The Marriage of BPM and Six Sigma

BPM Six Sigma Context

BPM tends to focus on the automation of business process through the use of BPM suites. Every software system automates a process; and generally every process, efficiency, or quality improvement project involves use of software systems.

Process Centric

"It's all about process" - As stated by Jack Welch, General Electric's famous CEO, success in business is all about process.

Every software system automates some process. Don't automate a bad process. Take the time to properly engineer or re-engineer your business processes before making that IT investment.

Six Sigma Applies Practical Statistical Analysis

Statistical modeling and analysis is a core element of world class Quality process management. It is a fundamental tenant of Six Sigma and is a regular part of management in the world's top organizations. The ability to understand business inputs, internal attributes, outputs, customers, and partners through meaningful and usable statistical analysis enables organizations to reach the highest levels of effectiveness and efficiency. Effective quantification of business processes provides major benefits.

• The ability to predict the Quality of outputs
• The ability to quickly identify "real" root causes
• The ability to identify issues before they become problems
• The ability to identify special cases
• The ability to improve processes and their outputs

From simple percentages to complex regression modeling of multiple processes, Six Sigma helps organizations define and implement analysis systems that deliver meaningful and useable information. These statistical methods are implemented to meet several key criteria:

• Appropriate Level of Complexity
• Actionable Information
• Systemic Data Collection and Reporting
• Horizontal and Vertical Relationships identified and reported upon

Implementation of BPM systems without proper process engineering can lead to a disastrous situation in which functional silos are defined in terms of processes within the BPM system. This is simply not acceptable. Using traditional software methods for BPM implementation can deceive management into thinking that because BPM is in use, the organization is implementing process excellence. When in reality, software developers have simply taken the silo centric requirements gathered from the user community and automated them using BPM.

BPM Solutions Enable Continuous Process Improvement - If Implemented Properly

As any Six Sigma Black belt who has worked on business processes will tell you, "the improve and control phases of Six Sigma are very challenging on transactional business processes."

The benefits of using BPM tools as part of your Six Sigma program are many, but typically fall into one of three categories.

• Strategic process alignment and management
• Design, Implementation, and Control of  Six Sigma enabled processes
• Removal of barriers to process excellence

 Examples of these benefits include:

• A living catalogue of all business processes, their relationships, attributes, and performance
• Process centric data collection - all actions time stamped, actors captured, rework captured, decisions captured, X variables catalogued and captured
• The ability to identify each process instance as special or common case and act accordingly
• Six Sigma reports automated
• Ability to initiate and track improvement responsibilities and actions
• Reduced process user training
• Obvious value to process users
• Elimination of manually controlled and managed process documentation

There are numerous other benefits to using BPM tools and a proper way for the Six Sigma Black Belt to use BPM as part of the toolkit.

Non Manufacturing Six Sigma Solutions

Transactional Six Sigma, Six Sigma for Soft Processes, Six Sigma for Services - Call it what you will, Six Sigma is a methodology for success in all processes.

Only two percent of all processes in the United States are manufacturing processes. Numerous corporations have benefited from the increased efficiency, higher quality, and improved customer relationships delivered by Six Sigma. Most of these corporations have reaped these benefits through implementation of Six Sigma in the manufacturing environment. As consumers, we see the results of Six Sigma in products that meet our needs, last longer, are priced affordably, and are available where and when we want them. Most people enjoy the benefits of Six Sigma when using pagers, cars, cell phones, and printers and never even realize it.

Today, the world class corporations that implemented Six Sigma for manufacturing processes are implementing Six Sigma in the non-manufacturing environment on soft processes such as Order to Cash, Customer Acquisition, After Sales Service & Support, etc.. They are doing this because they realize that no matter how good your manufacturing processes are, if soft processes are of poor quality, the company and its customers will suffer.

Why is Six Sigma Important for Soft Processes?

• Soft processes are the ones that touch customers and suppliers
• Soft processes initiate manufacturing and distribute the products of manufacturing
• Soft processes often have fewer transactions and these transactions are of greater value
• Soft processes are human centric and are full of variation and special cases, science must be applied to reduce and manage this variation
• In non-manufacturing industries, there are only soft processes.
• Soft processes manage your money!

In most corporations, the quality of soft processes is critical to success. Yet implementation of Six Sigma in such environments is no easy task and you typically only get one shot at it. This is why organizations should focus on the implementation of Six Sigma in soft processes, and the automation of such processes.

Leverage the Best of Six Sigma Tailored for Application on Non-Manufacturing Processes

First, a process is a process and every process can benefit from Six Sigma. Second, non-manufacturing/soft processes and manufacturing processes present very unique challenges when implementing Six Sigma. Third, all modern Six Sigma or process engineering projects must leverage well designed information technology to be successful and fourth, nearly all information system projects involve process automation which should be engineered properly.

Our experience shows that soft processes can be substantially more difficult to get into a Six Sigma project. The challenges lie in the difficulty to clearly identify process variables, the difficulty to find process variables that can be measured without undue burden, and cultural resistance to changing white collar processes. The Six Sigma program should eliminate concerns by moving to the improvement of key processes, integration of horizontal process centric application design, and reducing the training and analysis traditionally associated with Six Sigma. Traditional DMAIC Six Sigma, some of the fundamental differences between traditional Six Sigma as found in manufacturing, and the Six Sigma for transactional processes are described below.

• Places more emphasis on the big picture – whole process optimization
• Emphasizes use of information systems for process automation
• Emphasizes greater use of technological and procedural benchmarking
• Specifically addresses evolution as a phase and places emphasis on continuous improvement, seeking to deal with the greater degree of random variation and special case situations inherent to human driven processes

However, Six Sigma has proven significantly more difficult to implement off the shop floor. The reasons are many, but lie within a few root causes. Two of these root causes as (1) data and (2) human behavior.

The use of the Six Sigma techniques for obtaining data, applying quantitative measures to seemingly un-quantifiable information, identifying significant measures, data collection techniques, and meaningful reports has seen resistance. For example, Six Sigma should use a key decision point approach for collecting data on human behavior and integrates techniques that identify process variables differentiating control variables from others and building relationships between process and output variables. Working with Six Sigma in this area has proven to drive cost savings, increased effectiveness, and increases customer satisfaction.

Further, the use of information technology such as BPM enables businesses to collect and analyze process data with accuracy and ease. By using a process excellence centric approach to "system" engineering processes traditionally considered an un-manageable art are engineered to efficient and effective science. By system, we mean all elements of the system including, people, processes, and technology.

Some of the techniques in this area include:

• Collection, segmentation, analysis, and reporting of existing data volumes
• Identification of process variables both X and Y
• Integration of X and Y(cost, time, performance) variable data collection in automated processes
• Implementation of Special Cause detection and alert systems
• Identification and data collection of key decision variables

Ultimately, Six Sigma’s unique abilities in the area of collecting data and building statistical models on transactional processes means that companies are able to easily realize the benefits of transactional Six Sigma.

Marvin Wurtzel is the Principal Consultant of Marvin M. Wurtzel & Associates, Inc., a consulting and training firm that specializes in quality, process and productivity improvement. Marvin has extensive management experience at leading companies in financial services, information technology, electronic manufacturing, and consumer products. He has implemented Six Sigma and Process Management strategies resulting in, cost reduction, as well as, customer satisfaction, productivity, quality and cycle time improvements. He is a Fellow of the American Society for Quality, a three time Malcolm Baldrige National Quality Award (MBNQA) Examiner and a Master Black Belt.

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