Benefits of Six Sigma in Finance
Last Updated January 17, 2020
Finance institutions, like most businesses, can benefit greatly from the application of Six Sigma practices. Although Six Sigma was originally developed as a tool for streamlining the manufacturing process, it can be applied just as effectively to a service-oriented industry like finance. However, it’s important to recognize that the nature of financial services firms presents special challenges to Six Sigma implementations. Those charged with managing Six Sigma in a finance setting will find that specialized training can significantly enhance their success.
Basics of Six Sigma for Finance
Six Sigma is a methodology that helps businesses reduce costs and inefficiencies by finding and eliminating any wasteful steps in a process. Because finance organizations typically have many moving parts and intricate processes, identifying problem areas can be just as complicated as fixing them. Proven Six Sigma tools and strategies can greatly simplify this procedure.
Six Sigma practitioners use a variety of techniques to define the scope of a project or process, break it down into its constituent parts and examine each of those parts for some defect or variation. Once that has been accomplished, the next step is to identify and track relevant metrics, and determine how changes to the process will impact efficiency and costs. Careful tracking and reporting are a vital part of Six Sigma practices, as they establish progress in relation to the specified objectives.
By utilizing Six Sigma tactics within a customer-oriented, results-based approach, a finance company can maintain the proper focus and increase profitability.
Challenges of Applying Six Sigma to Finance
The cost savings Six Sigma can generate are often attractive to companies that operate in the finance sector. However, there are certain challenges that need to be addressed when implementing Six Sigma projects in these types of companies. Financial institutions do not deal with the same types of products and processes as manufacturing organizations, so their areas of opportunity can be more difficult to identify and measure.
The good news is that with some minor modifications, the principles of Six Sigma can be effectively put to use by finance institutions and other service providers. Six Sigma practices have already proven to be highly successful when applied to a firm’s operations, and they are rapidly proving their value in other functional areas such as sales, marketing, and technology.
Using Key Performance Indicators (KPI) to Achieve Measurable Results
In order for Six Sigma metrics to be effective, they must be directed at measuring the right thing. Establishing appropriate key performance indicators (KPI) is one of the most important hurdles to overcome when integrating Six Sigma within finance. A KPI shouldn’t be too subjective, as that makes it difficult to measure and evaluate in any meaningful way. Ideally, KPIs should be concrete and as detailed as possible. A good rule of thumb for KPIs is to put them to the “SMART” test, which assesses whether they are specific, measurable, attainable, realistic and timely. The best KPIs generate usable data that can be applied to bring about substantial positive change.
Master the Applications of Six Sigma and Incorporate Them in Finance
With so many specific challenges to incorporating Six Sigma within a finance setting, there is a rapidly growing demand for Six Sigma Black Belts with specialized training in this area. That’s why now is the ideal time to obtain training and certification in this burgeoning field, as it can significantly enhance your job prospects and earnings potential.
To meet the needs of companies and individuals within the finance sector, Villanova offers the Certificate in Lean Six Sigma program, which includes three certificate courses – Six Sigma Green Belt, Lean Six Sigma and an elective course. Available 100% online, the program covers everything you need to know to achieve certification as a Lean Black Belt while providing valuable tools and techniques that can be applied immediately to the financial industry.
Working professionals appreciate Villanova’s innovative, video-based e-learning platform, which connects them to some of the industry’s leading experts in Lean Six Sigma. Lectures can be viewed anytime and anywhere through streaming video. In addition to the convenience of online learning, Villanova offers an industry-recognized certifications available 100% online.
Distinguish yourself with Villanova’s Certificate in Six Sigma, and prove that you have the knowledge and expertise to lead successful Lean Six Sigma implementations within the challenging and complex finance arena.
