Diferencia Entre hard news y soft news

What Counts Can Be Counted
November 6, 2015 – 08:56 am
In this Jan

Six Sigma is all about what can be quantified and measured. So it is not surprising that organizations which utilize Six Sigma often prefer to measure success in terms of hard savings – dollars to the bottom line now – and are less impressed with soft savings – the possibility of dollars to the bottom line in the future. But it pays any organization to consider both hard and soft savings when evaluating the merits of a Six Sigma project. Sometimes soft savings are harder than management realizes.

The traditional view of hard savings is pretty standard. According to Karen Lay-Brew, CIO and vice president of knowledge services of BHP Billiton, regularly listed examples of hard savings are: reduction in unit cost of operation (e.g. cost of sale) and unit cost of production; reduction in transaction cost; lower overhead costs; lower head count; and increased throughput, resulting in increased sales or revenue.

Adam Bowden, director of Six Sigma for First Data Corporation, puts it even more simply: “We’re no longer spending the money on X; we were, but now we’re not.” Bowden says that senior leadership can be quite narrow in their outlook: “They want to see X off the P&L, period.” And that can make hard savings an easy sell, but soft savings much more difficult.

A Spectrum: From Hard to Soft

Instead of looking at Six Sigma project savings as hard or soft, it is more reasonable to think of them as a savings spectrum, according to Rob Tripp, a consultant with Six Sigma Consultants. “Think of it as four major categories in hard and soft savings, A, B, C and D. But don’t think of them as separate entities; instead, think of them as a spectrum, from A to D.”

A is the easiest to describe: it’s on the P&L, and for the current period. It’s in the budget. “If a process owner is willing to actually book something into his or her budget, then that’s hard savings, ” Tripp says. Category B also is hard savings, but it’s a little bit more out in the future: savings on the balance sheet, cash flow, or working capital. C is when things begin to shift into soft savings, and includes things like cost avoidance or capacity enhancement. Savings will occur, the project team is fairly certain, but there is no positive confirmation of this. For example, when a bottleneck is removed from a process there is an expectation of greater production, increased customer satisfaction or faster transaction speed. And D is when the team knows that it’s the right thing to do (e.g. safety improvements, legal or environmental changes), but you have no proof and no quantifiers. A project, Tripp says, can migrate from one category to another. What starts as soft savings can become hard savings, after time – as the savings which could at first only be theorized becomes quantifiable.

“The word ‘savings’ is, ” in Lay-Brew’s view, “too limited to describe what Six Sigma can deliver. The preferred term is ‘benefits, ’ in that the bottom line can be affected both by reduction in cost (savings) and by increasing the revenue.” The word savings implies reduction, which suggests an “I-have-to-cut-something” mentality, she says. The term benefits has a more positive connotation, and shifts the focus to growth, not reduction. Many organizations prefer “benefits” because of its broader and more positive focus, according to Lay-Brew.

Hard savings – or hard benefits – still receive most of the attention in companies. But why? Lay-Brew says that it has to do with the culture. “One reason is the focus of our society in measuring the success of companies by hard numbers. Analysts, the stock market and investors all use financial performance as a primary assessment tool of a company’s success.” Companies are expected to show revenue increases and cost savings that affect the bottom line. “Six Sigma is typically associated with cost reduction efforts, and so by natural deduction and association, the focus also tends to be on hard savings, ” she says.

Source: www.isixsigma.com
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