Integrating Six Sigma and ERP

I recently came across a good question on how to integrate Six Sigma with an ERP project. Using an ERP financials implementation as an example, there are three key items to keep in mind to link your Six Sigma and ERP initiatives:

First, to integrate Six Sigma with your financial management software, it will be important for you to define your business processes for key financial processes, such as period-end close, A/P, A/R, consolidation, reporting, etc. These processes should be documented in detail (at least level 2/3), along with the inputs, outputs, and employee responsible for each process.

Second, it is important to define what the key performance measures are for each of the sub-processes you define. For example, measures such as number of business days required to close the books, number of adjustments, A/R days outstanding, etc. will help you measure the efficiency and quality of your processes. These measures should also map and align with higher-level corporate goals and performance measures.

Finally, once you have defined the key business processes in detail along with their related performance measures, it is important to ensure your ERP reporting is aligned accordingly. If your performance measures are not easily attained from within your ERP's business intelligence software, then you may have to measure using report-writers, other systems, or manual processes. Either way, you will need to define the process for collecting performance measure data on a regular basis to measure process and performance quality.