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Poornima Mohandas

Six sigma is a rigorous methodology that uses data and statistical analysis to measure and improve a company's operational performance.

Mumbai , Sept. 19

NEW age banks are becoming more quality and cost-conscious; six sigma is increasingly getting popular. After ICICI Bank, HDFC Bank is the second one to implement the concept. While Citibank has six sigma running as a worldwide initiative, HSBC is to start the same in India shortly.

HDFC Bank had embarked on the initiative in January, engaging Wipro Corporation for consultancy services in the area. Wipro, which implemented the `quality check-cum-cost savings' initiative seven years ago, is considered to be the only Indian company to have successfully implemented the initiative and is being engaged by HSBC too to begin the same.

Talking on the benefits of six sigma, Mr Jagdish Ramaswamy, General Manager, Corporate Mission Quality, Wipro Corporation, said, "Within one year of six sigma implementation we started seeing cost benefits. Higher customer/employee satisfaction and better quality and faster delivery are the other fallouts.'' However, he declined to divulge any figures in terms of cost benefits to the organisation.

Globally, Motorola, the pioneer in six sigma concept, claims to have saved $16 billion through it that was implemented way ago in 1986. Mr Jack Welch, CEO, GE, is seen as an icon of the concept.

Six sigma is a rigorous methodology that uses data and statistical analysis to measure and improve a company's operational performance by identifying and eliminating "defects'' and thereby eliminates the cost of defects. Initially started in the manufacturing sector it later picked up in the service-related processes.

In the case of HDFC Bank, the quality check tool is being applied across the organisation in functions as varied as "customer deliveries, account opening, turnaround time, card/cheque delivery on the retail banking front; in cheque collection and time taken for credit approvals on the corporate banking front and in back-end processing on the treasury side of the business,'' explained Mr H. Srikrishnan, Country Head, Transactional Banking & Operations, HDFC Bank. In the case of the first 12 projects undertaken in the bank it achieved values of 3.9 - 4.9 sigma.

The goal to start with is merely reduction in number of defects, reduction in time of the operating cycle and benchmarking against competitors but this will finally spiral into tremendous cost benefits to the organisation, believes Mr Srikrishnan.

ICICI Bank started the initiative two years ago and is said to have derived both cost benefits and quality improvement as a result. However, the bank did not divulge figures.

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