March/April 2004www.edocmagazine.com

Enterprise content management at WorkThe Official Magazine of

By Mark W. Fowler

In my previous column, I shared that a definition ofinsanity is “Doing the same thing repeatedly, yetexpecting the results to differ each time.” As a prin-cipal in a global document management consulting

practice, I often see organizations attempting to addresstheir document management needs, perceived or real,through a request for proposal (RFP) process and focustheir efforts on learning about software features and ben-efits or licensing fee structures, rather than identifyingthe root cause of the organization’s problem and aligningthe solution to the business strategy. The question thatbegs to be asked is “What is different about your RFPprocess that is going to give you not only the lowest pro-curement costs upfront, but also deliver continuous costimprovements over the lifecycle of the technology andfacilitate non-technological improvements for your firm,too?”

One of the major challenges withRFPs is that the specification offeredby the purchasing firm is likely rep-resenting only a snapshot in time of abusiness condition that needs to beaddressed. More often than not, thetechnology will be implemented butnot fully adopted by the targeted usercommunity, and the projected returnon investment is never realized. Thisis often a result of an RFP processthat failed to recognize a simple factof life: business issues change overtime, quite unpredictably and swiftlyin many industries. Technology investments must contin-ue to generate positive returns despite such changes with-in the business environment and be adaptable so they can

continue to be aligned with business strategy. That adapt-ability is critical, and to achieve it one must first under-stand the processes underlying the technology about tobe acquired and have a mechanism by which to measurethe technology’s impact on that process. Without a clearmethodology, one may quite easily replace inefficientpaper-based processes with highly automated alterna-tives that do nothing more than very efficiently stuff yourcontent into a sort of digital landfill, where the contentsbecome just as valueless as their paper predecessors andthe anticipated benefits to the business are lost.

There are certain methodologies being deployed onsolving business problems via document management. Inthis article, we’ll take a closer look at how organizationshave gotten “SMARTer” with their document manage-ment projects:

SpecificMeasurableAchievableRelevant to the businessTime-bounded

Many organizations have started byinvesting greater attention on the prob-lem, or the current state. The first step togetting a handle on the problem is toassess the external versus internal forcesover a representative period of time.Once the root causes of the problem areidentified, they can be prioritized. With aprioritized list of opportunities and basicestimates of their respective returns to the

business, many businesses then evaluate “fit.” That is,would addressing these opportunities dovetail with theorganization’s top goals? If so, the construction of a

Using a Lean Six

Sigma methodology

to focus on the

right priorities for

How To BringSanityto Insane RFP’s

compelling business case will garner executive sponsor-ship to move forward. If not, the initiative can be disqual-ified—even though it may have originally looked prom-ising. Organizations simply do not have the resources toentertain engagements that do not deliver quantifiableresults to the bottom line, regardless of the features andbargain basement prices that may be outlined in theresponses to an RFP.

Six Sigma ExplainedWith an increased frequency, organizations are turning toa Six Sigma methodology to prioritize and guide invest-ments in the document management space. A primarygoal of all Six Sigma projects is to reduce process vari-ability and improve consistency of output. Emergingfrom manufacturing at Motorola and honed by GeneralElectric, Honeywell, and others, leading non-manufac-turing companies are now also concentrating more ontheir process excellence and less on implementing tech-nological tools that address a relatively simplistic view ofthe business issues at hand. In fact, Larry Bossidy ofHoneywell once noted that their “experience shows thatthe average savings for a service project is double that ofa manufacturing project.” Clearly, the Six Sigmaapproach of defining, measuring, analyzing, implement-ing, and controlling new, improved business processes—often, but not always—facilitated with technologicalimprovements is applicable beyond the manufacturingcommunity.

Six Sigma is a comprehensive and flexible systemforachieving, sustaining, and maximizing business suc-cess. Six Sigma is uniquely driven by close understand-ing of customer needs, disciplined use of facts, data, andstatistical analysis, and diligent attention to managing,improving, and reinventing business processes.

The goal of Six Sigma is to design processes that dowhat they are supposed to do with very high reliability,ultimately producing very consistent products and serv-

ices. Six Sigma applies to all company operations,including business transactions, services, product devel-opment, and manufacturing processes. The term SixSigma refers to a product or process that produces onlythree defects (or errors) out of every million opportuni-ties.

Few, if any, companies have attained this level ofnear-perfection across the board. But many individualproducts or service delivery processes have reachedthis high level of performance. Most companies oper-ate somewhere between two and three sigma, whichmeans they produce between 300,000 and 65,000defects for every one million opportunities. Improvingperformance closer to Six Sigma can provide more ofwhat all of the company’s diverse stakeholders want:

• Customers receive more quality, more reliability, andmore value

• Employees obtain more job security, more teamwork,and more participation

• Shareholders gain more profitability, more marketshare, and more return on investment

Each step along the path to higher performance bene-fits all stakeholders: customers, employees, and stock-owners, even if every process does not reach the SixSigma level. The purpose is business success. Businesssuccess may be defined in one or several different terms,including:

• Reduced cost• Increased market share• Improved customer satisfaction• Faster time to market• Increased revenue and profitsHaving discussed Six Sigma in general terms, let’s

move on to understand the specific process employed bySix Sigma to achieve results—a structured, closed-loop,team-oriented application of the scientific method. If youare familiar with Deming’s Plan-Do-Check-Act/Adjustcycle, you will see a similarity in the basic thought

The following graphic demonstrates how Lean Six Sigma provides a holistic and mutually reinforcing approach to process improvement.

content, broken down to a greater level of detail. The five-step Six Sigma process uses data to drive

decisions. The steps applied to specific improvementprojects are:

Define–Measure–Analyze–Improve–Control (D-M-A-I-C). Before embarking on a project, however, apreliminary activity is also necessary to Prioritize proj-ects based on business performance (sometimes includedwith the Define phase).Define: Prioritize projects based on business impact andalignment with performance excellence plan. Six Sigmaprojects start by capturing the voice of the customer.Measure: Measurements drive the Six Sigma process—what gets measured gets done!Analyze: Analytical tools are used to dissect the rootcause of process variability and separate the vital fewinputs from the trivial many.Improve: The Improve phase turns analysis into action.Control: After implementing improvement actions, theControl step verifies results and consolidates the gains.1

Lean ProductionMost readers are probably familiar with the old adage,“Time is money.” In business, the cost of time manifestsitself in many forms, such as: full time employees(FTEs), slow moving inventory, or staged events waitingfor some value-add task to be completed. Where SixSigma addresses the issue of consistent quality, LeanProduction addresses the other critical business elementof time. Michael L. George, chairman and CEO of theGeorge Group, explains in his book Lean Six Sigma:Lean is a process philosophy with three purposes:

1.To eliminate wasted time, effort, and material.2.To provide customers with made-to-order prod-

ucts.3.To reduce cost while improving quality.

Lean is a methodology that is used to accelerate thevelocity and reduce the cost of any process (be it service ormanufacturing) by removing waste. Lean is founded on amathematical result known as Little’s Law:

The lead-time is the amount of time taken between theentry of work into a process (which may consist of manyactivities) to the time the work exits the process. Thingsin Process

• in Procurement are the number of requisitions.• in Product Development is the number of

ProjectsIn Process.

• in Manufacturing is the amount of Work InProcess.

Lean contains a well-defined set of tools that are usedto control and then reduce the number of Things inProcess, thus eliminating the non-value add cost drivenby those Things in Process.2

A Symbiosis: Lean Six SigmaBy integrating these two powerful business processapproaches, Lean and Six Sigma, we end up with LeanSix Sigma. George goes on to further explain, “The pay-offs of Lean Six Sigma have an interesting phasing.Projects that are primarily Lean concerned with processvelocity and efficiency pay off very quickly in inventoryand manufacturing cost reductions. Then Six Sigma proj-ects that are working to improve quality (reduce defects)provide a mid-range addition, aided by faster processcycle times achieved by Lean efforts. Design for LeanSix Sigma efforts have much larger payoffs, as theyimpact 50% of the product or service cost determined bydesign.”

Putting it another way, the principle of Lean Six Sigmasays: Fix the processes first that are causing the longestdelay times with respect to your identified Critical ToQuality (CTQ) issues. If you do this, you will be work-ing on the right projects in the right order. This principlewas the key breakthrough of Lean Six Sigma that wasnot, nor could not, have been understood by those whoadvocated either Lean or Six Sigma alone.

Determining ValueAs stated earlier, the challenge with RFPs is that RFPs aresnapshots of a specific instant in the life of a business.Business issues change over time, morphing fluidly as thedynamics that govern the underlying business processeschange. Technology investments must stay relevant andchange with that type of dynamic business climate.Aligning technology investments with business strategyis critical—as critical as identifying the root technologicalissues. In many cases, the dynamic nature of the businessclimate is the source of competitive advantage over time.

In his book Value Migration, Adrian J. Slywotzkydescribes the flow of profit and shareholder wealthacross the business chessboard. Value leaves economi-cally obsolete business designs and flows to other, newbusiness designs that more effectively create utility forthe customer and capture value for the producer. The firststep in mastering patterns of value migration is to under-stand the interaction between customer priorities and thebusiness design. Slywotzky summarizes this in writing,“Technology alone, not embedded in an effective busi-ness design, is no longer a viable approach to generatingsustained value growth.”3

Slywotzky concludes that in order to create and cap-ture persistent value the technologies and products thatcompanies purchase must be linked to successful busi-ness designs. Those business designs need to focus onthe firm’s customer’s value. The business designs mustdemonstrate to customers that the superiority of thefirm’s product(s) is a critical element in the ability tomaintain continual business momentum. While mostbusiness people would likely consider this commonsense and further suggest that their organizations alreadywork in this way, very few consistently demonstrate anaptitude to selecting the technology-related projects theywill work on in a manner consistent with these concepts.

Lead Time OfAny Process =

Quantity Of Things In Process

Average Completion Rate/Unit Of Time

Fewer yet are able to procure and implement technolo-gies, including document and content management sys-tems, in a manner that supports these ideals. However, astrong methodology, like Lean Six Sigma, can ensurethe wants and needs of a company’s customers directlyimpact and guide the projects and processes created,deployed, and innovated upon.

Case in point: recently a state department of transporta-tion decided to approach a document management initia-tive with Lean Six Sigma methodology. They started byassessing the current process of creating the necessarydocumentation to support their Bid/Let process. Theirgoals were to:

• Document current state process and define opportuni-ties for improvement.

• Define functional requirements for realization ofimprovements.

• Identify financial impact of changes.The opportunities for improvement they found were

decreased cycle times, reduced costs, and qualityimprovements. By providing an electronic means of thedistribution of plans (via the Web), costs associated withpaper document creation and distribution were drastical-ly reduced. The time associated with non value-add taskswill be reduced as well, allowing them to refocus thattime on collaboration across project teams to create realvalue. Lastly, productivity increases will be facilitatedthrough the implementation and adoption of an electron-ic repository inside the core department of transportationIT infrastructure. By starting with the process instead ofthe technology, the organization is linking the technolog-ical changes to the changes in work process for the indi-viduals performing the work, and providing a platformfor long-term growth throughout the department.

The combined potential savings internally(printing/copying), to consultants and to contractors isalmost a million dollars each year. The project will notonly pay for itself quite quickly, as most Lean Six Sigmaengagements do; it will continue to provide additionalcost savings opportunities on an ongoing basis while pro-viding the flexibility to adapt as business conditionschange.

Cost savings like these are being seen consistently bythose that embrace Lean Six Sigma and a focus on gettingto the question of “Why?” that so often goes unaskedwhen technology is being procured. The savings are onthe table across many industries, and they may be yoursfor the taking. For example, if you’re a mortgage compa-

ny that is processing loans the old-fashioned way by pass-ing folders from one out-box to another in-box, what isimplementing imaging and workflow going to do for yourorganization if future growth via mergers and acquisitionis not taken into consideration? How can you turn a highdegree of accuracy of the data into a premium paid byinvestors for the loan portfolio? Can you enter new seg-ments of your markets by managing the content of thefiles more effectively than your competitors?

Similarly, a health insurance company may believe thatimage-enabling their customer relationship managementsystem will drive down their call center costs, and thatmay in fact be true. However, why are the customers call-ing in the first place? Are there larger gains to be garneredby driving down the number of incoming calls rather thanserving up images to the customer service representa-tives? Is there a root cause that needs to be assessed, forexample a confusing format to the explanation of benefitdocuments being mailed out, rather than focusing on thefeatures and integration potential of an imaging system?

If organizations incorporate Lean Six Sigma into theircorporate cultures and way of conducting business, thentheir projects conducted with the methodology will aligndirectly with existing business strategy and needs.Organizations are becoming “SMART” (Specific,Measurable, Achievable, Relevant to the business, Time-bounded) by using Lean Six Sigma methodology onsolving business problems with their document manage-ment projects and saving big money while doing so. •

Mark W. Fowler (mark.fowler@connect.xerox.com) is aPrincipal in the Document Content & Imaging ServicesPractice for Xerox Global Services, Inc., the professionalservices division of Xerox. He works with clients to helpthem do great work for their customers using document &content management tools & services and the Lean SixSigma methodology.Notes1 Xerox Global Services. Introduction to Lean SixSigma. www.xerox.com, 2003.

2 Michael George. Lean Six Sigma. New York:McGraw-Hill, 2002.

3 Adrian J. Slywotzky. Value Migration: How toThink Several Moves Ahead of the Competition.Boston: Harvard Business School Press, 1996.

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