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“ITIL AND S IX S IGMA ”

“ITIL AND SIX SIGMA

“ITIL AND S IX S IGMA ”

Introduction

This white paper will provide the reader an overview of what is Six Sigma and how it can benefit every ITIL process improvement initiative. It also describes some major similarities and differences between both process improvement concepts.

Six Sigma began as an initiative for improving quality rather than as a methodology for continuous business process improvement. Because the New Six Sigma emphasizes more on the latter objective its practical approach comes with beneficial tools that are worthwhile considering for IT process improvement initiatives based on ITIL’s best practices.

What is Six Sigma?

Six Sigma 1 – the number six (6), and sigma, the Greek letter (σ), represent a statistical measure and a management philosophy in today’s industry. Six Sigma, gives people well- defined roles and a clear structure to do their tasks. It works best when every level in the organization is involved, top to bottom. The people that usually run the Six Sigma project are the middle managers. Six Sigma combines People Power with Process Power. It is a management philosophy focused on eliminating mistakes, waste and rework. It establishes

a measurable status to accomplish and consists of a strategic problem solving method to increase customer satisfaction and thus the bottom line.

A Six Sigma project aims to implement efficiency and effectiveness by: • focusing on making
A Six Sigma project aims to implement efficiency and effectiveness by:
• focusing on making less mistakes
• wasting less time and/or materials
• making less errors in the delivery of services
• staying focused on what a company is doing best
Six Sigma projects are characterized by:
• giving a lot of authority to the project manager
• giving the project manager a lot of recognition
• giving the project manager a lot of support they need to succeed
• giving the project manager and the project team financial rewards for
their success, such as a bonus, stock options or a percentage of the
money saved on each project

Six Sigma and Processes

The Greek letter Sigma represents the standard deviation in mathematics. It is a measure

of the variation within a process. For example, if an IT organization is executing its changes

at One Sigma, this means that its changes are completed successfully 30% of the time.

1 Six Sigma is a registered trademark of Motorola Corporation

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With Two Sigma, almost 70% of the changes are completed successfully. Most companies operate between Three and Four Sigma. Three and Four Sigma means changes are done right between 93.3% and 99.4% of the time. This may seem like an acceptable accomplishment, but even when operating at 99% (i.e. 3.8 Sigma), this would mean that installing 3 time a week hot fixes and/or service packs on 100 servers for one full year, a mistake would be made 156(!) times during such change.

In the extreme event that each server would support a different customer, we would end up with 156 customers that may have complains about our services. Industry statistics learn that one happy customer will share his or her experience with 3 people. One unhappy customer will share it with 20 people. That is potentially, worst case scenario, 3120 customers…

With Six Sigma the quality improvement efforts of processes will become measurable. Numbers will bring clarity as in where you are today and where you want to be in the (near) future.

Six Sigma may seem just another quality improvement model but in fact it is a management philosophy. Its main focus is to increase customer satisfaction and thus the bottom line, by making lesser mistakes for example or having fewer penalties or refunds to pay of Service Level Agreements (SLAs). This in itself already increases profits. Six Sigma companies have learned that improving quality saves money instead of costs money. Six Sigma companies relatively spent more money on customer retention compared to those that spent large amounts on attracting new customers.

CSF of Six Sigma

The Critical Success Factor (CSFs) of Six Sigma is that is tries to eliminate the problem of a process instead of managing it. For example, having a QA department looking at the end result of a change to make sure only changes with the expected outcome will be implemented is fundamentally different compared to having the QA department taking the process apart in every single piece, fix the problem, and put it back together again.

Six Sigma recommends asking the customer which problem should be fixed and not have the IT department pick a problem they think that has to be fixed. For example, a luxury European car brand claims to have built the ultimate driving machine, making comfortably driving the car the first priority, but ignoring the fact that customers may decide for another brand since the car’s cup holders are of a poor quality and positioned quite uncomfortably.

Six Sigma projects all begin with looking what the customer really wants. This may result in many potential improvement projects. However, Six Sigma recommends to choose those low-hanging fruits that have the most room for improvement with the greatest cost saving and increase in customer satisfaction.

“ITIL AND S IX S IGMA ”

“ITIL AND SIX SIGMA

“ITIL AND S IX S IGMA ”

People Power

One of the most important elements of Six Sigma improvement projects of Six Sigma is the role everybody plays. So-called Black Belts run the project. They get all the help they need from their supervisors, the so-called Champions or Master Black Belts. The Deployment Champions provide leadership and commitment and work to implement Six Sigma throughout the business. Project Champions oversee the Black Belts by breaking down the corporate barriers, creating support systems, and making budgets available to run the projects. They also prioritize the improvement projects, scope the projects and benchmark them. The Green Belts are the support staff of the Black Belt. Black Belt roles are usually fulfilled by middle management positions. The Project Champions make sure that the Master Black Belts and the Black Belts can solely focus on the project at hand. A project on average lasts four to six months.

Six Sigma Roles Hierarchy Chart Executives Deployment & Project Champions Master Black Belts Black Belts
Six Sigma Roles Hierarchy Chart
Executives
Deployment
& Project Champions
Master Black Belts
Black Belts
Green Belts

Executive Leadership has to support a Six Sigma initiative from day one. Support in this context means being the driving force and continuously inspire the organization by sending signals that the company takes this effort very serious. Executive Leadership will very carefully select the people that will be part of a Six Sigma improvement project. Black Belts are most often high potential people that are most valuable for the organization.

Master Black Belts are most often positions fulfilled by outside consultants who come in as Six Sigma experts to teach its principles to the Black Belt candidates. They help the

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Champions select the right projects and the right people to run it. Master Black Belts train, coach and monitor. It is this outside consultant’s objective to make him or herself obsolete.

It is the Black Belt that really is doing the project. They are considerably intellectual, have a drive for improvements and can think outside the box. They have management and technical skills and the ability to inspire employees and gain trust from executives.

In short, Executive Leaders and Champions worry about what is getting done, while Master

Black Belts and Black Belts worry about how it is getting done. Black Belts are provided with

a clear structure regarding what to do, when to do it, the deadlines and numerical goals to

achieve. They also get clear statistical tools to analyze data, how they are doing and to determine what needs to be done next.

A typical Black Belt training lasts four weeks and depending on the scope of the Black Belt’s

project(s), a Black Belt fulfills its role for 2 to 3 years. The training is done in four separate weeks and in between the Black Belt to-be goes back to his or her workplace to practice the

acquired knowledge.

The first week of the training the Black Belt learns measure the processes that produce an increased customer satisfaction. The second week focuses on how to analyze them. The third week is all about how to improve them and the fourth week how to control them. The curriculum includes subjects such as statistics, quantitative benchmarking and design of experiments.

Process Power

Six Sigma’s Process Improvement Steps: DMAIC Define Control Measure Improve Analyze
Six Sigma’s Process
Improvement Steps: DMAIC
Define
Control
Measure
Improve
Analyze
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“ITIL AND S IX S IGMA ”

The first step of a Six Sigma project is to Define what the problems are. Key during this step is not to focus on the outcome, but on the flow of the process steps that create the product or the service. Often the links, or gaps, between those process steps are the cause of the problem. Those problems that can be fixed are selected for improvements. The problems should be defined objectively, preferably numerically. This will make the improvement process better measurable and therefore better manageable. It is important to choose an problem to be resolved that will reward you the most as well as will benefit the company and the customer the most.

The second step is to Measure the capability of the process. Besides the number of errors of the process it is even more important to measure the number of opportunities for defects a certain process presents. Benchmarking your competition is a useful next step to determine the process objectives to accomplish. The measurement step is the true foundation of the Six Sigma concepts and should therefore get most of the attention. This is based on the fact that a good decision is only as good as the data available when making the decision. Six Sigma tries to look for as much as possible numerical data in this step to allow measuring any process improvement further down the road.

The third step is to Analyze the numbers to find out how the quality of your process

compared to what is possible and to what your competition is doing. With these three steps you should be able to determine the maximum results that are possible if everything is perfect and where there is room for improvement. In case there are not too many improvements to be expected you move on to the next problem, which might be more valuable. The main questions to be answered are why there are errors and how to fix them.

A decent root cause analyses effort is what is needed in this phase.

The fourth step is to Improve the processes to be pursued. In this phase changes are being implemented to improve those components that are critical to the quality of the process. It is the Black Belt’s responsibility to measure the improvements by calculating which of the tolerance bands needs to be tightened to accomplish the process improvement goals.

During the final step, Control, you lock in the improvements. Black Belts will implement measures to keep the key variables of the process within their new operating boundaries.

Six Sigma has abbreviated these steps to DMAIC.

The New Six Sigma

Recently, the Motorola University has developed the New Six Sigma because of its complexity and effectiveness in mainly manufacturing and engineering environments, which

is a common misperception. Also, practitioners of Six Sigma have proven that the concepts

work to effectively improve all business strategies due to Six Sigma’s focus on understanding the customer requirements, continuous process improvements, and using

“ITIL AND S IX S IGMA ”

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statistical analysis to drive fact-based decision making. The New Six Sigma builds on the strengths of the Six Sigma methodology.

The New Six Sigma incorporates tools such as Voice of the Customer, Balanced Scorecards, Business Process Redesign, High-Performance Teams and continuous monitoring of key business metrics. It also introduces key leadership principles such as Align, Mobilize, Accelerate, and Govern.

The Align principle uses the scorecard process as a framework. It creates uses the customer’s requirements as a starting point, then looks for key processes to meet these requirements and chooses metrics and performance drivers to measure and further improve the process.

The Mobilize principle uses empowered teams and a focused project management methodology to enable people to take action.

The keys elements to the Accelerate results within the New Six Sigma are a so-called Action Learning Methodology, a Campaign Planning, and Clock Management.

The Govern principle assures visible sponsorship of the projects, a rigorous review of the projects and ongoing knowledge sharing and proactive communications of all the project results.

The New Six Sigma business improvement methodology delivers desired business results within accelerated timeframes. Successful practitioners of Six Sigma such as Motorola, GE and AlliedSignal have reported millions of dollars in annual savings.

ITIL and Six Sigma

The experienced ITIL practitioner may already have noticed some similarities and some differences between ITIL and Six Sigma. More important however is to know how both concepts can compliment each other. The paragraphs below will describe the similarities, the differences and how to get the best out of both concepts. However, the author of the white paper does not pretend to be complete with the analysis that follows.

ITIL and Six Sigma Similarities and Differences

The table below lists some of the most significant similarities and differences between Six Sigma and ITIL.

ITIL Six Sigma Process improvements with a main focus is on IT processes Process improvements
ITIL
Six Sigma
Process improvements with a main
focus is on IT processes
Process improvements with a main focus
is on business processes
“ITIL AND S IX S IGMA ”

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ITIL Six Sigma Clear description of roles and Clear description of roles and responsibilities within
ITIL
Six Sigma
Clear
description
of
roles
and
Clear
description
of
roles
and
responsibilities within
any
given
IT
responsibilities
within
a
process
process
improvement initiative
For an IT process improvement project
ITIL refers to its related PRINCE2
project methodology
Six
Sigma
is
a
business
process
improvement
project
methodology
in
itself
Steps within a continuous IT process
improvement initiative are:
Steps
within
a
continuous
business
process improvement project are:
• Define Mission, Vision, and Business
objectives
• Define
• Measure
• Assess
• Analyze
• Execute Change Processes
• Improve
• Measure
• Control
Provides guidelines to shift IT’s culture
from a technology focus to an IT
service / IT customer focus
Provides guidelines to shift
an
organization’s culture from internally
focused to an external business customer
focus
The reward system for process
improvements has a more intrinsic
focus for the responsible individual:
“doing more with less”
The reward system for process
improvements has a more financial focus
for the responsible individual and bottom-
line for the organization
Introduces Key Performance Indicators
and Critical Success Factors for IT
process improvements
Introduces Key Performance Indicators
and Critical Success Factors for business
process improvement initiatives
Independent
and non-profit
examination institutes monitor the
quality of the certification processes for
individuals
No independent examination institutes
exist at this moment that enforce the
quality of the Six Sigma certifications for
individuals
In ITIL’s Problem Management process
a root cause analyses step is build in to
eliminate reoccurring incidents that
impact the quality of service
In Six Sigma’s Analyze step the root
cause analyses step is built in to eliminate
the poor performance of a process
The
Business
Perspective
processes
highly
focus
on
aligning
IT
to
the
business
The Align principle of Six Sigma highly
focuses on aligning the business customer
needs to the organization’s processes
Provides a proven set of best practices
regarding IT processes that has
resulted in tremendous savings for IT
organizations
Provides a proven methodology for
business process improvements that has
resulted in tremendous savings for
businesses
Provides guidelines and metrics for IT
processes
Provides tools
to
measure
the
performance of business processes
Introduces across-the-board IT process
improvement concepts to eliminate IT
silos
Encourages to look beyond the traditional
business department’s boundaries
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ITIL Six Sigma Provides solid definitions for IT terminology to improve the communication processes within
ITIL
Six Sigma
Provides solid definitions for IT
terminology to improve the
communication processes within IT and
with IT’s customers, vendors and
external service providers
Provides clear communication structures
to improve the communication processes
within the organization that encourage
knowledge sharing

ITIL and Six Sigma are Complimentary

The New Six Sigma has adopted the successful principles of the Balanced Scorecard concept as developed by Kaplan and Norton. This model has been described in our white paper “ITIL and Balanced Scorecards”. The concepts of ITIL contribute to the goals the Balanced Scorecard tries to accomplish. With this, ITIL can obviously contribute to the goals Six Sigma tries to achieve.

Six Sigma on the other hand can be a major contributor to strategic objectives of an IT organization’s processes. IT’s Quality Management and Business/IT Alignment initiatives in combination with Service Level Management improvement efforts can benefit of the outcomes of a Six Sigma analysis by aiming for IT process improvements that fulfill the critical business needs as determined by Six Sigma.

The principles of Six Sigma for business process improvement projects can easily be reused for ITIL’s IT process improvement initiatives. With the additional information ITIL provides regarding what to aim for when attempting to implement an IT process according to the industry best practices, the high level goals to accomplish are already available within ITIL, unlike the business goals that are the target for a Six Sigma project. What is left is to express these goals in numerical targets to make them more specific.

The New Six Sigma provides a useful set of tools that can help implementing ITIL’s best practices more rapidly. The ITIL-related PRINCE2 project methodology is more generic by nature and has less sophisticated process improvement tools available.

Conclusion

Although Six Sigma’s focus is more business-process oriented, it concepts and tools can easily be reused for any ITIL-based IT process improvement efforts. IT process improvement initiatives can have the best of both worlds when using ITIL’s best practices as guidelines for defining what the process problems are and what to aim for when attempting to improve those IT processes. Six Sigma’s project approach for process improvements, which comes with clear roles and responsibilities within a process-improvement project, will help the IT process improvement initiative to stay focused and be more successful.

At the same time, a Six Sigma project that depends on IT process improvements can rely on ITIL’s best practices for higher success rates. Although at first sight the steps for process

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improvements being introduced by both concepts may seem different, it requires little or no effort to combine and integrate the steps into a coherent set of activities. Both have a ‘define’ and ‘measure’ step. Six Sigma’s analyze step and ITIL’s asses step are very much comparable. The ‘execute change processes’ of ITIL can be related to Six Sigma’s ‘improve’ and ‘control’ steps.

Six Sigma’s project roles hierarchy can serve as a blue print for ITIL process improvement teams. Process owners could play the role of the Black Belts. Master certified ITIL consultants could play the role of the Master Black Belts. Subject Matter Experts within IT of the process at hand could initially be the Green Belts and later become a Black Belt. Executives and Six Sigma Champions are those IT executives and managers that enable cross-boundary solutions resulting from IT process improvement projects.

Six Sigma’s strong financial focus can be stimulate IT’s efforts to become more business focused.

Especially the New Six Sigma provides a set of process improvement tools that can be major contributors to ITIL’s process improvement initiatives.

And Finally…

InterProm USA would appreciate the opportunity to help your organization to benefit of Six Sigma’s concepts when considering implementing ITIL’s best practices. With Six Sigma and ITIL your organization can take advantage of what other organizations have captured for you to optimize the processes that better align IT to the business. Our ITIL Master certified consultants would appreciate the opportunity to fulfill the role of the ITIL Master Black Belt to implement any IT process optimization effort following the Six Sigma methodology.

The uniqueness of our service offerings is based on the fact that we are one of the very few companies that has more than a decade of service management implementation experience and is able to cover all aspects including IT service improvements, IT process optimizations, IT organizational enhancements, all supported by selecting and implementing the right suite of tools and technology. Our SPOT™ model is the representation of our core competencies to your benefit.

For more information call us at (+1) 281.286.2853, or visit our website at http://www.interpromusa.com, or visit the ITIL Portal at http://www.itilportal.com.