Measuring success of Agile !

A very close friend called up. He asked me how do we predict or project the monetary benefit of doing agile product development. I asked him what he meant. He explained to me that his top management has decided to go the agile way of product development using scrum as the framework and they want to know how much monetary benefit it will accrue to the company by doing so.

I was surprised but not shocked. The same question has been asked multiple times, but the language may have been different. To my friend, I replied its like asking Ravi Shastri the coach of Indian team, how many centuries will Virat Kohli make in this year or in his career. The answer is obvious, we do not know! The only way to see if agile is working for the company is to observe business outcomes after certain point in time. I said focus more on business outcomes like for example, do you know if your customers are happy? You delivered your product faster using agile, but was it the right product? Do you have the flexibility and agility to capitalize on market opportunities when they arise? Is faster delivery into the market having an impact on your bottom line? These are some of the questions which are going to answer whether going agile is having an impact on the organization. These questions can only be answered after certain point in time. There is no way one can predict answers to the question beforehand, even before you have started.

Another mistake many companies do is start measuring success using process metrics – time to market, team throughput and cycle times, velocity, improved quality, and better predictability of output. These metrics are important since agile is built on a foundation of continuous improvement: inspect, learn and adapt. Yet, these measurements in my experience don’t always indicate the outcome of the work, and whether it’s truly impacting the business. They are helpful to a certain extent in scaling proficiency of using an agile framework but not business impact, which is the true measure of agility!

Agile can be game changer for the companies! Many companies have started applying agile practises across the organisation, case in point is ING Bank in Netherlands! Application of agile practises also means having the agility to think about success beyond the known metrics. Identifying the business outcomes and tracking them regularly is what will ensure that organization is on the right path and built for success!

What is your experience of Agile? Have you also come across such questions? How did you answer them?

 Would love to hear from all of you..