Paul the German psychic octopus was right. Spain finally won the World Cup in soccer (or “Football” for the rest of the world – which, if you think about it, makes more sense). Now Australia has a “psychic” crocodile that predicted an election result! Unfortunately, we do not have a robust psychic octopus, crocodile or any other ferocious animal that can select the best strategies to recover from the current economic meltdown. The bulls and bears have to battle it out in the murky waters of uncertainty for the foreseeable future.
In this economic climate, the value proposition of process improvement strategies such as Lean and Six Sigma are more compelling than ever. Improvement and optimization techniques that were used in manufacturing are now being applied with increasing success in service industries. The economic uncertainty requires that we cut costs while at the same time generating revenue through increased customer satisfaction, customer value, and innovation. It sounds like an irresolvable conundrum. Lean focuses on reducing waste, focusing on value, and increasing processing speeds. Lean targets internal, especially operational, processes to get rid of waste. But it can equally be applicable to development and management processes. Six Sigma on the other hand focuses on reducing variance and improving quality. The experience and the voice of the customer are critical in Six Sigma. Both are important. In fact, it is known, both from theory and practice, that getting rid of waste in internal processes enhances Six Sigma objectives –reducing variation for better quality and customer experience.
More importantly, in combination with robust BPM suite functions, Lean and Six Sigma (LSS) objectives could be achieved in all the phases of end-to-end process improvement lifecycles: through real-time LSS. What does “real-time” LSS mean? Typically waste or process efficiencies are analyzed after the fact. Though often necessary, this is a re-active and backward approach to process improvement. The data is gathered to measure the efficiencies of processes after they have already been executed. The analysis involves measuring historic data – assuming the data is available and of high quality. It also involves tracking operations and identifying potential improvements. There is a huge gap between the time a problem is identified and the time it takes to fix the processes, through getting rid of the waste or keeping the process in control – or both. “Real-Time” means lean efficiencies (reduce waste and improve speed) and process quality improvements are realized while doing the work – in real-time while executing the automated processes. The Lean objectives of process efficiency and reduced waste are immediately realized through automation. For instance, instead of toggling manually between offices, phone calls, or different screens, operators are assisted by the smart automated BPM solution to streamline their work to completion. So, the waste is avoided and work gets done quickly, with less errors. Similarly, Critical To Quality (CTQ) measures that are used to keep the process in control are directly mapped onto properties within the automated BPM solution. Thus, processes are kept lean and in control – in real-time. What type of processes? Operational? Management? Customer facing? Internal? Development? Governance? Methodology? Maturity Model? Well, in reality, all of the above. The process objectives are kept in control and continuously improved through business process management automation lifecycle – for all process categories. Increasing the real-time LSS is a roadmap. Forrester sees Lean being pivotal in the overall BPM governance maturity – with increased elimination of waste in its Lean Business Technology maturity model. Gartner’s Jim Sinur pointed out in a recent blog: “When considering the advanced stages of BPM maturity are also about goal driven and business optimized processes, you find a consistent theme between BPM and lean six sigma.” We do face uncertainties. But with BPM process automation solutions, reducing waste, increasing efficiencies, and keeping processes in control systematically (Lean Six Sigma) in real-time provides our best chance to reducing costs and increasing revenue through innovation. For more detailed coverage of Real-Time Lean Six Sigma, as well as specific examples, please check www.pega.com. You will find a spectrum of BPM case studies that have demonstrated tangible improvements in increased productivity, revenue growth, improved efficiencies in retention, reduced errors (better quality), and reduced unnecessary work - all through BPM automation. Also check Alan Trefler’s BPM Go Live blogs for recent compelling examples in various industries.