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Written by Kevin Heisey
on November 23, 2021

As organizations transition from Project to Product and scale Agile across their enterprises, they must rethink how they define and measure success. Traditional Project Management metrics, like Productivity, Return on Investment and Cost Variance, remain important when it comes to cost management and cost containment, but Agile measures allow for ways to better understand control cost and value delivery. The key to deciding which metrics to use is to understand what is important to you to measure.

Reduce Time-to-Market

Measurements of cycle time and how quickly you can go from idea to delivering value to customers are important components of business value. Longer times cost money and increase the risk of products becoming irrelevant through late or delayed deliveries to the market. The whole flow must be calibrated and measured, then consistently evaluated over time to accelerate the process of moving through the whole funnel system itself to ensure value is being delivered as quickly as possible.

Monitor and Reduce Rework

Rework refers to defects found in production that must be revisited and fixed. The cost of rework can be significant, even more than 20% of total cost, for a typical Information Technology team. In addition to the increasing direct cost, rework prevents or delays you from moving forward on the current product or starting something new as the delays and costs compound. It is important to measure and monitor as a necessary step in reducing rework, which indicates an increase in quality.

Predictability: Velocity versus Throughput

Velocity is a metric used to measure what is possible. It is not a measure of team performance, and it should not be used to compare teams. Velocity is based on each team’s estimates of work which vary from team-to-team resulting in varying metrics. Velocity measures what a team has accomplished in the past to show what is possible in the immediate future, which helps calibrate expectations.

Throughput is increasingly used as a more straightforward, easier to understand metric that measures the number of tasks completed in each period, which can be used to plan work for future periods. While all tasks are not equal, it is more consistent across teams and easier for teams and outside Stakeholders to understand.

Measurements of time-to-market and the value delivery flow, rework and predictability are not departures from traditional Project Management cost control metrics; they simply provide more granular insight into what is behind costs. You might reduce cycle time by identifying and reducing rework issues to reduces costs. Predictability allows you to measure improvement, and is more important in terms of serving customers or other teams within your enterprise who rely on your products.