Applying Six Sigma and Lean processes to Information

Technology Service Delivery

Hightower Consulting Stephen Hightower

(407) 810-2746 Stephen@Hightower-Consulting.com

July 13, 2012

     

Does your IT organization suffer from credibility problems due to cost

overruns, not meeting schedules and not meeting customer expectations?

Walk into any world class manufacturing facility and you’ll see a variety of

metrics, repeatable processes, an emphasis on quality and a focus on

continuous improvement. Everything related to inventory, production,

backlog, shipments and quality are present in every measurement.

There are certifications for adherence to industry standards (ISO, Six

Sigma, etc.) that are recognized around the world as standards for quality

and excellence.

Information Technology (IT) service delivery can benefit from the same

processes and management techniques to delivery high quality, world-

class solutions in an IT environment.

As W. Edwards Deming, the father of the Total Quality Management

movement, would tell you, the key to quality is consistency, which is

determined by repeatable processes. The impact of Dr. Deming’s

teachings on American manufacturing and service organizations has been

profound. He led a sweeping quality revolution that is improving the

competitive position of the United States.

But how many IT organizations utilize these same disciplines? The

answer is not many, but the good news is that more and more people

whose product is IT service are recognizing the value of metrics-based

Quality management methodologies in achieving real quality and customer

satisfaction. The migration to the cloud and the ubiquity of mobile devices

is driving IT organizations to re-engineer, innovate and most of all,

measure their services in new and meaningful ways.

The goal, as in most industries, is a much better product at a reduced

price – in this case improving distributed computing service

reliability/speed while reducing the total cost of ownership. The path to

meeting this objective requires team involvement and a commitment to

stay the course. Depending upon where you are in your maturity level of

service, this can take place in four basic stages.

The first stage is Ground Zero, which is characterized by the following:

• Informal Processes are the rule

• Cycle times cannot be predicted with any accuracy for repeat

requests

• Everyday a different priority emerges and closure remains

elusive

• Expedite everything because you can’t trust the process

• Customer satisfaction is a problem and getting worse

• Lack of planning and mismanagement of customer

expectations

Obviously, this is not your optimal state, but many people find

themselves in this environment and don’t know how to break the

cycle.

The next stage, Baseline, consists of taking small steps to achieve a

basic understanding of the environment. As the saying goes, “How do

you eat an elephant? One bite at a time”. This is extremely important

to remember during this process, since this is not an overnight

transition and takes a dedicated, focused effort to achieve. This stage

is characterized by:

• Understanding and quantifying your work-flow (input, production,

backlog, restore to service)

• Evaluating the maturity level of the organization for people, process

and technology

• Identifying top problems and applying root cause corrective action

• Establishing basic metrics related to availability and performance to a

baseline

• Standardizing service delivery processes

• Practicing basic configuration management

• Stabilizing customer satisfaction in some areas

Moving into the third stage, Managing By the Numbers, marks the

beginning of sound operating processes and ensuring that customer

satisfaction starts to improve. This stage is characterized by:

• Predictable cycle times for standard services

• Documented, repeatable processes

• Critical processes are understood and process control engineering

principles are implemented

• Trending of problems and failure analysis

• Automation is being put into the process for analysis

• Customer satisfaction starts to improve in certain areas

The fourth stage is Proactive and Predictive Support for the

customer. This is where world-class manufacturing organizations

reside. In an IT environment, the following characteristics are found:

• Forecasts are accurate

• Cycle time reduction programs are in place while quality of service

improves

• Market share is increased through more services being provided by

the IT organization

• Integrated Change Control in place across the organization

• Total Quality Management and Continuous Improvement are a part of

the culture.

• Customer satisfaction has a good baseline and is improving

Listed below are a few of the many benefits that came from

implementing a Six Sigma service delivery model in a large, complex

IT organization:

• Improving the quality of the Service Desk so that First Call Resolution

(FCR) for problems was improved from a 32% FCR to a sustained

78% FCR. This translated to saving over $1,000,000 on an annual

basis due to improved productivity for the business and cost

reductions to the IT organization.

• As a result of applying Six Sigma and Lean techniques dramatic

increases were seen in customer satisfaction. The composite

improvement for restore to service in the desktop area improved by 30

percent and customer satisfaction increased by 42 percent.

• The critical service delivery processes were identified, and due to the

program’s early success influenced leaders to move to a 4.2 Sigma

level. The transformational program slashed failure rates from

30,000+ a year to 3,000 a year, and saved $2 million during the first

year of implementation. The Chief Information Officer for the business that benefited from the

Six Sigma implementation for IT service delivery said, “ We reduced

the total cost of ownership dramatically while improving our service.

Our customer satisfaction has improved by applying these principles

to our environment. Operational metrics provide an early warning

indicator when service declines and we take pro-active steps to

address the issues before they result in a crisis”.

Stephen Hightower is an experienced industry executive and has

applied these concepts in a variety of industries utilizing lean, six

sigma and business process re-engineering to drive continuous

improvement into all aspects of IT service delivery. Stephen has

held many roles including CIO, CTO as well as managing large

Manufacturing, Quality, and Strategic Planning organizations

throughout his career and has seen the power of putting a

disciplined approach to managing IT services so that the “Trains

always run on time”.

Stephen is the Managing Director for Hightower Consulting as

well as the Chief Strategy and Technology Officer for

CollaborateMD, a software medical billing company.