How Digital Transformation Skyrockets Lean Six Sigma In Impact – Forbes
The promise of Lean Six Sigma is continuous improvement and that it will deliver business performance improvement by 3% every year. That was great in a business world where 3% was enough. But not today, when organizations can gain performance breakthroughs of 40-60% or more. Plus, Lean Six programs didnât enable organizations to change their competitive position. Those two facts are why digital transformation is overwhelming Lean Six Sigma. But to capture the value that digital promises, itâs important to understand how it differs from Lean Six Sigma.
What is it about digital transformation that makes it so much more powerful than Lean Six Sigma? The outcomes from Lean Six Sigma depended on adjusting business processes. In contrast, digital transformation enables the opportunity to reconceive the underlying business model and completely transform the business.
Tristan Cammaert, Vice President at Royal Bank of Canada (RBC), recently spoke at an Everest Group conference about a fine example of capturing or creating new value through digital business models. The bank reconceived its ability to provide unsecured lines of credit for its clients. The results were significant:
- Client and employee experience improved dramatically
- Underwriting process and quality were notably enhanced
- Cost to sell plummeted
Rethinking The Process From A Digital Perspective
Providing an unsecured line of credit can be a profitable line of business for a bank. However, in most banks, itâs a very painful, laborious process. A lot of forms and paperwork. Underwriting challenges. Compliance challenges. The resulting lengthy, painful application and fulfillment processes add up to frustration for clients applying for the line of credit as well as for the bank.
In rethinking the process from a digital perspective to remove that frustration and reduce the time to approval, RBC identified people who were prequalified for a line of credit. Instead of responding to people applying for an unsecured line of credit and then exploring whether a person was qualified for it, the bank realized it could provide quick, easy access for prequalified clients.
RBC used big data analytics to identify which clients were pre-qualified. Then the bank created a four-step digital simple process in which individuals can accept their offer online or at a physical bank location. All the application components are prepopulated and the system validates that information.
This transformational re-imagination resulted in creating a process that now takes an average of one minute versus the high-cost process that took several weeks, multiple touchpoints and branch visits, and a great deal of effort.