6 Sigma for Business Management—What you need to know:

Delivering and supporting IT services is not enough to make IT a driver of business value. As IT increasingly plays an integral part in the business process management, it must consider new approaches to improve service quality and business process efficiency to become more aligned and integrated with business management objectives.

But how?

IT best practices like ITIL v3 (Information Technology Infrastructure Library) introduce Continual Service Improvement for service management. And, quality methods like 6 Sigma bring a business process focus to IT. In combination, they add a quality layer to ITSM (IT Service Management).

This series of articles will focus on what 6 Sigma is, how 6 Sigma techniques bring business process focus to business organization and how 6 Sigma complements ITIL v3.
 

What is Lean 6 Sigma?

Lean 6 Sigma is a business process driven quality improvement method that enables organizations to streamline business processes by reducing the number of nonconformance that 1) impact customers and 2) increase costs. The sigma measures, represents the standard deviation, indicating the amount of variation or inconsistency in a business process. The target for quality equates to 6 standard deviations or Sigma 6 from the mean— 6 sigma —by which the variation from a business process is reduced to no more than 3.4 defects per million opportunities (DPMO).

According to Quality America, a bank operating at three sigma for instance would correspond to 270 million erroneous credit card transactions recorded per year in the United States and 54,000 checks lost each night. It is numbers like this that get the attention of C-level business executives to turn to 6 Sigma quality solutions for business process transformation.

6 Sigma has roots in manufacturing, but it is now adopted in many industries such as finance and banking, healthcare and government—as well as IT management—with considerable success. Companies such as General Electric, Getronics, Sun Microsystems, American Express, Bank of America and Lockheed Martin have achieved and published significant returns from 6 Sigma. Moreover, Service management technology vendors such as Compuware and others have incorporated automated 6 Sigma techniques in their business process management system.
What is DMAIC?

The core of 6 Sigma is its business process improvement model, called DMAIC, for Define, Measure, Analyze, Improve and Control.
Each of the DMAIC phases has clear objectives, tasks and proven techniques. This continual loop provides a business process improvement cycle for products and services, starting with key measurable business management objectives definition through to implementing recommended solutions and sustaining business process improvement until further enhancement is required.
6 Sigma is proven to provide quantified returns, in terms of cost reduction and increased profit. All business organizations can benefit from 6 Sigma by reducing business process non conformance, impacting critical business management processes (reducing costs to fix errors but also reducing costs to the business from these failures), improving business management processes, and, as a result, improving the business process quality delivered to the business peformance.

In short, 6 Sigma helps baseline service quality level, quantify improvement for return on investments and sustain improvement until further enhancement is required. 6 Sigma is a business process driven quality method with strong emphasis on customer requirements that helps IT service providers (internal or external) become more business-aligned.

Now that we have covered the basics of 6 Sigma and its core improvement model (DMAIC), the next article will discuss how 6 Sigma brings a business management focus to business process and which techniques are applicable for business process management.

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