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™) 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:
- Current Value
- Ability to Innovate
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 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
KVA: Current Value
|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
|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
|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
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.
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.
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.
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.
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:
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