Six Sigma, as most people in the business world have heard by now, is a program and toolkit for improving quality in manufacturing processes. Originated by Motorola in the late 1980s, the Six Sigma methodology aims to reduce variations in a process—in other words, defects. The term sigma refers to standard deviations from an ideal level of operation; put simply, each level of sigma allows fewer defects than the preceding level. If a company manages to get up to six sigma, that’s a mere 3.4 defects per million outputs.
How nice for those on the shop floors of the world, you say. Now back to IT business. But it so happens that a few resourceful CIOs are applying Six Sigma methods to the functioning of their IT departments. Among CIO 100 honorees, Raytheon Aircraft’s IT department has used Six Sigma to improve claims processing and save the company $13 million. IT staffers at J.P. Morgan Chase have applied the methodology to standardize the company’s processes and measure the impact of technology programs. And Seagate Technology’s CIO has sent most of his IT employees to Six Sigma training in an effort to change the department’s approach to problem solving.
“Six Sigma is about taking your IT organization and getting it under control,” says Mark A. Brewer, senior vice president and CIO of computer manufacturer Seagate Technology. Brewer says that Six Sigma methods work as well in reducing errors across IT operations as they do in manufacturing processes—because IT operations are a kind of factory, with inputs, desired outputs and parameters that must be controlled. “If I view IT operations as a factory, then Six Sigma applies immediately. I have a factory, it’s just data centers, networks, servers, VPN, help desks and so on,” he says.
Seagate’s IT department booked direct savings from Six Sigma analyses of $3.7 million during the previous fiscal year. Since instituting Six Sigma two years ago, the IT department has saved $4.5 million overall. (The company as a whole reports saving more than $956 million from Six Sigma since adopting the methodology five years ago.) Brewer talked with Senior Editor Edward Prewitt about how he came to Six Sigma, why it’s a methodology that resourceful IT departments should consider and how Seagate IT applies it.
CIO: When did you adopt Six Sigma?
MARK BREWER: About five years ago, we recognized we wanted a transformational kind of change throughout the company [in response to production problems and lowered PC demand that led to a $530 million loss in 1998]. We went out and looked at what other companies were doing to improve their processes. Companies that had Six Sigma seemed to have something different; it wasn’t just slogans and feel-good Quality Circles. It was heavy-duty statistical analysis of problems and a way to attack them. I went to engineering school for eight years and learned lots of things, but nowhere did I learn this kind of methodology for solving problems.
The IT organization was not on the front burner of this in Seagate. We felt the value was greater in manufacturing, so that was where the initial focus was. A couple of years ago, I stomped on the gas. I went to [Six Sigma] training myself for four weeks. Now every one of the [50 director-level staff] or above has gone through four weeks of training to become brown belts or black belts [the top two levels of Six Sigma qualification].
What made you think that IT could benefit from Six Sigma?
Well, I didn’t see a lot of IT organizations adopting this. We looked around. But a couple of things turned the corner for us. I got the training, and it opened my eyes. And several of us realized there’s no reason you can’t apply Six Sigma to an IT organization.
I’ll give you an example. Say our server resides in the United States, and the response time in Asia is very poor. The first response everyone has is, It’s a bandwidth problem. That’s very expensive to deal with. But we went and measured—we looked at several servers around the world and measured how fast their response times were. We found variability in response time in servers that had nothing to do with bandwidth. We were able to do a kind of tune-up that brought the response time way down. We didn’t buy bandwidth or software; it didn’t cost me anything. That was not the conclusion anyone thought of up front, but by doing the measurement and analysis phase, we found the root problem.
Another example: All of the key things important to us are now measured in control charts. We measure how long it takes e-mail to go out, hit a Hotmail account and come back. Number one, you can tell if the process is under control. Number two, you can tell what the system is capable of. Control charts let you focus on things that are truly different. Any system is going to have variations over time. You shouldn’t bother trying to fix things that [fall within] normal [operating parameters]. Historically, we’ve just focused on downtime—you know, when the system goes down, you run and fix it. Now, when we’re talking about downtime or uptime, everything is measured statistically, so we have a basis for comparison.
Does Six Sigma require a cultural change within an organization?
It’s absolutely a cultural change. It has to be top-down; the top guys have to be fanatical about it. It’s not a book you go read. You learn to approach problems with a rigorous methodology instead of shooting from the hip—which is the IT methodology, traditionally. When IT workers get in a new situation, they fall back on what happened before.
Can Six Sigma be successfully applied within IT only, even if other parts of a company aren’t using it?
If the CIO is fanatical about it himself, he can make it happen. It just requires a commitment. There’s a commitment to train—that takes time and money. The CIO has got to be involved with the adoption.
You’ve talked about how Six Sigma can be used to improve IT processes. Can IT use Six Sigma to help the business?
A big part of what we use Six Sigma for is business-focused. We have about a 50-50 split in Six Sigma projects between the operations area, which is things like reducing downtime and failures, and business-focused projects. [The latter are] things like invoicing—are we processing fast enough? Typically IT staff will be part of a team trying to improve a business process.
A really good project was in [a factory in] Thailand. [The amount of leftover] scrap from a critical manufacturing process was too high, so a black belt from IT was assigned to work the problem. Data files were taking too long to transfer to another system for analysis. The delay resulted in further delays in detecting control problems, which would then delay corrective actions. When the project began, it was not clear at all that the transfer time was the reason for the control problem. By applying the Six Sigma methods to this problem, the root cause was found and appropriate tuning was done to the network and file server [lowering process time from 19 minutes to five]. We saved $1 million right there.
What’s next for Six Sigma within Seagate IT?
We’re being a lot more rigorous with maintenance contracts. We got a team together, analyzed what was needed and defined what maintenance level we wanted. That saved $1.5 million right there. We’re applying the same process now to all of our contracts, like outsourced services and hardware and software contracts. We just inventoried all of our contracts and licensing agreements around the world. That was a task because they weren’t centralized. You could argue that we were out of control, but the truth is we hadn’t even considered control.
We’re now looking at telecommunications contracts. There’s a lot to work through; they’re so complicated.
How are IT staffers trained in Six Sigma?
We began with a third party and took it over over time, which was part of the agreement. We have master black belts teaching classes. There are three versions of training: operations, which uses examples from manufacturing; transactional, with examples from finance and purchasing; and blended, [which is a combination of the two]. The only difference is the examples. My opinion is it doesn’t matter.
How did your staff respond to Six Sigma training initially?
It’s the whole issue of doing things a different way. Nobody left because of Six Sigma. Eventually you get excited, you say, It’ll help me do my job. IT people have a pretty powerful thing on their r¿m¿ith Six Sigma.
When you think about it, though, there’s probably nothing in Six Sigma that’s really different. You’ve heard all of this stuff before if you’re in a manufacturing company—control charts, Pareto charts, voice of the customer. But Six Sigma is a methodology, a way of looking at things. Once you turn the corner and realize IT operations are just a kind of factory, it’s like a light turning on.
We’re by no means the greatest IT organization—we have tons of things to work on. But Six Sigma is clearly making a difference. You can feel it here.