The Manage IT Newsletter - Lowering Cost With Transactional Six-Sigma:

This issue focuses on how IT managers can quickly put to work the principals of the “Dirty Thirty,” a Transactional Six Sigma based approach for rapidly reducing costs.

Welcome to this month's information packed issue of the "Manage IT Newsletter." This monthly publication is a part mentoring and part coaching tool dedicated to helping IT managers enjoy a richer career experience so they can reach their full potential.

Our focal topic this month centers on a cost reduction methodology based on the Six-Sigma model. Would you and your organization benefit by quick and dramatic reductions to your businesses transaction costs? As an IT manager, you happen to be in a unique position to help your organization in this manner and not to mention increase your own value by introducing and using the principals of the "Dirty 30 Transactional Six Sigma approach," offered by Jay Arthur.

Jay also known as "the KnowWare(R) Man" works with companies that want to plug the leaks in their cash flow. Jay is the author of a number of books and guides, including the Small Business Guerrilla Guide to Six Sigma, Six Sigma Simplified, the QI Macros Six Sigma Software for Excel and Improving Software Quality. I am sure those of you that need to get results right-away will find Jay's article below and the ideas contained in this months tip sheet of great value.

As always, I invite you to please share this newsletter with your network, friends and colleagues. If you are an IT executive or HR professional, pass a copy of this newsletter on to your IT managers. A FREE subscription is available by sending a blank email to:
ManageITNewsletter-on@zines.webvalence.com

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With warmest regards,
Joe Santana,
Co-author Manage IT
www.joesantana.com

P.S. Please note that I will be traveling out of the country from April 15th through April 26th. I will return your calls or emails when I come back. ***************************In this Issue ****************************
* Focus Topic - The "Dirty 30" a Rapid Transactional Six Sigma Based Approach for Reducing Your Costs
* IT Management News & Trends:
* Tip Sheet: How to use the "Dirty Thirty" approach to reduce your costs
* Closing Comments and Announcements
*********************************************************************

--------------------------- Focus Topic -----------------------------
The "Dirty 30" a Rapid Transactional Six Sigma Based Approach for Reducing Your Costs
By Jay Arthur, The KnowWare(R) Man

While most Six Sigma efforts focus on manufacturing, companies are discovering tremendous opportunity in transactions: orders, bills, purchases, and payments. Every time a waitress takes your order, you place an order over the Internet, or you pay your bills with a check, a transaction has occurred. Every transaction can produce two unwanted side effects: defects and delay.

The majority of these transactions are handled electronically by information systems and networks. The secret to reducing or eliminating transaction defects and delay is to:

1. Quantify the cost of correcting these rejected transactions.
2. Understand the Pareto pattern (20/80) of rejected transactions.
3. Analyze 30 rejected transactions one by one to determine the root cause.
4. Revise the requirements and modify the system to prevent the problem.

Case in Point

In working with one wireless company, we found a 17 percent level of rejected service orders (170,000 parts per million). In this organization, 30,000 errors per month cost $375,000 per month to fix. The objective was to cut this level of rejects in half by the end of the year. There were over 200 different error codes, but only six of them accounted for over 80 percent of the total rejected transactions. Two affected service directly, four affected the customer records. It only took about three days to gather the data and isolate these transactions as the key ones to focus on. Our next step was to convene root cause teams to investigate 30 rejects of each error type. By midyear, the changes we made as a result of our findings completely eliminated the two top service-affecting errors and three of the four record-affecting changes. The result, errors went from 31,121 down to 2,395 per month a 77% percent reduction in total errors that translated into savings of $299,426 per month or over $3 million per year.

Conclusion

The "Dirty 30" process is ideal for Transactional Six Sigma because the data required to implement it is collected by most systems automatically. Then all it takes is four-to-eight hours of analysis to identify the root cause of the error. One of the big positive by-products of this approach is that the systems analysts learn how their requirements and designs most often fail. Until software engineering finds ways to prevent all of the possible defects inherent in software development, the Dirty 30 process will provide a simple way to tune up a system release and move it ever closer to Six Sigma performance.

-------------------- IT Management News and Trends -------------------
This month, we offer three select articles that focus on the providing an overview of Six-Sigma as well as the benefits of error correction.

A quick study overview of Six Sigma for those who are not acquainted with the history and meaning of the term.
http://www.computerworld.com/managementtopics/management/helpdesk/story/0,10801,58237,00.html

An article that defines and talks about the process of error prevention specifically in software development, but offers lessons have broad application.
http://www.computerworld.com/developmenttopics/development/webdev/story/0,10801,83735,00.html

Article on how priceline.com is using software to decrease errors
http://www.computerworld.com/developmenttopics/websitemgmt/story/0,10801,76304,00.html

--------------------------- Tip Sheet --------------------------------
For your free list of steps you can take to use the "Dirty Thirty approach to dramatically lower your costs, get your copy of the April 04 tip sheet at http://www.joesantana.com/freenewsandtips.htm

----------------- Closing Thoughts and Announcements -----------------
NEED HELP STOPPING THE CASH FROM BLEEDING OUT OF YOUR COMPANY?
Jay Arthur, the KnowWare(R) Man, works with companies that want to plug the leaks in their cash flow. He is the author of the Small Business Guerrilla Guide to Six Sigma, Six Sigma Simplified, the QI Macros Six Sigma Software for Excel, and Improving Software Quality (Wiley). He can be reached at: knowwareman@mindspring.com, http://www.sixsigmatoolbelt.com, 888-468-1537, 2244 S. Olive St., Denver, CO 80224

WANT TO KNOW WHAT IT PROS AROUND THE WORLD THINK?
Join to the IT Professional World Wide network at http://itpww1-network.ryze.com (Membership growing at a phenomenal rate and it is still free).

WANT TO LEARN WHAT TO OUTSOURCE FOR TOP RETURN ON INVESTMENT?
Get your copy of the audio program titled "Doing more with less through IT Outsourcing," at http://store.mixonic.com/joesantana

WANT TO HELP YOUR FRIENDS LOOKING FOR ADVICE ON HOW TO FIGHT BURNOUT AND ACHIEVE PEAK PERFORMANCE
Have them visit www.joesantana.com and sign up for the free TIPS DRIVING PEAK PERFORMANCE EMAIL SEMINAR. Delivered over seven days, this program is packed with advice that can immediately be put to use by a rookie or a veteran IT manager. (HR pros will also find it a rich source of ideas they can use to coach IT managers).

WANT TO LEARN MORE ABOUT IT MANAGEMENT WITH JOE?
Visit www.ULiveandLearn.com and register for the IT Management webinar. This information packed program comes right to your desktop and offers you advice on one of your most important career decisions.

NEED HELP QUICKLY BUILDING A PIPELINE OF CANDIDATES.
Contact EmployeeROI www.employeeroi.com/1-888-654-8845

I hope you enjoyed this issue of the IT Managers Newsletter. As always, your feedback on topics that interest you is always appreciated.

JS