Integrating Six Sigma and BPM for use in financial services institutions

An interactive forum hosted by The Six Sigma Group and IDT Ltd.

Integrating Six Sigma with other tools, techniques and methodologies is always a hot topic, with Lean tools in particular being used with great success. The purpose of this forum was to show that Business Process Management (BPM) can also be effectively integrated, particularly in the Financial Services sector.

Jointly hosted by The Six Sigma Group and IDT, the forum utilised their expertise of Six Sigma and BPM respectively, although the event did not require any previous knowledge of either methodology. As a result, the presentations that made up the day dealt with the basic principles behind each, before going into the detail of how easily they can be integrated to provide a more efficient and durable change programme.

Stephen Walsh of the Six Sigma Group gave the meeting an enthusiastic introduction to Six Sigma, beginning by explaining that although it can be defined in many ways (a measure of quality, a performance target, a methodology, a philosophy), at its root it is a change programme that improves the way an organisation does business. Once this has been done, it then becomes ingrained in the organisation to ensure the improvements remain.

In their training, the Six Sigma Group put particular emphasis on passing on the knowledge gained from projects throughout the organisation; so much so that they ingrain it in their version of DMAIC by adding a ‘T’ for ‘Transfer’ at the end, making it DMAICT.

Jon Alderton, also of the Six Sigma Group, gave a detailed case study of Six Sigma applied in financial services. The forum was aimed at organisations from this sector, and it is not traditionally associated with Six Sigma, it is however well suited to this method of improvement by its very nature of being data-rich. The programme he described realised such benefits as significant reduction in duplication of effort, elimination of the root causes of errors in processes thus saving money and increasing customer satisfaction, improved payment processes that led to better cash flow, ascertained inter company differences, and many more.

Jon explained how it was vital to align the projects with the bottom line strategic plan of the organisation in order for the real benefits to be properly recognised. By doing this at every stage of the improvement process, momentum can be maintained. Additionally, it is vital to get buy-in to the programme from everyone involved in the process; not just those who are responsible for running the project, or who is the ultimate beneficiary, but everyone who contributes and supplies inputs.

Scott Matheson of Metastorm Ltd talked to the meeting about how BPM drives efficiency gains. Like Six Sigma, it reduces operational costs and increases productivity, but it does it by focusing on automating and improving the technological interface with the customer, improving the service delivery by shortening the turnaround of key processes, giving quicker and more accurate access to information and getting new and relevant products to the market quicker, thus avoiding the potential disaster of a new product taking too long to get to the market and being obsolete once it gets there.

BPM looks at the technological solutions to enabling better access to information and improving processes by increased automation. Scott spoke about how BPM works to reduce the automation gap in organisations in order create greater speed to value: how quick something can be delivered before getting value back from it. This is the strategic differentiator for most organisations, and BPM works by increasing end-to-end visibility of processes. This gives greater management control by applying metrics that can be measured and analysed so that the benefits – and the weak areas – are visible.

A survey by Gartner showed that 95% of all BPM projects are successful. They manage this by getting into the fine detail of problems and processes and almost always resulting in saved time by filling the gaps between people and functions by integrating the IT systems and creating seamless processes.

Scott gave the meeting a demonstration of Metastorm BPM software, showing how it can be used in Financial Services to create better integrated systems for such things as account opening, referencing data, statement disputes, amongst many others.

The final part of the day consisted of Stephen Walsh and Colin Brimson of IDT explaining what they called the ‘Six Sigma – BPM hybrid’; essentially how the two can work together.

Both are concerned with improving processes, and BPM can feed into the Six Sigma framework at many levels by improving the visibility of the projects and programmes and filling in the gaps between the people involved in the improvement. They are both concerned with better customer service, and of course both are data driven. Also, one of the most important aspects of Six Sigma is selecting the right projects and the BPM process architecture makes this easier to do because it helps to see the bigger picture across the organisation, instead of functional slices, thus making the benefits more visible.

Together, the Six Sigma Group and IDT took the Six Sigma process stage by stage and showed how BPM can complement it:

Define – BPM offers greater clarity of the project goals and communicates them more effectively through an intuitive interface that can map the whole process.

Measure & Analyse – vitally important that all possible data is gathered, accurately analysed and effectively communicated; BPM can do this by creating a model of the critical areas of the process, as well as providing dashboards for continual analysis and linking to KPIs.

Improve – BPM simulates potential solutions without the need to instigate them, whilst also providing a more effective means of implementing the chosen solution.

Control & Transfer – in building the new process into the organisation, BPM is a structured process that can ensure the monitoring, dissemination and compliance, so that the process is effectively controlled and transferred.

Ultimately, it was shown that Six Sigma is a high-level methodology for analyzing and improving process efficiency and BPM a technical framework for process automation. The ‘Six Sigma-BPM Hybrid’ leverages the statistical results of Six Sigma’s process analysis for easy execution using BPM. And the roundtrip capability of BPM provides the analytical reporting and process simulation tools to enforce Six Sigma. Together they complement each other by creating simplicity and visibility throughout the business, and therefore making a more efficient and agile organisation.

For more information, please use the menu to the right to contact the Six Sigma Group.