Lean Six Sigma in IT

Written by LUMINIS. Posted in Process Management Blog

Information technology (IT) organizations increasingly are under pressure to improve their service and process capability. In the quest for improvement methodologies, organizations often adopt a “pick one” strategy – with Six Sigma being the widely favored choice. However, it is possible to integrate Lean and Six Sigma and reap the full benefits that these methodologies can bring to the table.   

Defined as a measure of quality that strives for near perfection, six sigma is a disciplined, data-driven approach and methodology for eliminating defects (driving towards six standard deviations between the mean and the nearest specification limit) in any process -- from manufacturing to transactional and from product to service. To achieve six sigma, a process must not produce more than 3.4 defects per million opportunities. 

 

It is very well-known that a far-reaching performance is achieved by the use of Six Sigma and Lean to reduce waste. This in turn reduces cost, an important factor in determining the survival of an enterprise. Manufacturing with Lean in mind, has certain features such as reduced lead times of processes, faster delivery, improved quality of end products, reduction in inventory such as the work-in-process (WIP), low customer service activities, core materials, and products at all customer interfaces. This gives room for incorporating changes. 

The Six Sigma 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. It’s 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 (VOC) or House of Quality (QFD), probably aren’t, though CIOs report that these customer-centric tools are often the ones they find most enlightening.

 

How Lean Six Sigma Works in IT?

Despite its origin in manufacturing, Six Sigma, when implemented in IT, isn’t about widgets; the focus is still 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 or how well your customer support system is performing actually.

"Remember! Information Technology (IT) is a big user of processes--software testing and hardware implementation and software development," said Doug Debrecht, vice president and CIO at Raytheon Aircraft, where the entire IT workforce was made to undergo some form of Six Sigma training. "Six Sigma had given us a good toolset that we could use consistently and repeatedly to analyze how we had things set up and running." 

Six Sigma analysis actually 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 "an ungodly number" of servers? 350.  They needed to figure out a way to consolidate and be smarter in how they deployed their servers. 

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. This resulted in a sharp 40% consolidation in servers, with the attendant time and labor savings added back to the bottom line. 

Textron used the DMAIC process and the Voice of the Customer (VOC)  tool, among others, to tackle data-center sprawl. They found that they had over 80 data centers inside their company in 2003, and then they used Voice of the Customer to canvass our customer base and asked some very specific questions, such as --what critical information was stored where? By making customer needs the top priority, Textron were able to consolidate or shut down 40 of the data centers, which were supporting legacy or underused applications. 

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 sub-processes. Other organizations fine-tune the DMAIC model as needed. Chase Financial, for example, added a step called 'implement'. 

Based in Bangalore, India, Wipro is one of the largest IT services and product engineering companies in the world.  It has more than 100,000+ employees and 70+ delivery centers in 55+ countries. In fact, Wipro, an Indian IT giant, successfully decoded the Lean practices, implemented and then, perfected lean practices for their IT services. 

Wipro has successfully applied knowledge gained through its own internal Lean initiatives to its global clients via offerings from Wipro Consulting Services’ Process Excellence Practice.  The Practice utilizes Wipro’s intellectual property, lessons learned from internal Lean projects, Lean methodology and qualified, trained and experienced engagement teams.  Wipro has continuously developed its own Lean framework and has applied its improvement processes and tools into a strategic capability, which has been globally appreciated by their clients worldwide. 

“Wipro’s example shows that Lean can work and become a critical success factor for organisations operating with projects to provide IT-based services, where substantial variability in customer demand, technology prerequisites, and human-centric intervention is common,” says Alexander Peters, Analyst at Forrester Research.

At the toolset level, Raytheon’s Debrecht also explained further that his teams had wide latitude when it came to suggesting which measures were appropriate for which projects. They used brainstorming, value mapping, fishbone diagrams and 5-WHYs to help them get to the root cause of an issue. 

 

Even the GENPACT embeded Six Sigma in their BPO operations from the day one. As the former CEO of Genpact, Mr. Pramod Bhasin, explained, "....Having a few people trained to provide minor back-office support for a nascent Indian market was a far cry from handling a large volume of work and calls from all over the world at any time of day. We needed to conceive the entire operation from scratch. We decided that we had to become very good, very quickly, at four key elements: hiring the right people, training them, building a tool kit to replicate our learning in other parts of the world and to move processes from one location to another, and embedding Six Sigma quality controls in our operation from day one. We would be a beta site with the potential for huge growth at GE Capital—if we got it right....."  (Source: Harvard Business Review, June 2011)

The bottom-line here is that Lean & Six Sigma can successfully used in IT projects, Automated IT processes, ERP decisions/implementation, Data Warehousing, Software Designing, UI designing, customer support operations in all sort of IT companies, BPOs, KPOs, etc.

 

Wipro's model was quickly followed up by Tata Conulting Services (TCS) with a good success.  Their service offering clearly pointed out, "IT Process and Service Management focuses on transforming IT services using an integrated approach encompassing the gamut of processes involved in IT solutions, sourcing, services and operations. The range of services include assessments, strategic planning, process definition and implementation, and continual improvement, leveraging industry best practices like CMMI®, ITIL® V3, CMMI® SVC, ISO 20000, Six Sigma, Lean principles and Agile methodologies".

TCS logoImproving IT operations and system performance is one of the key priorities for most of the senior managers. For improving customer experience and optimizing costs, organizations are looking at initiatives like efficiency and effectiveness improvement, defect reduction. Applying Lean thinking on business and IT processes helps in eliminating waste, reducing variability, aligning to business needs and improving productivity. Our experience indicates that organizations can achieve productivity gains in the range of 25-40 % through lean transformation. (Source: Lean Advisory Services, TCS)

All IT organisation can achieve the following benefits with their diligent implementation of Lean Six Sigma:

  1. Improve efficiency and effectiveness of the business and IT processes
  2. Reduce overall operating costs
  3. Improve customer experience
  4. Deliver quicker results with business value
  5. Improve workforce productivity
  6. Improve quality of performance of products and services
  7. Enabled service capability and stability with operational efficiency and control

 

Lean Six Sigma approach gets a thumbs-up by most CIOs.  However, you need to know that --

Six Sigma is a system of tools.  There’s no prescribed set.  You have to determine yourself--

what you want to bring to your workforce before you choose your tools. 

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