Archives for September 2012

BA Problem Solving; Advancing Your Career by Learning “Lean” and “Six Sigma”

 By M. Duvernet

When a job description for a Business Analyst is accompanied by a few lines regarding minimum qualifications, it is pretty fundamental to expect to see the basic line requesting “excellent verbal and written communication skills,“ as well as “problem solving abilities to create and implement effective solutions.” These two basic needs are necessary to any level business analyst.

Yet, as many analysts know, there are all sorts of wonderful opportunities along the BA career path as the IIBA® Business Analyst Competency Model suggests.  The question is what skills would enable a person to have an advantage over other business analysts?  There are two ways to heighten one’s level of competency. Those two ways involve learning the value of “Lean” and “Six Sigma.”

By learning about “Lean” or “Six Sigma” one can begin to understand the big picture business perspective in a pinch, as these concepts promise to intensify proficiencies toward becoming a top notch analyst. While the concept of “Lean” is about reducing defects, the concept of “Six Sigma” is all about seeing patterns in the data; understanding what is measurable and metrics. These concepts are important to the organizational growth and success of all businesses and it is these “in-demand” skills that will take a person further in their business analyst career.

If one takes a holistic view of the basic objectives of “Lean” it is all centered around avoiding waste and reducing defects; to learn from previous missteps when producing products that are intended for the consumer. Yet, even before 1988, when John Krafeik wrote his article entitled “Triumph of the Lean Production System,” or before Henry Ford included the elimination of defects in his “Just-in-time manufacturing” construction of the assembly line, Benjamin Franklin packaged some examples regarding common sense in his “Poor Richard’s Almanac.” Franklin coined the phrase, “a penny saved, is a penny earned” and the ratio of investment compared to consumer demand in relation to a specific price point per product, or service, became an instant formula for success. It is rather interesting to find that Benjamin Franklin, as a man of many talents, also recognized the importance of common sense and packaged it in the simplest way possible so that everyone could understand it and profit from its benefits.

While “Lean” is all about uncovering defects, or waste – whether it be time and/or money – in a given process, or processes. The concept of “Six Sigma” is all about a business management strategy which seeks to improve the quality of the process outputs.

Historically, Motorola (an Illinois based company) is credited with conceiving the concept of “Six Sigma” as a business management strategy. As the story goes, a senior executive named Art Sundry took a pragmatic look at Motorola’s poor product quality in the 1970’s and he began to share his notions that there were connections between increases in quality and decreases in costs of production. It was not an easy sell, as the mindset back then was that quality costs extra money. However, common sense prevailed, as management understood that if you build good products, you have a greater likelihood of customers returning to buy more products.

By 1986 the “Six Sigma” methodology was formalized by Bill Smith and it is, to this day, a registered service mark and trademark of Motorola Inc. It also has served to inspire all sorts of other experts regarding Total Quality Management (TQM); experts like Deming, Ishikawa, and Taguchi. Plus, it laid the foundation for process improvement methodologies, the likes of Information Technology Infrastructure Library, known as ITIL.

As for the more rudimentary details, the “Six” in “Six Sigma” it is derived from the sigma rating corresponding to “yield” (an internal rate of return: IRR) directly related to the percentage of defect-free products created. This process is known to have 99.99966% of products manufactured to be free of defects (3.4 defects per million) a number based on thorough statistical research and a desire to provide a baseline for organizational maturity. To elaborate further, the notion is that if one has six standard deviations between the process “mean” (mean is an alternate word for “average”) and the nearest specification limit, it is expected that no items will fail to meet specifications. This is how “Six Sigma” became so important to the world of doing business.

Another big picture leader of “Sigma” is Jack Welch; CEO of General Electric, who from 1981 to 2001 escalated GE’s value – as a high performing company – by a whopping 4000% (and yes, that is a 4 followed by three zeros).

Today, many practitioners have combined the concepts of “Lean” and “Six Sigma” to create a new methodology known as “Lean Six Sigma.” This “Lean Six Sigma” carries the same principles of process improvement to further promote the importance of reaching optimal organizational maturity by achieving business and operational excellence.

Many Fortune 500 companies offer training in these areas to their internal employees. It is part of management’s job to provide opportunities for growth and career advancement. Offering these training classes suggests that the goal is to plant the seed of innovation in order to further strengthen the production of better products and/or services. It also provides a vehicle for better understanding standards in software development toward achieving sales goals and functions that define an organization’s service delivery.

In organizations where “Lean” is part of the culture there are efforts to provide every internal employee the ability to become a trained “Kaizen Facilitator.” In other companies – that are financial industry powerhouses – there is the effort to promote the certification of “Six Sigma Green Belts” to give every employee a basic understanding of the six sigma methods, so they can watch for opportunities to better the business. As for the “Six Sigma Black Belt” training, this is a more in-depth training opportunity to demonstrate cost savings and identify CBAs (Cost-benefit Analysis) related to an organization’s processes. All of which need careful planning, managerial buy-in, and expert execution to implement cost savings as expected. These certifications are complete when a Black Belt shows a savings of $250,000, or more. At which point they are designated a Master Black Belt expert, which adds expertise to anyone’s resume.

Of all the business organizations, and entrepreneurs, who look to provide better options to consumers or to improve on effectiveness and efficiencies in the business world, every single one of them understands the importance of having a business strategy behind the “numbers” that will help them define the overarching value needed. As every business owner knows, they are a major stakeholder when it comes to composing a convincing business plan, or business case, to show the looming potential that awaits the organization’s product(s) or service(s).

The very first thing when it comes to defining a business strategy for all new, and growing, businesses is to define the problem, so that a solution can be created. A good example of showing how an entrepreneur saw an opportunity to capitalize – where another business was not listening to their customers – is the Redbox and/or Netflix, in comparison to Blockbuster. Where Blockbuster was making a big profit on customer “late fees”, both Redbox and Netflix, recognized the cost to the customer and thus offered an alternative where “late fees” where not even part of the business strategy. Blockbuster had to totally rethink their business strategy and now they have fewer stores with an option to order both movies and games online.

Other examples of how manufacturers have used both “Lean” and “Six Sigma” to plan their approaches to process improvement and workforce management are all around us. Many of them are utilizing the benefits brought about by the ever-changing evolution of leading edge technologies. Benefits that came about as someone recognized a defect, or areas of overproduction, or transportation alternatives based on changes in routing, time wasted because of waiting, or limitations related to inventory constraints or excess, or cost of services in motion, and possibilities of over-processing of processes.

There are four things to learn from both “Lean” and “Six Sigma” that can add to the competency levels of any business analyst. Those things are:

–       How to apply Lean Six Sigma concepts to service-related processes
–       How to reduce defects and unnecessary waste
–       How to discover and define process improvement toward better business strategies
–       How to promote organizational value by increasing customer satisfaction

While the IIBA® Competency Model is full of good information regarding the various career paths that every analyst may achieve, the role is assigned a title based on organizational context (as titles can differ based on organizational structures). No matter what the title, the main thing to remember is that all the roles are focused on the work that the business analyst does and the value derived as a result of the work. As every career option outlined in the model is based on three different role categories; Generalist, Specialist, and the Hybrid, the model does not stop there. It suggests, that when it comes to the level of competencies acquired, representing those competencies are key to fulfilling the various roles. And where one may begin as a novice level BA, there is no limit to the places one can go… for the BA landscape is full of possibilities. That while the ladder of success may only have so many rungs to it, the potential to go anywhere exists; including Enterprise Architect or CEO. The bottomline: If you want to improve your competency level learn “Lean” and/or “Six Sigma.”