Applying Six Sigma and Lean processes to Information Technology Service Delivery Hightower Consulting Stephen Hightower (407) 810-2746 Stephen@Hightower-Consulting.com July 13, 2012
Does your IT organization suffer from credibility problems due to costoverruns, not meeting schedules and not meeting customer expectations?Walk into any world class manufacturing facility and you’ll see a variety ofmetrics, repeatable processes, an emphasis on quality and a focus oncontinuous improvement. Everything related to inventory, production,backlog, shipments and quality are present in every measurement.There are certifications for adherence to industry standards (ISO, SixSigma, etc.) that are recognized around the world as standards for qualityand excellence.Information Technology (IT) service delivery can benefit from the sameprocesses and management techniques to delivery high quality, world-class solutions in an IT environment.As W. Edwards Deming, the father of the Total Quality Managementmovement, would tell you, the key to quality is consistency, which is
determined by repeatable processes. The impact of Dr. Deming’steachings on American manufacturing and service organizations has beenprofound. He led a sweeping quality revolution that is improving thecompetitive position of the United States.But how many IT organizations utilize these same disciplines? Theanswer is not many, but the good news is that more and more peoplewhose product is IT service are recognizing the value of metrics-basedQuality management methodologies in achieving real quality and customersatisfaction. The migration to the cloud and the ubiquity of mobile devicesis driving IT organizations to re-engineer, innovate and most of all,measure their services in new and meaningful ways.The goal, as in most industries, is a much better product at a reducedprice – in this case improving distributed computing servicereliability/speed while reducing the total cost of ownership. The path tomeeting this objective requires team involvement and a commitment to
stay the course. Depending upon where you are in your maturity level ofservice, this can take place in four basic stages.The first stage is Ground Zero, which is characterized by the following: • Informal Processes are the rule • Cycle times cannot be predicted with any accuracy for repeat requests • Everyday a different priority emerges and closure remains elusive • Expedite everything because you can’t trust the process • Customer satisfaction is a problem and getting worse • Lack of planning and mismanagement of customer expectationsObviously, this is not your optimal state, but many people findthemselves in this environment and don’t know how to break thecycle.
The next stage, Baseline, consists of taking small steps to achieve a basic understanding of the environment. As the saying goes, “How do you eat an elephant? One bite at a time”. This is extremely important to remember during this process, since this is not an overnight transition and takes a dedicated, focused effort to achieve. This stage is characterized by:• Understanding and quantifying your work-flow (input, production, backlog, restore to service)• Evaluating the maturity level of the organization for people, process and technology• Identifying top problems and applying root cause corrective action• Establishing basic metrics related to availability and performance to a baseline• Standardizing service delivery processes• Practicing basic configuration management• Stabilizing customer satisfaction in some areas
Moving into the third stage, Managing By the Numbers, marks the beginning of sound operating processes and ensuring that customer satisfaction starts to improve. This stage is characterized by:• Predictable cycle times for standard services• Documented, repeatable processes• Critical processes are understood and process control engineering principles are implemented• Trending of problems and failure analysis• Automation is being put into the process for analysis• Customer satisfaction starts to improve in certain areas The fourth stage is Proactive and Predictive Support for the customer. This is where world-class manufacturing organizations reside. In an IT environment, the following characteristics are found:• Forecasts are accurate• Cycle time reduction programs are in place while quality of service improves• Market share is increased through more services being provided by the IT organization
• Integrated Change Control in place across the organization• Total Quality Management and Continuous Improvement are a part of the culture.• Customer satisfaction has a good baseline and is improving Listed below are a few of the many benefits that came from implementing a Six Sigma service delivery model in a large, complex IT organization:• Improving the quality of the Service Desk so that First Call Resolution (FCR) for problems was improved from a 32% FCR to a sustained 78% FCR. This translated to saving over $1,000,000 on an annual basis due to improved productivity for the business and cost reductions to the IT organization.• As a result of applying Six Sigma and Lean techniques dramatic increases were seen in customer satisfaction. The composite
improvement for restore to service in the desktop area improved by 30 percent and customer satisfaction increased by 42 percent.• The critical service delivery processes were identified, and due to the program’s early success influenced leaders to move to a 4.2 Sigma level. The transformational program slashed failure rates from 30,000+ a year to 3,000 a year, and saved $2 million during the first year of implementation. The Chief Information Officer for the business that benefited from the Six Sigma implementation for IT service delivery said, “ We reduced the total cost of ownership dramatically while improving our service. Our customer satisfaction has improved by applying these principles to our environment. Operational metrics provide an early warning indicator when service declines and we take pro-active steps to address the issues before they result in a crisis”.
Stephen Hightower is an experienced industry executive and hasapplied these concepts in a variety of industries utilizing lean, sixsigma and business process re-engineering to drive continuousimprovement into all aspects of IT service delivery. Stephen hasheld many roles including CIO, CTO as well as managing largeManufacturing, Quality, and Strategic Planning organizationsthroughout his career and has seen the power of putting adisciplined approach to managing IT services so that the “Trainsalways run on time”.Stephen is the Managing Director for Hightower Consulting aswell as the Chief Strategy and Technology Officer forCollaborateMD, a software medical billing company.