best practices: how six sigma complements itilv3 linh c. ho

Best Practices:

How Six Sigma

Complements ITILv3

Linh C. Ho

itSMF Portugal 2008

Current State

• The business is IT, IT is

the business

• Proving the business value

of IT

• Better integration with the

business

ITIL version 3

ITIL v3

Overview

ITIL v3

Service Management Lifecycle

ITIL v3

Highlights• ITSM life-cycle approach

• Integration vs. alignment

• Service portfolio

• Supplier management/ITO

• Industry Practices – e.g.,

Six Sigma, CoBIT, ISO

• Knowledge management

• Event management

• Business Service

Management…

Knowledge Management

• ITIL key objectives

• Improve quality of

management decision.

• Deliver the right

information to the

right people or place at the

right time.

Agenda

ITIL v3 Overview

Six Sigma and ITIL

Bank success story

Summary

CSI: Continual Service Improvement

Goal• Continually improve service quality while minimizing costs

Highlights• Quality management methods

• Six Sigma

• Technologies for measurement and reporting

• Turn raw data into meaningful corrective actions

CSI: The 7-Step Improvement process

Agenda

ITIL v3 Overview

ITIL v3 Continual Service

Improvement

Bank success story

Summary

What is Six Sigma?

Business-driven continual process improvement model

“Critical to Quality” (CTQ)

– What is important to the customer?

Identify and eliminate critical defects

– Defects that impact customers

– Defects that cost money

DMAIC Model

– Define, Measure, Analyze, Improve, Control

History and Background

Motorola in the 1980‟s as a method to improve process quality

– The Six Sigma techniques are not new, just their application

First manufacturing processes

– Now any business processes

Six Sigma Companies

– Motorola, GE, Sony, Bank of America, IBM, Sun Microsystems, Getronics,

American Express…

“The most important initiative GE has ever undertaken”

Jack Welch, Former CEO General Electric

Cost of Poor Quality

By Quality America Inc.

Pareto Chart

Highlight the most frequent

problems in the process

Focus on the most

significant

Highest cost of poor

quality

Identify candidates for

quality improvement

Control Chart

Detect Variance in a

process

Centre line (average)

Upper and Lower Control

Limits (e.g. 3 sigma)

Analyse patterns of

process variation

Cost of Poor Quality (COPQ)

CSI: 7 step improvement •ITIL v3 Highlights:

•Service measure/report

•Data into information

•Use of methods/tools

Complementary approaches

Industry analysts: Six Sigma in IT

“Through 2010; Six Sigma will become the leading quality

improvement framework for IT operational groups.”[1]

Ed Holub, Industry Analyst, Gartner

[1] “Leveraging ITIL, and Other Process/Quality/Governance for IT Operational

Success.”, Gartner, Ed Holub, Gartner Data Center Conference, December 2005.

Six Sigma and ITIL summary

ITIL tells you „what‟ and Six Sigma tells you „how‟

Six Sigma brings additional benefits to ITIL

– Baseline service quality

– Prioritize and focus on CTQ

– Quantify improvement for ROI

– Sustain improvement

Six Sigma is now the industry accepted quality practice for ITIL

– Analysts, Global/Fortune companies, Vendors…

Agenda

ITIL v3 Overview

ITIL v3 Continual Service

Improvement

Six Sigma and ITIL

Summary

Bank success story

Service Strategy

– IT services company (ITO) worked closely with a bank to understand their business

goals– Business executives, IT executives, business users…

Service Design

– ITO designed business services to meet the needs of the bank.– Check processing, business key performance indicators, SLAs, ITO as supplier …

Service Transition

– Tested, implemented services defined and in production in 6 months.

Service Operation– ITO maintains and supports the new implemented solution

– 350 business indicators, 2,200 services measured/reported on Vantage

– 7 layers of staff inc. business/IT execs, business users, administrators, developers..

– 30 FTEs saved = reorganized to other areas for improvement

– 50 % saving in time

Continual Service Improvement

– ITO continues to look for ways to improve services– ITO is looking at Six Sigma from Vantage

Bank success story

ITIL v3: Four Ps Better integration with the

business!

Summary

Continual service quality improvement Establish consistent processes (ITIL)

Improve service quality (Six Sigma)

Increase IT maturity

Focus: Critical to Quality

Customers

If you remember nothing else…

The business is IT, and IT is the business

If you improve IT, you improve the business

Additional resources 15% off on NEW itSMF Global

Best Practice book

Questions for the audience

How many here use ITIL?

How many here use Six Sigma?

How many use both?

Where did you start? ROI?

Obrigada!

Linh C. Ho

Linh.ho@compuware.com