Understanding Permutations and Combinations

In Six Sigma problem solving, it is often important to calculate the likelihood that a combination of events or an ordered combination of events will occur. Understanding some of the basic concepts of probability provides practitioners with the tools to make predictions about events or event combinations. This provides a good foundation for understanding probability distributions, confidence intervals and hypothesis testing. Permutations and combinations are two important concepts for building this foundation.

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PRINCE2 – Initiating vs Starting Up a Project

When getting to grips with PRINCE2, a common cause for confusion is the difference between ‘Starting Up a Project’ and ‘Initiating a Project’. This blog will not only explain the distinction between the two, but how together they guarantee the best start for your project.

‘Starting Up a Project’ is all about identifying whether a project is worth initiating. The goal is to gather enough core information about the project to deem it both beneficial and feasible. This means you can skimp on the more intricate project details.

Upon completing the process, your organisation’s Project Board (consisting of the Executive, the Senior User and the Senior Supplier) should be presented with the following:

• The outlined business case for the project
• The intended project approach and scope
• A plan for the Initiation Stage, including who would take roles in initiating the project.

If the long term benefits of the proposed project cannot be recognised, or there are inherent flaws, the project does not progress further. ‘Starting Up a Project’ is essentially a filtration process. Only projects with a strong chance of success are initiated.

At this point, the ‘Initiating a Project’ phase commences. It may be helpful in this stage to think of a project in construction terms. Now you’ve obtained planning permission, you can begin to build a solid foundation. Through this process, your initial concept becomes a fully-fledged strategy. Your team will identify critical success factors, risks and quality assurance methods. This culminates in the creation of a Project Initiation Document (PID). With the PID, your predetermined intentions become planned actions.  You can learn about the PID with more detail in our previous blog post, ‘How to Start a Successful Project’.

For smaller projects, the PRINCE2’s scalability means the two can be carried out simultaneously. This may prompt the question as to why it’s worth doing one after the other in the first place. The answer is that it depends on how much work you can put into a project that may not come to fruition. In ‘Starting Up a Project’, the amount of resources you put in your investigation is to your discretion, as long as ultimately you can gauge whether your project is worth initiating.

To summarise, ‘Starting Up a Project’ and ‘Initiating a Project’ widens the window between the conception and action of a project. Because of this, projects with a low chance of success can be terminated before they officially start, saving valuable resources down the line. Putting the time and effort in these initial stages will boost your chances of project success. It also inspires confidence in your ability to execute a project in a thorough, thoughtful manner.

Want to learn more ways you can guarantee project success? Or do you want to demonstrate your project manager capabilities and adopt further responsibility? If so, a PRINCE2 qualification could be exactly what you’re looking for. We even offer a guaranteed pass for the Foundation classroom and e-learning course. Click here to find out more about PRINCE2.

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Types of Training Programs for the PMP Certification Exam

Types of PMP Training Programs

There are various types of PMP training programs available on the market; however, according to the delivery of training, you can divide the PMP training programs into four main categories:

• Online Training Programs
• Classroom Training Programs
• Online Live Training Programs
• Hybrid Training Programs

Online and classroom PMP training programs are more popular, however online live training programs are also becoming very popular these days.

Now let’s discuss each type of training program in detail.

Online PMP Training Programs

I don’t have any data to support my claim, though I believe this is currently the most popular form of PMP training program.

This type of training program is popular for its flexibility, comfortability, and the price tag.

Joining this type of program is very easy. You only need to have a desktop or laptop computer with an Internet connection. After making the payment, you get immediate access to the program.

Once you complete the training you can download your certificate immediately.

If you have some experience in project management and don’t want to spend a lot of money on contact hours, I suggest you try the online PMP training program because it offers you many benefits over other types of training programs, such as:

• Cost
• Flexibility
• No location restrictions
• No seat limitations

Cost

Online training programs are the cheapest among all that are offered. The cost of online PMP training programs range from 100 USD to 350 USD. On the other hand the cost of a classroom training program starts at 1,000 USD and can go up to 4,000 USD.

Other types of training programs such as hybrid and live classroom training programs are also not cheap. Typically they hover around 1,000 USD.

Flexibility

Again, online training programs are the most flexible program among all other types of training programs.

Online training providers give you sufficient time to complete the training. The validity of the course can vary from several months to a lifetime. Therefore, you can complete the course at your own pace.

Conversely, with other types of training programs the schedule is fixed and you may have to complete the course within three to four sittings. This can be very exhausting for you.

No Location Restrictions

Online training programs are not limited by location.

You can join an online training program from any place in the world and can complete the course from your home.

With the other types of training programs you may have to visit to their center to attend the course. If the center is close to where you live, you can go and join the course easily. However if it is far away you may have to make travel arrangements.

No Seat Limitations

There is are no seat limitations with online training programs. Any number of students can join it at any given time.

However with the other types of training programs you may face seat limitation issues. If you don’t join at the right time, you may miss the train.

Drawbacks of Online Training Programs

The main drawback of online training program is a lack of interaction. There is no interactive discussion. You have to watch the recorded webinar and understand the concepts.

The other drawback is the slow response to your queries. If you need to clarify any points during the training and you post your question in the forum or the support portal, the response from the instructor may take some time. Although these days you can expect them to respond within 24 hours, I think it is still not very quick.

Classroom Training Programs

This is the oldest and most traditional method of teaching, and we all have gone through it. In this type of training program, you have to attend the training program and the trainer will teach you in a class. Here you will have to sit for six to eight hours per day for a period of three to five days, sometimes even more.

The classroom training program offers you many benefits.

The first and most important benefit is interactivity. In classroom training programs, sessions are very interactive. The trainer explains concepts and participants ask questions. This helps you understand the concepts better. According to many studies, interactive sessions are the best teaching method.

In classroom training program, if you have any questions you can ask the teacher and get the answer instantly.

Here you also get a chance to meet cross-functional professionals, which helps you understand processes in different industries and you are also able to expand your network.

In classroom training programs you can complete your training very quickly; in three to five days the training is completed.

However, classroom training programs have some drawbacks as well.

The first drawback is the cost, because these programs can cost from 1,000 USD to several thousand.

Moreover, these programs are usually conducted in big cities and on a fixed schedule. So if you do not live near their center, you will have to travel to join the program.

Seats are also limited in classroom training programs, so if you are little late applying for the program, they may deny your entry and you will have to wait for the next dates.

Now if you want to join a classroom training program, I suggest you contact your local PMI chapter. Usually the quality of the training offered by the PMI’s local chapters is better than the other providers.

Online Live Training Programs

The third category is a live online training program. This type of training program is relatively new and is becoming more popular.

This type of training program is mostly given by training providers who are experienced in providing online training and want to venture into another arena.

In online live training programs, an instructor will teach the class from a remote place and you have to attend the lecture in real time through the computer with a webcam and microphone. The instructor will deliver the lecture through a webinar, and if you have any questions you can ask them in real time.

The drawback of this type of program is that if you don’t live in same geographic location, the time difference may pose a problem for you.

The other problem is the quality of the Internet connection; you must have a high-speed, uninterrupted Internet connection if you want to enjoy the program seamlessly. Moreover, most of the time the price of a live online training program is similar to a classroom training program.

The only benefit of this program is that you may get access to a renowned expert.

Hybrid Training Programs

The last type of training program is a hybrid training program.

In a hybrid training program, the training provider may deliver the study materials by mail. You have to study them, and then send the assignments through mail/email. Sometimes, you may have a few live online face to face sessions to answer questions.

Hybrid training programs have many shortcomings; for example, if the program provider decides to schedule a live online face to face session and you don’t live in same geographical location, the time difference may pose a problem for you.

Likewise, low quality Internet may be a problem for you during the live sessions.

Other problems include deliverability of materials, communication gaps, etc.

Now the final question:

What type of training program should you select?

The answer to this question is not simple and only you can decide what type of training program is suitable for you.

If you are less experienced in project management, cost does not matter to you, you can spare three to five days for the training, and the trainer is very renowned, you should invest in the classroom training program.

However, if you have a busy schedule and are looking for flexible and low cost training program, you should join any online training program.

Anyway, it is your call and your decision.

I have explained all types of training programs with their pros and cons and now you can make a better, more informed decision.

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How to Upgrade PRINCE2 Foundation to Practitioner

You may be unsure of how PRINCE2 Practitioner differs from Foundation. Perhaps want to know how to make the advancement to Practitioner level. Or it could be that you don’t have a Foundation qualification and want to jump straight to Practitioner.

To sit the Practitioner exam, you must have either a PRINCE2 Foundation, PMP, CAPM or IPMA certification. It’s not possible to make Practitioner your first project management qualification. However, you can take a joint Foundation & Practitioner course. Whether you’re new to PRINCE2 or you’ve already passed the Foundation exam, it’s important to know the difference between the two.

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DevOps - Faster, Better and Safer

There is no way around DevOps. The recent "2016 State of DevOps Report" by DORA, the experts of the "DevOps Research and Assessment" leave no doubt that the new agile method offers enormous potential. Specifically, so-called "high-performance IT organizations" are more than 200 times more likely to roll out new releases, are 24 times faster in resolving software errors, have 3 times fewer failures due to unsuccessful changes, and 2 ' 500 times faster throughput times.

These figures are so impressive that one would like to read them as too utopian and shrewd. More and more often, however, we also hear and read from companies in Switzerland who have already been able to show their first successes with this new method. Organizations that have apparently succeeded in overcoming the Rösti ditch between the Developers and the operations and brought about bureaucratic silo constructions.

The operations people have good reason to protect the production and to avoid uncontrolled changes as far as possible. On the other hand, the developers want to take the pressure of the business into account and deliver new functionality as quickly as possible. A classic target conflict, which has dominated IT in the last decades and which has never been solved to the present day. An inherent target conflict, so to speak. The business is to choose between "fast and cuddly" or "slowly stable". Quality before time was given to the business because otherwise no warranty was taken.

One has to solve this stereotypical view, if one wants to understand the phenomenon "DevOps" better. It is by no means that the developer wants to force the production to its knees. Even the production manager does not want to prevent the further development of the business. Everyone wants to contribute the best for the company. This is an important basic setting for a new cooperation model.

Today, individual teams are already trying to optimize with scrum or CSI approaches in their workspace. But what are the benefits of software solutions developed with agile sprints when they are restarted during release planning in order to be tested and delivered as an integrated whole at a later date? Too rarely one considers the whole value stream from the idea to the conception, from the implementation in the development to the testing, from the deployment up to the hopefully utilizing enterprise. Everywhere new heads and tools are involved and make their "thing", as always has been done. In the end, no one dares to ask what the benefits to the customer are.

Internal value of IT4IT

DevOps is different. The success of DevOps goes beyond the development and the operation. As is often the case, it is not primarily a technical simplification, but a cultural change that needs to turn the cooperation from the idea to the value-generating services completely upside down. DevOps is an artistic name from development and operations, but should be called "value flow". The entire value flow is intended to be understood. This also includes common incentives and objectives. All teams put their minds together and look at the individual steps and processes involved to understand how the value develops and where unnecessary barriers lead to delays and waste.

It requires a questioning of existing patterns of thought. Since changes and stability are generally diametrically opposed, changes are postponed to transfer them into larger production batches as a release. Complex systems do not react well to such large changes. It would be more effective to implement the changes continuously over time in small steps. This results in the paradoxical realization that more frequent changes provide better stability.

Another point of view is the preservation of glass production. If the volatility of the changes is artificially suppressed, then production tends to react more susceptibly to changes. Risks are scarcely visible because permanent attempts are made to keep "any" damage from production. If something happens then it becomes critical for the business, because the error must be looked like a pin in the haystack of the big release. If you are growing up in a sterile environment, you will not learn to live in the "dirty" everyday life.

The developer must in the future build his software so that it is robust. The quality must be in the antifragility of the developed solution. This does not mean simply robustness or strength, but much more the ability to respond to faults in the system and to spontaneously changing boundary conditions in a suitable way, just antifragil.

DevOps can be very exciting, however, if you want to throw old visions overboard: Teams learn together, faster and at higher clock rates to deliver and at the same time better to the business. With DevOps the ditch between development and operation is added. Stability and high change density need no longer be a contradiction. As the DOSA report shows, with DevOps, IT delivers faster, better, and more robustly and more securely than traditional operating concepts.

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Correlation and Variation

Six Sigma projects differ from traditional projects in one important requirement – understanding of the Y=f(x) relationship with data before developing or implementing a solution. In the DMAIC framework, we identify, test and verify the causal relationship between a potential root cause (x) and the outcome (Big Y), and then develop a solution to change the x to move the Y in the desired direction.

This sounds simple enough. But in practice, why is it so hard to identify and/or verify such relationships? Is the concept of hypothesis testing too difficult? Are statistical tools too complicated for the average person? Maybe. But before we teach people statistical tools, we have to first help them develop statistical thinking – the concept of variation.

All the statistical tools would be unnecessary if there were no variation in life.

So how does variation affect our ability to understand Y=f(x)? To give an example, I created a simple Excel sheet to show how variation (or noise) can affect our conclusions on whether two variables correlate in a linear regression.

The Y=f(x) relationship in this example is Y = 2x + 10.

Without other sources of variation, change in x from 1 to 30 would lead to change in Y from 12 to 70 (as shown by columns x1 and Y1 in Figure 1).

However, if we add 1% of variation to x (or 1% Coefficient of Variation, which is defined as the standard deviation divided by the mean) and 15% variation to Y, the data would be as in columns x2 and Y2.

Now look at the charts made from x2 and Y2 in Figure 1. The top one shows all 30 data points, whereas the bottom one shows only the first 10 data points. The linear regression lines and equations are also shown. Would you conclude that Y and x correlate if you had the data on the top graph? How about the bottom?

What about the data from figure 2 or 3?

Did you draw the same conclusion? And you SHOULD because the data sets came from the same underlying system. The differences (in R-square, slope and intercept) we see among the data is due to pure random variation. In this example, I used the random number generator (RAND function) in Excel and a normal distribution (NORMINV function) to generate the random values deviating from the expected x or Y.

In a real system, the variation includes all sources (in addition to the x of interest) that can affect the Y. So a 15% CV is fairly small compared to the variation in many real systems. With a 15% CV, about 95% of the time, the data will appear within +/- 30% of the expected value. Even with such small variation, data from a sample (such as those in any of the six graphs) could lead to a different conclusion if statistical thinking is not applied. In problems where variation or uncertainty exists (i.e. practically everything we do), the conclusion should always be expressed/understood in statistical or probabilistic terms.

No matter how sophisticated the statistical tools we use, one goal is common – to separate sources of variation so we can understand how the variable of interest affects the outcome. In practice, the challenge often lies in identifying and then reducing undesired sources of variation, i.e. noise. For most people, however, the first step is simply to appreciate how greatly variation impacts our everyday decisions, and to apply statistical thinking.

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The Six Sigma Renaissance? What the Future Holds for Six Sigma in Financial Services

Process standardization and quality improvement had been neglected in the financial service industry for decades. When the manufacturing industry needed to become more efficient and reduce waste, the financial service industry was flourishing and therefore, found itself not in need for major improvement initiatives. When this situation changed, everyone suddenly started to look for a quick fix and Six Sigma, which had already been so successful in the manufacturing industry a method of Quality control, was seen by many as the golden path.

Countless financial services companies have followed this path and have implemented Six Sigma in the last decade. Some have been very successful and happily announce their multi-million dollar savings. However, many others keep very quiet about their returns or have stopped their engagement in Six Sigma all together because they didn’t attain the expected return on their investment. This is reflected in the coverage of Six Sigma in the financial service sector – there is only a handful of books available on the topic, while there are hundreds on the use of Six Sigma in manufacturing.

Why Six Sigma has been so successful in the manufacturing industry, but only worked for a small group of FS firms? More importantly, how can the financial service sector make better use of Six Sigma?

Strengths and Weaknesses of Six Sigma in Financial Services

Without question, Six Sigma is a well accepted quality enhancement method which has been applied with great success in the manufacturing industry for decades. However, Six Sigma methods cannot just be transferred from the manufacturing industry to the financial service industry without any changes. Let us review the main strengths and pitfalls of Six Sigma, when transferring it to the financial service industry.

Strengths:

1. Unique customer focus

Focus on the customer is one of the main strengths of Six Sigma. By linking quality improvement initiatives to customer needs, Six Sigma teams ensure that the improvement has a positive impact on the customer. Particularly in the financial service industry, where the interaction with the customer takes place on a daily basis, customer focus is of utmost importance. When implementing Six Sigma in finance processes, customer needs have to be given highest priority. Short-sighted focus on cost or headcount reduction will not bring the long term benefits Six Sigma promises.

Only a close cooperation with customers and a clear focus on customer needs can lead Six Sigma to success in a financial service environment.

2. Six Sigma framework and tool kit

Many financial service organizations have not engaged in structured process improvement until recently. Therefore, they often lack standardized processes, organized quality and engineering departments and a general understanding of what quality improvement means to them. Six Sigma provides, with the DMAIC cycle, a structured framework to guide users throughout the improvement efforts and ensures that the project develops in the desired direction. Additionally, Six Sigma comes with a whole tool kit of brainstorming, analysis and prioritization tools that help to unfold its power. This structured approach, combined with the Six Sigma tools are particularly valuable for teams with a financial service background.

3. Data-driven and statistical methodology

Some may argue that financial service process improvement greatly benefits from its data richness. However, in my experience exactly this data overflow is one of the main problems for successful project selection and completion in this industry. Too many improvement efforts are based on ill selected data and the general assumption that the problem root cause is already known before the project even starts. This causes projects to fail and the improvement efforts to loose their reputation. Six Sigma offers a more statistical approach to measuring and analyzing data, thereby minimizing the risk of quick assumptions and allowing projects to be wisely selected and executed.

Weaknesses:

1. Resistance from people

I experienced that resistance towards change is even greater in the service industry, than in manufacturing. The average white-collar worker seems to be extremely unaware of the waste in his daily work and is, to my surprise, very resistant towards others outlining this waste to him. Now this most likely originates from the fact that processes in the service industry are invisible, following an unwritten process through electronic data exchange and peoples’ heads. Seeing and accepting waste in such a virtual environment is more difficult than in a factory, where bottlenecks and process defaults are physically existing. This resistance leads to many project failures and makes it very difficult to implement Six Sigma.

2. High initial investment and slow return on investment

The financial service industry is famous for its fast-paced culture, striving from one budget to another. However, for anyone looking for short term return on investment, Six Sigma is not the right cure. Six Sigma requires a high level of initial investment for implementation and the first years of Six Sigma introduction into an organization are particularly costly. During this period Six Sigma experts and employees have to be trained or recruited and senior management focus on Six Sigma implementation is required. Additionally, return on investment is often not realised in the short term.

From an organization-wide perspective, achieving a break-even from implementing Six Sigma takes a considerable amount of time as initial investment is high and results from improvements might only become apparent after several months.

Recommendations and Outlook for Six Sigma in Financial Services

Six Sigma is more a culture than it is a methodology. In order to make it work, you have to prepare your whole organization to embrace the values and ideas behind the concept. If you are looking for a quick fix to make the next budget, then Six Sigma is definitely not the right thing for you. The same holds for organizations that have not yet had any or only limited engagement with quality and process improvement. If you still have a lot of low hanging fruits out there, then go for Lean and 5S first.

However, if you are willing to take your organization through a true transformation, to standardize and re-engineer processes and to make a long-term commitment to Six Sigma, then go for it. Success cases from the financial service industry and many years of successful implementation in the manufacturing industry prove that Six Sigma is indeed a very effective method to bring your organization to the next level.

Both of the weaknesses outlined in this article can, with the right commitment, be reduced to a minimal. Once you have made the initial investment of time, effort and money, Six Sigma will reward you with a very worthy return on your investment.

In my opinion, particularly the ever increasing importance of outsourced finance services brings a never before seen centralization and standardization to financial organizations. This allows for large scale projects and makes the return on investment more favorable, than implementing Six Sigma in small decentralized offices. The most recent developments in the financial industry and the harsh competition following the financial crisis have further strengthened the need for more cost efficient solutions and better quality. At the same time, many players in the financial service industry have already hit their climax in getting process improvement from Lean. That's why I predict that Six Sigma will see a renaissance – this time not in manufacturing, but in financial services.

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