offers theoretical implications to digital transformation literature, as well as practical implications for MBs to apply Lean management principles in their digital transformation efforts.

## 2. Background Literature

### 2.1 Lean

The concept of Lean management is very popular among companies who are constantly looking for solutions to meet the challenges of competition, changing customer demands, and operational optimization. In fact, Lean methodologies are increasingly being applied [4]. The term "Lean" was coined by American businessman John Krafcik in his article "Triumph of the Lean Production System" in 1988, after observing Toyota's manufacturing system [5]. The term was further defined in 1996 by researchers James Womack and Daniel Jones, as a methodology relying on five main principles: "Specify value for each particular product, identify the value flow of each product, flow value uninterrupted, draw value from producers to customers and striving for perfection" [6]. Although Lean management has its roots in the Toyota production system, which was developed in Japan about 70 years ago, today this concept is widely adopted in various sectors worldwide [7].

Lean practices refer to a set of methods, processes, techniques, and tools aimed at continuously creating customer value and reducing product lead times [8]. Implementing Lean practices can improve operational performance for manufacturers [5, 9]. Lean manufacturing has emerged as an important operational management paradigm for organizations to achieve goals of improving quality, flexibility, and delivery while focusing on cost savings [5, 10]. Lean has been defined in numerous ways to highlight its various aspects. Table 1 lists key aspects of Lean definitions identified by authors.

<table><caption>Table 1: List of Lean definitions</caption><thead><tr><td>Source</td><td>Lean Definition</td></tr></thead><tbody><tr><td>Christian Hohmann (2012)[1]</td><td>Lean is a system aiming to generate maximum added value at the lowest cost and as quickly as possible. It allows the use of the right resources</td></tr><tr><td>Worley & Doolen (2006)[11]</td><td>Lean is the systematic removal of waste by all members of the organization from all areas of the value stream.</td></tr><tr><td>Karim & Arif-Uz-Zaman (2013)[12]</td><td>Lean process is an integrated socio-technical system whose main objective is to eliminate waste by concurrently reducing or minimizing supplier, customer and internal variability. Lean philosophy seeks to reduce waste anywhere in the company, optimize core resources and establish corporate culture dedicated to identifying and continuously fostering customer satisfaction.</td></tr><tr><td>Al-Balushi, Sohal, Singh, Al Hajri, Al Farsi, & Al Abri (2014) [13]</td><td>Lean is a process reengineering philosophy composed of strategic guiding principles and a set of tools at the operational level. Lean is a system which requires less time, less human effort, less cost, less space, with fewer injuries, and less mistakes, to create an organization that accomplishes more and does these better.</td></tr></tbody></table>

To understand the Lean philosophy, it is essential to know the meanings of "effectiveness" and
"efficiency". Effectiveness is the achievement of objectives, and efficiency is the time and resources dedicated to the achievement of objectives [1]. Lean's ultimate goal is to identify and eliminate all parts of the non-value-adding process. In this way, Lean manufacturing allows companies to respond more quickly to changing customer demands, leading to faster production and lower costs.

Figure 1 portrays the seven types of waste that Lean processes commonly aim to eliminate.

<figure><img src="image_3.png" /></figure>

Source: Deloitte analysis.

Deloitte Insights | deloitte.com/insights

<caption>**Figure 1: The seven kinds of waste [14]**</caption>

Lean promotes effectiveness and efficiency by doing things faster, better, and saving costs. It strives to eliminate waste and continuously improve the process [15]. To do this, everyone in the organization must always put the customer first and maximize customer value by reducing unnecessary waste constantly. Lean is a way of thinking and action that allows people to move their organization forward, improve performance and capacity and drive innovation. Lean helps ensure flexibility, responsiveness, efficiency, and innovation, enabling businesses to compete and gain an edge by continuously listening to their customers.

Researchers Womack and Jones [16] proposed a 5 step thought process to guide managers through a Lean transformation. These are as follows: identify value, map the value chain, create a seamless workflow, create a pull system and continuous improvement

Many companies have utilized Lean training courses to grow sustainably and efficiently. In Ireland, for example, the *Lean for Micro program* was launched in 2015 by the Local Enterprise Offices to provide Lean training to micro enterprises. These Lean training programs train individuals to drive continuous improvement, harness time, effort and resources, bring significant benefits to their organization, increase productivity and competitiveness, and create the highest value for customers. In the current situation, it is undeniable that companies need to be more competitive by improving their productivity and efficiency. Lean practices are recognized as a key factor in improving efficiency and embracing MB innovation and technological change. Lean for Micro is designed to encourage MBs to adopt Lean business principles, build resilience, and be better at responding to market challenges and opportunities. Thus, Lean management is an approach to business management that supports ideas for
continuous improvement. In fact, it's an ongoing effort to improve processes, products, and services. The Lean approach needs to constantly evolve over time to increase the overall efficiency of the organization. Some business advisors and lean consultants/mentors promote the use of digital technologies for such continuous improvement efforts through the use of Lean management. Consequently, Lean management is integrated with DT efforts of many MBs especially in the Irish context [17, 18].

## 2.2 Lean and Digital Transformation

In recent years, companies have been increasingly exploring new digital technologies and using their capabilities to create new value for their users [19, 20], that led information systems (IS) research to consider digital transformation as an important phenomenon. Slack et al. [21] describe digital transformation as a phenomenon that “encompasses the profound changes taking place in society and industries through the use of digital technologies”. In response, organizations are forced to react to digital transformations and realign their strategies in order to take advantage of them [22] which affect people and processes both inside at the organizational levels and outside at the societal levels [23]. An overview of definitions from existing literature is depicted in Table 2.

<table><caption>Table 2: Digital transformation definitions</caption><thead><tr><td>Source</td><td>Definition</td></tr></thead><tbody><tr><td>European Commission (2019)[24]</td><td>Digital transformation is characterized by a fusion of advanced technologies and the integration of physical and digital systems, the predominance of innovative business models and new processes, and the use of certain smart products and services.</td></tr><tr><td>OECD (2018)[25]</td><td>Digital transformation refers to the economic and societal effects of digitization and digitalization. Digitization is the conversion of analog data and processes into a machine-readable format. Digitalization is the use of digital technologies and data as well as their interconnection which results in new or changes to existing activities.</td></tr><tr><td>Gruman (2016)[26]</td><td>The application of digital technologies to fundamentally impact all aspects of business</td></tr><tr><td>Schwertner (2017)[27]</td><td>The application of technology to build new business models, processes, software, and systems that results in more profitable revenue, greater competitive advantage, and higher efficiency.</td></tr><tr><td>Fitzgerald et al. (2013)[28]</td><td>The use of new digital technologies (social media, mobile, analytics or embedded devices) to enable major business improvements (such as enhancing customer experience, streamlining operations or creating new business models).</td></tr></tbody></table>

The digital transformation of a company requires a fundamental organizational change [21], and reminds us that technology itself is “only part of the complex puzzle that must be solved for organizations to remain competitive in a digital world.” Similar results were reported by Kane et al. [1, 29] when discussing "technology fallacy" that revolve around the misunderstanding that solutions are likely to come from digital technology, as business challenges are driven by evolving digital innovation. Kane et al. [1, 29] also suggest that we need to shift our focus from technology to people when investigating digital transformations. They explain that people are inhibitors of digital transformation and place more importance on changing the culture to be more agile, risk tolerant, and experimental. Therefore, understanding processes around implementing, embedding, integrating, and evaluating digital technologies which transform business operations and business models are critical to sustaining a digital transformation process.

Integrating Lean into strategic thinking allows to fully leverage the potential of digital technologies to ensure that the digital transformations are actually helping add value and eliminate waste. Disconnected technology initiatives that lack a clear purpose will not get very
far. Therefore, as stated in one of the core principles of Lean thinking, it is important to define
the value intended to deliver to customers [9]. Both digital transformations and Lean principles
are oriented towards creating value for customers, so we posit that these two concepts are
interrelated [29]. Hence, we posit that digital transformation builds on and reinforces several
pillars of the Lean philosophy: customer value, waste elimination, flexibility, agility, etc. The
success of digital transformation may depend on the five dimensions that form the Lean
transformation framework: purpose, process, people capabilities, management and leadership
style, and mental models [1]. Thus, we believe that Lean management is a way to maximize
customer value, and if it goes hand in hand with digital transformation, it can be effective for
MBs.

## 2.3 Microbusiness and Digital Transformation

Microbusinesses are included in the SME sector; they represent the smallest businesses that exist. They operate on a small scale with less than 10 staff. Small and medium sized organizations represent more than 90% of all businesses, about 60-70% of employees, and 55% of GDP worldwide [30]. Microbusinesses face many challenges because of their size and owner led management. They often cannot scale their businesses [31]. Previously conducted research has shown that microbusinesses “work differently from large companies”. Unlike large companies with complex applications and systems, microbusinesses may not necessarily use technology, or they may primarily use basic information and communications technology [32].

Every company needs to continuously evolve and look for ways to improve. This is especially relevant for microbusinesses' looking to enhance competitiveness and sustain their business. Lean thinking and practice are paramount to ensuring that microbusinesses are using all available resources to maximize results. This benefits the entire organization, from owners to employees as well as customers. According to prior literature, MBs are motivated by several external factors to participate in digital transformation efforts. These include the pandemic, income loss, and technological advancements [33]. However, the literature on microbusinesses does not focus on their digital transformation process and how lean might influence DT projects. In spite of this, policy makers support digital tools as having a lot of benefits for small and medium-sized businesses. Digitization reduces transaction costs and provides better access to information and communication. It can help microbusiness integration into global markets by reducing costs [25].

# 3. Theory and Method

## 3.1 The ADROIT framework

For the purposes of understanding the impact of Lean management and Lean training on digital transformation strategy we employ the ADROIT framework on digital transformation [27, 34]. In his book Digital Intelligence, eminent scholar, Sunil Mithas explains that Digital Transformations enabled by information technology (IT) helps in creating sustainable competitive advantage by increasing the willingness to pay [34]. He explains the role of digital technologies for improving the competitive advantage through the framework called ADROIT This framework helps to analyze the value created by IT through six components: adding revenues or volume, differentiating or increasing willingness-to-pay, reducing costs, optimizing risks, improving industry attractiveness or innovating by generating and deploying knowledge and other resources and capabilities, and transforming business models and business processes. ADROIT delineates the role of IT in creating competitive advantage through five key drivers of sustainable economic value: volume, margins (through differentiating, reducing costs or improving industry attractiveness), optimizing uncertainty or risks in a competitive environment, improving resources and capabilities of an organization, and continuous transformation to shape and respond to a changing competitive landscape [34]. We use the ADROIT framework as a way to understand how Lean principles contribute to DT efforts.

## 3.2 Method
This research aims to understand the added value of Lean training for MBs engaging in a digital transformation journey. For this study, we focus on the Irish context. Irish MBs play an important role in the Irish economy in terms of stimulating innovation, employment, and growth. In Ireland, microbusinesses, with 1-9 employees, comprise over 90 per cent of all businesses, but they are lagging behind in terms of digitalization- which puts their survival at risk [35]. Moreover, the Irish government undertook numerous policy level initiatives several years ago to promote Lean management amongst SMEs through their training programs. In fact, Ireland is at the forefront in equipping its businesses with Lean training, which aims to create a world leading Lean eco-system that brings significant impacts to businesses [36].

Since our research question is exploratory in nature, we use a qualitative approach using the focus group method to study the phenomenon of interest. We organized a focus group with 8 MB owner-managers (MBOMs) from the Irish MB ecosystem. Focus groups are usually conducted with ample size of 6 to 8 participants [37]) We conducted the session with two facilitators. The session lasted for 2 hours and took place in the autumn of 2021. We recorded the session with permission ensuring anonymity of participation and transcribed it for further analysis. The participation in the focus group was voluntary. Our cohort of sample for focus group participants was gathered through consulting with a mentor associated with several Local Enterprise Offices in Ireland that run the Lean business improvement program. Mentors are professionals with several years of business experience who typically deliver business improvement programs to microbusinesses including Lean management training programs among other programs. In the mentoring process with MBs, a minority of mentors use and promote digital tools. All the focus group participants implemented Lean management in their businesses thanks to the ‘Lean for Micro’ training provided by LEOs. Since our sample group had experience with Lean methods, their responses and discussions are relevant to understanding how Lean management influences DT initiatives and training. The focus groups were guided by questions on the motivators and enablers for digital transformation as well as the challenges they have experienced. Table 3 shows the MBOMs demographics.

<table><caption>Table 3: Microbusiness participants’ demographics</caption><thead><tr><td>Participant Code</td><td>Age Range</td><td>Gender</td><td>Role</td><td>Sector</td><td>No. of employees</td><td>Lean training/implementation</td><td>Digital Technology already Implemented (Website, social media, mobile, data analytics, cloud, cloud for accounting)</td></tr></thead><tbody><tr><td>P1</td><td>40-50</td><td>Female</td><td>Owner</td><td>Tertiary</td><td>5</td><td>Yes</td><td>Social media</td></tr><tr><td>P2</td><td>30-40</td><td>Female</td><td>Owner</td><td>Tertiary</td><td>4</td><td>Yes</td><td>Website presence, social media, mobile, data analytics cloud (excluding accounting, cloud)</td></tr><tr><td>P3</td><td>40-50</td><td>Male</td><td>Director</td><td>Secondary</td><td>5</td><td>Yes</td><td>Website presence, social media, cloud (excluding accounting) and cloud for accounting</td></tr></tbody></table>
<table><tr><td>P4</td><td>50-60</td><td>Male</td><td>Direct or</td><td>Secondary</td><td>4</td><td>Yes</td><td>Website presence, social media, mobile, cloud (excluding accounting) cloud for accounting.</td></tr><tr><td>P5</td><td>50-60</td><td>Male</td><td>Owner</td><td>Tertiary</td><td>4</td><td>Yes</td><td>Website presence, social media, mobile, cloud (excluding accounting), cloud</td></tr><tr><td>P6</td><td>40-50</td><td>Male</td><td>Owner</td><td>Tertiary</td><td>1</td><td>Yes</td><td>Website presence, social media, mobile, cloud (excluding accounting), cloud for accounting.</td></tr><tr><td>P7</td><td>50-60</td><td>Female</td><td>Manager</td><td>Tertiary</td><td>10</td><td>Yes</td><td>Website presence, social media, mobile, data analytics, cloud (excluding accounting), cloud for accounting.</td></tr><tr><td>P8</td><td>40-50</td><td>Male</td><td>Owner</td><td>Secondary</td><td>9</td><td>Yes</td><td>Website presence, mobile, cloud (excluding accounting), cloud for accounting.</td></tr></table>

This research is based on a thematic analysis of the data collected via the focus group. We used manual coding [38]. For the purposes of understanding the impact of Lean management and Lean training on digital transformation strategy we employ the ADROIT framework on digital transformation. Our results are presented in the section below.

# 4. Results

## 4.1 Lean trainings helped micro-businesses to start their digital transformation

From our data, we understand that Lean management is strongly linked to the digital strategy of microbusinesses, one can notice that the implementation of Lean methods helped them to start their journey of digital transformation. Thanks to Lean training the owners/managers implemented various digital tools to help them in their business processes. In addition, they raised awareness of the importance of staying competitive. As a result, they recognize that in order to remain competitive, they too should embrace digital transformation and make changes if they don't want to lose their clients to new or existing competitors As a result of Lean training, they will be able to fully realize the benefits of deploying a digital strategy for their business, giving them the advantage to differentiate from their competitors. From the focus group, most managers/owners were very satisfied with the results from the Lean training that was initially subsidized by the government and therefore felt encouraged to continue the digital journey using their own resources and funding. The table below explains how micro-business owners/managers relate Lean and digital transformation. We have specifically outlined the influence of Lean management on the motivation to carry on the DT journey.

<table><caption>Table 4: Digital transformation motivators</caption><thead><tr><td>Participant</td><td>Motivator</td><td>Illustrative Quotes</td></tr></thead></table>
<table><tr><td>P8</td><td>Stay competitive and ensure the sustainability of their business</td><td>“Due to digital transformation, anyone can do what we do... I'm very aware of that... But the way that our systems are, the digital transformation that we've gone through with the Lean program in the last two years have helped us to stay connected and reach new businesses.”</td></tr><tr><td>P8</td><td>Differentiate from competitors</td><td>“With Lean I'm not out trying to grow my business tomorrow morning. But to be the best. Yes. And I can definitely differentiate that very, very clearly in my own head. What separates us from our competition is the digital transformation we've gone on to do, and the motivation for that was to be the best.”</td></tr><tr><td>P2</td><td>Open to change</td><td>“You need to be open to embrace new changes in the digital era to Continue”.</td></tr><tr><td>P7</td><td>Encourage to get more digital knowledge</td><td>“When you get help from the government, like Lean programs it's great, they help you start the digital journey [...] Now, we are funding it ourselves, like, we pay for all our own digital learning”</td></tr></table>

Table 4 portrays that Lean management training enables micro-businesses to build competitive advantages. The results of this analysis are presented using the ADROIT framework mentioned above in order to demonstrate that the implementation of Lean Management methods fits well within our chosen theoretical framework. Lean played a major role for MBs helping them to generate more revenues and add volume. It allowed them to increase willingness-to-pay of their products or services provided, reduce costs and optimize risks. Furthermore, Lean helped them improve industry attractiveness and innovate by generating knowledge and capabilities.

## 4.2 Lean management helps to add volume, revenues, new products, customers when fused with digital technologies

As a result of Lean training, micro-businesses were able to increase their output by streamlining and improving their processes. Prior to starting digital transformation efforts, microbusinesses needed to identify what process could be changed, in order to add value and identify what activities are not adding value. Furthermore, implementing Lean methodology allowed participants to grow their customer base by exploring new tools that helped them to increase their client reach, for example ‘going online’ proved very beneficial to increasing the number of orders. This enabled them to target a larger number of clients, across a broader geographical area, rather than being restricted to local customers. Moreover, they implemented digital communication applications during the Lean training, this was very useful in facilitating efficient communication between teams as well as with clients, again, increasing sales and in turn revenue. Below is a table that shows how MBOMs who attended Lean trainings or implemented Lean methods were successful in adding volume, new products, customers, or channels as part of the firm’s DT efforts.
<table><caption>Table 5: Lean benefits</caption><thead><tr><td>Participant</td><td>Lean principle applied</td><td>Quotation</td></tr></thead><tbody><tr><td>P8</td><td><ul><li>Create a seamless workflow</li><li>Create a pull system</li><li>Identify value</li></ul></td><td>“In Rowan most of the people are enthusiastic about any sort of digital transformation that helps in improving what they do and that will increase output, like Lean. And I think sometimes the issue can be identifying exactly what we want to do and then identifying the right solution and implementing it”</td></tr><tr><td>P8</td><td><ul><li>Create a seamless workflow</li></ul></td><td>“The digital transformation that we've gone through in the last two years have helped us to stay out of reach and gain clients”</td></tr><tr><td>P1</td><td><ul><li>Create a pull system</li><li>Create a seamless workflow</li></ul></td><td>“I really have to look at getting online. I need to look into that, maybe just with different orders coming in from different areas, being able to kind of catch all of them”</td></tr><tr><td>P6</td><td><ul><li>Create a seamless workflow</li></ul></td><td>“It's definitely cost saving, [increases] efficiency and revenue, and the network generates business.”</td></tr><tr><td>P4</td><td><ul><li>Create a pull system</li><li>Continuous improvement</li></ul></td><td>“MMM (mentor) got us to embrace Evernote and came up with a very simple app for communication so that we had one point for messages to come from the office or from us and feed back to the office. And hopefully stuff didn't get lost and we didn't lose sales, and what we are working on at the moment is, we'd have three and a half thousand bits of equipment that would come back to us once a year for calibration, and it's managing that flow process and knowing where each piece of equipment is within that journey, is it on the way to the lab, is it in the lab, has it gone somewhere else for repair, back to the manufacturer.”</td></tr><tr><td>P2</td><td><ul><li>Create a pull system</li></ul></td><td>“Revenue generation is a kind of result or outcome of our digital processes”</td></tr></tbody></table>

From table 5 we can see that the most adopted Lean principles are: create a pull system and create a seamless workflow. Therefore, in order to increase volume, add customers and generate revenues companies need to ensure that the workflows remain smooth, and that they have cross-functional teamwork. The more stable the workflow, the faster and more efficiently the worker can process

### 4.3 Lean management along with DT efforts enables MBs increase customer's willingness to pay and to differentiate.

Each of the sample companies had the opportunity to initiate a strategic digital initiative based on the Lean methodology, which allowed them to develop digital tools and streamline their processes, prompting them to get ahead of their competitors, or stay out of reach of new entrants. Furthermore, Lean enables microbusinesses to increase their willingness to pay, as they become more efficient in their processes. With Lean training, owners/managers can manage their activities better and operate quicker, that way they provide a better experience to their customers and in turn increase the willingness to pay. Additionally, it helps them expand their network and portfolio of clients.

Table 6 below shows verbatim responses from MBOMs regarding their experiences with Lean training and how it enabled them to differentiate and increase willingness to pay
<table><caption>Table 6: Willingness to pay & Differentiation</caption><thead><tr><td>Participant</td><td>Lean principle applied</td><td>Quotation</td></tr></thead><tbody><tr><td>P8</td><td>Continuous improvement</td><td>“Yes. Literally like, our goal is not to be like the richest company or anything like that. It's actually to be the best. And I can definitely differentiate that very clearly in my own head. What separates us from our competition is the digital transformation we've gone on to do, and the motivation for that was to be the best”.</td></tr><tr><td>P4</td><td>Create a seamless workflow<br>Create a pull system</td><td>“We were struggling and like some of the others, it was because emails were not being attended to, getting lost, messages between field staff and the office not being attended to, sales being lost. And that was our first step along, so MMM (a mentor) got us to embrace Evernote and came up with a very simple app for communication so that we had one point for messages to come from the office or from us and feed back to the office. Hopefully stuff didn't get lost, and we didn't lose sales.”</td></tr><tr><td>P6</td><td>Create a seamless workflow</td><td>“It's definitely a cost saving, [increases] efficiency and revenue, the network generates business.”</td></tr><tr><td>P2</td><td>Identify value<br>Continuous improvement</td><td>“The first objective was to make our business more efficient. The second thing is that so we can actually manage our business better. So that is financial planning, financial reporting. And staff management is just basically, I suppose, watching the figures. And the third thing is, this is really important for us, delivering the best customer experience that we can, we're in a really competitive industry. And we know from client feedback that they would value some of the digital processes that they would see on their end. We would use a lot of digital processes and we're always on the lookout to make our current processes more efficient and better, but also looking out for more opportunities to. Like It's quite addictive.”</td></tr></tbody></table>

In Table 6, there is no emphasis on any particular Lean principle as different principles have been used by the participants in order to differentiate from the competition and increase clients' willingness to pay.

## 4.4 Lean Management along with DT efforts allows MBs to reduce costs

Following the Lean trainings and mentorships, MBs were able to lower their costs- the result of streamlining processes in order to accomplish more in a shorter amount of time. Another way of reducing expenses with Lean is to use digital tools instead of traditional methods, for example, introducing online orders, incorporating a virtual planning system such as Calendly that allows them to book customers and virtually interact with them using a Zoom call, thus saving travel costs. The Table 7 below synthesizes the findings and provides illustrative codes:
<table><caption>Table 7: Cost reduction</caption><thead><tr><td>Participant</td><td>Lean principle applied</td><td>Quotation</td></tr></thead><tbody><tr><td>P7</td><td>• Mapping the value chain</td><td>“I suppose the first thing was we used it to streamline our processes, and that had the result of reducing costs because we tried to become more efficient at extracting data and then analyzing that data.”</td></tr><tr><td>P6</td><td>• Mapping the value chain<br>• Create a seamless workflow</td><td>“We have implemented Calendly for booking customers in for meetings and doing a Zoom call meeting, which has been hugely efficient on the cost and the time of traveling to customers. It's definitely cost saving, [increases] efficiency and a revenue, the network generates business.”</td></tr><tr><td>P2</td><td>• Continuous improvement</td><td>“Cost reduction is a kind of result or outcome of our digital processes”</td></tr></tbody></table>

Analyzing the Lean principles used in this table, we can say that there are indeed 2 principles that are mainly applied by MB for cost reduction, these are *identify value* and *continuous improvement*. Identifying value is a key step in microbusinesses' activities- by determining the value of every individual process they can differentiate between value-added and wasteful activities. The principle of continuous improvement helps MBs to lower their costs because its goal is to continuously improve each of the processes by focusing on strengthening the activities that generate the most value for customers while eliminating as much waste as possible and reducing waste leads to cost reduction. As Lean combined with digital technologies promotes efficiency, microbusinesses save money by not wasting effort on activities that do not add value to their business and are able to remain competitive.

### 4.5 Lean Management along with DT efforts helps to optimize risk, reduce competitive risk

Lean methodology results in reducing competitive risks and optimizing risks in general by using more effective digital tools. Indeed, by implementing digital solutions, owners/managers could better manage and analyze their data and therefore take informed decisions. With traditional methods they often analyzed data incorrectly or not precisely enough, which could induce risks for their businesses. Since digital tools improve overall data accuracy, they can reduce risks related to data management and analysis. Likewise, with communication tools, they can better organize business processes, for example the order taking process rather than taking orders via emails or on paper, which are more prone to mistakes than digital systems.

Furthermore, as explained in the previous result section, Lean management methods help micro businesses to remain competitive they are able to reduce their competitive risks and remain competitive by staying one step ahead of newcomers who engage in digital strategy as a means of entering the market Table 8 below synthesizes the finding and provides illustrative codes:

<table><caption>Table 8. Optimize risks</caption><thead><tr><td>Participant</td><td>Lean principle applied</td><td>Quotation</td></tr></thead><tbody><tr><td>P7</td><td>• Identify value</td><td>“We had a lot of data but analyzing incorrectly so we interrogated it better and then we could use the information we got out to perhaps influence any decisions we would make. So, it was kind of analyzing the data which led to streamlining of some processes in terms of how we dealt with that data previously. And a lot of this would be monthly financial information- our key performance indicators. [Lean] helped us analyze that more quickly. And so that made us a bit more efficient”</td></tr></tbody></table>
<table><tr><td></td><td></td><td>with that.”</td></tr><tr><td>P8</td><td><ul><li>Map the value chain</li><li>Continuous improvement</li></ul></td><td>“A communication app into the office and to the two the guys on the field whose emails I always found them confusing for everyone. Hundreds of emails flying around the place. No one really knows, there's no order to them... I kind of came up with this idea of a communication app where it was no need for any please or thank you, you know. You just get to the point.”</td></tr><tr><td>P1</td><td><ul><li>Mapping the value chain</li><li>Create a seamless workflow</li></ul></td><td>“Afraid of missing sales or missing someone/ a call or missing a bride [client] anything that helps. Any digitalization that helps that can only be a positive thing. I couldn't and I can't see myself being able to sleep at night or go on any further without knowing that there's some type of web[site] that will catch [these sales/calls]. So that feeling that you're going to miss something or that a bride is going to ring you and say, “what time can I expect you with my flowers” and you're not going to have them ordered. I mean, it has never come to anything like that, but I just kind of feel that the safety nets have to be put in place. And I just want to make it like having an extra set of hands watching out for you and kind of letting things move on to the next level.”</td></tr></table>

Table 8 demonstrates that for optimizing risks in the business there is no emphasis on any Lean principle in particular, they all partly contribute to reducing risk factors for MBs.

## 4.6 Lean management along with DT efforts favors Innovation by generating knowledge and capabilities

Implementing Lean results in a change in business processes, it helps the microbusinesses to innovate. A growing number of companies utilize digital technology to perform their organizational and production functions. Thanks to Lean they improved their communication methods by using digital tools such as conference call applications- used for internal interactions as well as for dealing with customers. Employees are able to work remotely thanks to these communication tools, traditionally they worked in an office. However, they can now work from home or from any location

Furthermore, pre-Lean, it was necessary for employees to perform a great deal of inefficient work, such as manually creating and operating Excel spreadsheets, these tasks weren't value-added. With Lean training, they have implemented integrated systems- which automate processes, freeing employees from tasks that waste time and that do not add value. The result is that they can devote more time to activities that require their intellect and knowledge, in turn saving them both time and money. They use digital tools like Docusign to get client signatures remotely. Table 9 below synthesizes the findings and provides illustrative codes:
<table><caption>Table 9: Digitalized process</caption><thead><tr><td>Participant</td><td>Lean principle applied</td><td>Quotation</td></tr></thead><tbody><tr><td>P7</td><td><ul><li>Mapping the value chain</li><li>Identify value</li></ul></td><td>"And we do a huge amount of our own internal meetings through Microsoft Teams, and we do a lot of our consultations, where we used to meet in person and we do a lot of that remotely now as well. But I think the key thing for us is what we want to analyze next or what we want to do. How can we make things quicker? We are talking to a couple of people, and we do ask people we meet, and we do ask any of our advisors if they can recommend people and then we go and talk to them. And some turned out to be useful and others don't. So yes, I suppose knowledge, integration and awareness of what's happening outside is important for us."</td></tr><tr><td>P8</td><td><ul><li>Mapping the value chain</li></ul></td><td>"I went on the Lean program, and that was kind of the perfect fit, really, because I had a lot of ideas. And since then, the ideas I had, which was like, one was a communication app into the office and to the guys on the field whose emails, I always found them confusing for everyone. I kind of came up with this idea of a communication app where it was, no need for any please or thank you, you know. You just get to the point. Say what you want to say. And then it's being actioned, done or closed."</td></tr><tr><td>P6</td><td><ul><li>Identify value</li><li>Mapping the value chain</li><li>Create a seamless workflow</li></ul></td><td>"With regard to how we communicate, it has made out lives much easier and also being able to work either from home or in the office or, you know, sharing work on files at the same time without having to have a physical file. We've implemented DocuSign for signatures for customers. And we've implemented cloud solutions"</td></tr><tr><td>P4</td><td><ul><li>Continuous improvement</li></ul></td><td>"Skype has been around. Zoom has been around, Calendly links, all that stuff. But partly my confidence to suggest those routes or to say this is the route we're going is one part of it. But the other part is definitely the public- my customers' acceptance that we would be dealing this way has greatly improved"</td></tr><tr><td>P2</td><td><ul><li>Mapping the value chain</li><li>Identify the value</li></ul></td><td>"So, you know, prior to having some of our integrated systems, there was just a lot of kind of manual labor that had to be done, you know, cutting and pasting from Excel into an excel file into another point. And you'd be doing that at 10-11 o'clock at night. And you know, it's just some of the digital processes that we've brought in, mean that things work away in the background without always having to be physically involved in them. You're, free you know. So that's great"</td></tr></tbody></table>

From this table, we see that Innovation is closely related with *identifying the value* and *mapping* it. Indeed, it is crucial to understand what the clients need, because in Lean the value is in the problem that we are trying to solve for the customer (internal or external). After identifying the value, managers can seek digital tools that better meet the customer's needs. Mapping the value chain is also a key step, the company has to map its workflow including all the actions and people involved in delivering the final product to the customer. This enables identification of
the process steps that are time consuming and do not add value and replace them with digitized processes.

## 4.7 Lean along with DT efforts enables MBs to transform their organization and working methods

As part of the Lean training, MBOMs learn how to eliminate tasks that are not of value to the business and introduce digital strategies for improving efficiency and streamlining processes. As an example, rather than traveling to each individual customer's location in person to gather information, creating an online platform that collects this information could save significant time and money. Lean management helps transform the business; at the same time, it opens the door for new opportunities by introducing various digital tools. Table 10 below synthesis the finding and provides illustrative codes:

<table><caption>Table 10. Transformation</caption><thead><tr><td>Participant</td><td>Lean principle applied</td><td>Quotation</td></tr></thead><tbody><tr><td>P7</td><td><ul><li>Mapping the value chain</li><li>Create a seamless workflow</li><li>Create a pull system</li></ul></td><td>"And we were also looking at it in terms of how we can do things quicker in terms of an automation of dictation and a few things like that and generating auto reports. And we do a huge amount of our own internal meetings through Microsoft Teams, and we save a lot of our time with consultations where we used to meet in person, and we do a lot of that remotely now as well. We need to produce a report and that report is used in court as evidence. But the question is how much of that can we automate. I'm just identifying the solution, whether that's dictation as we go and let somebody automatically type. And so that would be something we know we want to automate. We know we want to make it more efficient."</td></tr><tr><td>P8</td><td><ul><li>Continuous improvement</li></ul></td><td>"Lean training, kind of transformed my journey in a way. I'm actually kind of dependent on certain technology at the moment to drive my business"</td></tr><tr><td>P5</td><td><ul><li>Create a seamless workflow</li><li>Create a pull system</li></ul></td><td>"We were a paper-based order taking system. MMM (a mentor) developed an app for us, which allowed us to basically take our orders live in the shop. They go directly back to the office and get started to be picked immediately. Now we're developing a system for basically the component stock levels"</td></tr></tbody></table>
## 4.8 Synthesis

The findings show the link between Lean principles and practices and DT practices of MBs. Figure 2 below synthesizes our findings using the ADROIT framework which initially is used to identify the role of IT in digital transformation efforts. We integrate Lean Principles to this framework and show the strength of its connection between each of the components of the framework. Thick blue lines signify stronger links and thinner blue lines signify weaker links.

<figure><img src="image_4.png" /><figcaption>Figure 2: Linking Lean Principles to Digital Strategy and Transformation</figcaption></figure>

## 6. Implications and Conclusion

This study contributes towards literature on Lean as well as digital transformation literature by extending it to include the microbusiness sector [39]. In this study, we also present the link between the Lean principles and digital transformation by using the ADROIT framework, thereby demonstrating that Lean management does facilitate the process of digital transformation within microbusinesses. We also provide further validity to the ADROIT framework that has not been empirically tested in many studies in the past. In terms of practical implications, this study contributes to the microbusiness industry as it highlights the practical advantages of Lean management training and practices. This should provide further validity to policy makers continuing to provide Lean and Digital mentorships to MBs. The study also can be used by policy makers to encourage more MB owners/managers to enroll in the Lean training program if they wish to either begin or further their digital transformation process within the organization.

Implementing Lean management within MBs allows them to survive and sustain in the digital economy. Their contribution to the local and regional economy is significant, and digital transformation is crucial for their survival. Prior research on the factors enabling digital transformation efforts by microbusinesses have not been well studied [39]. The findings obtained from microbusiness owners/managers that experienced Lean methods implementation reveal that Lean, is in fact, very closely linked to digital transformation. Thus, we can see that Lean training helps MBs to start their digital transformation. Lean management and practices help to add volume, revenues and customers; it also enables microbusinesses to increase willingness to pay (of its customers) and to differentiate (product and services). Through Lean practices, costs are reduced, risks are optimized, and competitive risks are reduced. Moreover, Lean favors innovation by generating knowledge and capabilities and eventually enables microbusinesses to transform their organization and working methods. Most Lean principles
play a significant role in driving efficiency as MBs embark of a DT journey.
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