Much More Than Manufacturing: Applying Six Sigma to the Reuters Global Information Backbone

When the world looks to you for accuracy, you have to deliver. Global operation 24/7 is much more than an aspiration for Reuters. With customers accessing its information day and night around the world, in sectors as diverse as the media, consumer markets and financial services, Reuters has to be very, very good at what it does. There is simply no room for an off day, or even an off quarter of a second. And information is never more mission critical than when it is being depended on by a global community of professionals trading bonds that have a combined issue value of $37 trillion.

Bond traders are surely one of the planet’s ‘ultimate customer groups’. The product they rely on from Reuters is real-time, accurate, global information to help them make instant buy and sell decisions that have to be profitable. There is simply no time for review or hesitation and no margin for error. New bond issues and the information that surrounds them have to be brought to the global market as they happen. And that real-time task has to be combined with maintaining the integrity of the data that relates to a vast array of existing bonds.

Reuters senior management set the challenge of ensuring that data quality for the fixed income asset business – bonds – would always, as a minimum, match the expectations of the customers who use it. And that meant root and branch evaluation of every aspect of the operational process, with a desired end point of nothing less than Content Transformation.

After one year, Celerant Consulting has delivered near 90% reductions in key process cycle times and an 80% cut in accuracy and completeness defect levels. That means the crucial benefits of more accurate data –something customers confirm is mission critical to their business –and faster updates. And perhaps most important of all, Celerant has left an enduring legacy not just of commitment to quality but of a practical ability to go on delivering it.

"We knew we wanted to achieve content transformation of the data we offer to our bond trader customers, we knew we were committed to Six Sigma and we knew we wanted nothing less than a raising of the bar across the whole team. How to do all that was our challenge to Celerant."

In those briskly challenging terms, Paul Hansford, Global Head of Data Quality, Reuters, London, sets up the expectations that he and his senior management team had of Celerant Consulting. The challenge was not without a great deal of prior consideration, as Hansford explains: "Reuters people are passionate about their jobs and equally passionate about providing our customers with the best. We had initiated a number of separate quality moves and quality as an issue was gaining more and more profile within our teams. But we had not yet cracked achieving a real raising of the bar right across our global organisation."

Reuters was not only determined to pursue and achieve ever-greater levels of data quality but, Hansford stresses, it also had to be a definition of quality that would be recognised and appreciated by the customer.

On the issue of customer voice and customer satisfaction, Hansford confirms that he was "very keen on this being a project that drove customer satisfaction. When you’re running a high-pressure organisation hour by hour, the inevitable ‘trade-off decisions’ can tend to water down people’s bigger-picture focus on customers. What we needed were good mechanisms to help us quantify what the client really wants. Celerant helped us to quantify the customer voice and that client-based data is crucial because clients are the best people to tell you what they want."

What the data underscored was that Reuters customers, not surprisingly, value data quality above all other attributes, including even content and functionality. What they want is a quality product. And making sure they get it is a question of harnessing real commitment to quality to the appropriate practical initiatives. As Paul Hansford puts it: "The issue of individual project identification and prioritisation had already involved us in a fair bit of groundwork." But he also concedes Reuters sometimes found that isolating the most effective actions and initiatives to pursue quality could be a thorny issue. "Celerant has helped us find the right projects. Now it’s not just a question of how we do it but of what we do."

Hansford was impressed with Celerant’s ability to deploy "teams that threw themselves at the problem spaces we gave them and tightened the field. Celerant took just 40 days to show us some realities of how we were performing."

Close understanding of those performance realities was quickly followed by a range of practical, Six Sigma-based initiatives to drive change. Paul Hansford describes himself as being "very impressed" by the ability of Celerant to apply methods to measure the performance of interim processes: "We had no understanding of levels of variation and now we do."

And the key legacy of the project? "The ability to know what to do in order to do better and then the ability to keep on doing better."

Six Sigma was the core methodology. but for Reuters, Celerant never forgot that it has to work in a variety of cultural realities and it has to be the enabler of a bigger-picture change

For clients whose situation indicates a need for deep Six Sigma expertise, Celerant can offer unrivalled experience. But it’s coupled with the realisation that increasing numbers of those clients expect a great deal more than a standard outcome when proprietary methodologies are overlaid onto their unique individual situations. That expectation is turned into reality through the consistent application of Celerant’s Closework® approach. This seeks to identify the fundamental differences between how work should be done to deliver desired results and how it actually is being done.

For the Celerant team on the Content Transformation project, one of the most gratifying client reactions was Paul Hansford’s remark: "Now we have the ability to drive the tools." This was gratifying because the whole Celerant philosophy turns on people, and their own working environments, rather than the imposition of ‘outsider know-how’. Which helps create a working environment for success, based on effective and lasting initiatives that don’t just bridge but remove the gaps between not knowing and knowing and between knowing and doing.

To discover how Celerant goes ‘beyond the literal’ and takes Six Sigma into a wider change management dimension, you need to go back to the very origins of the Reuters project. Pragmatism is one of the hallmarks of the Celerant approach. It’s manifested in what Celerant Project Director Paul Donnellan calls "an emphasis on real day-to-day work."

Donnellan explains: "We are physically deployed in all the work locations and that speaks for itself. It’s about being where the work gets done." He also confirms Celerant’s hands-on style of engaging with each workplace: "We took the worst desks in an office and that’s a good visual demonstration. It shows we’re about practical partnership rather than a ‘strategic posture’ of some kind."

Donnellan also stresses the "big cultural dimension" attached to the project. Celerant was not simply working on a geographically distributed basis with Reuters. It was also "culturally distributed" with some real differences in attitude to the Six Sigma approach.

As he puts it: "In the US and UK, the idea of a Six Sigma Blackbelt as a ‘can do’ figure who will sort things on their own initiative is well accepted. And we found the role also resonated well with the workforce in Bangalore, who also fostered a ‘can do’ culture within a very young team. But this contrasted significantly with Singapore, where a more collaborative approach is the cultural norm."

Adjusting for those cultural norms was more than lip service. Reuters was "impressed" by Celerant’s willingness to fine-tune its own human resource until all the consultants on the ground ‘meshed’ with the Reuters people they worked alongside. And there was the need for further meshing, this time of attitudes and approaches to quality.

Donnellan encountered "80% positivity around the idea of raising quality and making whatever changes were needed to do that. It was significantly higher than in many work situations but we still had to be respectful of the fact that people had not been ignoring the quality issue up until our arrival. Many of them, especially at supervisory level, had been working very hard on this. Inevitably, there was an element of ‘What do we need you for?’

So we had to show them, and show them quickly, credibly and with respect."

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Perhaps more usually associated with manufacturing industry, what is it that makes Six Sigma so productive in the realm of data management and content transformation? Celerant lead consultant on the Reuters project, Paul Donnellan answers some questions....

Q Is Six Sigma an approach that more organisations in the financial services industry should be contemplating, or is it still primarily a manufacturing discipline?

A Six Sigma uptake in the financial services and financial data industries is growing appreciably and for sound reasons. What makes Six Sigma so appropriate to financial data quality improvement is its ability to engage with high-volume processes. The financial sector handles billions of transactions. Even minute degrees of error will be magnified into significant problems as a result of these huge volumes: relatively small numbers of mistakes in the context of a lot of transactions = a lot of mistakes!

Q Why have financial services organisations been relatively late adopters of quality-improvement methodologies?

A Perhaps ‘quality’ has tended to be seen as more ‘abstract’ than would be the case in a physical production environment. But it is being driven as a high-profile issue by the advent of ‘straight-through processing’ – STP – which removes human involvement in reviewing very high volumes of data. With no human factor involved, an automated system is literally only as good as the data that is automatically loaded into it. So it has to be very good indeed – to Six Sigma standards.

Q How do you get the data behind millions of transactions and thousands of updates in real time to reach and stay at the desired quality benchmark?

A With the same rigour you would apply in any Six Sigma situation. Your aim is to achieve client improvements that are quantified and to enable continuous improvements in quality and service. We do that by quickly identifying appropriate Six Sigma projects that look at the end-to-end process, from customer intelligence at one end, through issues of infrastructure and automation, inbuilt capabilities, measurement and supplier management to the client’s own particular culture and behaviours at the other end.

Q What information does that process yield?

A You quickly discover the areas that work really well and the points where there is weakness and room for improvement. And you measure so that you can go back to the client and say, “I don’t think this or that is going wrong – I now know that it is and by what factor. And working with your people, we can do something about it.” In fact, this issue of knowing and knowing by how much, not just thinking, is a hallmark of our Closework® approach.

Q And what has Six Sigma enabled you to “do about it” for Reuters?

A Together, we have delivered real and measurable results. Results like end-to-end process cycle times reduced by nearly 90% so that Reuters customers are getting data faster. Results like accuracy and completeness defect levels cut by 80% so the data that customers are getting faster is also consistently better quality – defined by a reduction in variation of up to 95%.

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Legacy?

A standardised improvement methodology.

Meaning?

A common language for our business that includes mutually understood reference points and language templates.

Enabling?

Less time wasted on working out what we are saying and more time freed up to share what we really mean, because the methodology takes the strain and we’re not stuck at first base on the fundamentals.

Leading to?

A robust, consistent approach that spans the business and lets us drive the tools to deliver quality improvements that last.