How to Combine Lean Six Sigma, SOA & BPM To Deliver Real Business Results

Managing Waste and Improving Efficiencies

In the current economic market, organisations are often forced to seek innovative ways to save time, money and reduce waste. This is typically achieved through reviewing waste management and understanding where there may be efficiency gains. Sadly, this activity is not given the attention, time, effort or resources necessary to deliver long-term business benefits. The end result is often poor management decisions, redundancies and “quick & dirty” cost-cutting initiatives leading to low morale across the organisation.

What’s the Solution?

 

Organisations should invest time in reviewing how they can adapt their SOA/BPM strategies to include Lean Six Sigma techniques.

Lean Six Sigma (LSS) produces real results in difficult economic times by uncovering process waste, reducing non-value adding activity, and increasing productivity. The benefits are even felt in IT. According to the consulting firm McKinsey & Company, “companies can reduce application development and maintenance costs by up to 40%.” That application development productivity can be improved “by up to 50%” by applying LSS techniques, freeing budget for needed investments.

 

 

Business process management (BPM) and service-oriented architectures (SOAs) combine with LSS to accelerate improvements and results. At the same time, they increase organizational flexibility and technology enabled responsiveness.Many successful companies have found that the linkages are clear. Early adopters who have worked their way past cultural and organizational barriers are seeing impressive performance and financial results:

 

 

 

  • Improved responsiveness to market challenges and changes through aligned and significantly more flexible business and technical architectures
  • Improved ability to innovate and achieve strategic differentiation by driving change into the market and tuning processes to meet the specific needs of key market segments
  • Reduced process costs through automation and an improved ability to monitor, detect, and respond to problems by using real-time data, automated alerts, and planned escalation
  • Significantly lower technical implementation costs through shared process models and higher levels of component reuse
  • Lower analysis costs and reduced risk through process simulation capabilities and an improved ability to gain feedback and buy-in prior to coding 

     

 

The rewards can be great, especially for those who take action now.

Lean Six Sigma (LSS) produces real results in difficult economic times by uncovering process waste, reducing non-value adding activity, and increasing productivity.

Business process management (BPM) and service-oriented architectures (SOAs) combine with LSS to accelerate improvements and results. At the same time, this combination increases organizational flexibility and technology-enabled responsiveness, key to positioning the company for growth as the economy improves.

Process improvement experts are uniquely positioned to play a key role in this transformation as they are able to leverage their business and technical knowledge in combination with the tools and techniques of Lean Six Sigma.

Examples will be provided along with recomendations for getting started.

Recommendations

  • Understand the basics of Lean Six Sigma and how BPM and SOA support the Lean Six Sigma methodology
  • Understand how to use data to select the right improvement project
  • Understand how Business Architects and Business Analysts can play a role in accelerating results

The presentation is available for download here was provided by Hans Skalle an esteemed colleague from IBM’s Global Business Integration Group.

Hans Skalle specializes in Business Process Management (BPM) solutions, business process modeling, and the development of financial models and business cases to support BPM and integration software investments. He has worked directly in the Information Technology industry since 1980 including 8 years as a Business Analyst. He is the lead author of an IBM Redpaper: Aligning Business Process Management, Service-Oriented Architecture, and Lean Six Sigma for Real Business Results. 

Hans has more than 20 years of hands-on process improvement consulting experience and is a past Master Evaluator for Minnesota’s Malcolm Baldrige-based Quality Award in the US. He has in-depth knowledge of various performance improvement methodologies including Six Sigma, Lean Sigma, ISO 9000 and other tools and techniques used to drive and sustain continuous improvement and competitive advantage through change and innovation.

Sustainable Transformation

Business Process Management (BPM) and Continuous Process Improvement (CPI) are complementary initiatives and together foster business alignment. Successful and sustainable business transformation requires a programmatic approach that includes the technology of BPM and the methodology of CPI.

A programmatic approach to process improvement and management:

  • Fosters a close alignment between the various functions of the business and IT
  • Incorporates change management and program management
  • Ensures communication at all levels and
  • Establishes control mechanisms for sustainability

Having already become Certified Process Professional (CPP) and gained years of practice directing organisational transformation using Business Process Modelling, Re-Engineering and Management, the next challenge is to formally embrace LEAN Six Sigma.

And so begins my journey into becoming a Black-belt LEAN Six Sigma (LSS) expert.

My goal? To advise, guide and mentor organisations to achieve efficiency gains / savings by tackling waste management issues. With May 6 looming ever so closer and the political landscape about to change significantly across the UK, Sir Peter Gershon’s efficiency review will once again land on the desks of the CEO and CIO across all organisations – ranging from the SMEs to the Blue Chip companies who will be helping the government to claw back monies to help pay off our deficit.

See you on the other side 🙂

PS Don’t forget to vote before/on May 6, 2010. Use your vote wisely!

Combining Lean Six Sigma and SOA/BPM

Reducing Operating Costs

Today the pressure is on the CIO and the IT organization to identify, enable, and create new business opportunities while dramatically reducing operating costs. In virtually every industry, aggressive, more technologically agile competitors are now offering new products and services faster or are executing processes more efficiently, to win customers, market share, and profit.

Thankfully, advances in technology and technical standards, specifically SOAs, are now allowing IT budgets to be reclaimed and the organization to be repositioned. New technical tools and capabilities complement traditional BPM methods and even unlock existing application functionality to greatly accelerate process improvement and innovation.

Leading firms are using BPM technologies to accomplish the following tasks:

  • Choreograph human and system interactions
  • Provide real-time visibility into key performance indicators (KPIs)
  • Manage escalations in the event of failure or missed targets
  • Provide the foundation for continued process improvement and optimization

However, on their own SOA/BPM do not address waste management or efficiency considerations. This is where Lean Six Sigma can help.

Step Back – Definitions & Terms

Lean Six Sigma (LSS) produces real results in difficult economic times by uncovering process waste, reducing non-value adding activity, and increasing productivity. The benefits are even felt in IT. According to the consulting firm McKinsey & Company, “companies can reduce application development and maintenance costs by up to 40%.” That application development productivity can be improved “by up to 50%” by applying LSS techniques, freeing budget for needed investments. 

Business process management (BPM) and service-oriented architectures(SOAs) combine with LSS to accelerate improvements and results. At the same time, they increase organizational flexibility and technology enabled responsiveness.

Many successful companies have found that the linkages are clear. Early adopters who have worked their way past cultural and organizational barriers are seeing impressive performance and financial results: 

  • Improved responsiveness to market challenges and changes through aligned and  market and tuning processes to meet the specific needs of key market segments
  • Improved ability to innovate and achieve strategic differentiation by driving change into the and respond to problems by using real-time data, automated alerts, and planned escalation
  • Reduced process costs through automation and an improved ability to monitor, detect,higher levels of component reuse
  • Significantly lower technical implementation costs through shared process models and improved ability to gain feedback and buy-in prior to coding
  • Lower analysis costs and reduced risk through process simulation capabilities and an improved ability to gain feedback and buy-in prior to coding

Recommendations

Lean Six Sigma (LSS) and business process management have much in common. Both methodologies use iterative improvement and design techniques to deliver financial and performance benefits through better managed and optimized processes.  

By combining key concepts from LSS with the capabilities of BPM (including process modeling and analysis, automation, and executive dashboards that deliver real-time performance metrics to process consumers), a company can ensure that its people are focused on the most meaningful value-added work. SOAs add increased flexibility so that processes can be quickly assembled from reusable Lego-type building blocks of technical functionality.

Companies that successfully bring together LSS, BPM, and SOA initiatives will realize a competitive advantage.

To fully understand the linkages between BPM, SOA, and LSS, and fully realize the benefits of these linkages, it is important to establish definitions and list key concepts for each initiative.

Conclusion

Process improvement experts are uniquely positioned to play a key role in this transformation as they are able to leverage their business and technical knowledge in combination with the tools and techniques of Lean Six Sigma.

Take Aways

  • Understand the basics of Lean Six Sigma and how BPM and SOA support the Lean Six Sigma methodology
  • Understand how to use data to select the right improvement project
  • Understand how Business Analysts can play a role in accelerating results
  • Consider embedding Lean Six methodology into your SOA/BPM strategy as part of your overall Enterprise Architecture

The rewards can be great, especially for those who take action now.