Agility Index - Concept

• Organizational agility is often thought of as the practices used by individual teams and the techniques used to coordinate work across those teams. In some cases, focus is on improving practices without fully considering why those practices are being used in the first place. For instance, Scrum Teams monitor success by delivering potentially shippable Increments of work, but do those Increments contribute to the value of the overall organization?
• Without measuring value, the success of any agile initiative is based on nothing more than intuition and assumption
• EBMgt measures value as evidence of organizational agility. This approach enables to make rational, fact-based decisions, elevating conversations from preferences and opinions to logic and insight
• Software Organizations are Struggling to Prove their Value
  • many organizations have built software through the Scrum framework and the application of agile principles
  • management efforts often focus directly on the practices used rather than the outcomes produced
  • While the answers to these (practices) questions may be interesting, unfortunately they are irrelevant to organizational value
  • Monitoring only the direct use of practices does not provide the best evidence of their effectiveness
  • Example: tracking velocity is irrelevant to a PO who is responsible for maximizing the value of the product
• Outcomes Provide Evidence of Value and Ways to Improve
  • Increasingly, software and business intelligence has driven sustainability and competitive advantage for most organizations. As a result, decision-makers are looking to IT to improve the use of data and analytics
  • Measuring outcomes, e.g. value, provides a clearer lens through which to evaluate practices currently in use
  • If tweaking a practice improves value, then there is evidence that the change was beneficial to the organization, this evidence is an opportunity for empirical analysis of investments and initiatives
• Consider a potential investor looking for unambiguous evidence of a software organization’s value
  • Revenue
    • is often suggested, but the expense of acquisition affects the credibility of revenue
  • Profit
    • is interesting, but financial decisions such as recent acquisitions, or sale of assets may affect profit
  • Strategic measurement of the software organization’s value and agility is missing
• EBM for Investing
  • overall indicator of organizational value, speed indicator of current & future ability to deliver value
  • An organization’s outcome, over which direct evidence is gathered, is impacted by managerial decisions and the application of organizational practices
  • The adoption and use of practices across all teams is circumstantial, supportive evidence
  • It is assembled by appraising the application of practices in 5 organization-wide domains
    • “Process”
    • “Productivity”
    • “Value”
    • “Quality”
    • “Enterprise”
  • adoption of practices should have a positive impact on the outcome, and be reflected in the direct evidence
  • The relationship between practices and metrics however is not one-on-one
  • direct evidence is monitored to validate assumptions, it often takes time before practices get hold
  • All knowledge is imperfect and incomplete, EBM works better with active learning in short cycles. All evidence needs to be updated and checked regularly against the assumptions for improved adaptability
• Agility Index
  • is a composite number representing the current value an organization derives from software and its ability to continue deriving value going forward
  • It is the Key Indicator (KI) of a single organization’s health in overall agility
  • also includes standard industry code and organization size, so that it may be compared to similar organizations