Involving Finance in Six Sigma – Do it Early and Fully

By involving the finance department from the early stages of the project, you can have appropriate data at all stages to ensure that the project is on the right track.

Involvement of Finance

Throughout the project phases, the finance department works with the various teams to identify the benefits of the project. Teams benefit from the additional input by the finance expert’s participation. They agree upon the calculation of benefits upon implementation of the project. Before transferring the ownership of the solution to the process owner, a second review of the expected benefits is done using the gathered data.

The Belts do not have to take care of this function, which would be done by the finance personnel. After the project is executed, a final review is done to verify if the expected benefits are being achieved. If there is a deviation, it is discussed with the process owner, the reason for its failure identified, and areas of improvement marked. 12 months after the implementation, the company finds and reports the benefits. After that, a baseline is calculated using the improved key performance indicator (KPI).

Only those benefits beyond that baseline are reported. If there seems to be any improvements needed, a new Six Sigma project is generated. Some benefits are also achieved during the DMAIC process. All benefits, as well as key performance indicators, are reported every month in a prescribed format.

The KPIs that need to be improved are then taken care of. A comparison of both with the target set is done to find any improvements.

Here are some of the advantages of full involvement of the finance department:


The finance department will be calculating the benefits honestly. There will be no misrepresentation of the data for the sake of records. Rather, they will report correctly, as savings and cost reductions are a matter of importance for them.

With the finance department involved in finance activities, the responsible team would be free to concentrate on improvements expected of them.


Standardizing the calculation of benefits is constructive. By have consistency in the data generated for comparison, the results can be reliable and meaningful.

Incorrect Benefits

A process owner calculating the benefits may not be considering the effect that the process has outside the project. This effect has to be calculated for the overall success and profit of the organization.


Like other financial activities, the project results and benefits are also available to internal audits and other reviews of benefits.


A successful process improvement should be included in the next financial budget. This will ensure that the improved KPIs become a permanent part of the system.

Proactive Finance

As a member of the finance department will be involved in the project, they will be in a better position to understand the business, and the factors and results influenced by the project.

The department will have a proactive approach to overall business improvement.


The finance department is responsible for calculating and reporting the benefits of the process changes at various departments in the organization. By using their financial knowledge, they are in a position to ensure that the Six Sigma project has accomplished more than the previous year.

Six Sigma projects can be successful if implementation is linked with quantifiable financial results. By involving the finance department fully from the beginning, companies can ensure that project becomes successful financially.



How to handle resistence in change management ?

Any change management practice is difficult especially in service business. It is hard to keep control on SOP’s. These processes are mainly people dependent. I divide people in three broad categories – green balls, red balls, and yellow balls.

Green balls are most structured people. They are highly analytical and love to face challenges of projects. They are potential black- belts. Despite time issues, they love to devote time for any improvement related activity. Develop them hard and give them wide exposure. Train them hard. They would deliver.

Red balls are most difficult nuts to crack. They believe in shortcuts and believe in quick wins. They hates quality guy and think they don’t need any external help I feel at many places we start with many projects and create many failures. This also creates high resistance in the organizational system. These people can provide you good critic support. Training can align these balls but most importantly they want to see quick success. Success drives success in six sigma methodology. So learn to create by using simple tools.

Yellow balls constitute eighty percent of organizational system. They haven’t made their mind on any methodology and don’t have rigid stand on it. They can be trained and major emphasis should be on these people. On induction level in organization, they should be given a short two days or three days training on structure problem solving tools. High attrition is major concern for any organization,. There is no point in teaching them after one or two year as this may be too late especially in services where retention time is two to three year.