White Paper: From Performance to Value

From Performance to Value: Measuring in Agile

Insight

This paper looks at how the UK subsidiary of a large multinational handles the shift away from traditional measures of IT performance to ones that are more compatible with agile ways of working and its focus on value.

Summary

Faster delivery of business value is often cited as a reason for adopting agile. However, measuring the value achieved through IT development is challenging. For those relatively new to agile, measurement is not straightforward, as traditional project and portfolio metrics are often hardwired into management report requirements and are hard to change. During agile adoption it makes sense to start by measuring team performance, as this can aid learning. From small beginnings, an agile measurement approach can iteratively be developed to meet the requirements of the business.

This white paper presents the case of a department within a multinational organization in the insurance sector that adopted Dynamic Systems Development Method (DSDM) in the first quarter of 2013. One of the issues they faced was how to shift from a traditional approach to measuring IT development to one that is compatible with agile development. We present the challenges they asked us to investigate along with suggestions from the published literature about how to overcome them, and a summary of proposed mitigation strategies. Their primary challenge was ‘understanding and measuring value in agile projects’. In order to do this we were asked to investigate the three levels of performance measurement that the department already used, and explore how they may be adapted to be more suitable for agile working.

The three levels we looked at were:

1. Personal performance: how to gauge individual contribution to the success of a project;
2. Project performance: how to identify, track and report on project progress and delivery in a meaningful way in order to demonstrate strong delivery of benefits, along with improvements compared to more traditional projects; and
3. Department performance: how to use the information in existing KPIs at departmental level.

The department already had a well-established measurement process at all three levels for their waterfall projects. As they started adopting agile processes they wanted to shift their measurement practices in order to ensure that they were capturing the right management information as well as driving the right behaviour. Three types of recommendation for how to approach these challenge areas are identified from the literature:

1. Guidelines and frameworks for measuring business value and agile processes in agile projects
2. Specific measurement techniques
3. Approaches for dealing with individual, team and portfolio measurement in agile environments.

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