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New product development process May 25, 2008

Posted by Coolguy in Design for Six Sigma.
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Six Sigma advocates a 5 stage process for new product development. The complete NPD process includes the following stages:

  1. Concept Study. This is done to uncover unknowns about the market and technology.
  2. Feasibility investigations are done to determine the limitations of the concept.
  3. Development of new product includes specifications, needs of customer, study of target markets etc.
  4. Maintenance activities following delivery.
  5. Continous learning through status reports and evaluation.

Formula for creating winning products May 25, 2008

Posted by Coolguy in Design for Six Sigma.
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According to a old (1993) study, new products account for 40% of sales and 46% of profits. For every 7 to 11  new product ideas, only 1 becomes a successful product according to a study.

Here are some of the factors for creating winning products.

  • Unique, superior product. Product should have value for customer
  • Strong market orientation. Understanding for customers needs and wants.
  • Predevelopment work. Up front activities like market analysis, technical assessment are vital before development starts.
  • Good product definition. Product and project should be completely defined before development begi
  • Quality of execution through out the development process.
  • Team effort including research & development, marketing, sales and operations.
  • Proper project selection to provide adequate resources for good projects. Poor projects must be killed.
  • Good product launch ensures success.
  • Top management leadership plays a vital role in product development process. They must provide strategy, resources and leadership.
  • Speed to market.
  • Strong, established new product process to screen new products
  • Attractive market makes it easier to have a successful project

Handling layoff’s May 23, 2008

Posted by Coolguy in Management.
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With the US economy in recession, everyday slew of employees are being laid-off, particularity in the finance sector. Here is my take on how you can monitor for rebound of the economy.

This is a quick list of do’s and don’ts for those in unfortunate position of having to let your teams go :

  • Explain why layoff’s are happening. Show numbers. That will atleast show them whats motivating it.
  • Don’t blame external factors. Its your job to monitor them.
  • Set and communicate a timetable for when they will be carried out. Be specific in plans.
  • Have counselors on-site to help employees deal with emotional aspect
  • Engage career counselor’s and let your staff know that they will be available
  • Do inform them personally. Email/SMS are terrible choices.
  • Don’t withhold information any longer than necessary.
  • Move swiftly once you announce the plan.
  • Take measures to motivate the employees you are keeping. Provide clear details on targets and plans you will achieve by the change.
  • Have alumni networks available for people leaving. They can help people make new contacts and find another job.

When will US get out of recession ? May 22, 2008

Posted by Coolguy in Finance.
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At this point almost all of the financial pundits have concluded that US is in economic recession. Most of the macroeconomic indicators are looking pretty bad and financial markets are going south.

I begun wondering if a rebound is anywhere near. While I am not attempting to answer this question, here is a set of good indicators that should give you a feel on how you can see a rebound coming.

(Unfortunately this post also made me painfully aware of the limitations of WordPress wrt tables. I think i am going to look for an alternative…)


Your Job

Credit Availability


Performance of your company

Credit spreads

What to look for?

Stock price and information your know about your company

TED Spread

What is it?

Measure of a company’s future earning prospects

Difference between LIBOR and 3 month treasury bills

Why is it important?

If your company’s stock is up and if it’s better than industry, market reckons your company will grow and so will you.

Higher TED spread indicates banks are nervous about lending among them selves.

This is effect companies and individuals.

Where can you look?

Numerous public sources

Bankrate.com. Its LIBOR-3 month t-bill rate

When is it updated?

By minute


What’s normal?


When is it really bad?

Drops to 52 week low’s or is not in line sector indexes

1.50% and more


General Economy



Business sentiment

Money supply

What to look for?

ISM Non-manufacturing index


What is it?

Monthly survey of conditions in service sector

Money supply growth that changes with interest rates cuts by Fed

Why is it important?

80% of jobs in US now are in service sector

Fed cuts interest rates by buying treasury bonds from banks. This increases money supply and reduces dollar value

Where can you look?



When is it updated?

3rd Business day of every month

Every week

What’s normal?



When is it really bad?

When it drops below 50 and stays there

Compounded annual rate of 14%


Financial Markets

House prices


Interest rates


What to look for?

Fed interest rates.

Housing supply inventory

What is it?

Interest rates changes by Federal reserve.

Number of houses for sale, measured by months of supply available

Why is it important?

Stock prices follow corp. earnings. Lower interest rates make earnings more valuable. Markets typically take about a year from rate cuts to recover

Rising inventory is a sign of decreasing prices.

Where can you look?

Numerous public sources


and your local realtor

When is it updated?

Every month

Every month

What’s normal?


6 months

When is it really bad?

8% and above ?

9 months and above

RACI Chart May 20, 2008

Posted by Coolguy in Business Analysis.
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RACI Chart describes roles and responsibilities of various people involved in a project. The acronym RACI stands for:

Responsible : Resources who complete the task

Accountable : Person responsible for completion of the task. Also called as Approver.

Consulted : People whose inputs are sought during the process of completing the task

Informed : People who are kept up-to-date on the progress of the task.

This tool is along with stakeholder matrices to identify all the stakeholders in a project and define a communication plan that is appropriate for them.

Technical Skills for Service Delivery May 14, 2008

Posted by Coolguy in Service Delivery.
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There are some of the technical skills needed for successful service delivery role.

  • Experience with multiple SDLC models
  • Understanding of IT Infrastructure and Knowledge of Networking concepts
  • Hands-on experience in multiple stages of software development
    • Experience and certifications in Project Management and frameworks (PRINCE2, PMP)
    • Development experience across range of projects/platforms and technologies
    • Business analysis experience
    • Understanding of Software design, architecture and estimation
  • Practical knowledge of IT Standards. Six Sigma, COBiT
  • IT Security concepts

Metrics Management May 12, 2008

Posted by Coolguy in Service Delivery, Six Sigma.
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Benchmarking and analysis of KPI’s against best practices is critical to the success of any internal service delivery organization. Almost every other organization has some sort of KPI’s of some sort in place to measure and monitor performance. Metrics management is also key skills to successful Solution Delivery role.

Six Sigma advocates three levels of metrics: business level metrics, operations level metrics and process metrics. Some of the metrics Six Sigma suggests are here.

Business Level Metrics

These metrics are typically financial and operational summaries for shareholders and management. Balanced scorecards is widely used for business level metrics. IT can be viewed either as a cost center or a profit center in companies. Based on this financial management for solution delivery is responsible for:

  • Estimating costs of projects accurately working with vendors, where necessary
  • Costs of providing services and undertaking projects fall withing approved budgets
  • Tracking expenses against allocated budgets
  • Helping Senior Management understand the total cost of completing an initiative
  • Plan IT costs for maintaining and improving ongoing services
  • Charge back IT investments to business units, where applicable

Operations Level Metrics

These relate to cost, time and resource to produce products and maintain services. Examples specific to IT include:

  • Resource utilization metrics
  • SLA Metrics
  • Capacity Metrics
  • Availably Metrics
  • Service Continuity Metrics

Process Metrics

These are detailed metrics form process level. Examples include

  • Agility in responding to a change
  • Reduce total released defects, Total Containment Effectiveness (TCE)
  • Fix defects closer to origin, Phase Containment Effectiveness (PCE)
  • Compare implementations within company, Function Point Defects per KLOC
  • Benchmark with other companies, Six Sigma that tracks Defects per Million Opportunities (DPMO)

Scope management May 12, 2008

Posted by Coolguy in PMP, Project Management, Service Delivery.
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Inputs Project scope management is one of the key knowledge areas addressed by PMP. Its also a key skills for successful solution delivery.

Key Stakeholders involved in the scoping activities include:

  • Project Sponsor / Executive
  • Business Process Owner and SME for business area
  • IT Management supporting this business area

Project Scope Management of PMP includes processes to ensure that all and only the work required by the project is done on any project. The key processes for this area in PMP are:

  1. Scope Planning
  2. Scope Definition
  3. Creating Work Breakdown Structure / Product Breakdown Structure
  4. Scope Verification
  5. Scope Control

Scope Planning

Elaborate ,formal and time consuming scope planning activities are often necessary for critical projects. Decisions on scope are typically documented in a scope management plan. This plan contains information on:

  • How the project scope will be defined
  • Define a WBS from Project Scope
  • How the scope will be verified
  • How the scope will be kept in control

Scope Definition

Scope definition and decomposition involve the activities to size the proposed project so that estimates can be made of costs, resources requirements and project duration. This phase builds on the initial Project Scope statement. Assumptions, constraints on the project are elaborated in this phase. Dependencies of the project are identified and documented. The output of this phase is a Project Scope Document which typically has:

  • Business objectives and high level requirements
  • Strategic alignment describing how the initiative fits with organizational direction or mission.
  • Project Description: Characteristics of the product/service being developed.
  • Project Objectives : Key success criteria which include time/cost constraints, quality targets etc. Each objective can have a metric like dollars for cost.
  • Project Boundaries: Including context diagrams to provide a visual model of the scope of the project
  • Project Deliverables
  • Initial constraints, assumptions, dependencies and risks
  • Project team organization
  • Important Project Milestones
  • Initial cost and time estimates
  • Project Configuration management details

Creating a WBS/PBS

Work Breakdown Structure (WBS), is a decomposition of work that is required to complete a project to accomplish the business objectives. It is typically deliverable-oriented and hierarchical in nature. The WBS describes the total scope of the project work to be performed. A Product Breakdown Structure (PBS)
is a decomposition of the components of the product. The PBS describes the total scope of the product or service to be delivered.

Creation of a WBS(or PBS) is the next step after completion of a Project Scope Document. In this phase deliverables are divided into manageable components of work until deliverables until they are defined into a work package level. Cost and schedule should be reliably estimated from work packages.

A WBS dictionary can be created to support the WBS.

Scope Verification

This phase involves obtaining stakeholders formal approval to the completed project scope.

Scope control

This is to assure that all changes to the scope are processed through established change control processes. Scope changes can be

  • Request for new items to be added in projects scope
  • Request to modify deliverables
  • Removal of deliverables from project scope. (de-scoping)

Six Sigma Introduction and Goals May 11, 2008

Posted by Coolguy in Six Sigma goals.
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I will attempt to introduce Six Sigma and various training programs available to get trained on Six Sigma with a series of simple Q&A’s. Refer to my post for additional information on Six Sigma certification

What is Six Sigma ?

Six Sigma is a highly disciplined process that focusses on producing and delivering near perfect products and services. Its a business improvement approach that seeks to find and eliminate causes of mistakes or defects in business processes.

Six Sigma measures defects in million ‘opportunities’ and assigns ‘levels’. There are six such levels. An organizations is said to be at 6 sigma level if it has 3.4 defects per million opportunities. This is the highest level an organization can attain. Average American company is at 4 sigma level. That is equivalent to 6,210 defects per million opportunities.

The six sigma steps for many organizations are described as DMAIC:

Define: Select responses/processes to be improved

Measure: Gather data to measure the process/response

Analyze: Identify the root causes for defects

Improve: Eliminate the cause

Control: Monitor the process/response to sustain improvements

Who developed it?

Motorola developed Six Sigma in 1987. Dr Mikel Harry is credited with the development of Six Sigma in Motorola.

Does Six Sigma really work ?

Short answer is; yes it does !!. Here are some reported facts on how Six Sigma made a difference in big corporations:

  • Six Sigma is believed to have saved Morotola $940 million over 3 years.
  • HoneyWell reported a estimated saving of $1.75 billion in year 1997
  • GE reported a saving of $1.75 billion in 1998 and a accumulated savings of $2.5 billion in 1998.

Why does Six Sigma work ?

  • Typically short project times (6-9) months
  • It forces Senior Management involvement
  • Clear definition of success and its measurement
  • Defined processes for training individuals. (Green belts, black belts etc)

Who is using Six Sigma ? (Just to name a few..)

  • Morotola (Not surprisingly)
  • GE
  • Sony
  • Toshiba
  • Johnson and Johnson

Does getting trained in Six Sigma make sense ?

An average black/green belt will save a company about $175k, if there are around 5 to 6 projects per year. In big corp’s there is about one black belt per 100 employees. So plenty of opportunities there..

Which level of training is right for me ?

Everyone- Orientation Training

Green belt candidates – Green belt training

Supervisors – Overview

Black Belt candidates – Black belt training

Management – Executive training

Master black belts – Master black belt training

Senior management – Sponsorship training

When is it a good time to implement a improvement program like Six Sigma ?

When times are good and when times are bad. When times are bad, focus is on survival. At the same time its important to realize that a company cannot loose money because of poor quality, especially at bad times. When times are good, resources are typically dedicated to take advantage of the opportunity.Improvement projects are typically last on list.However customers are not likely to to repeat business with a company known for quality issues.

When is a company ready for Six Sigma ?

If performance of a company is low, its better to concentrate on basics. Apply cost management techniques and engage with customer. When the performance is OK, set goals and monitor them. Simplify processes. When performance is high, benchmark with other firms, develop and communicate strategic plans and strive to continously improve.

What does Six Sigma measure ?

Six Sigma advocates a holistic view on metrics. After the metrics are established, project teams must work to implementing them.

What should be a first project to implement Six Sigma ?

  • Should be simple but not trivial
  • Should last around 3-4 months
  • Reasonable time and resource constraints
  • Problem should be clearly defined
  • Problem should be measurable

Six Sigma Certification May 11, 2008

Posted by Coolguy in Six Sigma.
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I recently successfully completed my Six Sigma green belt certification (CSSGB) administered by ASQ. While I did blog about some of the tools and techniques of Six Sigma in the past, I decided to do more to help out any one aspiring to be a Six Sigma green belt. This and a next few posts are my attempts to provide a comprehensive overview to anyone attempting the Six Sigma Green belt exam or to anyone just simply trying to learn more about basics of Six Sigma.

The test is divided into 10 modules. Following are the topics in the exam with the % weight for the topic in exam.

  1. Six sigma goals 5%
  2. Lean and DFSS 10%
  3. Define – Teams & Customer 10%
  4. Define – Tools, Projects and Results 15%
  5. Measure – Data & Process Analysis 12%
  6. Measure – Probability 10%
  7. Measure – Capability & Measurement 8%
  8. Analyze – 15%
  9. Improvement Techniques – 7%
  10. Control – 8%

(As I blog about these topics, I will edit this post to add the links)

CSSGB Primer is a must have reference to attempt this exam. This is the only book/material I reviewed to prepare for the exam in addition attending a course at my local community college.

I swear by mindmapping technique. I used mind maps successfully to prepare for my PRINCE2 certifications.

I repeated the technique for this certification too and here is the mindmap I created.