How to Apply 6 Sigma Quality Practices to Your Business

Six Sigma for IT Service Management—What you need to know:

Delivering and supporting IT services is not enough to make IT a driver of business value. As IT increasingly plays an integral part in the business, it must consider new approaches to improve service quality and process efficiency to become more aligned and integrated with business objectives.

But how?

IT best practices like ITIL v3 (Information Technology Infrastructure Library) introduce Continual Service Improvement for service management. And, quality methods like Six Sigma bring a business focus to IT. In combination, they add a quality layer to ITSM (IT Service Management).

This series of articles will focus on what Six Sigma is, how Six Sigma techniques bring business focus to ITSM and how Six Sigma complements ITIL v3.

What is Six Sigma?

Six Sigma is a business-driven quality improvement method that enables organizations to streamline processes by reducing the number of defects that 1) impact customers and 2) increase costs. The sigma measure, σ, represents the standard deviation, indicating the amount of variation or inconsistency in a process. The target for quality equates to six standard deviations from the mean—six sigma—by which the variation from a process is reduced to no more than 3.4 defects per million opportunities (DPMO).

According to Quality America, a bank operating at three sigma for instance would correspond to 270 million erroneous credit card transactions recorded per year in the United States and 54,000 checks lost each night. It is numbers like this that get the attention of C-level business executives to turn to quality solutions for business transformation.

Six Sigma has roots in manufacturing, but it is now adopted in many industries such as finance and banking, healthcare and government—as well as IT management—with considerable success. Companies such as General Electric, Getronics, Sun Microsystems, American Express, Bank of America and Lockheed Martin have achieved and published significant returns from Six Sigma. Moreover, Service management technology vendors such as Compuware and others have incorporated automated Six Sigma techniques in their solutions.

What is DMAIC?

At the core of Six Sigma is its quality improvement model, called DMAIC, for Define, Measure, Analyze, Improve and Control. Each of the DMAIC phases has clear objectives, tasks and proven techniques (see table, below). This continual loop provides a quality improvement cycle for products and services, starting with key measurable objectives definition through to implementing recommended solutions and sustaining improvement until further enhancement is required.

Six Sigma is proven to provide quantified returns, in terms of cost reduction and increased profit. ITSM organizations can benefit from Six Sigma by reducing IT problems (defects), impacting critical business processes (reducing costs to fix problems but also reducing costs to the business from these problems), improving service management processes, and, as a result, improving the IT service quality delivered to the business.

In short, Six Sigma helps baseline service quality level, quantify improvement for return on investments and sustain improvement until further enhancement is required. Six Sigma is a business-driven quality method with strong emphasis on customer requirements that helps IT service providers (internal or external) become more business-aligned.

Now that we have covered the basics of Six Sigma and its core improvement model (DMAIC), the next article will discuss how Six Sigma brings a business focus to ITSM and which techniques are applicable for IT service management.

Linh C. Ho, product marketing manager for Compuware Corporation's IT service management solutions, has 10 years in the IT industry. Ho is a co-author of itSMF's Six Sigma for IT Management book and pocket guide, and she has written articles and spoken at conferences on integrating these two approaches. She was also on the review board for several itSMF books including ITILv3 Foundations and Frameworks for IT Management.

She was also an assistant professor for Statistics for Management and Applications of Statistical Methods in Business at the University of Ottawa, Canada.

Further reading:

Linh C. Ho has published a Six Sigma Q&A (click here: http://www.compuware.com/dl/EM17276_ITSM_NewsletterV2.pdf) itSMF has published a book called "Six Sigma for IT Management" relating to this topic.

Leading service provider Wipro has a white paper relating to using Six Sigma for service quality improvement. Click here.