Using Both Six Sigma and Business Architecture for More Effective Business Transformation

[i] and GE in 1995. It is “a set of techniques and tools for process improvement. (…) It seeks to improve the quality of the output of a process by identifying and removing the causes of defects and minimizing variability in (…) business processes. It uses a set of quality management methods, mainly empirical, statistical methods, and creates a special infrastructure of people within the organization who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has specific value targets, for example: reduce process cycle time, reduce pollution, reduce costs, increase customer satisfaction, and increase profits.”[ii] Lean and Six Sigma was first used in manufacturing, but it has since evolved into all kind of service companies.

In Six Sigma process improvement techniques, SIPOC diagrams (as per Diagram 1[iii] above) are often used. It is a “tool that summarizes the inputs and outputs of one or more processes in table form. The acronym SIPOC stands for suppliers, inputs, process, outputs, and customers which form the columns of the table. It was in use at least as early as the total quality management programs of the late 1980s and continues to be used today in Six Sigma, lean manufacturing, and business process management.”[iv]

Making Operational Improvements Stick

Using Six Sigma process improvement techniques alone has been trickier and not always a success in the long run. As pointed out in an Harvard Business Review article, “too many continuous improvement projects focus so much on gaining efficiencies that they don’t challenge the basic assumptions of what’s being done. For example, a Six Sigma team in one global consumer products firm spent a great deal of time streamlining information flows between headquarters and the field sales force, but didn’t question how the information was ultimately used. Once they did, they were able to eliminate much of the data and free up thousands of hours that were redeployed to customer-facing activities.”[v]

A McKinsey & Co Review articles point to the same problem. “Consequently, many companies emphasize the technical aspects of their programs over the organizational ones. That approach is understandable. Technical solutions are objective and straightforward; analytical solutions to operational problems abound in lean and Six Sigma tool kits; and companies make significant investments to train experts who know how to apply them. What’s more, the tools and experts are invaluable in diagnosing and improving operational performance. (…)

Overlooking the softer side, however, drastically lowers any initiative’s odds of success. Some companies, for example, rush to implement the tool kit without ensuring that their employees—including managers—are prepared to work and lead in new and different ways. In such cases, “initiative fatigue” and even distrust may set in, and efficiency gains fizzle out as the black belts move on to other projects.”[vi]

Using Business Architecture can be an excellent method to make sure that process improvement techniques like Six Sigma do not get carried away. As mentioned in an article written by Mark Katanani[vii]: “In lean and Six Sigma, the first thing we care is the Customer of the product or service, once identified and clearly measured, we move to build the Business Case, the opportunity statement. (...) Business Architecture however, is concerned about the total Line of Business as a whole with bottom line, revenue and market share complications.”[viii]

Business Architecture and Six Sigma

As mentioned in the Business Architecture Guild® BIZBOK® guide, “Business Architecture (…) provides an overall framework in which to visualize, plan, scope, assess, and manage business alignment and transformation initiatives. Once initiatives are identified, Lean Six Sigma is a methodology that can be used to understand and analyze the problem or opportunity at a more detailed level and implement a solution. Conversely, Lean Six Sigma projects often surface areas of concern where a broader evaluation of impacts to determine upstream, downstream, or related work could be beneficial. Aligning these two disciplines will enhance the benefits gained by the organizations using them”[ix] since both methodologies are aimed at business and operational excellence.

The Business Architecture Guild® BIZBOK® guide is unfortunately silent about SIPOC reports. Yet, SIPOC are extremely common among Six Sigma Black Belts and this subject most be addressed.

SIPOC reports (as per Diagram 1) should be linked to Value Streams, as shown in Diagram 2. The Process Procedure Owner, the Supplier, the Players and the Customer in a SIPOC report are typically Internal Stakeholders in a Business Architecture Model. SIPOC report’s Process/Procedure should be linked to one of the Value Stages composing a Value Stream. Finally, SIPOC report’s Input and Outputs, they should be linked to Information Concepts within a Business Architecture model.

A Value Stream with enabling Capabilities, as in Diagram 3 below, will allow a Six Sigma Black Belt to find out quickly the data necessary to complete a SIPOC report since every Capability enabling a Value Stage are linked to the relevant Business Unit(s), Stakeholder(s), Information Concept(s), Asset(s) (including Application Software), Initiative(s)/Project(s).

Note that aside from Six Sigma and SIPOC diagrams, business architecture could instead be combined to other types of process improvement techniques, including the IDEF0 Diagram, the IGOE Diagram (Input-Guides-Outputs-Enablers), and the Business Interaction Model (BIM), as described by Bart Nijs.[x]

Banking Example on How to Use Business Architecture and Six Sigma

A major North American bank has started combining Business Architecture and Six Sigma it its Enterprise Real Estate Business Unit to migrate from its proprietary legacy systems to the cloud. The 80,000-employee bank has started using both Six Sigma and Business Architecture for the following reasons[xi]:

• Design their SIPOC reports (as per Diagram 1) much more rapidly using information provided by their Business Architecture model made easily accessible through the banks’ internal web,
• Leverage their Business Architecture model to provide a value driven central framework for any stakeholder to identify a full range of cost/complexity factors within Six Sigma initiatives,
• Identify potential overlaps and interactions between Six Sigma initiatives across business units,
• Apply Six Sigma improvements on one business unit to other business units that share common processes within the context of one or more value streams,
• Avoid lean efforts on a business unit process when a more aligned enterprise wide solution may be to rationalize business units that are delivering the same outcome, rather than create a series of really lean but siloed business processes,
• Determine upstream, downstream, and cross-functional relationships and impacts of Six Sigma efforts on a value stream. This provides a framework for validating that the elimination of waste produced by process improvements in one area is not inadvertently redistributed onto another process or business unit, and
• Identify opportunities for Six Sigma process improvement initiatives using capability performance assessments or heat-mapping exercises.

Conclusion

Six Sigma Black Belts will continue to transform businesses for a very long time. To insure their continued success, the Six Sigma methodology need Business Architecture to make their operational improvements stick over the long run for more effective business transformation. To combine these two complementary methodologies, it is crucial to link Six Sigma SIPOC reports to Value Streams, Information Concepts and various Stakeholders within a business architecture model. In brief, combining Business Architecture to their practice will allow Six Sigma Black Belts to execute their business process improvements at a greater pace while yet minimizing their risk of failure.

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[i] Jack Welch’s LinkedIn Profile: https://www.linkedin.com/in/johnfwelch/.[ii] This Six Sigma definition is from Wikipedia: https://en.wikipedia.org/wiki/Six_Sigma.[iii] This SIPOC Diagram comes from this presentation made at BBC 2016 on November 2, 2016 and published on SlideShare on October 31, 2016.[iv] This description of a SIPOC Diagram is from Wikipedia: https://en.wikipedia.org/wiki/SIPOC[v] Quote from the article entitled “It’s Time to Rethink Continuous Improvement” written by Ron Ashkenas in the Harvard Business Review on May 8, 2012.[vi] Quote from the article entitled “From Lean to Lasting: Making Operational Improvements Stick” written by David Fine, Maia A. Hansen, and Stefan Roggenhofer on McKinsey & Company’s website in November 2008.[vii] Mark Katanani’s LinkedIn Profile: https://www.linkedin.com/in/mark-katanani-444b8934/.[viii] Quote from the article entitled “I Want It All! Business Architecture, Enterprise Architecture, and Lean Six Sigma” written by Mark Katanani on LinkedIn Pulse on September 3, 2015.[ix] Quote from page 329 of the Business Architecture Guild® BIZBOK® guide in section 3.6 entitled “ Business Architecture and Six Sigma”.[x] This list of process improvement techniques are mentioned in an article entitled “Scoping a process using Process Architecture” written by Bart Nijs on LinkedIn Pulse on February 6, 2017.[xi] Most reasons mentioned in this section are from page 332 of the Business Architecture Guild® BIZBOK® guide in section 3.6 entitled “ Business Architecture and Six Sigma”.