LEVERAGING SIX SIGMA IN ITIL PROBLEM MANAGEMENT

Krishna Murthy Dasari Satyam Computer Services Ltd.

INTRODUCTION
This paper discusses the role of Six Sigma in the Problem Management area of
Information Technology Infrastructure Library (ITIL). ITIL Problem Management has
two aspects the reactive aspect and the proactive aspect. This paper discusses on the
proactive aspect of Problem Management and provides an insight on when to initiate
correction from the trend analysis report. How Six Sigma can help in identifying when to
initiate correction, is demonstrated by a simple example.

SIX SIGMA IN PROACTIVE PROBLEM MANAGEMENT

Proactive Problem Management is concerned with identifying and resolving problems
and known errors before incidents occur, thus minimizing the adverse impact on the
service and business related costs. One of the main activities within proactive
Problem Management process is trend analysis. The objective of trend analysis is to
identify the upward pattern of incidents, which can then be analyzed to identify faults
in the IT infrastructure and then correction is initiated. Correction of faults requires
effort and resources and therefore can be expensive. The organization has to decide
when exactly to initiate correction so that the time and money spent on this activity is
less than the adverse business impact created by the faults at a later stage. Trend of
incidents of an IT infrastructure component is given below.
Trend - Number of Incidents
500

Number of Incidents

400

300

200

100

0
Jan

Feb

Mar

Apr

May

Jun

Month

Jul

Aug

Sep

Oct

Nov

From the chart it is obvious that there is an upward trend observed from August. Now
the challenge is when to initiate correction so that the effort and resources spent are
justifiable. Do we need to initiate correction in August itself or is it still possible to
gain business/customer satisfaction even when things go wrong. Well, an
understanding of Incident Life Cycle will help making the decision.
Incident Life Cycle:
Detection
Elapsed Time

Response
Time

Repair Time

Recovery Time

Incident
Detection

Diagnosis

Repair

Recover
y

Restoration

Downtime

Incident passes through several stages till the service is restored. Downtime is the
total time elapsed from the time the incident happened to the time the service is
restored. Once we know the downtime due to incidents, we can compute the cost to
business due to downtime which in turn will help us in deciding to whether to initiate
correction or not.
Cost to Business due to Downtime or Cost of Downtime:
Cost to business due to downtime is the sum of cost of unavailability of the service
and the cost to repair it. Problem Management should work closely with Availability
Management to understand the cost of unavailability of the service. The following
formula may help in determining the cost of unavailability of service:
Cost of Unavailability = (Downtime * Users affected * Average cost per user) +
(Downtime * Lost Business Revenue per hour) +
Overtime working costs + Sundry cost
Cost to repair = (Downtime * cost of the repair team)
It is also advisable to add the soft costs such as customer perception, legal loss etc. to
arrive at the Total cost to business.

Regression Equation for Predicting Cost to business due to Downtime:

Once we know the number of incidents and the cost to business due to these
incidents, we can build a prediction model from the historical data. The model takes
the number of incidents as the predictor and gives us the response which is the cost to
business due to these incidents. From this value we can decide whether there is a need
to initiate correction or is it still possible to continue without any action as there is no
adverse impact yet on the business operations. The regression equation and the
regression plot for this case are given below. From the regression equation it is
obvious that the predictor which is the number of incidents has significant impact on
the cost to business. Once the trend chart is plotted, the value of number of incidents
is substituted in the regression equation to arrive at the cost to business.

Cost to Business = - 35496 + 1407* Number of Incidents

Predictor
Coef SE Coef
T
P
Constant
-35496 50189 -0.71 0.497
Number of Incidents 1407.2 196.7 7.15 0.000

S = 50621.0 R-Sq = 85.0% R-Sq (adj) = 83.4%

Regression Line
600000

Cost to Business($)

500000

400000

300000

200000

100000
150

200

250
300
Number of Incidents

350

400

SUMMARY
The approach discussed in this paper is easy to implement as only basic tools are used
to demonstrate the application if Six Sigma in ITIL Problem Management. Care
should be exercised in computing the cost to business, and it is recommended that this
cost needs to be arrived from a brainstorming session with participation from
different processes like Incident Management, Problem Management, Availability
Management, Financial Management etc.. Scope for further study is to understand the
influence of other parameters on the cost to business and to build a multiple
regression model.

Author Biography:
Krishna Murthy Dasari is a Six Sigma Black Belt and a software quality professional
with 12 years of experience in quality. He has worked in industries like
manufacturing and IT. He has specialized experience in ISO 9000, CMMI, ITIL, Six
Sigma and Information Security Management. He is currently working with Satyam
Computer Services Ltd. He can be reached at dvkm_dasari@yahoo.com