Published in TDAN.com October 2005
Six Sigma and Data Management
Written by Larry Dziedzic
In this article, I highlight the very close relationship of Six Sigma methodologies to those that we often use in data management. I believe that using Six Sigma methodologies in our data management practices will greatly improve the acceptance of data management to the business sector, because Six Sigma is a more readily accepted and a more widely recognized practice than many methodologies used in data management.
The above quote is from “Six Sigma Demystified” by Paul Keller, vice president and senior consultant with Quality America, a Six Sigma consulting firm. The text is excellent, and it has become my guide for implementing data management in my job.
Early in the text, Keller points out that a successful Six Sigma level project implementation will produce fewer than 4 defects per million opportunities, an opportunity being any situation in which an error can occur. In the case of an airline, that error could be loss of your luggage. Luggage handling is currently rated at three sigma, which amounts to about 67,000 defects per million opportunities. Obviously, you would spend less time waiting for your luggage if airlines enhanced their luggage handling practices. A single-level move — to four sigma — would reduce the defects per million to 6500, a very significant improvement. Of course, the airline sigma level for fatalities in the airline industry is above six sigma, at less than one defect per million opportunities.
As the text clearly details, a company functioning at three sigma level will spend about 25 % of it total sales on remedying errors. This expenditure includes fixing product problems and handling customer complaints. Since a six sigma level would result in fewer errors, more satisfied customers and higher profit margins, it is a goal worth striving for. The author notes that projects implementing Six Sigma generally achieve savings in the $100,000 range.
Many companies are using the Six Sigma methodology to develop Process Excellence, and are achieving significant savings in projects where implemented. We all know that a process is only as good as the data that it uses, and that data without a good process is somewhat useless. Thus, data management should play a very large and important role in Process Excellence. Historically, demonstrating return on investment has been one of the elusive areas of data management. I believe that aligning data management with Six Sigma methodologies will give us significant ROI.
So how does Six Sigma align with data management? What I quickly and happily discovered in my six sigma reading is that many of the Six Sigma processes and methodologies are very similar to those that we use in data management. Moreover, they can provide additional credence to the work that we in data management perform. And because Six Sigma contributes greatly to ROI when implemented in projects, it is an excellent choice to use.
Although the mathematical equations used in the six sigma methodologies are complex, Keller does a superb job of explaining them. To be truthful, I believe you can implement six sigma in data management without undue attention to the mathematics. You will not need a lot of the math for successful use with data management.
How are six sigma and data management practices similar? Six Sigma uses the concept of DMAIC, which stands for Define, Measure, Analyze, Improve and Control. These should sound familiar to anyone who has worked in DM. The methodologies also call for project charters, project scopes, customer input (called Voice of Customer), identification of critical areas, problem statements, milestones, use of swim lanes and deliverables and customer and management support (and on and on and on…).
By now, you are probably getting my point; you can use Six Sigma methodologies to implement data management projects. I am not advocating that anyone abandon data management techniques, but I feel that data management efforts can certainly be enhanced by incorporating Six Sigma methodologies.
So far, I’ve found that Six Sigma is an important support process for validating what we in data management have often struggled to achieve – full recognition for the data management processes. Add to this the focus on data’s importance because of the Sarbanes Oxley and PATRIOT acts, and I believe that there is an excellent opportunity for those of us in data management to get the recognition we seek and deserve. Logical data models RULE!!
Seriously, I really do feel that this time period is a critical one for data management. We in data management need to take steps to ensure that we ride out the time successfully. And when we finish the ride, everyone will know the accomplishment that our craft can deliver.
As the current president of DAMA International, I can’t pass an opportunity to mention the organization in this writing. I urge you to support your local DAMA chapter by actively participating and sharing the knowledge and skills that you posses. We are fortunate to have many experts traveling around the country and the world, presenting their ideas and their views on successful implementation of data management to the local chapters. I encourage you to attend those meetings at which they present and learn from the masters!
If you’d like to discuss this article or reach me to talk about attending a DAMA meeting or even starting a local chapter, email me at DAMAInt@yahoo.com.
Larry Dziedzic is the president of DAMA International.