The Connection Between Six Sigma and CRM

Six Sigma is an industrial business strategy directed at improving the quality of process outputs by eliminating errors and system variables. The end objective is to achieve a state where 99.99966% of events are likely to be defect free. This would yield a statistical rating of Sigma 6 hence the name.

The process itself is thankfully more user-friendly. It presents a model for evaluating and improving customer relationships based on data provided by an automated customer relations management (CRM) system. However in the nature of human interaction we doubt the 99.99966% is practically achievable.

Six Sigma Fundamentals

The basic tenets of the business doctrine and the features that set off are generally accepted to be the following:

  1. Continuous improvement is essential for success
  1. Business processes can be measured and improved
  1. Top down commitment is fundamental to sustained improvement
  1. Claims of progress must be quantifiable and yield financial benefits
  1. Management must lead with enthusiasm and passion
  1. Verifiable data is a non-negotiable (no guessing)

Steps Towards the Goal

The five basic steps in Six Sigma are define the system, measure key aspects, analyse the relevant data, improve the method, and control the process to sustain improvements. There are a number of variations to this DMAIC model, however it serves the purpose of this article. To create a bridge across to customer relationships management let us assume our CRM data has thrown out a report that average service times in our fast food chicken outlets are as follows.

<2 Minutes 3 to 8 Minutes 9 to 10 Minutes >10 Minutes
45% 30% 20% 5%
Table: Servicing Tickets in Chippy?s Chicken Caf?s

Using DMAIC to unravel the reasons behind this might proceed as follows

  • Define the system in order to understand the process. How are customers prioritised up front, and does the back of store follow suit?
  • Break the system up into manageable process chunks. How long should each take on average? Where are bottlenecks most likely to occur?
  • Analyse the ticket servicing data by store, by time of day, by time of week and by season. Does the type of food ordered have a bearing?
  • Examine all these variables carefully. Should there for example be separate queues for fast and slower orders, are there some recipes needing rejigging
  • Set a goal of 90% of tickets serviced within 8 minutes. Monitor progress carefully. Relate this to individual store profitability. Provide recognition.

Conclusion

A symbiotic relation between CRM and a process improvement system can provide a powerful vehicle for evidencing customer care and providing feedback through measurable results. Denizon has contributed to many strategically important systems.?

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Spreadsheet Risk Issues

It is interesting to note that the riskiness of operational spreadsheets are overlooked even by companies with high standards of risk management. Only when errors amount to actual losses do they realize that these risks have been staring them in the face all along.

Common spreadsheet risk issues

Susceptibility to trivial manual errors

Due to the fundamental structure of spreadsheets, a slight change in the formula or value in any of their inhabited cells may already affect their overall output. An

  • accidental copy-paste,
  • omission of a negative sign,
  • erroneous range selection,
  • incorrect data input or
  • unintentional deletion of a character,cell, range, column, or row

are just some of the simple errors spreadsheet users frequently encounter. Rarely are there any counter-checking controls in place in a spreadsheet-based activity and manual errors therefore easily go undetected.

Possibility of the user working on the wrong version

How do you store spreadsheet files?

Since the most common reports are usually generated on a monthly basis, users tend to store them using variations of these two configurations:

spreadsheet storage

If you notice, a user can accidentally work on the wrong version with any of these structures.

Prone to inconsistent company-wide reporting

This happens when a summary or ?final? spreadsheet is fed information by different departments coming from their own spreadsheets. Even if most of the data in their spreadsheets come from one source (the company-wide database), erroneous copy-pasting and linking, or even different interpretations of the same data can result to contradicting information in the end.

Often defenceless against unauthorised access

Some spreadsheets contain information needed by various individuals or department units in an organisation. Hence, they are often shared via email or through shared folders in a network. Now, because spreadsheets don’t normally use any access control, any user can easily open a spreadsheet file and view or modify the contents as he wishes.

Highly vulnerable to fraud

A complex spreadsheet system with zero or very minimal controls provides the perfect setting for would-be fraudsters. Hidden cells with malicious formulas and links to bogus information can go unnoticed for a long time especially if the final figures don’t deviate much from expected values.

Spreadsheet risk mitigation solutions may not suffice

Inherent complexity makes testing and logic inspection very time consuming

Deep testing can uncover possible errors hidden in spreadsheet cells and consequently mitigate risks. But spreadsheets used to support financial reporting are normally large, complex, highly-personalised and, without ample supporting documentation, understandably hard to follow.

No clear ownership of risk management responsibilities

There?s always a dilemma when an organisation starts assigning risk management responsibilities for spreadsheets. IT personnel believe users in the business side of the organisation should be responsible since they are the ones who create, edit, store, duplicate, and share the spreadsheet files. On the other hand, users believe IT should be responsible since they have always been in-charge of managing IT infrastructure, applications, and files.

To get rid of spreadsheet risks, you’ll have to get rid of spreadsheets altogether

One remedy is to have a risk management activity that involves both IT personnel and spreadsheet users. But wouldn’t you want to get rid of the complexity of having to distribute the responsibilities between the two parties instead of just one?

Learn more about Denizon’s server application solutions and how you can get rid of spreadsheet risk issues.

More Spreadsheet Blogs


Spreadsheet Risks in Banks


Top 10 Disadvantages of Spreadsheets


Disadvantages of Spreadsheets – obstacles to compliance in the Healthcare Industry


How Internal Auditors can win the War against Spreadsheet Fraud


Spreadsheet Reporting – No Room in your company in an age of Business Intelligence


Still looking for a Way to Consolidate Excel Spreadsheets?


Disadvantages of Spreadsheets


Spreadsheet woes – ill equipped for an Agile Business Environment


Spreadsheet Fraud


Spreadsheet Woes – Limited features for easy adoption of a control framework


Spreadsheet woes – Burden in SOX Compliance and other Regulations


Spreadsheet Risk Issues


Server Application Solutions – Don’t let Spreadsheets hold your Business back


Why Spreadsheets can send the pillars of Solvency II crashing down

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UK Government Updates ESOS Guidelines

Britain?s Environment Agency has produced an update to the ESOS guidelines previously published by the Department of Energy and Climate Change. Fortunately for businesses much of it has remained the same. Hence it is only necessary to highlight the changes here.

  1. Participants in joint ventures without a clear majority must assess themselves individually against criteria for participation, and run their own ESOS programs if they comply.
  2. If a party supplying energy to assets held in trust qualifies for ESOS then these assets must be included in its program.
  3. Total energy consumption applies only to assets held on both the 31 December 2014 and 5 December 2015 peg points. This is relevant to the construction industry where sites may exchange hands between the two dates. The definition of ?held? includes borrowed, leased, rented and used.
  4. Energy consumption while travelling by plane or ship is only relevant if either (or both) start and end-points are in the UK. Foreign travel may be voluntarily included at company discretion. The guidelines are silent regarding double counting when travelling to fellow EU states.
  5. The choice of sites to sample is at the discretion of the company and lead assessor. The findings of these audits must be applied across the board, and ?robust explanations? provided in the evidence pack for selection of specific sites. This is a departure from traditional emphasis on random.

The Environment Agency has provided the following checklist of what to keep in the evidence pack

  1. Contact details of participating and responsible undertakings
  2. Details of directors or equivalents who reviewed the assessment
  3. Written confirmation of this by these persons
  4. Contact details of lead assessor and the register they appear on
  5. Written confirmation by the assessor they signed the ESOS off
  6. Calculation of total energy consumption
  7. List of identified areas of significant consumption
  8. Details of audits and methodologies used
  9. Details of energy saving opportunities identified
  10. Details of methods used to address these opportunities / certificates
  11. Contracts covering aggregation or release of group members
  12. If less than twelve months of data used why this was so
  13. Justification for using this lesser time frame
  14. Reasons for including unverifiable data in assessments
  15. Methodology used for arriving at estimates applied
  16. If applicable, why the lead assessor overlooked a consumption profile

Check out: Ecovaro ? energy data analytics specialist 

Transformation to a process based organisation

Today’s global marketplace rewards nimble organisations that learn and reinvent themselves faster than their competition. Employees at all levels of these organisations see themselves as members of teams responsible for specific business processes, with performance measures tied to the success of the enterprise. As team members, they are “owners” of the process (or processes) to which they are assigned. They are responsible for both the day to day functioning of their process(s), and also for continuously seeking sustainable process improvements.

Transforming a traditionally designed “top down control” enterprise to a process-based organisation built around empowered teams actively engaged in business process re-engineering (BPR) has proven more difficult than many corporate leaders have expected. Poorly planned transformation efforts have resulted in both serious impacts to the bottom line, and even more serious damage to the organisation’s fabric of trust and confidence in leadership.

Tomislav Hernaus, in a publication titled “Generic Process Transformation Model: Transition to Process-based Organisation” has presented an overview of existing approaches to organisational transformation. From the sources reviewed, Heraus has synthesised a set of steps that collectively represent a framework for planning a successful organisational change effort. Key elements identified by Hernaus include:

Strategic Analysis:

The essential first step in any transformation effort must be development of a clear and practical vision of a future organisation that will be able to profitably compete under anticipated market conditions. That vision must be expected to flex and adjust as understanding of future market conditions change, but it must always be stated in terms that all organisational members can understand.

Identifying Core Business Processes:

With the strategic vision for the organisation in mind, the next step is to define the core business processes necessary for the future organisation to function. These processes may exist across the legacy organisation’s organisational structures.

Designing around Core Processes:

The next step is development of a schematic representation of the “end state” company, organised around the Core Business Processes defined in the previous step.

Transitional Organisational Forms/ Developing Support Systems:

In his transformation model, Hernaus recognises that information management systems designed for the legacy organisation may not be able to meet the needs of the process management teams in the new organisation. Interim management structures (that can function with currently available IT system outputs) may be required to allow IT professionals time to redesign the organisation’s information management system to be flexible enough to meet changing team needs.

Creating Awareness, Understanding, and Acceptance of the Process-based Organisation:

Starting immediately after the completion of the Strategic Analysis process described above, management must devote sufficient resources to assure that all organisation members, especially key managers, have a full understanding of how a process-based organisation functions. In addition, data based process management skills need to be provided to future process team members. It is not enough to schedule communication and training activities, and check them off the list as they are completed. It is critical that management set behavioural criteria for communication and training efforts that allow objective evaluation of the results of these efforts. Management must commit to continuing essential communication and training efforts until success criteria are achieved. During this effort, it may be determined that some members of the organisation are unlikely to ever accept the new roles they will be required to assume in a process-based organization. Replacement of these individuals should be seen as both an organisational necessity and a kindness to the employees affected.

Implementation of Process Teams:

After the completion of required training AND the completion of required IT system changes, process teams can be formally rolled out in a planned sequence. Providing new teams with part time support by qualified facilitators during the firsts weeks after start-up can pay valuable long term dividends.

Team Skill Development and Continuous Process Improvement:

Providing resources for on-going skill development and for providing timely and meaningful recognition of process team successes are two keys for success in a process-based organisation. Qualified individuals with responsibility for providing training and recognition must be clearly identified and provided with sufficient budgetary resources.

The Hernaus model for transformation to a process based organisation is both well thought out and clear. His paper provides an ample resource of references for further study.

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