Our alumni understand that leadership and facilitation are simpler and easier than developing the optimal methodology.  Therefore, consider Scrum’s Evidence-Based Management for Software Organizations (EBMgt™)[1] that measures value to improve your organizational agility.

The EBMgt approach enables service organizations and groups to make rational, fact-based decisions, elevating conversations from preferences and opinions to logic and insight. Above all, supporting detail and a modified methodology have been based on the “Evidence-based Management Guide: Empirical management for software organizations” written by Ken Schwaber, Patricia Kong, and David Starr.

Because Service Organizations and Groups Struggle to Prove their Value

Hence, within service organizations, so much effort is focused on features and functions that benefits get overlooked. For example, monitoring the efficacy of the software does NOT provide evidence of a groups value-add, rather . . .

Outcomes Provide Evidence of Value and Ways to Improve

Therefore, the Current Value of any organization must be accompanied by evidence of its ability to meet market demand with timely delivery (Time-to-Market) while being able to sustain delivery over time (Ability to Innovate.)  Organizations should therefore focus on the following Key Value Areas (KVA) categories:

  1. Current Value
  2. Time-to-Market
  3. Ability to Innovate
  • Current Value

Current Value reveals the organization’s actual value in the marketplace but has no relevance on an organization’s ability to sustain value in the future.

  • Time-to-Market

Time-to-Market evaluates the organization’s efficacy at delivering new features, functions, services, and products. Hence, without actively managing Time-to-Market, the ability to  sustain delivering value in the future remains uncertain.

  • Ability to Innovate

The Ability to Innovate helps avoid software that is overloaded by low value features. As low-value features accumulate, more of the budget and time is consumed maintaining the product, not increasing capacity to innovate.

What to Measure

Within the KVAs, EBMgt recommends eleven Key Value Measures (KVMs). Each should stand on its own and remain clear and transparent.

KVA: Current Value

KVM: Measuring:
Budget or revenue per Employee Approved budget or gross revenue / #employees
Product Cost Ratio All traceable expenses that develop, sustain, provide services, and administers the product or system.
Employee Satisfaction Because engaged employees are one of the most significant assets of any software group or organization.
Customer Satisfaction Sound management, solid software, and fulfilled stakeholders.

 

KVA: Time to Market

KVM: Measuring:
Release Frequency The time needed to satisfy the customer with effective products and services.
Release Stabilization Impact of poor development practices and underlying design and code base.
Cycle Time The time (including stabilization) to satisfy a key set of customer(s) or to respond to a significant organizational request.

 

KVA: Ability to Innovate

KVM: Measuring:
Installed Version Index Because of the difficulty customers face adapting or changing to a new release.
Usage Index Determines a product that is burdensome and difficult to use and excess software that must be maintained even if rarely used.
Innovation Rate Growth of technical debt caused by poorly designed and developed software. Consequently, trend of budget percentage being consumed keeping old software alive.
Defects Additionally measures increasingly poor quality software that leads to greater resource.

 

How to Improve Empirically through EBMgt

Scrum’s Evidence-based, Evidence-Based Methodology

Scrum’s Evidence-based Methodology

Monitoring KVAs provides a great start toward managing with evidence, but not enough to change the way agility is managed. The EBMgt approach recommends four phases that enable organizations to constantly learn and improve the value derived from software investments.

  1. Measure KVMs

First establish actual values for the KVMs. Now you have an initial view of organizational value. In the figure below, KVMs are displayed in a radar graph that helps visualize relative strengths and weaknesses. In the example, the organization’s ability to bring new features, functions, and products to its customers is strong, but its costs and defects are high.

 

Scrum’s Evidence-based, Evidence-Based Methodology

Baseline: Eleven Key Value Measures (KVMs)

  1. Select KVAs to Improve

Thus, with a clear view of current organizational value and an understanding of the measures that reveal it, leaders can now make informed decisions about which KVAs to change. Incremental changes performed in small learning loops are the most effective method for increasing an organization’s overall agility.

  1. Conduct Practice Experiments to Improve Value

Next in sequence, practitioners select a single or small set of practices to use in an experiment. For example, a software group may want to increase quality to reduce the Defects KVM. Therefore, an experiment might implement test-first practices in development teams. Making this change in a time-boxed experiment allows observation on the impact of these practices to overall organizational value.

  1. Consequently, Evaluate Results

Finally, assess the results and impact of an experiment to monitor the trend of value over time. Because, understanding the changes of the KVMs prepares the organization for its next learning loop. Consequently, organizations that track changes periodically across time learn from patterns that emerge. Therefore, you can interpret the final chart below:

Scrum’s Evidence-based, Evidence-Based Methodology

Trends: Eleven Key Value Measures (KVMs)

 

[1] ©2014 Scrum.Org. Offered for license under the Attribution Share-Alike license of Creative Commons, accessible at http://creativecommons.org/licenses/by-sa/4.0/legalcode and also described in summary form at http://creativecommons.org/licenses/by-sa/4.0/.

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Facilitation Expert

Terrence Metz, CSM, PSPO, CSPF, is the Managing Director of MG RUSH Facilitation Training and Coaching, the acknowledged leader in structured facilitation training. His FAST Monthly Facilitation blog features over 300 articles on facilitation skills and tools aimed at helping others lead faster, more productive meetings and workshops that yield higher quality decisions. His clients include Agilists, Scrum teams, program and project managers, senior officers, and the business analyst community among numerous private and public companies and global corporations. As an undergraduate of Northwestern University (Evanston, IL) and MBA graduate from NWU’s Kellogg School of Management, his professional experience has focused on process improvement and product development. He continually aspires to make it easier for others to succeed.

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