Just as the discovery of the Rosetta Stone gave us a translation tool to unlock the mysteries of ancient Egypt, the emergence of flow metrics provides business and IT executives with a window into the enigmatic world of software delivery.
These business-centric metrics provide a common language for making collaborative decisions to accelerate the value delivery of an enterprise's software portfolio.
Software's insatiable appetite is consuming all markets, forcing mature enterprises to adapt their business models at a vertiginous pace. The problem is that they lack real forms of measurement that can tell them if their transformational efforts are working.
Performance metrics have come under intense scrutiny, according to Dominica DeGrandis, author of Making Work Visible. She explains, for example, that counting the number of lines of code and number of deployments represents local activities and optimizations, not business outcomes such as revenue, customer responsiveness, and retention.
Dr. Mik Kersten, author of Project to Product, doesn't mince his words when he cautions that "proxy metrics kill transformations."
Phrases like "story points" and "T-shirt sizes" need subtitles. But what if there were a new vocabulary that helped IT and business executives have more productive and effective conversations with IT leaders? With flow metrics, both business and IT executives have unearthed their own digital version of the Rosetta Stone.
Speaking the language of the business with metrics
Many CFOs understandably feel shortchanged, given the lack of ROI in their digital transformations; they are not in a hurry to sign off on the latest shiny tools and in-vogue methodologies. More investment in innovation and transformation will require serious justification.
CFOs don’t want to hear more anecdotes about what another company did or hear guesses and assumptions about what should or may happen. Absent data and a compelling proof of concept—unless CFOs can see and, crucially, understand how the investment is driving continuous improvement of the business—the checkbook will remain closed.
Flow metrics, however, can help IT leaders convince the business to loosen the purse strings and think more about how to strategically invest in IT, rather than just constrain its costs.
By crunching the objective data that is captured from integrated software delivery tool chains—across teams, tools, and departments—organizations can generate five clear business metrics.
These are the questions that flow metrics can help answer. And they can improve cross-organizational decision making, answering crucial business questions such as the following:
- How is your software delivery impacting revenues, quality, and costs?
- What's slowing down your value delivery?
- How are your DevOps, agile, and SAFe transformations performing?
- Where should you strategically invest to improve business outcomes?
Where flow metrics come in
Flow metrics present a new approach to measure software delivery value streams against business outcomes. Questions you should ask include:
- Flow velocity: Is value delivery accelerating?
- Flow time: Is time to value getting shorter?
- Flow efficiency: Is work upstream (ideate stage) in a wait state, holding up delivery?
- Flow distribution: Are all types of work, which include debts (for instance, how to improve flow) and risks (such as ensuring customer information is protected) being considered and prioritized appropriately?
- Flow load: Is demand outweighing capacity?
Keeping a product healthy means not only adding new features and addressing defects, but also ensuring that investments are made in reducing technical debt and improving ways of working. You also need to protect your company reputation against exposure of sensitive customer data.
Money metrics and the supporting cast
Flow time and flow velocity are the money metrics—they tell you how much business value you're delivering, and how quickly. While the money metrics are naturally the most appealing to business executives, the supporting metrics—flow distribution, flow load, and flow efficiency—have an indirect impact on the money metrics:
- Flow load tells you if your work in process (WIP) is overloading your teams.
- Flow efficiency helps you identify where wait states are undermining your flow time.
- Flow distribution considers all types of work and which areas most critically need resources.
These metrics interlink to enable data-driven continuous improvement and support the transition from project to product. Shifting to a product-centric operating model requires taking ownership over the product's entire lifecycle to continuously support the business's needs.
A healthy product also requires investing in debt—architectural, technical, and ways of working—to sustain ongoing value creation. The metrics help you make the right investments across all types of work (feature, defect, risk, and debt) to keep the product competitive.
For example, at my firm, paying down debt enabled us to keep feature velocity high, shorten flow times, and be proactive with investments in debt and risk to protect the business. We could easily modify healthy code, our architecture was flexible and modern, and we could implement the latest tools.
Employees were also happier, since they weren't hampered by debt; onboarding was faster, since we avoided spaghetti code that could take six to 12 months to learn; and new tools could be incorporated more quickly, because the technical architecture and infrastructure were kept up to date.
Set the standard
Flow metrics, like the Rosetta Stone, set a standard: a baseline to learn and grow from, to galvanize stronger understanding between the old world and the new. Through a product-oriented view of how all IT work interlinks and affects the business, flow metrics drive continuous improvement as a normal way of working.
Teams "learn to see" and business leaders "learn to improve." This promises a new dawn for how the business and technologists can engage and work together to accelerate the value delivery of a healthy product portfolio that will help your business survive—and thrive.
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