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IT Best Practices Using Lean Six Sigma

The application of Lean Six Sigma in best-practice companies has consistently provided a roadmap toward higher
performance levels in all aspects of IT. IT organizations and CIOs, including those at Bank of America Corp., Sara
Lee Corp., National City Corp., Xerox Corp., GE and Seagate Technology LLC, have demonstrated that IT processes
can be defined, measured, analyzed, improved and controlled in a way that helps align projects and assures
business results the Lean Six Sigma way.

These companies and others have also successfully deployed the Lean Six Sigma design roadmap, Design for Lean
Six Sigma or (DFLSS), to assure effective, efficient and robust designs of their IT solutions.

Sara Lee required all professionals within its IT organization (including strategic IT vendors) to become Lean Six
Sigma certified prior to beginning a company-wide SAP AG software implementation. Sara Lee chief information
officer (CIO) George Chappelle recently explained to Lean Six Sigma conference attendees that, We needed to do
this so we would be able to see measurable outcomes aligned to the needs of our company and our customers. It
was that data-driven aspect of Lean Six Sigma that enabled Sara Lees IT group to gain strategic alignment,
quantitative understanding and a high probability of successful business outcomes related to the deployment. DFLSS
concepts were used throughout the projects.

Seagate CIO Mark Brewer has relied on Lean Six Sigma since the early 2000s. In a CIO magazine interview, which
cited millions of dollars of IT savings, he said, If I view IT operations as a factory, then Six Sigma applies
immediately. In the same article he discussed a server response problem long thought to be an expensive bandwidth
problem. Once Six Sigma was used to measure multiple server response times, and the causes of variation were
understood, the problem was found to have nothing to do with bandwidth. The solution was basically free (other than
the analysis and some tuning) and large savings were realized.

Further, these organizations have used DFLSS for everything from portfolio management to risk management to
software development. By charging the process with better, faster and more-accurate requirements planning,
prioritization and analytical tools; accurate measurement systems; and a management process to monitor and adjust
their use, DFLSS brings a layer of efficiency, order and alignment to customer needs often missed by other tools and
methods.

Some Common Questions


These cases and examples were, for the subject companies, significant breakthroughs from the reactive and chaotic
state they were in before Lean Six Sigma brought some consistency, order and methods to the table. Going into Lean
Six Sigma, they likely had many questions and concerns.

Q: Does Lean Six Sigma replace everything else going on in an organization?


A: Of course not. Other specific development tools and methods must remain in place to drive function-specific best
practices and core work processes. Lean Six Sigma helps glue them together, keeps them data driven, and aligned
to customer and company needs. By reducing and eliminating rework and eliminating mistakes and recurring
problems, a new layer of efficiency will be realized. Project redundancy and overlap are often discovered through the
use of prioritization tools such as analytic hierarchy process (AHP), cause-and-effect diagrams and FMEA (failure
mode and effects analysis). The use of these tools is not often taught or advocated in conventional software
development or IT standards.

Q: Are Lean Six Sigma resources necessarily incremental?


A: If they are, then something is wrong. Lean Six Sigma resources are supposed to be the best and brightest from
their respective organizations. Lean Six Sigma projects should be related to the most important and strategic
business issues in the organization. These two things should go together. If they do not, then an organization is doing
a poor job of resource allocation. Lean Six Sigma helps organize teams, roles and responsibilities around specific
projects and issues. Project-selection tools assure alignment and business cases that meet the needs of the
company. The only incremental resource is the time required to put employees through training. But even at that,
projects are pulled through the training process and completed as a function of an employees training, often saving
more money than the training costs.

Organizational Evaluation
Remarkably, many IT groups argue that they dont have time for Lean Six Sigma because they are working on
various initiatives, such as portfolio management, security, information technology infrastructure library (ITIL),
capability maturity model integration (CMMi), control objectives for integrated and related technology (COBIT) and
project management body of knowledge (PMBoK). When assessing these organizations, findings indicate that the
many initiatives often conflict, contend or duplicate each other. This drives them to a reactive state where emotionally
charged executives and managers attempt to justify their projects over others on what is usually subjective or
anecdotal information. Higher performing organizations, however, realize that Lean Six Sigma does not mean more
work. It means doing the existing work in a more efficient, data-driven, planned and prioritized manner. If an IT
organization is really interested in becoming more efficient and customer focused, it might help to start by looking
inward and devising a plan to drive systemic change based on the organizations character.

Organizations usually fall into one of three general categories:

1. Short-sighted and reactive organizations Someone at this type of organization might simply say, Everyone is
already too busy with what they have on their plate; we do not have time. Lean Six Sigma is all about statistical
methods. Their methods and data are usually subjective, anecdotal and generalized.
2. Early learning organizations Someone at this type of organization might say, Our data shows that we have a
miserable track record for completing value-added projects on time and on budget. We need to and will change.
They have some level of data use in their decision-making process but prioritization and analytical techniques are
not used broadly and consistently. The data may exist but may be poorly organized and inaccurate. Thus, the data
may drive invalid conclusions, even if good analytical tools are employed.
3. High-performing organizations These organizations use a method and tools for aligning, prioritizing,
measuring and managing project performance. Observations clearly show a common and consistently followed
approach that can be quantitatively linked to auditable business results with strong and continuous cycles of
evaluation, improvement and innovation (even in iterative, agile processes).
Take the Next Steps
Intuitively, most people know that change, especially when driving an organization from a reactive state to a proactive
state, does not happen by mandating a new software tool or demanding everyone work harder. Change comes from
a consistent, strategically aligned, rigorous process that is reinforced for the long haul as the organizations operating
system. Many existing standards and methods fall short on this front-end change mechanic. Lean Six Sigma was
engineered to address those shortfalls by:

Focusing on facts and data to prioritize and select projects and resources.
Establishing roles, responsibilities and accountabilities driven by performance data.
Linking and aligning business goals to project goals (driving the businesses closer to software and IT functions).
Requiring frequent review of performance data and supporting analysis.
Refusing to accept redundancy, overlap and poorly prioritized projects and resources.
Historically, Lean Six Sigma was created because attempts at using standards such as International Organization for
Standard 9000, conventional quality assurance/quality control and other top-down, broad-based initiatives failed to
drive the advertised performance results. In analyzing what worked and what did not in these systems, practitioners
learned that problem-solving success comes from thinking a problem through and clearly defining it in quantitative
terms from the beginning. In todays fast-paced software and IT world there is tremendous pressure to deliver on time
and on budget. This pressure can easily cause organizational behavior to short-circuit the front-end processes
(planning, prioritization, requirements and design), resulting in poor resource-management decisions, missed
requirements, and higher rework and support costs.

The following six steps may go a long way to help IT organizations avoid some of these problems:

1. Pay particular attention to the organizations project selection process; make sure that it is data driven and utilizes
some basic prioritization and alignment tools.
2. Be sure that project definition, selection and prioritization is a team sport, especially involving business and external
customers.
3. Utilize a complete and common project charter template that clearly states a measurable project metric(s).
4. Follow a common roadmap (such as DMAIC) to assure that all critical success steps and tools are utilized to
maximize efficiency and minimize project risk.
5. Conduct frequent data-driven tollgate reviews, focusing not only on milestones and cost, but also on performance
data related to functional or specification requirements.
6. Learn form project performance by retaining and reviewing project history, particularly project successes and
failures.
The Lean Six Sigma methodology, adopted for use in software and IT, has proven to be a valuable way to drive
organizations from the reactive and chaotic state to a more desirable and efficient proactive state. When implemented
properly, it helps to provide a much needed process discipline, while recognizing and leveraging other bodies of
knowledge including agile, PMBoK, CMMi, ITIL and other important domain-specific processes.
Some of the countrys largest IT organizations are looking trim and vigorous these days.
Its no miracle cure or diet of the month. Its a particular piece of process methodology
called Six Sigma.

Six Sigma is a defect reduction methodology that transforms organizations by forcing


them to focus on the quality of the customer experience. The term sigma refers to
deviations from an ideal level of operation, where each level of sigma, starting from one,
allows for fewer defects. Sigma six, the

operational equivalent of nirvana, allows a mere 3.4 defects per million outputs. If youre
in manufacturing, that means 999,996.6 flaw-free widgets. If youre in IT, that means
fewer servers, faster call response times and better project delivery.

Six Sigma got its start in manufacturing at Motorola in the 1980s, and later spread to
nuts-and-bolts powerhouses like AlliedSignal, General Electric and Honeywell
International. But now CIOs at companies of all disciplines are adopting Six Sigma for
its fact-based, quantifiable insistence on continuous improvement and its ability to
doggedly root out and improve defects in processes.

"Six Sigma isnt just a manufacturing thing. It can be applied to the financial services
industry very effectively," says Doug Sutton, president of Fidelity Wide Processing,
where the methodology is delivering cost reductions and quality improvements in the
range of 20 percent to 50 percent across the board. "A lot of our potential customers are
asking if we use it. They want to know if were focused on business process
improvement, and the answer is yes."

On the numbers side, Six Sigma provides CIOs with an objective, measurable way to
justify technology investments; on the karma side, it serves as a judgment-free common
language between IT and other project stakeholders within the company.

"IT always gets caught up in insatiable demands and lost ROI. Six Sigma solves both
those problems," says Charles P. Costa, executive vice president and CIO at Chase
Financial Services, which assigns a Six Sigma team to most IT projects worth more
than $1 million. "Six Sigma gives us a very precise way to demonstrate the real value of
technology, and it helps us improve the way we deliver that value."

Six Sigma has a lot of normally staid CIOs excited for a good reason: Quality is back on
the corporate radar in a big way. "Weve cut so far into IT in the past couple of years
that were starting to see some quality problems," says Val Sribar, a Meta Group senior
vice president. "If youre smart about where you apply [Six Sigma], if you apply it to your
core disciplines, it makes a lot of sense right now."
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Still, wary and weary CIOs, especially those who have endured both the 1990s flavor-
of-the-month management mania and the apparently endless post-bubble budget
crises, are justified in wondering if Six Sigma is right for them.

Six Sigma users insist it works for all types of companies and in all functions, but they
do admit there are a few times when the methodology wont take. If your resources
have truly been cut beyond the point of pain, now isnt the time?not because you dont
need Six Sigmas benefits (you probably do, more than ever) but because burned-out
staffers and stressed-out managers arent likely to be able to give the regimen its due.

While very small IT shops can benefit from Six Sigmas approach to error reduction,
theyll have to wait to see quantifiable benefits. "Theres still applicability, but it will take
a small shop a long time to know whether theyve reduced their defects to three in a
million, just because its going to take longer to get to that first million," observes Matt
Light, a research director at Gartner.

And finally, every single IT professional experienced with Six Sigma emphasizes that it
absolutely, positively requires top-down buy-in. Six Sigma is an executive-directed
transformation tool, and if senior management isnt interested or willing to personally
sponsor the strategy, its going to fail?point blank.

"To have a successful Six Sigma initiative in your company, senior management has to
understand its role: to pick teams, decide what measurements are going to matter,
establish some form of accountability and visibility, and set up a mechanism to establish
and track results," says Alan Larson, author of Demystifying Six Sigma: A Company-
Wide Approach to Continuous Improvement who worked at Motorola in the 1980s and
was part of the team that introduced Six Sigma to Honeywell.

How Six Sigma Works in IT


Despite its origin in manufacturing, Six Sigma isnt about widgets; the focus is on
processes. When applied to IT operations, Six Sigma aims to measure and improve
both internal processes, such as network speed and reliability, and line-of-business
processes in which IT has a role, such as how well an online ordering system is
working.

"IT is a big user of processes: testing and hardware implementation and software
development," says Doug Debrecht, vice president and CIO at Raytheon Aircraft, where
the entire IT workforce has had some form of Six Sigma training. "Six Sigma has given
us a good toolset that we can use consistently and repeatedly to analyze how we have
things set up and running."
Six Sigma analysis tends to begin with the formulation of a problem statement. One Six
Sigma team at Raytheon, for example, was charged with analyzing why the division had
what Debrecht admits was "an ungodly number" of servers?350. "We needed to figure
out a way to consolidate and be smarter in how we deployed our servers," he says. The
Six Sigma team determined the root cause of the problem?that each application got its
own server, regardless of its size or bandwidth requirements?and then worked out the
specifics to allow applications to share servers logically and securely. The result: a 40
percent consolidation in servers, with the attendant time and labor savings added back
to the bottom line.

The methodology breaks down problem evaluation into five distinct steps: define,
measure, analyze, improve and control. Practitioners call this rubric DMAIC for short,
pronounced "de-MAY-ick." (Another approach, Design for Six Sigma, aims to remove
defects from a process during the design phase. Its generally used only by
organizations that have mastered the DMAIC methodology.)

At each of the DMAIC steps, organizations apply appropriate tools and measures from a
wide variety of choices. Some, such as histograms, Pareto charts and Scatter diagrams,
may already be familiar to IT. Others, which boast names such as Voice of the
Customer or House of Quality, probably arent, though CIOs report that these customer-
centric tools are often the ones they find most enlightening.

Textron used the DMAIC process and the Voice of the Customer tool, among others, to
tackle data-center sprawl. "We found we had over 80 data centers inside our company,"
says Ken Bohlen, Textrons executive vice president and chief innovation officer. "We
used Voice of the Customer to canvass our customer base and ask some very specific
questions," such as what critical information was stored where. By making customer
needs the top priority, Textron has been able to consolidate or shut down 40 of the data
centers, which were supporting legacy or underused applications. Bohlen says his long-
term goal is to get down to five data centers.

While Six Sigma often helps organizations refine and streamline operations, the
methodology can also be used to leverage existing systems for customer benefit. Chase
Financial Services formed a Six Sigma team to take a look at the costs accrued by
customer service representatives. The team recommended technology changes to the
companys interactive voice-response system to allow customers to more easily find
their own answers to routine questions, which in turn allowed service representatives to
redirect their efforts into selling additional products.

Pioneer CIOs and industry watchers point to some best practices for reaping success
from Six Sigma in IT.

1. Pick the right people. Workers trained in Six Sigma techniques act like internal SWAT
teams, coming together to tackle a given process, then breaking apart and reforming,
often in a different configuration, to undertake the next challenge. Depending on what
level of Six Sigma training employees have undergone, theyre known as green belts,
brown belts or black belts, with black belts most often deployed to lead a team or tackle
projects on their own.

Its important to tap motivated employees for training, which produces a high-
performance team and at the same time signals that Six Sigma is part of an upward
career path. "If you grab the C- and D-level players because you can spare them, youre
sending the wrong message," says Textrons Bohlen. "We started with the best and
brightest, and showed that [Six Sigma training] accelerated their careers. Now I have a
waiting list of people wanting to get black belt training."

Be careful about training people but not giving them a project right away to work on,
warns Chase Financial Services Costa. "We have found it very beneficial for people to
take a project with them into training or to start something right after," he says.

2. Dont substitute Six Sigma for thinking. For IT staffers particularly, the urge is strong
to first use tools they know (that is, technology) before dipping into untried
methodologies. Resist that urge, counsels Fidelity Wide Processings Sutton. "If you just
throw technology at a business problem, all you wind up with is a bad process with new
technology. If you wring out the process first, then you can really use technology to
move it to a higher level."

As a case in point, Fidelity Wide Processing used Six Sigma tenets to reengineer its
inbound, paper-based, customer data processing operation. Only after gaining 32
percent improvement by streamlining the process did Suttons department start to
consider new technologies. The company is currently expanding its use of advanced
character recognition technology to speed processing of customer data.

3. Dont be afraid to tinker. While the philosophy behind Six Sigma is, or should be,
sacrosanct?focus on the customer, reduce defects, streamline and improve processes,
evaluate continuously?you neednt treat the tactics and tools as if theyre set in stone.

Many big companies, including Honeywell and Textron, have their own internal "brands"
of Six Sigma that have been tailored to their line of business and oftentimes combined
with Lean, another manufacturing technique designed to weed out non-value-adding
subprocesses. Other organizations fine-tune the DMAIC model as needed. Chase
Financial, for example, added a step called "implement."

At the toolset level, Raytheons Debrecht says his teams have wide latitude when it
comes to suggesting which measures are appropriate for which projects. "We use
brainstorming, value mapping, fishbone diagrams and something we call the five whys
to help us get to the root cause of an issue," he says. Textrons Bohlen gives that
approach a thumbs-up. "Six Sigma is a system of tools," he says. "Theres no
prescribed set. You have to determine what you want to bring to your workforce before
you choose your tools."

One word of warning: A cautious CIO might be tempted to try a little bit of Six Sigma
here and there to see if it works. Thats a mistake, says Costa. "We tried too hard to go
part-time on some of this stuff, so projects were taking too long. Now we try to focus
black belts full-time on a project, and in most cases were seeing between $1 million
and $3 million in benefits," he says.

4. Dont get bogged down in numbers. Like any other measurement-based system, Six
Sigma can be driven into the ground by too many numbers. "All that statistical analysis
that the black belts use, all those data points dont add up unless you understand what
youre measuring," says Gartners Light. The "define" phase in DMAIC is, in his opinion,
probably the most important part of the discipline, and its the one that involves the
fewest metrics. "Chartering the team and specifying who the customers are and defining
what a good experience is and whats a defect, thats where the value is," he says.

"You can use statistics in degrees," echoes Sutton. "People hear measure and they
say, Oh, we gotta have a control chart. But there are certain areas where we have no
control charts. Whats important is the methodology and how you apply it."

How to Sell Six Sigma


For all their enthusiasm, CIOs acknowledge that the most difficult aspect of Six Sigma
may well be trying to sell its benefits to the rank and file, many of whom have lived
through too many rah-rah kickoffs in the conference room to embrace any more
management initiatives.

Six Sigma can certainly turn into some executives pet leadership strategy thats
launched and forgotten three months down the line. But if its done right, practitioners
say, Six Sigma stimulates a fundamental change in the way an organization conducts
business and makes decisions.

So whats the best way to introduce that change? Maybe not at all. Fidelity Wide
Processings Sutton is a fan of the show-first-tell-later strategy. When Six Sigma was
new to his organization, he sometimes shunned the words Six Sigma or training or
quality.

"We dont come in with touchy-feely training and have [skeptics] say, Oh yeah, right,
Six Sigma," Sutton says. "We say, lets talk about your business problems. You need to
drive improvements in your business, and were going to show you how to do it."

And that, Sutton says, reels them in every time.