Saturday, June 18, 2016

“Digital Agility” Book Introduction Chapter 6: Agility Measurement

 Being careful in establishing KPIs, as the old saying goes, you get what you measure.

Business agility is the ability to sense, respond, and take actions to changes. It is a strategic imperative for companies’ surviving and thriving at today's "VUCA" digital dynamic. If you can only manage what you measure, how to measure business agility in order to continue building and improving business change capability and maturity?

Agile values and principles are best measured via linking what you want to achieve: In agile, measure directly what you want to achieve, what your organizational goals are like such as go to the market time, cycle time to develop a feature, and anything that you truly want to see results from. Agile effectiveness is creating value, timely delivery, teamwork and productivity for the work done. If you want to measure agility, you need to be able to measure how well your organizations can respond. To be “agile,” you need to be able to respond effectively to change, From an agile perspective, the direction is more crucial than an absolute destination. You can measure the time from what a radical new requirement appears until the software is delivered, start with,” Doing the right thing,” before “doing things right.” And agility measurement needs to focus on:
-Timely delivery achieved frequently and repeatedly.
-Response to change quickly.
-Less cost to customers to support requirement changes.

Being careful in establishing KPIs, as the old saying goes, you get what you measure: Be sure to understand what decisions you are looking to make based on these KPIs. Since there will be an effort to collect and massage the raw data, you want to be sure that there are decisions made and actions taken based on the information provided. The measures should both motivate individuals as well as team performance. In the agile world, the team is more important than an individual, thus, the measure should focus on team KPI as well. From project/program management perspective, the goal is to deliver best, fast, good quality and cost-effective products or services and make the adjustment from spending organizational resources on something with low business value and slow ROI to deliver an alternative with much higher business value and faster ROI.

The “C” level executive would like to know something about ROI at macro level upon building the right products and culture: Each organization is different, and even within the same organization, and even if they do better by “being Agile,” there is no way to remove the confounding factors. But this will not stop an organization from measuring components of things that are measurable and will lead to favorable outcomes. Hence, at the macro level, Agile should be about how to ensure building the right product and portfolio on value, on time and on budget, focus on Agile mindset and culture, business and IT integration, portfolio management, the level of innovation. One of the most meaningful measures of Agile success is customer satisfaction. And the agile maturity measurement needs to say something about being truly agile, not just a lot of saying about doing the agile activity, there is the right mix of strategic metrics and tactical metrics needed in measuring things really matter.


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