Manage IT Projects and Resources the Six Sigma Way

Best-practice companies have been using Lean Six Sigma to drive Information Technology (IT) improvements and better software designs for years. But broad acceptance, despite proven results in the sector, has been slow. This may be due to a lack of understanding about the processes and benefits of Lean Six Sigma. By exploring how Lean Six Sigma is used at these best-practice companies and learning the answers to some common questions, software and IT organizations not already using Lean Six Sigma can gain a greater understanding of what they are missing.

Software and IT: The Last Improvement Frontier

Underperforming and benchmark IT processes alike face many of the same issues. These problems have been well known to practitioners of Lean Six Sigma for years, and include the following traits of poor IT portfolio management practices:

◉ Poorly defined processes

◉ More projects than capacity

◉ Poor visibility of what is being worked on

◉ Poor or no alignment to strategic objectives

One research firm noted that 75 percent of IT organizations have “little oversight of their IT project portfolios and employ nonrepeatable, chaotic planning processes.” Other aspects of IT processes experience similar problems and results. Certainly, if this is the state of the front end of where fundamental IT work is allocated, budgeted and managed, the entire process is set up for downstream failure.

There have been many attempts, under many labels, to fix these problems and issues in IT. Some address the strategic alignment issues while others address specific tactical or functional issues. Although most of these solutions are adequate helpers within their individual spheres of influence, few methodologies have provided the holistic alignment and linkage needed from top to bottom the way a properly orchestrated Lean Six Sigma system does.

IT Best Practices Using Lean Six Sigma

The application of Lean Six Sigma in best-practice companies has consistently provided a roadmap toward higher performance levels in all aspects of IT. IT organizations and CIOs, including those at Bank of America Corp., Sara Lee Corp., National City Corp., Xerox Corp., GE and Seagate Technology LLC, have demonstrated that IT processes can be defined, measured, analyzed, improved and controlled in a way that helps align projects and assures business results – the Lean Six Sigma way.

These companies and others have also successfully deployed the Lean Six Sigma design roadmap, Design for Lean Six Sigma or (DFLSS), to assure effective, efficient and robust designs of their IT solutions.

Sara Lee required all professionals within its IT organization (including strategic IT vendors) to become Lean Six Sigma certified prior to beginning a company-wide SAP AG software implementation. Sara Lee chief information officer (CIO) George Chappelle recently explained to Lean Six Sigma conference attendees that, “We needed to do this so we would be able to see measurable outcomes aligned to the needs of our company and our customers.” It was that data-driven aspect of Lean Six Sigma that enabled Sara Lee’s IT group to gain strategic alignment, quantitative understanding and a high probability of successful business outcomes related to the deployment. DFLSS concepts were used throughout the projects.

Seagate CIO Mark Brewer has relied on Lean Six Sigma since the early 2000s. In a CIO magazine interview, which cited millions of dollars of IT savings, he said, “If I view IT operations as a factory, then Six Sigma applies immediately.” In the same article he discussed a server response problem long thought to be an expensive bandwidth problem. Once Six Sigma was used to measure multiple server response times, and the causes of variation were understood, the problem was found to have nothing to do with bandwidth. The solution was basically free (other than the analysis and some tuning) and large savings were realized.

Further, these organizations have used DFLSS for everything from portfolio management to risk management to software development. By charging the process with better, faster and more-accurate requirements planning, prioritization and analytical tools; accurate measurement systems; and a management process to monitor and adjust their use, DFLSS brings a layer of efficiency, order and alignment to customer needs often missed by other tools and methods.

Some Common Questions

These cases and examples were, for the subject companies, significant breakthroughs from the reactive and chaotic state they were in before Lean Six Sigma brought some consistency, order and methods to the table. Going into Lean Six Sigma, they likely had many questions and concerns.

Q: Does Lean Six Sigma replace everything else going on in an organization?

A: Of course not. Other specific development tools and methods must remain in place to drive function-specific best practices and core work processes. Lean Six Sigma helps glue them together, keeps them data driven, and aligned to customer and company needs. By reducing and eliminating rework and eliminating mistakes and recurring problems, a new layer of efficiency will be realized. Project redundancy and overlap are often discovered through the use of prioritization tools such as analytic hierarchy process (AHP), cause-and-effect diagrams and FMEA (failure mode and effects analysis). The use of these tools is not often taught or advocated in conventional software development or IT standards.

Q: Are Lean Six Sigma resources necessarily incremental?

A: If they are, then something is wrong. Lean Six Sigma resources are supposed to be the “best and brightest” from their respective organizations. Lean Six Sigma projects should be related to the most important and strategic business issues in the organization. These two things should go together. If they do not, then an organization is doing a poor job of resource allocation. Lean Six Sigma helps organize teams, roles and responsibilities around specific projects and issues. Project-selection tools assure alignment and business cases that meet the needs of the company. The only incremental resource is the time required to put employees through training. But even at that, projects are “pulled through” the training process and completed as a function of an employee’s training, often saving more money than the training costs.

Organizational Evaluation

Remarkably, many IT groups argue that they “don’t have time for Lean Six Sigma” because they are working on various initiatives, such as portfolio management, security, information technology infrastructure library (ITIL), capability maturity model integration (CMMi), control objectives for integrated and related technology (COBIT) and project management body of knowledge (PMBoK). When assessing these organizations, findings indicate that the many initiatives often conflict, contend or duplicate each other. This drives them to a reactive state where emotionally charged executives and managers attempt to justify their projects over others on what is usually subjective or anecdotal information. Higher performing organizations, however, realize that Lean Six Sigma does not mean more work. It means doing the existing work in a more efficient, data-driven, planned and prioritized manner. If an IT organization is really interested in becoming more efficient and customer focused, it might help to start by looking inward and devising a plan to drive systemic change based on the organization’s character.

Organizations usually fall into one of three general categories:

1. “Short-sighted and reactive organizations” – Someone at this type of organization might simply say, “Everyone is already too busy with what they have on their plate; we do not have time. Lean Six Sigma is all about statistical methods.” Their methods and data are usually subjective, anecdotal and generalized.

2. “Early learning organizations” – Someone at this type of organization might say, “Our data shows that we have a miserable track record for completing value-added projects on time and on budget. We need to and will change.” They have some level of data use in their decision-making process but prioritization and analytical techniques are not used broadly and consistently. The data may exist but may be poorly organized and inaccurate. Thus, the data may drive invalid conclusions, even if good analytical tools are employed.

3. “High-performing organizations” – These organizations use a method and tools for aligning, prioritizing, measuring and managing project performance. Observations clearly show a common and consistently followed approach that can be quantitatively linked to auditable business results with strong and continuous cycles of evaluation, improvement and innovation (even in iterative, agile processes).

Take the Next Steps

Intuitively, most people know that change, especially when driving an organization from a reactive state to a proactive state, does not happen by mandating a new software tool or demanding everyone work harder. Change comes from a consistent, strategically aligned, rigorous process that is reinforced for the long haul as the organization’s operating system. Many existing standards and methods fall short on this front-end change mechanic. Lean Six Sigma was engineered to address those shortfalls by:

◉ Focusing on facts and data to prioritize and select projects and resources.

◉ Establishing roles, responsibilities and accountabilities driven by performance data.

◉ Linking and aligning business goals to project goals (driving the businesses closer to software and IT functions).

◉ Requiring frequent review of performance data and supporting analysis.

◉ Refusing to accept redundancy, overlap and poorly prioritized projects and resources.

Historically, Lean Six Sigma was created because attempts at using standards such as International Organization for Standard 9000, conventional quality assurance/quality control and other top-down, broad-based initiatives failed to drive the advertised performance results. In analyzing what worked and what did not in these systems, practitioners learned that problem-solving success comes from thinking a problem through and clearly defining it in quantitative terms from the beginning. In today’s fast-paced software and IT world there is tremendous pressure to deliver on time and on budget. This pressure can easily cause organizational behavior to short-circuit the front-end processes (planning, prioritization, requirements and design), resulting in poor resource-management decisions, missed requirements, and higher rework and support costs.

The following six steps may go a long way to help IT organizations avoid some of these problems:

1. Pay particular attention to the organization’s project selection process; make sure that it is data driven and utilizes some basic prioritization and alignment tools.

2. Be sure that project definition, selection and prioritization is a team sport, especially involving business and external customers.

3. Utilize a complete and common project charter template that clearly states a measurable project metric(s).

4. Follow a common roadmap (such as DMAIC) to assure that all critical success steps and tools are utilized to maximize efficiency and minimize project risk.

5. Conduct frequent data-driven tollgate reviews, focusing not only on milestones and cost, but also on performance data related to functional or specification requirements.

6. Learn form project performance by retaining and reviewing project history, particularly project successes and failures.

The Lean Six Sigma methodology, adopted for use in software and IT, has proven to be a valuable way to drive organizations from the reactive and chaotic state to a more desirable and efficient proactive state. When implemented properly, it helps to provide a much needed process discipline, while recognizing and leveraging other bodies of knowledge including agile, PMBoK, CMMi, ITIL and other important domain-specific processes.