Let me begin with a story
This is the story of a young graduate, applying for a managerial position in a multinational company, who is getting interviewed by the CEO of the company. At the end of the interview, the director looks out the window of his opulent office. Two cars are parked in front of the building: a long and magnificent black limousine and a small city car.
“- According to you, which of those two cars is mine?, asks the CEO, pointing out the parking lot.
-The small one Sir, replies the applicant.
-Why?, asks the manager, extremely surprised.
-Because you do not give a ten year edge to your company with tools that are ten years old.”
This story is extracted from an advertising campaign for an international car producer. At the end of the interview, the young graduate goes out of the building and gets in the small car. Whether the applicant finally gets the job remains unknown, but his crushing remark is hard to forget. We will now show how his remark is questionable .
Industrials offer us a plethora of evidence with their widespread use of the so-called “Lean Six Sigma methodology.” This doctrine does not settle for only cost optimization: it puts the customer’s needs as a primary concern. Combining cost savings and customer satisfaction has enabled many manufacturers to make breakthroughs in their markets. Since the 2000s and the 2008 crisis, professionals of the financial sector are keen to achieve similar results.
Therefore, some professionals in the financial industry have decided to implement new banking systems which promote synergies, but also require significant effort.
As-is analysis, definition of business requirements, expression of the ideal situation, gaps analysis, several testing phases… All these are necessary steps for the implementation of a new system and come with new difficulties over time. Countless cost overruns, which can easily amount to millions of Euros, are to be deplored in the frame of the development of banking systems. However, there are still some possibilities to reduce the risk of setbacks, especially in critical phases such as release periods.
Thus, specifications from a “Value Stream Mapping” clarify the activities and the processes, as well as the list of users involved in each complete business function. For each process, the Value Stream Mapping identifies the stakeholders and their inputs (direct and indirect contributors). This action covers the entire process, including upstream and downstream items. The risk of missing a key part in a process is therefore considerably reduced.
The testing phase remains too often the moment where the failures and inadequacies of the analysis phase are discovered. For example, in this phase, it may be found that users will not be able to perform an operation properly. Although in some instances, the necessary adjustments may be easy and quick to make, they also may require a major modification in the functioning of the system and can lead to more unexpected issues. In this second case, a new cycle (analysis – development – testing) is required. If this occurs in the final phase of a project, it will imperils the date of go-live and leads to additional costs.
Reporting (a key issue) in the banking industry) is another illustrative example of the added- value of Lean Six Sigma. Most often, reports are requested by several departments within the bank, to satisfy several ‘ad hoc’ needs. Consequently, the number of reports issued keeps increasing with time. Is this really necessary? As experience demonstrates, there is a lack of organization around the type of reports to be generated. They are created to meet the specific needs of a customer and are regularly redundant with existing documents. Performing a Value Stream Mapping provides extensive requirements in terms of reporting and expresses specifications firm-wide. All reports can therefore be defined in consultation between stakeholders. The probability of producing duplicates in this case becomes extremely low.
A last interesting application of Lean Six Sigma can be made in the design phase of testing. A detailed Value Stream Mapping indeed helps to highlight the process logical paths. Thus, it is quite possible to design “end to end” test scenarios, involving all stakeholders instead of restricting those scenarios to iterations limited into each department.
Reproducing real business processes as sensible as possible finally improves the relevance, the sufficiency and the reliability of tests.
This article has been deliberately focused on the Value Stream Mapping, but there are many additional benefits offered by the Lean Six Sigma method. Defect management may be optimized by causal decompositions (method of the “Five Whys”) or by Pareto’s analysis. Since the essence of the method is to ensure the reliability of processes, why not take the opportunity to adapt it in test phases, so that the scenarios are as real as possible? A structured approach of testing certainly helps avoiding disappointments and unexpected issues at the final stages of a project.
It also saves time while preventing budget overruns. The challenge is adapting at low cost a cost-killing method from industry to the financial service area which has a lot of common constraints with the manufacturing sector.
Sébastien Gillot
Lean Six Sigma Black Belt
SCS Solutions
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