Making Sense of Six Sigma: Driving the Journey Towards Quality Improvement in Software and IT

Tom GuthrieVice President of I.T. OperationsCox Communications

The Burning Platform

THE BURNING PLATFORM1

The “Burning Platform” for Cox

• Rapidly changing competitive landscape

• The need to bring products and services to market faster

• Expanding convergence pressure (Quadruple Play)

• Increasingly complex partnerships and new content

• Pressure to manage spending but do more/better

THE BURNING PLATFORM2

• The competitive landscape is intense… the stakes are high!

• Pressure to do “more with less”

• Old measurement schemes not customer focused

• Service levels not predictable

The “Burning Platform” for I.T.

THE BURNING PLATFORM3

The Quality Dividend

Capability

Operating Costs

Quality

$

4

Variability at the airport

Imagine that you are at the Atlanta airport baggage claim and on top of the baggage carousal is a sign that says “Our average luggage delivery reliability is 99.99%”

• Close your eyes… how does 99.99% feel?

• Close your eyes again…the carousel comes to a stop and your bag is no where to be found…. Now how does 99.99% feel?

Do our Customer’s feel the averageor their own individual experience?

Variability on the Golf Course

Golfer 1

Golfer 2

Which Golfer do want in your foursome?

Key Assumptions

• Variation is inevitable

• Defects can be prevented by monitoring, controlling, and reducing variability in processes and products

• Continuous process improvement can be used to reduce variability and improve results

If a process in “In Control”, a randomly selected item has a 99.73% chance of being between -3 and 3 standard

deviations (σ) from the mean.

Average (µ)

99.73%

µ – 3σ µ + 3σ

Process Stability as a Central Tenet

STRATEGIC SIX SIGMA17

230 per million5

6210 per million4

69 per hundred1

31 per hundred2

67 per thousand3

3.4 per million6

DefectsZ

USL

Defects

(Result > USL)

Defects (Result > USL)

LSL

Defects

(Result < LSL)

Defects (Result < LSL)

x

Process Capability is the KeyDefects per Million Opportunity analysis

STRATEGIC SIX SIGMA

Three SIGMAOr

BUST!

Six SIGMAWhere

APPROPRIATE

18

It’s more than averages

Our customer don’t experience averages… they experience variation

On average, I answer the phone in 30 seconds

Jane called, I answered in 45 seconds

Fred called, I answered in 90 seconds

Average

How you doing, Fred?

Averages don’t represent variation

Both call centers have the same average, which one do you want to call?

Call Center 1

Call Center 2

10 30 60Seconds to Answer

What does SPC allow us to do?• Identify critical problem areas/ solutions

– Focuses only on real issues– Eliminates the death grip of month to month comparisons– Uses the VOICE of THE CUSTOMER to gauge success

• Determine the “capability” of any process

• Understand and optimize any process

• Reduce variation and monitor for unusual conditions

SPC = Statistical Process Control

What About Metrics?

Processes are “how we execute” … metrics tell us “how well we execute”

0

10

20

3040

50

60

70

80

H L

SpeedOil Pressure

H L

Temperature

Target is 50%

First Call Resolution Control Chart (Feb 04 – Feb 05)

46%

61%

55%

59%

64%

56%53%

25%

30%

35%

40%

45%

50%

55%

60%

65%

70%

Feb-0

4

Mar-

04

Apr-0

4

May

-04

Jun-

04

Jul-0

4

Aug-0

4

Sep-0

4

Oct-04

Nov-0

4

Dec-0

4

Jan-

05

Feb-0

5

Months

% F

irst

Cal

l Res

olu

tion

.

0

1,000

2,000

3,000

4,000

5,000

6,000

Tot

al T

ick

ets

Good

. Reorganized the tasks formerly done by the System Administrator positions by

increasing permissions for the Help Desk Coordinators.

VOC = 50%

VOP = 59%

Process IN ControlFebruary 2005 First Call Resolution was 56%

Initial goal is 50% or better *

* Final goal is 90% or better

First Call Resolution

0

10

20

30

40

50

60

45 to50

50 to55

55 to60

60 to65

65 to70

70 to75

75 to80

80 to85

85 to90

90 to95

95 to100

100 to105

% First Call Resolution

Nu

mb

er o

f D

ays

in e

ach

ran

ge

n = 148Weekdays

Aug04 - Feb05 LSL=50 USL=100

11/9/04 - IVR and Seagate outages2/4/05 - Outlook issues2/14/05 - Citrix Outage

11/30/04 - Network Drive Outage (tickets closed by HD, not assigned to Parent)

12/27/05 - Day after Holiday, extremely low volume

Process is Operating at 1.97 Sigma Process is NOT Capable - Cpk (sigma) = .7

Target is 3 Sigma or better

First Call Resolution Capability Chart

Return to Presentation

Phone Only - Weekdays - Control Chart

Process IN of Control

August 2006 First Call Resolution was 60%

55%

57%

60% 60% 60%60% 60%

62%

61%

64%

61%

63%

59% 60%

40%

45%

50%

55%

60%

65%

70%

Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06

Months

% F

CR

.

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Tot

al T

icke

ts

.

FCR% UCL=67% A=66% B=64% VOP=62% B=61% A=59% LCL=57% VOC = 50% Total Tickets

Good

VOC = 50%

VOP = 59%

Process Break: Added FCR to

monthly incentive program. Pay out at 65%

First Call Resolution Control Chart (Jul 05 – Aug 06)

Added First Call Resolutionto monthly incentive program.Pays out at 65%

Voice of the Process = 62%

Voice of the Customer >= 50%

Return to Presentation

IT Helpdesk – First Call ResolutionAction Plan

• “My plan is to continue to try to add FCR opportunities to the Service Desk. I am currently in the process of meeting with other groups to transition some of their support to the helpdesk. The more we can solve the problem instead of passing it to another group, the better.”

Ross DominyHelp Desk Manager

Challenges in Process Improvement

• Questions about what I.T. knows about business?

• The deadly embrace of flawed methods

• Real improvements take time

Vendor created cost management(real example)

• Software problems driving $6M in annual cost

• Ticket backlog grew to 1000 open problems

• Contract negotiation pending

• Looking for a Win-Win solution

Vendor created cost management (cont’)

• Established contract incentives based on:

– Predictability of ticket resolution process

– Capability of ticket resolution process

• Open ticket volume reduced by 90% in 6 months

• Total 5 year incentive payout < 20% of the cost driven by software problems in same period

– Incentives funded directly by avoided cost

ICOMS -

KANA -

Cox Edge -

PeopleSoft -

Other -

Application SLA Missed %

30%

60%

41%

20%

29%

AS-400 Response Time

Transform

Voice of the Customer

Voice of the Process

Upper Control Limit

Lower Control Limit

First Call Resolution

HELP DESK ASA

Application Uptime

Performance ExcellenceMeasuring the Right Things Right USL

Control Charts Capability Charts

USL

USL

STRATEGIC SIX SIGMA

Before

After

16

Real improvements take time but ….

• We are all changing the engines in flight

• Business leaders want Shock and AWE

STAYING THE COURSE19

• Real understanding of what to change

• Sustainable, positive results that start quickly

Six Sigma offers the opportunity for