Six Sigma Aids in Resource Planning for IT Employees

Effective resource planning is an important part of any process improvement program. Formalizing processes and developing measurement systems helps to determine the value of internal projects from a human capital perspective. A measurement system for effective resource planning in implementing project goals may be particularly helpful for information technology (IT) divisions of companies.

Developing a Measurement System

A first step in defining the measurement system must be establishing formalized processes for resource planning. Practitioners should gather and analyze the business requirements within the process to determine deficiency input points. This can be done using process flow diagrams of both current, or “as is,” and modified, or “to be,” processes.

Next, practitioners should determine critical-to-quality (CTQ) requirements for project task deliverables. Metrics for evaluating resource planning processes consider these CTQs. Once CTQ characteristics are identified, the cost of poor quality (COPQ) can be determined. A project skills matrix and a failure mode and effects analysis (FMEA) for resource planning can be used to capture data for measurement. Then practitioners can identify the defects per million opportunities (DPMO), a number that can be converted to a sigma level. The sigma level will focus on measuring and eliminating defects in core resource planning processes.

Six Sigma can be used to define process capability in order to identify metrics for evaluating the outcome of CTQ requirements.

Identifying CTQ Variables

In evaluating project resourcing planning, the earned value management model can be used in defining CTQ variables. In order to evaluate performance, practitioners can use a general variance model, in which the actual resource cost is compared to the standard budget for a given project, to examine the cost of a resource in terms of hourly amount, hours utilized and scheduling. When actual utilization in terms of cost and scheduling exceeds the standard budget, it is deemed unfavorable.

Within the variance model framework, a resource manager should construct a CTQ FMEA template that is applicable to staffing requirements outlined in the Define phase. The CTQ specifications should be stated, and measures devised. Variables can be associated with defect opportunities (Table 1).

Table 1: Example of CTQ Requirements

Requirement	Variable	Defect Threshold
Set up server hardware	Resource skill	Hardware malfunctions due to incorrect setup four times
Install and configure Oracle on server	Resource skill in specialty area	Incorrect settings in system global area four times
Post go-live application support	Resource training relevant to skill	Incorrectly diagnose problem as user training issue when in actuality it is an application bug three times

The conversion of actual defects in task delivery to DPMO will derive a sigma value denoting either organizational excellence, satisfactory performance or unfavorable results. Practitioners can compare sigma values at the start and end of the project to determine improvement gains. A sample of a CTQ measurement is illustrated in Table 2.

Table 2: Sample CTQ Measurement

Define	Measure	Analyze	Improve	Control
CTQ: The customer will tolerate up to four hardware malfunctions due to incorrect setup	Defects: Hardware malfunctions four times Units: 196 (47 file servers x 4 setup errors) Opportunities: 1 per file server DPMO: 85,100 Process sigma: 2.81	Two system engineer resources, A and B, are assigned to task: Resource A sets up 23 file servers over a period extending beyond the planned 10 workdays (13 workdays actual). Resource B sets up the remaining 24 file servers under the planned 10 workdays (9 workdays actual). Six file servers that Resource A sets up experience malfunctions due to incorrect setup.	Resource A caused a cost and schedule variance and failed to meet CTQ requirements six times. Defects: Hardware malfunctions six times Units: 138 (23 file servers x 6 setup errors) Opportunities: 1 per file server DPMO: 260,900 Process sigma: 2.14	Identify opportunities for Resource A to improve server set up ability through training or journeying.

Quantifying COPQ in Resource Planning Processes

There are many causes that affect COPQ: demand constraints, labor cost to fix problems, cost of lost opportunity, underutilization, loss of sale or revenue, and lower service level to customers. Table 3 describes these causes from a resource planning perspective.

Table 3: Poor Quality Causes in Resource Planning

Poor Quality Cause	Description
1	Underutilization of resources is also termed spoilage in Six Sigma. It occurs when there is inconsistence or inefficient processes.
2	Reworking a deliverable due to wrong resources skill applied involves the labor to repair the defect.
3	Additional resources includes any burden of consumption of resources in order to accommodate an unforeseen step in project deliverables.
4	Lost opportunity is the loss in business of a failure. Included are the loss of margin and the capital to be invested for regaining lost revenue to offset the cumulative revenue loss.
5	Lost revenue due to poor quality considers the loss of new business due to defective quality in a deliverable.
6	Poor customer satisfaction is the sum total of all COPQ. Cost is compounded by losses customers suffer due to defective quality in a deliverable.

The calculation of COPQ uses weighted risk for potential failures. It considers an estimation of four components:

1. Probability of occurrence for each failure

2. Potential severity of each failure

3. Current detection provisions

4. Resolution cost of a single failure

Table 4: Sample COPQ Measurement

Goal: Reduce Customer Dissatisfaction Incidents Due to Resource Related Project Failures by 75

No.	Potential Resource Deficiency	Risk Priority Number	Effort Hours to Resolve	Average Cost Per Hour	Average Cost to Resolve	RPN x ACR
1	Right skilled but underutilized in project task	30	10	$90.00	$900.00	$27,000.00
2	Wrong skill to repair defect	27	40	$48.00	$1,920.00	$51,840.00
3	Added resource due to scope creep	27	56	$240.00	$13,440.00	$362,880.00
4	Loss of business opportunity due to downtime (daily revenue = $10,000)	18	40	$416.67	$16,666.80	$300,002.40
5	Lost revenue due to resource incorrectly working project task	21	10	$4,166.70	$41,667.00	$875,007.00
	Total:	123				$1,616,729.40

Formula 1: Weighted average cost to resolve = (RPN x ACR)/RPN = 1,616,729.40/123 = $13,144.14

Formula 2: COPQ (annualized) = Weighted average cost to resolve x annual reduction in resource related project failures 13,144.14 x 75 = $985,810.50

The connection of COPQ to DPMO means that poor quality costs are proportional to sigma levels. The yield should be compared to the cost of quality in the finished project deliverable. The sigma level correlation to DPMO and cost of quality is stated as percentage of revenue (Table 5).

Table 5: Sigma Level, Value, DPMO and Cost of Quality Percentage

Sigma Level	Range Value	Yield	DPMO	Cost of Quality Percentage
2	Unfavorable	-	298,000	More than 40%
3	Satisfactory	93.3%	66,870	25%-40%
4	Satisfactory	99.8%	6,210	15%-25%
5	Organization excellence	99.977%	233	5%-15%
6	Organization excellence	99.99966%	3.4	Less than 1%

Control System Benefits

A performance measurement system enables management to plan and make decisions. The approach identified here provides a control system that aligns practical standards against ideal, or perfect, conditions. Standardization provides performance baselines for control efforts in budgeting and planning of resource allocation. From here, practitioners can devise a simple formula that compares actual costs in resource allocation against the baselines. Variances should be noted to determine the extent of favorable and unfavorable outcomes. The data used to derive costs can be maintained in the project management application for creating reports and scorecards.

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9 Lessons Project Managers have learned this year

We are itching to see the back of 2020. It has been a year unlike any other.

The pandemic brought us stress and worry. The government's ever-changing guidelines threw us curve balls and had us jumping through hoops. And for months on end, we have been in a state of sink or swim.

But hey! You’re here. You’re reading this and you have made it through. So, take a moment, sit down, and reflect. You have learnt so much from surviving 2020. We’ll set the ball rolling for you; here are nine lessons we know project managers have learned this year:

1. Planning for the unplannable

In business not everything goes to plan, but no one could have predicted the coronavirus pandemic. And so, project managers have been given a crash course in planning for the unplannable. No risk management assessment could ever have taught it to this level. Project professionals have learnt the importance of being able to react, adapt and pivot; adjusting plans at speed as new information comes to light and government guidelines change.

2. How to be resilient

Speaking of changing guidelines, the pandemic has taught us a lot about following legislation and even having to make tough calls as a consequence. One such example is the difficult decision of furloughing staff or even worse, making redundancies – challenging choices that are sure to have tested many managers. In the interest of business continuity project managers have made numerous hard decisions throughout the pandemic and gained great resilience through the process.

3. The ability to prioritise

For many of us, long term projects have taken a back seat, been delayed, or halted altogether to make way for more pressing matters. Project managers have had to put aside those ‘nice to do’ projects and paused all but the necessary in order to free up time for urgent projects and measures that will protect the organisation in the long term. In this way project professionals have had a stark lesson in rethinking priorities.

4. Managing distributed teams

Remote working was no new thing, but that’s not to say the transition to fully distributed teams at the hands of COVID has been easy. Project managers in charge of large numbers of staff have been challenged with having to lead teams from afar. We are all guilty of micromanaging on occasion, but hopefully you’ve struck the right balance; checking in, not checking up on your employees!

5. Thinking outside the box

Priorities shifted and ‘business as usual’ became a thing of the past, and so out of the box thinking became essential for surviving the unprecedented environment of COVID-19. Project leaders should be proud of all they and their teams have achieved this year in terms of innovating and reimagining. This enhanced skill is sure to continue to be of benefit in the future.

6. Improving your work / life balance

Daily work life as you once knew it is sure to have been shaken up in some shape or form – whether you’ve been operating on a part-time basis, or just gaining back those hours normally wasted on your commute. Being given this time has been a blessing for many of us who have used these exceptional circumstances to improve our work / life balance. Afterall, the pandemic has taught us the great importance of loved ones, our health, and valuing a slower pace of life.

7. Building better relationships

Whilst it may have felt like the blind leading the blind, the pandemic is sure have bettered your relationships with your team. The comradery of “we’re all in this together” has echoed through our lives and brought a new sense of support to our workplaces. Adopting a leadership style which values empathy, active listening and engagement has been crucial for this journey. A management approach which cultivates wellbeing is surely a lesson we can carry forward too.

8. Investing in your employees

On the topic of prioritising relationships and building trust amongst your staff, this crisis has taught managers the value of investing in employees. The way people have risen to the pandemic’s challenges is amazing. Your teams are capable of great things – innovative thinking, resilience, and commitment; and so harnessing and developing their skills is essential.

9. You are capable of so much

Whilst looking back on 2020, you must recognise just how much you have accomplished in these whirlwind months. No one could have anticipated the mammoth changes this year brought with it, nor how successfully project managers have been able to adapt. Projects that could take months in normal times have been executed in days, and you have navigated your way through it all. You are capable of so much and should feel a great sense of pride! This should boost your confidence, motivate and enhance your future work.

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Applying Theory of Constraints to Manage Bottlenecks

The theory of constraints is an important tool for improving process flows. The implications of the theory are far reaching in terms of understanding bottlenecks to a process and better managing these bottlenecks to create an efficient process flow.

The theory of constraints is an important tool for operations managers to manage bottlenecks and improve process flows. Made famous by Eliyahu M. Goldratt in his book The Goal, the implications of the theory are far reaching in terms of understanding bottlenecks to a process and better managing these bottlenecks to create an efficient process flow. Simply put the theory states, “the throughput of any system is determined by one constraint (bottleneck).” Thus to increase the throughput, one must focus on identifying and improving the bottleneck or constraint.

Goldratt in another book, Theory of Constraints, outlines a five-step process to applying the theory:

1. Identify the process’ constraints

2. Decide how best to exploit the process constraints

3. Subordinate everything else to the above decisions

4. Evaluate the process constraint

5. Remove the constraint and re-evaluate the process

Illustrating Theory with Boxes of Candies

Teaching the theory of constraints can be aided by a simple simulation exercise with people in any training class: Take small five boxes partially filled with 15 small candies each. The instructor hands the boxes one at a time to the first participant who empties the contents and then hands the box and candies to the next participant. The second person counts the number of candies, puts them in the box and hands it to the third person who returns the box the instructor. The instructor varies the rates at which the five boxes of candies are handed to the first person in the “value chain” and times are recorded for each member’s part in the process.

Candy Box Value Chain

As the boxes of candies are handed to the first person slowly, it is easy to observe that all participants have ample time to carry out their activities. At the slow pace, all resources are being starved of work and the bottleneck is external to the process, i.e., the instructor. Now consider what happens if the instructor speeds up the process and hands over the boxes at a much faster rate – then, all three participants start to work faster, with the person in the middle always busy as the other two participants wait for him/her. In essence the bottleneck has now changed to Person B, and a process constraint or bottleneck has been identified.

Consider for the sake of argument that it takes the following average times for the participants to carry out their activities:

Person A: Time = 2 seconds (Throughput = 30 boxes/minute)

Person B: Time = 20 seconds (Throughput = 3 boxes/minute) <— Bottleneck

Person C: Time = 5 seconds (Throughput = 12 boxes/minute)

The efficiency of the process has slowed down to the slowest resource, the output of the whole process is three boxes a minute; and Person A and Person C are not contributing to the overall efficiency. If they were to slow down, they would not have an adverse impact on the process, since they will always have idle time. Such resources with extra capacity are non-bottleneck resources.

Considering the Effect of Inventory

Now consider the impact of inventory on the process. If only one box is sent through the value chain, the total time taken by the box to be serviced is the sum of the activities of all three participants, i.e., 2 + 20 + 5 = 27 seconds. This is the minimum theoretical time that a box of candies can be processed in. From a customer perspective it would take 27 seconds for their box of candies to be delivered. However, if there are other boxes within this value chain, then these boxes will be serviced first. The number of boxes within the system is sometimes referred to as work in process (WIP) and the relationship is expressed through Little’s Law:

Inventory = Throughput x Flow Time

Where Throughput is the throughput of the process and is the throughput of the slowest resource (Person B) and Flow Time is the average time that a typical flow unit spends within the process boundaries.

Now suppose there are a total of four boxes ahead of a particular customer’s box, thus Inventory = 5 and the formula is:

5 boxes = 3 boxes/minute x Flow Time

On overage the packet spends 1.67 minutes within the value chain before a customer gets his box back. While the value-added work on the packet is just 27 seconds, it spends a total of 100 seconds within the system boundaries. A 27 percent efficiency ratio (value-add time/total flow time).

While this simple example has been used to demonstrate the theory of constraints, the implications are clear for an operations manager who deals with processes. Suppose the three persons in the example represent three business units working together to create a horizontal value chain. If Business Unit A becomes more efficient (e.g., reducing its cycle time from 5 seconds to 2 seconds), it may actually be detrimental to the overall process. Yet quite often, Business Unit A’s improvements will be rewarded since there is a tendency to measure results vertically in silos. Additionally sometimes the work that an entity does is non-value-added. In the candies example, Person C was transporting the boxes and did not provide any value to the overall process. A good operations manager will think in depth about these issues.

Several other corollaries result:

Corollary 1: Implications on Inventory

Adding inventory to a system can greatly increase the lead time for a customer. Using the above example, the table below shows the effect of different inventories.

Inventory	Throughput	Flow Time	Efficiency Ratio
5	3 boxes/min.	1.67 minutes	.27
10	3 boxes/min.	3.33 minutes	.135
100	3 boxes/min.	33.3 minutes	.0135

In the extreme scenario where there is an inventory of 100 units on average within the system boundaries, an individual box only spends 1.35 percent of its time having value-added work performed. The rest is all waiting time. This is an important result, which means that wait time is an output Y, which is determined by inputs (X) such as inventory or throughput of the system. Some managers erroneously focus exclusively on reducing the wait times without understanding why these wait times occur (i.e., looking at the bottleneck resource or the amount of inventory that may be causing it).

Since inventory is usually a function of external demand, at some point it may be feasible to limit the number of units that can enter into the system. However, this may result in lost revenue opportunities. If this is not a viable solution, an alternative may be to put more resources to the bottleneck which will have a cost implication to the process but may speed up delivery.

Corollary 2: Implications on Throughput

In the candies example, Person B is the bottleneck. At this point all efforts should be focused on alleviating the bottleneck (theory of constraints). This can be done in a number of ways, for example, putting more resources on the bottleneck activity (like two persons acting as B instead of one), leaning, standardizing, fool proofing, flexible resourcing, job leveling (shifting some of Person B’s work to either Person A or C), etc. The idea is to alleviate the bottleneck as much as possible.

Suppose some work is shifted from Person B to Person C by asking them to fill the box with candies and the new times are recorded as follows:

Person A: Time = 2 seconds

Person B: Time = 15 seconds

Person C: Time = 10 seconds

Note that the total value-add time is still the same, i.e., 27 seconds. However, the flow times are reduced and efficiency ratios are improved, as the table below indicates.

Inventory	Throughput	Flow Time	Efficiency Ratio
5	4 boxes/min.	1.25 minutes	.36
10	4 boxes/min.	2.5 minutes	.18
100	4 boxes/min.	25 minutes	.018

Person B is still the bottleneck, however, if we continue to shift work from B to A or C, the bottleneck may change.

By simply shifting work, without any additional cost, the efficiency of the process has significantly been improved. This, however, may not be easy to do in a work setting with specialized jobs and roles.

It is obvious that theory of constraints can be applied in a number of work situations, whether it is the service industry or the manufacturing sector. The theory of constraints helps to focus on areas where improvements should be made and enables leveraging of other Six Sigma and Lean tools to improve that focus area.

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Layering: A New Approach to Business Process Mapping

According to leading LSS practitioners, 80 percent of problems in business processes can be identified and eliminated through the correct application of business process maps. Some research shows that process maps are used even more frequently than statistical tools.

SixSigma3.0, an evolution of Six Sigma developed by the Russian partnership Association Six Sigma, has significantly improved the application methodology of process maps. The practice of using conventional maps has not yet been formed into a single algorithm. Maps are used to visually represent the process and, at best, provide information on the inputs and outputs of the process steps. The information is kept fragmented. In SixSigma3.0, we added six specialized analytical layers to process maps to record various data:

1. Process flow: A business process management and notation (BPMN) backstage map of business process flow with actors, tasks and interactions.

2. Inputs-outputs: Collects information on inputs, outputs, documents, instructions and other conditions that control each task in the process.

3. Efficiency problems and optimization opportunities: Used for analysis and recording problems such as losses and missed opportunities. Each problem is marked with an asterisk and unique identification number.

4. Transfer table + Pareto chart: The transfer table is used to transfer the result of analysis from the previous layer; a detailed description of problems and assessment of losses are entered into the transfer table. The Pareto chart shows a list of prioritized problems to assign for missions.

5. Cycle time: Used to collect time data on process flow elements: tasks, evaluation points and transfer of output. Data is entered into the table on the next layer. This layer can be used in place of traditional VSM, which is time consuming.

6. Time analysis data: Collected data analysis shows process efficiency cycle time and non-value-added (NVA) time, and also reveals time traps and slow process steps.

Layer 1: Process Flow

The mission team, made up of the employees involved in the process, starts by creating a standard BMPN process map. The team brainstorms to identify actors as well as the most important tasks and interactions. They then analyze the sequence of operations and map the process flow.

After finalizing the process map, the team proceeds to collect diverse information on the process using all six analytical layers.

A procurement process example is shown in the following figures to demonstrate the process. Figure 1 shows the initial process flow.

Figure 1: Process Map Layer 1 – Process Flow

Layer 2: Inputs-Outputs

The second layer identifies and plots inputs and outputs for every process task and the conditions that affect the successful performance of operations: documents, instructions, technologies, materials, components, etc. “Note” or “database” icons can be used for this information. Documents can be attached to icons for further analysis. See Figure 2.

Figure 2: Process Map Layer 2 – Inputs-Outputs

Layer 3: Efficiency Problems and Optimization Opportunities

Here, the mission team analyzes the efficiency of the process as well as searches for defects and bottlenecks. Decision points with immediate results are checked for compliance and repeated cycles are identified. It is useful to put a counter to collect statistics on repeated cycles at decision points. Two types of problems will be identified:

1. Problems that have already led to serious losses

2. Missed opportunities that have led to virtual losses

The team surfs through the process flow asking: “Is there a problem in this element that hinders the achievement of our mission goal?” Identified problems are recorded on the map with an asterisk and number at the point of occurrence. See Figure 3.

Figure 3: Process Map Layer 3 – Efficiency Problems and Optimization Opportunities

Layer 4: Transfer Table + Pareto Chart

The economic loss is estimated for every problem and information on all the problems is recorded in the transfer table on this layer.

Then, the team identifies the most significant problems using a Pareto chart. See Figure 4.

Figure 4: Process Map Layer 4 – Transfer Table + Pareto Chart

Layers 5 and 6: Cycle Time and Time Analysis Data

If the goal of the mission is to reduce cycle time or accelerate process tasks, the team may continue analysis using the remaining layers. At each step of the process, we ask how this operation or task slows the cycle. The table with time data on Layer 5 (Figure 5 below) is used to identify slow operation and time traps and to evaluate process cycle efficiency. On Layer 6 (Figure 6 below), identified problems are added to the transfer table created in Layer 4.

Figure 5: Process Map Layer 5 – Cycle Time

Figure 6: Process Map Layer 6 – Time Analysis Data

During the work on the layered map the team gets a full understanding of the process –including influencing factors, performance data on defect rate, recurring cycles, slow operations and more – and a list of the most expensive problems that can be used for further analysis and resolution.

The layer approach has proven easy to grasp and staff in different industries (including banks, telecoms, chemicals, oil and pharmaceuticals) can easily perform both mapping and analysis using layered maps after a brief training. The algorithm prevented them from stumbling on roadblocks when choosing their next step in the project. The collected information is used at further stages of analysis and solution development.

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Using the Power of the Test for Good Hypothesis Testing

In any hypothesis test, there are four possible outcomes. The table below illustrates the only possibilities.

Table 1: Possible Outcomes of a Hypothesis Test

Reality	Decisions
Ho is true	Accepting Ho is true; good decision (p = 1 – a or confidence level)	Accepting Ho when it is false; Type II error (p = b)
Ha is true	Rejecting Ho when in fact it is true; Type 1 error (p = a or significance level)	Rejecting Ho that is not true; good decision (p = 1 – b or power of the test)

What should every good hypothesis test ensure? Ideally, it should make the probabilities of both a Type I error and Type II error very small. The probability of a Type I error is denoted as a and the probability of a Type II error is denoted as b.

Understanding a

Recall that in every test, a significance level is set, normally a= 0.05. In other words, that means one is willing to accept a probability of 0.05 of being wrong when rejecting the null hypothesis. This is the a risk that one is willing to take, and setting a at 0.05, or 5 percent, means one is willing to be wrong 5 out of 100 times when one rejects Ho. Hence, once the significance level is set, there is really nothing more that can be done about a.

Understanding b and 1 -b

Suppose the null hypothesis is false. One would want the hypothesis test to reject it all the time. Unfortunately, no test is foolproof, and there will be cases where the null hypothesis is in fact false but the test fails to reject it. In this case, a Type II error would be made. The probability of making a Type II error and b should be as small as possible. Consequently, 1 -b is the probability of rejecting a null hypothesis correctly (because in fact it is false), and this number should be as large as possible.

The Power of the Test

Rejecting a null hypothesis when it is false is what every good hypothesis test should do. Having a high value for 1 -b (near 1.0) means it is a good test, and having a low value (near 0.0) means it is a bad test. Hence, 1 -b is a measure of how good a test is, and it is known as the “power of the test.”

The power of the test is the probability that the test will reject Ho when in fact it is false. Conventionally, a test with a power of 0.8 is considered good.

Statistical Power Analysis

Consider the following when doing a power analysis:

1. What hypothesis test is being used

2. Standardized effect size

3. Sample size

4. Significance level or a

5. Power of the test or 1 – b

The computation of power depends on the test used. One of the simplest examples for power computation is the t-test. Assume that there is a population mean of m = 20 and a sample is collected of n = 44 and that a sample mean of  and sample standard deviation of s = 4 are found. Did this sample come from a population of mean = 20 if it is set that a= 0.05?

Ho: m does equal 20

Ha: m does not equal 20

a = 0.05, two-tailed test

The next example is testing an effect size of 2 . Since this is the absolute value, it needs to be standardized into a t-value using the standard error of the mean.

The critical value of t at 0.05 (two-tailed) for DF = 43 is 2.0167 (using spreadsheet software [e.g., Excel], TINV [0.05,43] = 2.0167). Since the t is greater than the critical value, the null hypothesis is rejected. But how powerful was this test?

Computing the Value of 1 -b

The critical value of t at 0.05 (two tailed) for DF = 43 is 2.0167. The following figure illustrates this graphically.

This t = +/-2.0167 equals in the hypothesized distribution = 20 +/-  (2.0167) = 20 + 0.603(2.0167) = 21.216 and 20 – 0.603(2.0167) = 18.784.

The next figure shows an alternative distribution of m = 22 and s = 4. This is the original distribution shift by two units to the right.

What is the probability of being less than -21.216 in this alternative distribution? That probability is b, accepting Ho when in fact it is false. This is because with any value within that region, in the original probability distribution, one would have accepted Ho. How does one find this b? What is the t value of 21.216 in the alternative distribution?

What is the corresponding probability of being less than t = -1.3? From the t-tables, using one-tailed, DF = 43, t = 1.3, one finds 0.10026 (using spreadsheet software TDIST, it is 0.10026). Hence b = 0.10026 and 1 -b = 0.9, which was the power of the test in this example.

Below is the statistical software output (Minitab) using the same example:

What Influences the Power of the Test?

Three key factors affect the power of the test.

Factor 1

The difference or effect size affects power. If the difference that one was trying to detect was not 2 but 1, the overlap between the original distribution and the alternative distribution would have been greater. Hence, b would increase and 1 -b or power would decrease.

Hence, as effect size increases, power will also increase.

Factor 2

Significance level or a affects power. Imagine in the example using the significance level of 0.1 instead. What would happen?

Table 2: Using a Different Significance Level

Significance Level	DF	Critical t	Value in Original Distribution
0.05	43	2.016692	21.21606538
0.l0	43	1.681071	21.01368563

The critical t would shift from 2.01669 to 1.68. This makes b smaller and 1 – b larger. Hence, as the significance level of the test increases, the power of the test also increases. However, this comes at a high price because a risk also increases.

Factor 3

Sample size affects power. Why? Consider the following equations:

How can t be increased? As t increases, it becomes easier to reject Ho. One way is to increase the numerator or the effect size. As the effect size increases, power also increases. Also, as the denominator or the standard error of the mean (SE mean) decreases, t also will increase, and consequently the power of the test also will increase. How can the denominator be decreased? As the sample size increases, the SE mean decreases. Hence, as sample size increases, t also will increase and the power of the test also will increase.

Power Curve for the One-Sample t-Test

In general, to improve power, really only the sample size can be increased because the significance level is usually fixed by industry (0.05 for Six Sigma) and there is not much that can be done to change the difference trying to be detected.

Since that power of 0.8 is good enough, one can use statistical software to find out what the corresponding sample size is that will be need to be collected prior to hypothesis testing to obtain a good power of test.

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Are You Desired to Gain PRINCE2 Foundation Certification?

PRINCE2 Foundation is the first and primary level of PRINCE2 certification that establishes the overall understanding, experience with the PRINCE2 vocabulary, and capability to work as a member of a project management team and it is, consequently, a good idea that all Project Stakeholders should have the opportunity to attend a PRINCE2 Foundation training.

The Foundation level is the first of the two PRINCE2 exams you must pass to become a PRINCE2 Practitioner, and the next certification is the PRINCE2 Practitioner. There are no provisions for taking the PRINCE2 Foundation exam. However, taking a regular PRINCE2 Training program such as an approved eLearning course is recommended by AXELOS.

Who Is It For?

• The PRINCE2 Foundation certification is the entry-level certification designed for people who want to move into project management or do not have the time or experience to try the full Practitioner certification.
• People in a technical role want to show project management competence to move up into project management.
• People who lead small projects or on a part-time basis.
• People who wish to demonstrate proficiency in project management even though they do not manage projects.

Do You Need to be a PRINCE2 Foundation Certified?

First of all, you should have the earnest intention to be a PRINCE2 Foundation certified, and this purpose might come from the career path you have in the project management field, mainly if you are working in the UK or one of the European countries, it might come from your passion for improving your knowledge in this field.

Wherever it is coming from, the PRINCE2 Foundation certificate is a significant career improvement for professional project managers or people who would like to make a career in project management. Once you have this purpose and you are willing to spend your time and money, you can be a PRINCE2 Foundation certification holder after 3-4 weeks from this moment.

The PRINCE2 Foundation qualification will prepare you for the PRINCE2 principles, terminology. When qualified, you will be able to act as a notified member of a project management team utilizing the PRINCE2 methodology within a project context supporting PRINCE2. PRINCE2 Foundation can be studied on its personal or as a requirement for the PRINCE2 Practitioner course.

As per the AXELOS standards, there are no requirements for the PRINCE2 Foundation level exam. Most of us are committed to a full-time job. With our families, so you want to find the most efficient way to get ready for the PRINCE2 Foundation exam, the step by start study plan I made based on my experience will save your time, no obligation to search the web for tons of broken data, 6-8 hours per week for 3-4 weeks following precisely this plan will guarantee your success from the first attempt.

It Is the Time to Test Your-Self

At this stage, you are about ready to go for the real PRINCE2 Foundation exam, and one step continues before you schedule your exam date; you require to test your willingness for the exam. At this step, you are done with the exam preparation program and done with the reference book.

Sit in your room, open the laptop, have a standard A4 paper, turn off your mobile, and be away from any possible interruption. You have to complete the exam questions in one hour. However, I have listed the best PRINCE2 Foundation exam simulators in the online market, and you can find this list here.

It is okay if you could not complete the exam questions within one hour in the first attempt; what is essential is to get a score of 55% and more. If you got this result, move to the subsequent step. If not, do not worry; refer back to the reference book again and reread it. Go forward with this research plan once you get a result of 55% or more.

Once you reach the PRINCE2 Foundation exam, you have to consider taking the more significant PRINCE2 certificate, the Practitioner exam!

In the project management world, the Foundation level is an entry-level only. It is a requirement of the Practitioner level, so now you think seriously about moving forward and preparing for the Practitioner level.

Conclusion

I hope you have found this interesting, which will help in passing the PRINCE2 Foundation effortlessly. Doing proper revision and practice of sample papers for the exam will help you qualify for the PRINCE2 Foundation exam successfully, which would be further recognized in your industries and boost your career accordingly!

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So you want to start out on your own?

The pandemic has diminished our sense of job security. A rise in redundancies and an uncertain business climate have left many professionals questioning their career. For these reasons starting out on your own you could be the answer, and now could be the perfect time to pivot.

By the end of last year the Office for National Statistics reported that there were over 5 million self-employed people in the UK. Freelance working is becoming increasingly popular with professionals, who are embracing the benefits of being their own boss and all that the gig economy has to offer.

Here we guide you through some key considerations before making the leap, as well as highlighting actionables that will give you the best shot at freelance success.

Know the risks...

The risks of starting out on your own will vary greatly depending upon your circumstances. The biggest is sure to be the impact on your income. Know your finances and have a fall back plan for any periods of low or no income. At the planning stage it can also be helpful to set out how you intend to get work, and any existing connections you can tap into.

As well as preparing yourself for challenging times money-wise, you should spare a thought for your well-being and lifestyle. The pandemic has given us a crash course in the remoteness of remote working, and freelance working pushes this to the next level. Without colleagues to message on slack, or regular Zoom meetings there is a real risk of loneliness. This can be detrimental to your productivity as well as your health, therefore is worth addressing when you're preparing yourself to make the leap.

Perhaps you have been freelancing on the side whilst working, in which case the jump is going to be far less daunting. For others, self-employment is going to be new territory. Either way it is well worth taking the time to consider the risks involved.

...but also the rewards

Whilst at the research and forward planning stage you should also look at the rewards freelance working has to offer, such as the average salary and earning potential. Consultancy day rates, for example, tend to be far higher than you’d make in employment.

It may also be worth seeking the insight of others, perhaps someone you know personally, who has transitioned to self-employment. Their perspective can be invaluable, and they can likely offer tips and guidance for starting out as well as for making it work long-term.

Whilst there are sure to be challenges, the counter argument is that starting out on your own is now easier than ever before. In a monumental shake up working from home has made professionals evermore resilient and industry’s eyes have been opened to remote employment. The gig economy suits a lot of businesses who benefit from short-term or project-based employment of freelancers, and organisations are much more ready to work in this way.

Invest in yourself

The biggest advantage you can give yourself as a freelancer is investing in yourself. You could upskill with a management training course, expand your knowledge with relevant industry websites, or simply assign yourself time for networking – in person or on LinkedIn. There is no better time to work on your professional self than when starting out on your own.

A broad range of business knowledge can put you a step ahead when shooting to win work. Learning more about a company or industry is always going to be good use of your time. There’s a wealth of industry insight and expertise in blog articles, industry magazines, webinars and TED Talks, so make a habit out of reading and researching.

There is strong demand for professionals who can combine deep knowledge of the industry with high level expertise in the core skills of their role. And so, training and upskilling can be hugely advantageous. Our PRINCE2 courses are perfect for evidencing your competencies. You gain consistency in processes and the ability to speak a common language with PRINCE2, and they are widely recognised in the industry. Not only do additional qualifications make you more appealing to a potential client, but they also provide you with technical skills that are greatly valued.

Source: prince2.com

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Lean Six Sigma and the Art of Integration

At first glance it may seem un-Six Sigma-like to use art concepts in a discussion of Lean Six Sigma and the merger of two large financial institutions. But in fact, any serious approach to integrating two extremely complex organizations can benefit from thinking in terms of art as well as science. The successful change manager is an artist who chooses colors from the palates of both organizations (acquiror and acquiree) and from both change methodologies (Lean Six Sigma and traditional project management) to create a new, more brilliant result. Customer-centric integration is not simply painting by numbers. And achieving economies through consolidation is not always black and white. Optimizing company return and customer satisfaction is a matter of application, stroke by stroke. When the effort is complete, the shadings and colors blend into a true work of art.

Most financial institutions, especially banks, are organized around functional or silo views – looking inward at work being done and not outward at the customers and their desires. Departments and employees have narrowly defined responsibilities related to specific functions, channels or products, such as accounting, consumer, mortgage, technology or human resources. These organizations’ careful control of each department’s costs often is at the expense of customer satisfaction. It is not unusual for customer needs to fall between the cracks because no person in the company owns the process of satisfying the customer.

The reality of this paradigm – that it looks at success within a function or silo and not from the viewpoint of the customer – is multiplied many times during the execution of a large-scale merger. To avoid these problems, Lean Six Sigma adopts the view that businesses are comprised of processes that start with customer needs and should end with delighted customers using the product or service. It is a given that each major process is a value stream. The process and customer viewpoint of the value stream have a profound impact on how an organization operates and how work gets done. This is especially true when change managers execute the tasks required to successfully merge two organizations – especially two financial institutions.

Lean Six Sigma Success Factors

So there are three principles to be considered when executing an integration or merger with Lean Six Sigma as opposed to a traditional project management approach. Thee principles can be referred to as the Lean Six Sigma success factors.

Success Factor No. 1 is simply customer focus. Lean Six Sigma make the customer experience a key component of the target environment. Lean Six Sigma methodologies require that management’s knowledge of customer desires is based on real data and careful assessment. Without this discipline, change managers often use conjecture, assumptions and corporate myths about what customers want. With Lean Six Sigma, processes between combined entities are designed and executed to fulfill customer requirements and are not based on hitting arbitrary dates or cost-cutting goals. In this way the integration approach implements a multi-faceted, ongoing voice of the customer effort, using customer-focused data to manage the integration in the short term and the combined entities in the long term.

Success Factor No. 2 is to execute the integration in a process-focused manner. Too often, integrations are seen as taking one function or organizational structure from Bank A and inserting it into Bank B – with the result being measured in terms of which technology wins over another and the size of the reduction in headcount. Of course, a single technology must be decided on and some jobs are likely to be lost. But these decisions should be made within the framework of mapped processes supporting the newly combined company’s business and customer strategies. This can be accomplished by incorporating into the assessment phase of the integration plan an understanding of how and why work gets done. It also is valuable to identify critical customer contact points and processes that across organizational boundaries. These are the places with the greatest potential for the customer to get lost in the cracks. During a merger, when processes are being blended and restructured, the risk is greatly multiplied. Looking at a process from end-to-end is critical for success. Some merger teams even create a position of customer advocate, who is responsible for looking at all activities from a process perspective. Of course, that person’s efforts are in conjunction with traditional work groups responsible for functionality.

Success Factor No. 3 is the whole construct of using data and establishing measurement/reporting during the merger activities. Historically, an executive team running an integration will be concerned first with technology, and will assess risk in terms of key performance indicators. The technology will be stress-tested. However, it also is necessary to do the same for the non-technology aspects of a process, and for the people components as well. Key performance indicators (KPIs) usually track results in terms of numbers and goals meaningful to internal managers. But, it also is imperative to be able to predict the impact on customers and translate the “techno speak” and managerial numbers into critical-to-quality (CTQ) metrics that the customer cares about. Ultimately, the goal is to retain and grow the customer base through the merger.

Based on the three key success factors, the traditional merger approach can be compared with one that is influenced by the principles of Lean Six Sigma. Good project execution and Lean Six Sigma principles go hand in hand. Although data is always an important consideration, in the end, understanding the culture of the two organizations and the sophistication of the change management infrastructure will help determine where and when Lean Six Sigma best add value to the integration effort. That is the art of applying Lean Six Sigma. The chart below compares the purely traditional integration approach to that same integration with Lean Six Sigma methodologies.

Traditional	Lean Six Sigma
Plan based on business requirements	Plans based on voice of the customer
Technology driven	People/process/technology driven
KPI metrics determine success	CTQ metrics determine success
Mapping/gapping of functional/organizational alignment	Mapping/gapping of value stream processes
Select one target environment	Select best practices
Audit against project plans	Audit against customer experience

In addition to integrating Lean Six Sigma principles into a traditional merger approach, there also is great value in aligning integration project deliverables into a Lean Six Sigma construct under the DMAIC (Define, Measure, Analyze, Improve, Control) process. Once again, it is a marriage of the Lean Six Sigma and project execution that has the greatest impact. It is still necessary to have a project office, to do field-to-field mapping, to execute branding and to consolidate physical sites. The difference is that these activities are now done to enable a customer- and process-focused effort.

Planning, Organization and Assessment (Define/Measure/Analyze)	Design and Early Implementation (Analyze/Improve)	Implementation (Improve/Control)
Project management office	Staff planning	Customer and associate communications
Work planning, issue tracking, gap analysis, other management information systems	Site selection	Physical site consolidations
Workflow and organization analysis	Field-to-field mapping	Testing (all areas)
Assessment surveys and analysis	Detailed consolidation plans (site/function)	Training/procedure documentation and delivery
Scope definitions and decisions	Detailed conversion plans and schedules (systems)	Equipment installations
Budget, staffing and timeline plans	Detailed conversion plans and schedules (systems)	Quality assurance/rapid response teams
Customer and associate communications	Detailed implementation approaches	Field support/conversion guides
Product, systems and functional mapping	Coding/technical testing	Control rooms/command centers
Integration approach development	Early implementation	Dress rehearsals
Early implementation decision		Systems conversions
		Post-implementation support

Many a traditional project manager or change manager may at first be a little uncomfortable by the introduction of unfamiliar Lean Six Sigma principles and tools. Customer-focused, data-driven decisions for best practices, and target environments defined by processes and not organizational charts may not be as simple as choosing a technology and combining a workforce. But, the picture of a combined organization with costs reduced furthest from the customer experience, processes that become synergistic, increased quality and speed of execution, and healthy customer growth will be seen as a great work of art by all.

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