Lean Six Sigma Secrets for the CIO

LEAN
SIX
SIGMA
SECRETS
FOR THE CIO

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William Bentley
Peter T. Davis
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Library of Congress Cataloging‑in‑Publication Data
Bentley, William, 1944-
Lean six sigma secrets for the CIO / William Bentley, Peter T. Davis.
p. cm.
Includes bibliographical references and index.
ISBN 978-1-4398-0379-0 (hbk. : alk. paper)
1. Information technology--Management. 2. Six sigma (Quality control standard) I.
Davis, Peter T. II. Title.
HD30.2.B458 2010
658.4’013--dc22 2009029625
Visit the Taylor & Francis Web site at

and the CRC Press Web site at

To Joyce, my always happy wife, who continues to endure me even
after nearly four decades; and to Brandon and Trevor, my wonderful
sons, both with computer science degrees, who continue to be amused
that I don’t give up trying to understand the world of computers.
—Bill
To Kelly, the pride of my life, who is off pursuing her dreams.
Bonne chance. Buena suerte. Viel Glueck. Buona fortuna.
—Peter

vii
Contents
Acknowledgments ....................................................................................... xiii
About the Authors .........................................................................................xv
1
Beyond IT Governance ...........................................................................1
e Corporate Paradox ................................................................................1
e Pitch......................................................................................................2
Lean Six Sigma Business Case......................................................................3
Lean Six Sigma Benefits ...............................................................................4
Why Is Its Use Not Rampant? .....................................................................5
It’s Not Just for Manufacturing ....................................................................6
It’s the Value, Stupid ....................................................................................8
It’s about More than Reducing Costs ...........................................................8
Governance Benefits ..................................................................................11
Prescriptive versus Proscriptive ...................................................................12
2
You Say Pro-ses and I Say Pra-ses, Let’s Do the Whole ing
Right! ....................................................................................................17
Process Components and Characteristics ...................................................18
Types of Business Processes ........................................................................19
Process Management .................................................................................20
Process Mapping ........................................................................................25
e Process Document .....................................................................26
Document Control Information ..............................................26
Document Owner ...................................................................26
Change Control .......................................................................27
Document Review ...................................................................27
Document Approval ................................................................28

Description ..............................................................................28
Process Scope...........................................................................28
Process Objectives ...................................................................28
Process Benefits .......................................................................28
viii  Contents
Process Overview .....................................................................28
Process Metrics ........................................................................28
Process Principles .....................................................................29
Process Flow ............................................................................29
Process Description .................................................................29
Process ARCI ..........................................................................29
Roles and Responsibilities ........................................................30
Glossary and Definitions .........................................................30
Process Library .................................................................................30
3
An Abundance of Wealth .....................................................................33
Balanced Scorecards ..................................................................................36
Basic Principles of Balanced Scorecard .............................................39
Financial Perspective ...............................................................39
Customer Perspective...............................................................39
Internal Process Perspective .....................................................39
Learning and Growth Perspective........................................... 40
BSC Implementation ....................................................................... 40
BSC and Lean Six Sigma ................................................................. 40
eory of Constraints ................................................................................41
Basic Principles of TOC .................................................................. 42
TOC Axioms .......................................................................... 42
Ongoing Improvement Steps ...................................................43
e TOC inking Processes ..................................................43
TOC and Lean Six Sigma .................................................................43

ISO 9000 .................................................................................................. 46
Basic Principles of ISO 9000 ........................................................... 46
ISO 9000 and Lean Six Sigma..........................................................48
Total Quality Management .......................................................................48
Basic Principles of TQM ...................................................................48
TQM and Lean Six Sigma ................................................................49
IT Governance ...........................................................................................50
IT Governance Guidance ..........................................................................51
CobiT ...............................................................................................52
Basic Principles of CobiT ........................................................53
CobiT Structure ......................................................................54
CobiT and Lean Six Sigma ......................................................55
ISO 27001 ........................................................................................55
Basic Principles of ISO/IEC 27001 ..........................................56
ISO 27001 and Lean Six Sigma ...............................................58
ITIL .................................................................................................58
Basic Principles of ITIL ...........................................................59
ITIL and Lean Six Sigma ........................................................61
Contents  ix
Val IT .............................................................................................. 64
Basic Principles of Val IT ........................................................ 66
Val IT and Lean Six Sigma ..................................................... 66
Providing More Specificity .........................................................................67
CMMI ..............................................................................................68
Basic Principles of CMMI .......................................................69
CMMI and Lean Six Sigma ....................................................69
IEEE 829 ..........................................................................................72
Basic Principles of IEEE 829 ...................................................72
IEEE 829 and Lean Six Sigma .................................................73
PMBOK ...........................................................................................73

Basic Principles of PMBOK .....................................................73
PMBOK and Lean Six Sigma ..................................................74
PRINCE2 .........................................................................................78
Basic Principles of PRINCE2 ..................................................78
PRINCE2 and Lean Six Sigma ...............................................79
Zachman Framework .......................................................................80
Basic Principles of the Zachman Framework ...........................81
Zachman and Lean Six Sigma .................................................82
Adopt and Adapt .......................................................................................83
4
What Is Lean Six Sigma? ......................................................................85
Understanding Data ..................................................................................86
Continuous Data .......................................................................................87
Attribute (or Discrete) Data .......................................................................88
Inputs versus Outputs ................................................................................89
Data Collection Plans ............................................................................... 90
Check Sheets ..............................................................................................95
Basic Sampling...........................................................................................97
Measurement System Analysis .................................................................100
5
Understanding Lean ...........................................................................105
Lean and the Socratic Method .................................................................108
Kaizen Events ..........................................................................................109
A Typical Kaizen Event................................................................... 111
Before the Event .................................................................... 111
Day 1 ..................................................................................... 111
Day 2 ..................................................................................... 111
Day 3 ..................................................................................... 111
Day 4 .....................................................................................112
Day 5 .....................................................................................112

Muda, Muri, or Mura? .............................................................................112
Defects ........................................................................................... 115
x  Contents
Overproduction .............................................................................. 116
Waiting ........................................................................................... 116
Transportation ................................................................................ 116
Inventory ........................................................................................ 117
Motion ...........................................................................................117
Extra Processing Waste ................................................................... 118
Underutilized People ...................................................................... 118
Process Efficiency ..................................................................................... 119
Capacity Constraints ......................................................................120
e Five Ss (Your Mother on Steroids) .....................................................124
6
Understanding Six Sigma ...................................................................129
What Is a Standard Deviation? ................................................................130
DMAIC ...................................................................................................133
Data Displays ...........................................................................................139
Descriptive Statistics ................................................................................145
Measures of Central Tendency: What Do You Mean? .............................145
Measures of Spread ..................................................................................147
Distributions (Not ose from Your IRA) ...............................................149
Normal Distributions ..................................................................... 152
Non-Normal Distributions ............................................................. 155
Process Monitoring ..................................................................................156
Variation Analysis: What’s So Special about It?........................................157
Process Stability .......................................................................................159
Control Charts ........................................................................................160
Types of Control Charts .................................................................160
Interpreting Control Charts............................................................164

Process Capability ....................................................................................166
Specification Limits .................................................................................167
Internal Specification Limits ...........................................................168
Measuring Process Capability ..................................................................169
Identifying and Verifying Root Causes ....................................................171
Cause-and-Effect Diagrams .....................................................................172
Five Whys ................................................................................................175
Pareto Charts ...........................................................................................175
C&E Matrix ............................................................................................176
7
e Customer and the Workplace: Putting IT All Together ..............179
Managing Your Customers ......................................................................179
Voice of the Business ................................................................................180
Voice of the Customer..............................................................................181
Critical to Quality ..........................................................................182
Kano Analysis .................................................................................183
Contents  xi
Voice of the Employee ..............................................................................185
Voice of the Process .................................................................................186
Processes at Matter .....................................................................187
e ree Reals ..............................................................................188
Processes Capability Revisited ........................................................190
Process Flow Tools ...................................................................................190
SIPOC ............................................................................................190
Use Case Diagrams ......................................................................... 191
Spaghetti Diagrams ........................................................................194
Swim Lane Diagrams .....................................................................194
Value Stream Mapping ...................................................................197
Value-Added and Non-Value-Added ...............................................199
Complexity Analysis .......................................................................203

Time Value Maps ...........................................................................205
Value Add Chart .............................................................................205
Evaluation Techniques ....................................................................205
Simulation Models ......................................................................... 206
Benchmarking ................................................................................209
Industry Standards and Internet Research ......................................209
Limited Pilots .................................................................................210
Poka-Yoke: Mistake Proofing ...................................................................211
8
Working on Ideas ...............................................................................215
Brainstorming .......................................................................................... 215
Six inking Hats....................................................................................216
Mind Mapping ........................................................................................218
Affinity Diagrams ................................................................................... 220
Multivoting............................................................................................. 222
TRIZ .......................................................................................................223
Process inking .....................................................................................225
9
Lean Six Sigma Projects .....................................................................229
Potential IT Projects ................................................................................231
Ensuring Compliance ..............................................................................231
IT Security...............................................................................................232
Deactivating Employees’ Access ......................................................232
Data Accuracy ................................................................................232
Password Reset ...............................................................................233
User Account Creation .................................................................. 234
Improving Network Security ......................................................... 234
Improve Application, Server, and Network Uptime .................................235
Improving Personal Productivity .............................................................235
Software Development .............................................................................236

xii  Contents
DFSS ..............................................................................................237
DMADV Methodology and Tools ..................................................240
QFD and House of Quality ............................................................243
Other IT Improvement Projects ...............................................................248
Generating Project Ideas ..........................................................................250
Call to Action ..........................................................................................251
Appendix A: Guidance ................................................................................253
Appendix B: Shewhart Constants for Control Charts ................................257
Appendix C: Table of z Values .....................................................................259
Appendix D: Useful Microsoft Excel® Statistics Functions .........................263
Appendix E: Bibliography ...........................................................................265
Appendix F: Lean and Six Sigma Resources ................................................269
Appendix G: Acronyms and Initialisms Used in is Book ........................271
Index ...........................................................................................................275
xiii
Acknowledgments
We would like to acknowledge Rich O’Hanley who started this rolling; John
Wyzalek, acquisitions editor, for pitching the book to the editorial committee and
getting us a contract (Much appreciated, John); Teresa Horton, copy editor, who
kept us honest; and Rich Halstead-Nussloch, technical editor, for his diligence in
reviewing the material (anks, Rich).
Peter T. Davis would like to thank first and foremost his co-author for tak-
ing this trip with him. He also would like to thank Dorian Cougias, Rabindra
“Danny” Jaggernauth, John Kearns, Al Marcella, Tony Noblett, William Prado,
Winn Schwartau, Rob van den Eijnden, and Herman Veltkamp for answering a
call for help. e provided information shows in this book. Any mistakes, as they
say, are mine and not theirs.
William (Bill) Bentley would like to thank Peter, his co-author for being patient
enough to wait for him to come around and write this with him, and his wonderful

network of Value-Train students and trainers, who are always there to help with his
sometimes unusual requests.

xv
About the Authors
William (Bill) Bentley (BSEE, MSEE, Six Sigma Master Black Belt, Lean Black
Belt) is the owner and president of Value-Train, a process improvement consulting
and training firm started in Atlanta, Georgia, in 2002. Bill’s college education is in
electrical engineering (advanced automatic control systems) and he practiced that
in various roles with Procter & Gamble, Frito-Lay, and Nabisco Brands for twenty
years. His last assignment in that career was director of automation for Nabisco
Brands. He subsequently managed engineering and software operations for various
companies, with his most recent corporate position being president and CEO of
MDT Software in Atlanta. He lives with his wife Joyce, two dogs, and two parrots,
all of whom get along just fine. He is an avid sailor, motorcyclist, bicyclist, and
virtual world advocate.
Peter T. Davis (CISA, CMA, CISSP, CWNA, CCNA, CMC, CISM, C
o b i
T FL,
ITIL v3 FL, ISSPCS, PMP, SSGB, CGEIT) founded Peter Davis + Associates (a
very original name) as an information technology governance firm specializing in
the security, audit, and control of information. A battle-scarred information sys-
tems veteran, his career includes positions as programmer, systems analyst, security
administrator, security planner, information systems auditor, and consultant. Peter
also is the past president and founder of the Toronto Information Systems Security
Association (ISSA) chapter, past recording secretary of the ISSA’s International
Board and past Computer Security Institute Advisory Committee member. He has
written or co-written numerous articles and ten books including Hacking Wireless
Networks for Dummies and Securing and Controlling Cisco Routers. He was listed in
the International Who’s Who of Professionals. In addition, he was only the third edi-

tor in the three-decade history of EDPACS, a security, audit, and control publica-
tion. He lives with his wife Janet, a cat, and a dog in Toronto, Ontario.

1
1Chapter
Beyond IT Governance
e CEO’s secretary calls and tells you the boss wants to see you immediately.
As you stride confidently toward the corner office, you cannot help wondering
what’s up. You have met all your targets and you believe your users are satisfied—
although you have no proof. When you enter the office, you notice the CEO is
sitting with the CFO. e air in the room is icy and you get a slight chill. is does
not augur well. With the CFO nodding like a bobblehead doll, the CEO explains
the financials this quarter are not good and the stock is going to get pummeled.
Right now you are thinking of the pointy-haired boss from the Dilbert cartoon.
Now the CFO explains that you will need to cut 10 percent from salaries and
noninterest expenses.
The Corporate Paradox
Does this sound familiar? is is not an unusual tactic. When times are tough,
many organizations retreat and decide to cut costs. Read the paper any given day
and you will see that organizations are laying off employees to reduce costs to
return to profitability or just to survive. As we write this book, U.S. automakers
are laying off workers because they did not foresee the shift in the auto market or
increases in gas prices.
When organizations cut staff, financial analysts respond favorably by buy-
ing the organizations’ stock and forcing the value of the companies upward. is
behavior perpetuates the cycle: Hire them when times are good and fire them when
times are bad. is behavior obviously has a negative impact on any organization.
If your employees think they are the next to go, they will not demonstrate a lot of
loyalty. Furthermore, the good ones will look for alternative employment while the
2  Lean Six Sigma Secrets for the CIO

poor ones remain. If that doesn’t convince you, read the 2008 Cyber-Ark survey*
that reports a whopping 88 percent of information technology (IT) administrators
admitted they would take corporate secrets, should their organization suddenly lay
them off. is strategy is obviously not always the best. As motivational speaker
Catherine DeVrye warns, “Remember that the six most expensive words in business
are: ‘We’ve always done it that way.’”
Downsizing, rightsizing, capsizing: You know that cutting resources beyond
the point of pain is not the way to succeed. You will have burnt-out staffers and
stressed-out managers who are just trying to keep their heads above water. Forget
trying to rework processes to improve performance when your staff finds it difficult
to just cope.
The Pitch
As you consider the CEO’s request, you are reminded of Monty Python’s first
film And Now for Something Completely Different and you tell the CEO and CFO
you’d like to go in a different direction. You think now is the time for Lean Six
Sigma. Your golfing buddy has been going on and on about it and you’d like to
try it.
Why not focus on becoming better at what you do? By focusing on improving
your processes, you can add to the bottom line. If it costs $100 to handle a call to
the service desk and you can reduce the number of calls from 100,000 to 50,000,
you have just added $5 million to the bottom line. So why not focus on efficiency
and effectiveness? You understand it is necessary to do some belt-tightening to affect
the bottom line, but kick-starting the top line is equally important. You also know
Lean Six Sigma can help improve your processes and stimulate innovation.
You tell them, “I would like to try to use Lean Six Sigma in my area. Lean Six
Sigma is a combination of historical methods for process improvement that focuses
on the bottom line and critical-to-customer requirements. It is a robust business
improvement methodology that focuses an organization on customer requirements,
process alignment, analytical rigor, and timely execution. LSS includes leadership,
infrastructure, tools and methods.”

e CEO and CFO have heard the term, but they’re not quite sure what it
means. Is Lean Six Sigma really different, or is it just another flavor-of-the-month
program that will disappear eventually? Is it an expensive, complicated approach
oversold by engineers and zealots? Is it the fabled goose that laid the golden egg, as
some suggest, or is it a boondoggle?
*
/>Beyond IT Governance  3
Lean Six Sigma Business Case
You assure them that Lean Six Sigma is not a skinny rock band from northern
Kentucky, a fad or a cult, or a fraternity or secret society with secret handshakes—
although there are some really neat pins. Rather, it is a flexible quality improvement
strategy used by organizations to identify and eliminate variation and reduce cycle
time and costs. is method differs from previous process improvement approaches
because it uses established engineering principles and is based on the institutional-
ization of the approach and independent validation of claims of success. You also
ensure them that it complements the existing corporate and IT governance pro-
grams. You explain how General Electric (GE) used Six Sigma (6∑) alone to turn
around their performance and strengthen customer relationships and how Toyota
used Lean Six Sigma to become a juggernaut.
Lean Six Sigma techniques go back to the 1920s with the development of time
and motion studies and the principles of statistical quality control. irty years
later in the early 1950s, W. Edwards Deming and Bonnie Small developed the
foundations of modern process improvement methods. Deming developed Total
Quality Management (TQM) and exported it to Japan. Small made the analyses of
statistical quality control accessible to people who were not professional statisticians
and mathematicians through her publication of e Western Electric Rule.*
Incorporating elements from the work of many quality pioneers, Six Sigma aims
for virtually error-free business performance. Six Sigma is a rigorous, focused, and
highly effective implementation of proven quality principles and techniques. You can
measure an organization’s performance by the sigma level of their business processes.

e 14 Principles of e Toyota Way, created by the Toyota Corporation is a
management philosophy that includes the Toyota Production System. Guiding prin-
ciples of e Toyota Way are to base management decisions on a “philosophical sense
of purpose” and to think long term, to have a process for solving problems, to add
value to the organization by developing its people, and to recognize that continu-
ously solving root causes drives organizational learning.
You add, “According to the American Society for Quality, eighty-two of the
one hundred largest companies in the United States have embraced Six Sigma.
Lean Six Sigma is steamrolling the nation as well. When companies start paying
attention to process improvement, they can realize huge improvements in produc-
tivity and profitability. Recent research tells us that efforts like Lean Six Sigma are
certainly needed. For example, in the service industry, slow production and rework
accounts for between 30 and 50 percent of the actual cost of producing and deliver-
ing a service. ink of how much better off any company would be when they pay
attention to processes and controls. Sure we would eat up some time and dollars in
the near term should we implement Lean Six Sigma, but it will pay big dividends in
the long term. For non-Lean Six Sigma companies, the cost of nonconformance is
*
You can read about the rules at />4  Lean Six Sigma Secrets for the CIO
often extremely high. Companies operating at three or four sigma typically spend
between 25 and 40 percent of their revenues fixing problems. is translates to
approximately 67,000 defects per million opportunities! If the rework costs just $10
per defect, an extremely low number, that’s a cool $670,000! is is known as the
cost of quality, or more accurately the cost of poor quality (COPQ). In companies
where the COPQ is unknown, it usually exceeds the profit margin. ink what
this could mean to our competitiveness when we’re at three sigma and our direct
competitor is at four sigma. e dollar cost of this gap is huge. Every time you move
up a sigma level, it can easily mean a 20 percent increase in profit margin. GE, a
pioneer of the concept, estimates that the gap between three or four sigma and Six
Sigma was costing them between $8 billion and $12 billion per year. Traditionally,

companies accepted three or four sigma performance levels as the norm, despite the
fact that these processes created between 6,200 and 67,000 problems per million
opportunities! e Six Sigma standard of 3.4 defects per million opportunities is a
response to the increasing expectations of customers and the increased complexity
of modern products and processes. Companies operating at Six Sigma typically
spend less than 5 percent of their revenues fixing problems.”
In short, what sets Lean Six Sigma apart from its individual components is the
recognition that you cannot do “just quality” or “just speed,” you need the bal-
anced process that can help an organization focus on improving service quality, as
defined by the customer within a set time limit.
Simple tools, simple questions, and common sense enhance customer expe-
rience, maximize growth, and enhance profitability—regardless of business size
and structure.
Lean Six Sigma Benefits
Lean Six Sigma for services is a business improvement methodology that maxi-
mizes shareholder value by achieving the fastest rate of improvement in customer
satisfaction, cost, quality, process speed, and invested capital. e fusion of Lean
and Six Sigma improvement methods is required because:
Lean itself cannot bring a process under statistical control. ◾
Six Sigma alone cannot dramatically improve process speed or reduce ◾
invested capital
Both enable the reduction of the cost of complexity. ◾
“While the CEO and CFO mull over what you said, you weigh in with this:
Evolving from Japanese manufacturing initiatives like Kaizen (continuous improve-
ment), Kanban (just-in-time or JIT), Toyota Production System (TPS), and 5S
(Visual Workplace), Lean is geared toward waste elimination and value-chain
improvements. When a company maximizes process flow and flexibility, it can
Beyond IT Governance  5
achieve breakthrough financial impacts. Like Six Sigma, it is dependent on process
data, but it also requires data integration and forecasting capabilities.”

Why Is Its Use Not Rampant?
e CFO asks the obvious question: “Why isn’t every business utilizing Lean and
Six Sigma?”
You say, “I’m glad you asked. You would think the benefits of an increase in
performance and decrease in process variation leading to defect reduction and vast
improvement in profits, employee morale, and quality of product would be enough.
But the truth is that many companies choose not to implement Lean and Six Sigma
because they think it is too complicated. In essence they are saying it’s the philoso-
phy of Lean and Six Sigma that doesn’t work for them, claiming they do not have
the time to build an infrastructure, train staff, and dive deeply into statistical analy-
sis. ey say the effort is too burdensome and would slow down their fast-paced
world of meeting customer demands. Unfortunately, most of these companies are
not actually meeting customer demands because they don’t know what their cus-
tomers really want. Lean Six Sigma is a quality objective that specifies the variabil-
ity required of a process in terms of the specifications of the product so that product
quality and reliability meet and exceed today’s demanding customer requirements.
Even though they need a systematic approach to making change happen, they can’t
get past the perception that Lean and Six Sigma is all about statistics and too com-
plex. By eliminating all the emotive statements people tend to attach to problems,
you can create a statistical solution and turn that into a practical reality.
“If you went to any IT department, including ours, and asked the first person
you met what it was they did around there, they’d respond by saying they were
in system administration or application development. With much prodding, they
would eventually say retail, manufacturing, government, or finance. IT is insulated
in most cases from the customer. People working in traditional functional orga-
nizations often have difficulty seeing how their work relates to other departments
and, more important, how their work relates to customers. is is especially true
for centralized service units such as technology, operations, and finance. Sure if we
were Microsoft or Hewlett-Packard, our employees would be in the business of IT.
But we’re not. Each department in our organization should know where it fits in

the organization and how it lines up with what our customers want. Our business
architecture needs to become a visual aid linking customers, business processes,
and support activities. e picture needs to focus on processes and customers—not
departments. e business architecture forms a foundation for many management
practices and programs including Lean and Six Sigma. Although the term business
architecture sounds theoretical, companies with a clear business architecture, cap-
tured in a simple diagram that all employees understand, can accelerate their prog-
ress toward their strategic goals.
6  Lean Six Sigma Secrets for the CIO
“Left to their own devices, employees doing work will always think there is
one right perspective: theirs. Rarely do people see themselves as working to satisfy
customers. e more departments you have—even if there’s only one person in
each—the harder it is for people to see how work fits together to create customer
satisfaction. People need a road map; what the Lean Six Sigma advocates call a ‘pro-
cess map.’ Process mapping takes the business architecture structure and Hoshin
planning techniques to the next level by accurately depicting both current and
future environments. Creating these diagrams is a dynamic and iterative process. It
usually helps to flush out non-value-added work.
“Compensation and incentives can be based on measures and aligned with pro-
cesses. Customer research can be redirected. Products can be reviewed for their effec-
tiveness in the processes that customers care most about. Our technology projects can
be redirected, accelerated, or killed. It will also help identify fast failures, indicators
that a research program is on the wrong track. Just imagine all the possible improve-
ments that a company could make. From the tape librarian to the application devel-
oper, hundreds of processes are waiting to be improved. No matter what we’re doing,
it’s possible to complement scientific knowledge and experimentation with analytical
and statistical methods to weed out practices that get us where we want to go faster.
“e heart of it all is very simple. In fact, it’s just good business. Start with
the customer: no revenue, no company, just the customer. e customer comes
first. Always. You need to ask the big questions: Do we actually know what our

customer wants? Have we asked? How much effort does it take to produce what
our customer wants? Do our people respond to the customer the same way when
situations recur?”
It’s Not Just for Manufacturing
Your boss challenges you: “But we are not a manufacturing company and IT is defi-
nitely not one.” You counter: “High-quality claims are not the domain of manu-
facturing! Anyway, it’s a mistake to view Lean and Six Sigma as exclusive to ‘hard’
manufacturing. Despite its origins in manufacturing, Lean Six Sigma isn’t about
widgets; its focus is on processes. Every day people go to work and have a process
for getting their work done. Every day, chances are, there are better ways of doing
it quicker and more efficiently. Quickness and efficiency equal a better product or
service, a happier customer, and higher profits for the company. LSS has been very
successfully used in transactional and service industries as LSS is a best practice for
process improvement.
“Any group operating and maintaining an IT enterprise cannot survive without
processes. Our IT function includes a range of activities that includes the planning
for, the acquisition and installation of, as well as the operation and support of
various hardware and software infrastructure components, including workstations,
networks, office-support tools, and communications facilities. We also acquire and
Beyond IT Governance  7
modify application software. It also directly applies to software processes, but few
organizations have applied it. We also operate a service desk, make changes, man-
age projects, and occasionally provide business process reengineering services and
internal consulting to facilitate business process improvement. ese are all pro-
cesses and they could all stand improvement. ese activities sound like simple,
mundane matters until you consider our size. We have over 1,000 people working
in IT.
“Lean Six Sigma works for all aspects of business, not just manufacturing pro-
duction. In reality, we might find the payoffs even greater in our administrative
areas because traditionally we often neglected these processes. When applied to

IT operations, Lean Six Sigma can help us identify valued-added processes, and
to measure and improve these internal processes, such as network throughput and
reliability, and line-of-business processes where IT has a role, such as how well our
online order system is working. e more complex a product or service, the more
ways there are to disappoint our customers.”
Gaining momentum you add, “Although Lean and Six Sigma both promote
continuous improvement, they are separate tools. LSS is not purely about quality,
but encompasses much more. Lean is a customer-driven philosophy with a goal of
producing what customers want within the shortest lead time, whereas Six Sigma
is project-focused. Lean promotes rethinking how to structure the process and
Six Sigma promotes refining how to reduce variation of the existing process. Lean
aims to drive down cycle times and retaining processes and subprocesses that add
value while trimming or eliminating those that don’t. Also Lean is an overarching
program to eliminate waste, whereas Six Sigma focuses on variation in processes.
When we get rid of waste and variation, we can get a more consistent process. e
most important thing to remember is that when we eliminate waste, the savings
directly impact the bottom line. ink of Lean as improving process speed and
think of Six Sigma as improving the quality of the end product. Any end result
that can be quantified will benefit from Six Sigma. Ironically, Six Sigma and Lean
have often been regarded as rival initiatives. Lean enthusiasts note that Six Sigma
pays little attention to anything related to speed and flow, and Six Sigma supporters
point out that Lean fails to address key concepts like customer needs and variation.
Both sides are right. Yet these arguments are more often used to advocate choosing
one over the other, rather than to support the more logical conclusion that we blend
Lean and Six Sigma. Simply put, we use Lean to move the mean and Six Sigma to
reduce variability around the mean. By wedding the two, we get Lean Six Sigma:
an effort to improve both process speed and product quality at the same time. e
two methodologies interact and reinforce one another, such that percentage gains
in return on investment (ROI) are much faster when Lean and Six Sigma are imple-
mented together.

“If customer satisfaction is the practical problem, using Lean Six Sigma can
turn this into a statistical problem we can analyze, using the Six Sigma structured
framework, and turn it into a statistical solution that in turn we can change to a
8  Lean Six Sigma Secrets for the CIO
practical solution. It doesn’t matter whether you’re streamlining manufacturing or
developing a new application. If you can define what you’re going after and quan-
tify those factors that are critical to quality, then you can apply Lean Six Sigma.”
It’s the Value, Stupid
“In IT, we are always caught up with insatiable demands and lost ROI. Lean Six
Sigma could assist us with both those problems. Lean is designed to weed out non-
value-adding processes. Lean inspects a process by analyzing each task or activity
to determine whether it is value-added, is not value-added but necessary, or is not
value-added. A value-added activity is something for which the customer is will-
ing to pay. An example of a value-added activity is the operation of the accounting
application. If we outsource this application, then an example of a non-value-added
but necessary activity is the payment of the invoice. We must eliminate those activi-
ties that don’t add value or are unnecessary. Backing out of an update because we
didn’t properly test it is non-value-added. We should therefore stop doing it. Lean
Six Sigma would give us a very precise way to demonstrate the real value of technol-
ogy, and it would help us improve the way we deliver that value.”
e CEO and CFO look a little perplexed and they wonder whether you have
been smoking your socks. You decide to use incident management as an exam-
ple because it has great variation. Users sometimes call the service desk where the
operative logs the call, but other users call the system analyst directly in an effort
to expedite the issue. To meet the increasing demand for high-quality service, the
analyst starts to work on the problem. is makes it difficult to monitor perfor-
mance and to build consistency into one process. “We don’t know how much this
is costing the company.”
Lean uses systems thinking and considers all of the process interactions while
utilizing simple tools. Unlike Six Sigma, Lean does not require a lot of mathematical

analysis and works well for mature, slow-growth, or low-transaction businesses.
It’s about More than Reducing Costs
You add, “Lean thinking is about smooth process flows, doing only the things that
add customer value and eliminating activities that don’t. Even though Lean and Six
Sigma are wonderful tools, I am not suggesting they are a panacea, but are these not
steps that a mature, well-run organization should undertake?
“However, we must ensure that we do not use our Lean Six Sigma effort strictly
as a means of reducing costs. Organizations that do so often do so at the expense
of service, a critical requirement for most customers. Lean Six Sigma is essentially a
comprehensive yet flexible system for achieving, supporting, and maximizing busi-
ness profits.