CIO — Some of the country’s largest IT organizations are looking trim and vigorous these days. It’s no miracle cure or diet of the month. It’s a particular piece of process methodology called Six Sigma.
Six Sigma is a defect reduction methodology that transforms organizations by forcing them to focus on the quality of the customer experience. The term sigma refers to deviations from an ideal level of operation, where each level of sigma, starting from one, allows for fewer defects. Sigma six, the
operational equivalent of nirvana, allows a mere 3.4 defects per million outputs. If you’re in manufacturing, that means 999,996.6 flaw-free widgets. If you’re in IT, that means fewer servers, faster call response times and better project delivery.
Six Sigma got its start in manufacturing at Motorola in the 1980s, and later spread to nuts-and-bolts powerhouses like AlliedSignal, General Electric and Honeywell International. But now CIOs at companies of all disciplines are adopting Six Sigma for its fact-based, quantifiable insistence on continuous improvement and its ability to doggedly root out and improve defects in processes.
"Six Sigma isn’t just a manufacturing thing. It can be applied to the financial services industry very effectively," says Doug Sutton, president of Fidelity Wide Processing, where the methodology is delivering cost reductions and quality improvements in the range of 20 percent to 50 percent across the board. "A lot of our potential customers are asking if we use it. They want to know if we’re focused on business process improvement, and the answer is yes."
On the numbers side, Six Sigma provides CIOs with an objective, measurable way to justify technology investments; on the karma side, it serves as a judgment-free common language between IT and other project stakeholders within the company.
"IT always gets caught up in insatiable demands and lost ROI. Six Sigma solves both those problems," says Charles P. Costa, executive vice president and CIO at Chase Financial Services, which assigns a Six Sigma team to most IT projects worth more than $1 million. "Six Sigma gives us a very precise way to demonstrate the real value of technology, and it helps us improve the way we deliver that value."
Six Sigma has a lot of normally staid CIOs excited for a good reason: Quality is back on the corporate radar in a big way. "We’ve cut so far into IT in the past couple of years that we’re starting to see some quality problems," says Val Sribar, a Meta Group senior vice president. "If you’re smart about where you apply [Six Sigma], if you apply it to your core disciplines, it makes a lot of sense right now."
