INTERVIEW: Jim Franklin, Chief Executive Officer, Decisioneering Inc.

Do you face challenges with selecting projects, calculating their potential for financial success, or quantifying and forecasting the effects of variation in your new process or design? Sophie Smiles from onesixsigma.com spoke to James Franklin, CEO of Decisioneering

What does Six Sigma mean to Decisioneering?
How are Six Sigma customers applying simulation and optimisation?
What are some of the time or cost savings Users have seen using Crystal Ball Software in their Six Sigma initiatives?
Why is simulation and optimisation so important in Six Sigma projects?'>
Can simulation be used by all levels of Six Sigma practitioners?
Which industry sectors are using simulations within their Six Sigma projects?
How has cultural diversity affected the uptake of Crystal Ball globally?

What does Six Sigma mean to Decisioneering?

We use Six Sigma to describe a broad set of disciplines, which include Lean Manufacturing, Process Excellence and other Continuous Improvement (CI) techniques which have data-driven decisions at their heart. Since I re-joined the company in 2001, we’ve optimised many fundamental business processes you would expect to find in any large software company through the acquisition of Master Black Belts and training of subsequent Green and Black belts.

Six Sigma is more than a statistical tool box; it can be equally regarded as a philosophy or mission. As such, Six Sigma seems to perpetuate itself and it is now becoming the way we think and behave as an organisation. We have found, like many other companies we deal with, that our employees are also learning so much more about the business through their projects, and they are being empowered and energised; the intangible benefits are significant.

As a vendor, the Six Sigma market commands the majority of our focus in the market place now and this indicates its growth, success and maturity on a global scale. Previously, Crystal Ball Software was a tool which generally applied for customers using various initiatives under different labels. The structure of the Six Sigma market is in fact a great resting home for us; its foundation is data-driven, and this is essential for running business simulations. Fact Based Management (FBM) is something we have been preaching about for quite some time, and Six Sigma supports this explicitly.

And from the perspective as a citizen, I can see Six Sigma being extremely important in a wider context; innovations around reducing variation, using data and taking steps out of processes are useful for transactions such as approving mortgages, but the application to critical environments such as hospitals is Substantial. The companies, consultants, vendors and associations helping to aggregate this market, are in fact trying to make the world a better place, one process at a time.

How are Six Sigma customers applying simulation and optimisation?

Simulation can be applied throughout all the phases of Six Sigma (whether it be the DMAIC or various DfSS methodologies), although interestingly, organisations often vary at which stage they apply simulation within their projects. Many companies are using simulation within the ‘Define’ phase to analyse the business cases and thus aid project selection at the front end of the process. Simulating the financial justification and business impact of projects dramatically increases the visibility of their project portfolio, through predicting the cost and benefits of each project on a stand-alone basis. Scrupulously showing the potential costs of sub-optimal decisions and hailing uncertainty in discounted cash-flow dramatically changes the behaviour of those responsible for selecting projects and so reduces the possibility of “sacred cow” or “pet” projects being undertaken.

Once you have defined, measured and analysed the optimisation of tolerances, the ‘Improve’ phase is probably our second most common application of simulation to Six Sigma projects. It allows companies to select the right set of business decisions, avoiding assumptions and removing common politics, in order to proceed with the next step of the process improvement. So simulation and optimisation is basically used at any point where forecasting is being carried out – whether it be the feasibility or success rate of projects and solutions – to look ahead and face the effects of variation and uncertainty.

Some organisations purely use it within their engineering and design departments; as with Computer Aided Design and Engineering, the application of simulation to Design for Six Sigma projects is vital. We are currently helping these organisations to share experience with our other customers in order to understand the broader application for Crystal Ball in other areas of the business.

What are some of the time or cost savings Users have seen using Crystal Ball Software in their Six Sigma initiatives?

One customer used Crystal Ball for virtual proto-typing. A large manufacturer of consumer products, used prototypes within their design and build phases. Using the tools to build virtual proto-types, saving time and expenses on building test products in the real world, allowed them to shrink their time to market by 3 months, and really gave them the competitive edge.
Another large technology company was spending millions on building prototype robot-like devices, reduced their time to market from 48 to 12 months. Beyond engineering applications, a leader in defence and aerospace discovered ran Crystal Ball Software across their 300 (per annum) project portfolio, and they have found a multi-million dollar positive shift in budget performance which is about 10% of their over all budget.

Why is simulation and optimisation so important in Six Sigma projects?

Doing things right first time, saves the cost of deployment and development of all of those prior iterations. It’s about having visibility into a confluence of scenarios that may have otherwise been missed, and de-railed the projects. Most organisations estimate their cost savings achieved by each Black Belt per year. How many of these organisations meet or excel those metrics? Scheduled delays and cost over-runs are common, but avoidable. Focusing on the right projects initially and managing your resources accordingly with that foresight is extremely important when deploying Six Sigma.

Can simulation be used by all levels of Six Sigma practitioners?

Black Belts are at the very heart of this application, although its reach is broader. Green Belts find it very easy to use because of its Excel-based platform, and yet the Master Black Belts really understand its breadth and depth.
We have found that the top 10% of Green Belts move on to Black Belt roles, and using Crystal Ball software actually facilitates that transition; it allows Black Belts to shift some of the mathematical work onto the Green Belts, who in turn become more familiar and comfortable with statistics. When they come to additional Six Sigma training, they learn it better, faster and cheaper because it is more familiar to them.
We can show the mean and the median and the mode in our graphs, and seeing how the graphs skew and the numbers shift make it much more intuitive for Green and Black Belts. Master Black Belts are comfortable with the higher-end analytical features of the tool, however it is not designed for senior executives as any kind of project tracking or dash board tool.

Which industry sectors are using simulations within their Six Sigma projects?

Like Six Sigma, our software isn’t industry specific. Every business has fundamental processes which will not be to Six Sigma standards unless they have practiced this discipline for a long time.
The Manufacturing and Engineering markets, in the US at least, are undoubtedly more mature, whereas the transactional process market is at a chasm-point where there are only relatively early applications.
In Europe, Asia and the Pacific Rim, we are seeing tremendous growth, primarily where there is most manufacturing activity however, for Indian and South Korean Call Centres and services businesses, transactional Six Sigma has generated a lot of interest. Subsequently, the healthcare industry and Government Associations are where we see the largest future growth areas. The potential is huge however, so too are the data collection and change management challenges faced by those sectors.

How has cultural diversity affected the uptake of Crystal Ball globally?

Crystal Ball is compatible with all international characters, and being an Excel-based tool, has to some extent mitigated some challenges through deployment across the world. The latest version of Crystal Ball software will address an important barrier crossed for our European audience especially; it is the first internationalisation of our .Net platform. We have written all of our software around a C# and .Net framework, and this is the first time it's available on a worldwide basis. It has allowed us to include flexible development in version 7.1; it’s called extreme-speed and it allows us to run simulations up to 100 times faster than the software that we’ve been making historically.
In terms of infiltrating new countries, we have definitely found more traction in Germany, South Korea and India; it could be argued that these are generally cultures which are more conducive to, and pride themselves highly in analysis and rigour. More influential to our growth however, are our connections with academia and channel partners such as MINITAB. We are established within the academic infrastructure in the United States (450 Universities use Crystal Ball software), which we are also infiltrating internationally to create in the long term, a whole class of business professionals already familiar with using Crystal Ball for solving problems and going about daily business. Our channel partners and the consultants in this market have really been flying the Six Sigma flag, and are now infiltrating Mexico and South America, Asia and the Pacific Rim quite aggressively. Their movement pilots the further uptake of Crystal Ball.

This is through your Partner Programme?

Yes, we have approximately 25 partners involved in the programme currently. We provide them with software and training which they use with their customers to apply simulation and optimisation. Established "Six Sigma Companies" use Crystal Ball software to apply Six Sigma with simulation and so it makes sense for the Six Sigma consultancies to be teaching this proven technique within the Six Sigma umbrella. We partner with organisations and universities for a common goal; to encourage the use of data-driven management, simulation and forecasting, process excellence and waste reduction.

To find out more about Decisioneering’s Crystal Ball Software and Six Sigma Partner programme, contact Larry Goldman on +1 303 534 1515 or email sixsigma@crystalball.com