The document discusses the business benefits of root cause analysis (RCA) based on a study conducted at Ericsson in the Netherlands. It finds that RCA helped improve business results by identifying over 190 root causes through 12 sessions. The cost of preventative actions was recouped 1.5-2.5 times for design and maintenance projects. RCA was most beneficial for addressing maintenance and customer issues. Key success factors included selecting problems with serious impact, skills in problem analysis and communication, and prioritizing actions that could be implemented.

1. 1 June 4, 2003 Ben LindersThe Business Benefit of Root Cause Analysis
The Business Benefit of Root Cause Analysis
SM/ASM 2003 Conference: June 4, San Jose, CA
Ben Linders
Operational Development & Quality
Ericsson R&D, The Netherlands
Ben.Linders@etm.ericsson.se, +31 161 24 9885

2. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders2
Overview
• Purpose & Aim of RCA
• Key Success Factors
• Investigation of Business
Results of RCA at Ericsson
• Conclusions
Enable R&D making quality products, cheaper, on time!

3. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders3
Ericsson, The Netherlands
• Main R&D Design Center
• Full product responsibility for Intelligent Networks
– Strategic Product Management
– Provisioning & total project management
– Development & maintenance
– Supply & support
• 1800 employees, of which 400 in R&D
Root Cause Analysis is done at:
– Design Center: Projects, products, supply/support issues
– Corporate level: Crash Commission, Telephone Exchange Outages

4. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders4
Purpose & Aim of RCA
Definition:
Technique to analyze a
problem to determine
causes that made that
problem happen, and to
define actions to prevent
similar problems from
happening
Has to be a real & concrete
(not imaginary/vague) problem,
that has caused significant damage,
with a sponsor who pays for the
investigation and preventive actions.
“We do not want such a problem to happen again!”

5. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders5
Examples where RCA can be used
• Major product defects from test or customers
• Significant project disturbances (off-track)
• Re-occurring problems hampering business results
Approach: - Analyze problem to find root causes
- Define and implement corrective actions
Method: Apollo Root Cause Analysis

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Key Success Factors
• Problem Selection
• Knowledge & Skills
• Communication

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Problem Selection
• Only problems with serious impact on business targets
Target not met -> RCA -> causes -> actions -> target met
• Organizations are limited in how much they can change
– No more actions then you can implement
– Prioritize RCA sessions i.s.o. actions
• Use results from RCA cost/benefit investigation
– How big was the loss due to the problem?
– How much does a preventive action cost, and what is the benefit?

8. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders8
Knowledge & Skills
Problem Analysis:
Causes + Relationships
First analysis, then solutions
Session Moderation:
Understand problem area
Ask the right questions
Main Problem
to be
investigated.
Cause
Level 1
Cause
Level 1
Cause
Level 1
Cause
Level 1
Cause
Level 1
Cause
Level 1
Cause
Level 2
Cause
Level 2
Cause
Level 2
Root
Cause
Level 2
Root
Cause
Level 3
Cause
Level 3
Root
Cause
Level 4
Root
Cause
Level 4

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Communication
• To people working in the problem area: Learning
• Preventive actions: What, when, how, who
• Contribution towards organizational targets: Benefits
Communication: A tool for organizational changes
that are needed for meeting targets!

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Investigation of RCA
Master Graduation Assignment:
• Evaluation of RCA
• Business point of view
• Contribution to targets: Cost, time, quality
Investigated:
Models: TQM, CMMI, ITU, ISO
Cost/benefit of RCA sessions

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Models
Total Quality Management (TQM)
Focus on Customer Satisfaction
Capability Maturity Model - Integration (CMM-I)
Improvements based on quantitative data
International Telecommunication Union (ITU)
Policy with thresholds for when to do RCA
ISO 9001
Corrective actions based on quality problems

12. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders12
Cost/benefit of RCA
• 12 RCA sessions,
~ 20 mhrs per session total
• 190 Root Causes,
135 Preventive Actions
• Cost/Benefit of
1:1.5 for design projects
1:2.5 for maintenance
• Average cost preventive actions
162 hrs for design projects
115 hrs for maintenance
Apply RCA primary for customer problems in maintenance
Cost - Benefit Ratio
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Project1Project2Project3Project4Project5M
aint1Project6M
aint2Project7M
aint3M
aint4M
aint5

13. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders13
Conclusions
• RCA helped to improve Business Results
• Most beneficial for maintenance + customer issues
• Problem analysis skills and communication
of results are very important
RCA has proven to be beneficial: Use it!

14. The Business Benefit of Root Cause Analysis June 4, 2003 Ben Linders14
Questions?
Contact:
Ben Linders
Operational Development & Quality
Ericsson R&D, The Netherlands
Ben.Linders@etm.ericsson.se, +31 161 24 9885
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