Team Guide to Metrics for Business Decisions
Mattia Battiston and Chris Young
Learn how business metrics can help your team answer questions like “How fast are we going? What should we do next? Where’s the bottleneck?”
How can software teams keep a laser-like focus on outcomes whilst improving practices and flow? How can software teams understand where the bottlenecks are in their processes? And how can software teams provide reliable forecasts of when work will be done? The answer to these questions is: software teams should use Business Metrics.
Teams that use Business Metrics understand Throughput, Lead Time, Forecasting, Flow, Quality, and Value - all measures that speak directly to business outcomes. By using Business Metrics, your software team will produce software that is more business-relevant with more certainty and less waste.
Work together using metrics to build a shared understanding of the state of the work and, the business needs your work addresses and the impact it has on these requirements.
Audience
This is a book for anyone interested in how the work of their software team supports and enables the wider business or organisation.
The book provides tools and methods for developers, testers, managers, and product people alike to help build a shared understanding of what a software team can do to inform the decisions made by the business.
Details
Publication date: 10 May 2021
Pages: 218
Formats: Leanpub (PDF, Mobi, ePub), print
Twitter: @BizMetricsBook
The Team Guide series
Team Guide to Metrics for Business Decisions is the second guidebook in the collection from Skelton Thatcher Publications (part of Conflux Books).
The Team Guide books are written and curated by experienced software practitioners and emphasise the need for collaboration and learning, with the team at the centre. The books focus on specific techniques and approaches that have been proven to work well for teams building software systems, and contain several case studies from people in the field, bringing to life the concepts in real situations.
Authors
Praise for Team Guide to Metrics for Business Decisions
"I love this book. It gets straight to the point providing easy to understand, and practical guidance on how to use data to answer all the commonly asked questions. Questions such as "How do we know this works?" and "When will it be done?'. Highly recommended to anyone who works with a team looking to improve their ability to build and operate software systems."
-- Amy Phillips, Engineering Manager at Gousto
"A beautifully written book about metrics that answers real key questions that teams face daily. With clear explanations, examples, myths and getting started tips this should be anyone’s go to book for making metrics easy and informative."
-- Helen Meek, Coach, Trainer & Consultant
"Despite my 20 years of Agile experience the book surprised me with a brand new and fresh perspective on the metrics matter! Each topic is thoroughly covered and explained with great clarity, nothing is taken for granted, and many false myths will be dismantled. You will understand deeply the essence of 'Why' and 'How' a metric should be adopted and 'Where' to focus on to get real benefits like eliminating bottlenecks, making good decisions and providing realistic forecasts. This book is a 'must' for your Agile library!"
-- Stefano Luzi Crivellini, Chief Delivery Officer at Creactives S.p.A.
"Software development teams need to go beyond estimation in order to forecast when work will be done. They also need to prove that their software is valuable for customers. Mattia and Chris's book is an excellent guide for how to have data-driven conversations, and it provides many tools and resources for success."
-- Heidi Helfand, Author of Dynamic Reteaming. Director of Engineering at Procore Technologies
"Mattia and Chris guide us through the questions that we've all been asked: How fast are we going? How long will this take? Full of real examples and suggestions they share their experience in a direct and actionable way. A book to read and to have on our desk to take decisions based on better conversations generated by data."
-- Stefania Marinelli, Agile Manager at Hotels.com
"I love that this is written specifically for team members, rather than tech leadership - there are questions that all teams need to ask themselves about the flow, quality and value of their work. The clear examples and explanations in here will spark curiosity in any team member, and equip them to use their own data to help them focus on what matters most."
-- Victoria Morgan-Smith, Director of Delivery, Internal Products at Financial Times
"Team Guide to Metrics for Business Decisions feels like a long overdue publication that has been missing from the Lean-Agile world. Whilst there can be no doubt about the wealth of useful material on metrics that is out there for practitioners to consume, I’ve always felt like there was something missing. ... Through reading this book it’s safe to say my opinion has changed. I would consider this book essential reading for people new and/or experienced in the lean-agile world. The questions it answers, the perspectives it gives and stories told make it a book with great learnings and practical guidance for everyday application in your organisation."
-- Nick Brown, Agile Lead (IFS) at PwC UK
Recent author events
Part of the Team Guides for Software series
Recent articles on Business Metrics
Errata
No errors as of 2020-12-22
References
Introduction
Adzic2014 - Gojko Adzic, 2014 'Zone of control vs Sphere of influence' 12-09-2014. [Online] <https://gojko.net/2014/09/12/zone-of-control-vs-sphere-of-influence/> [Accessed 04-Feb-2018]
Anderson2010 - David J. Anderson, Kanban: Successful Evolutionary Change for Your Technology Business. Blue Hole Press, 2010.
Sinek2011 - Simon Sinek, Start With Why: How Great Leaders Inspire Everyone To Take Action. Penguin, 2011.
Chapter 1 - Throughput
AndersonCarmichael2016 - David J Anderson, Andy Carmichael, Essential Kanban Condensed. Blue Hole Press, 2016.
A3Thinking - Crisp, ‘A3 Template’. [Online] https://www.crisp.se/gratis-material-och-guider/a3-template [Accessed 08-Feb-2018]
Brodzinski2015a - Pawel Brodzinski, 2015 ‘Story Points and Velocity: The Good Bits’ 18-02-2015. [Online] http://brodzinski.com/2015/02/story-points-velocity-the-good-bits.html [Accessed 08-Feb-2018]
Burrows2014 - Mike Burrows, 2014 ‘The Kanban Survivability Agenda’ 20-02-2014. [Online] https://www.infoq.com/articles/kanbanagenda-part3-survivability [Accessed 08-Feb-2018]
Carroll2016 - Ian Carroll, 2016 ‘No correlation between estimated size and actual time taken’ 18-04-2016. [Online] https://www.iancarroll.com/2016/04/18/no-correlation-between-estimated-sizeand-actual-time-taken/ [Accessed 08-Feb-2018]
Cohn2014 - Mike Cohn, 2014 ‘The Main Benefit of Story Points’ 09-09-2014. [Online] https://www.mountaingoatsoftware.com/blog/themain-benefit-of-story-points [Accessed 08-Feb-2018]
Cohn2016 - Mike Cohn, 2016 ‘What are Story Points?’ 23-08-2016. [Online] https://www.mountaingoatsoftware.com/blog/what-arestory-points [Accessed 08-Feb-2018]
Cynefin - Dave Snowden, ‘Cynefin Framework Introduction’. [Online] http://cognitive-edge.com/videos/cynefin-framework-introduction/ [Accessed 08-Feb-2018]
DeathMarch - ‘Death march (project management)’. [Online] https://en.wikipedia.org/wiki/Death_march_(project_management) [Accessed 08-Feb-2018]
Duarte2012 - Vasco Duarte, 2012 ‘Story Points Considered Harmful - Or why the future of estimation is really in our past…’ 25-01-2012. [Online] http://softwaredevelopmenttoday.blogspot.co.uk/2012/01/story-points-considered-harmful-or-why.html [Accessed 08-Feb-2018]
Duarte2015 - Vasco Duarte, No Estimates. Oikosofy Series, 2015. http://noestimatesbook.com/
Forss2016 - Hakan Forss, 2016 ‘KATA - Habits for lean learning Agile Australia 2016’ 20-06-2016. [Online] https://www.slideshare.net/HkanForss/kata-habits-for-lean-learning-agile-australia-2016 [Accessed 08-Feb-2018]
GermanTankProblem - ‘German tank problem’. [Online] https://en.wikipedia.org/wiki/German_tank_problem [Accessed 08-Feb-2018]
Maccherone2014 - Larry Maccherone, 2014 ‘The Impact of Lean and Agile Quantified: 2014’ 26-01-2015. [Online] https://www.infoq.com/presentations/agile-quantify (around minute 22) [Accessed 08-Feb-2018]
MagennisSpreadsheets - http://bit.ly/SimResources contains many spreadsheet templates related to forecasting and modelling software projects, maintained by Troy Magennis.
PlanningPoker - ‘Planning Poker’. [Online] https://www.agilealliance.org/glossary/poker/ [Accessed 08-Feb-2018]
Rao2014 - Mukesh Rao, 2014 ‘Estimation Using Ideal Days’ 27-03-2014. [Online] https://www.scrumalliance.org/community/articles/2014/march/estimation-using-ideal-days [Accessed 08-Feb-2018]
Reinertsen2009 - Donald G. Reinertsen, The Principles of Product Development Flow: Second Generation Lean Product Development. Celeritas Pub, 2009. Chapter 5 in particular.
Rother2009 - Mike Rother, Toyota Kata: Managing People for Improvement, Adaptiveness and Superior Results. McGraw-Hill Education, 2009.
Savage2012 - Sam L. Savage, The Flaw of Averages: Why We Underestimate Risk in the Face of Uncertainty. John Wiley & Sons, 2012.
Singh2016 - Vikram Singh, 2016 ‘Agile Estimation Techniques’ 18-01-2016. [Online] https://www.scrumalliance.org/community/articles/2016/january/agile-estimation-techniques [Accessed 08-Feb-2018]
Talai2014 - Nader Talai, 2014 ‘Does size matter?’ 09-04-2014. [Online] http://cdn2.hubspot.net/hubfs/2495218/valueglide_dec2016_files/DOCs/AgileOrganisation_EstimationJourney.pdf [Accessed 08-Feb-2018]
Thoughtworks2013 - Various authors, 2013 ‘How do you estimate on an Agile project?’. [Online] http://info.thoughtworks.com/rs/thoughtworks2/images/twebook-perspectives-estimation_1.pdf [Accessed 08-Feb-2018]
Vacanti2015 - Daniel S. Vacanti, Actionable Agile Metrics for Predictability: An Introduction. Daniel S. Vacanti, Inc, 2015.
Zheglov2014a - Alexei Zheglov, 2014 ‘Inside a Lead Time Distribution’ 07-09-2014. [Online] https://connected-knowledge.com/2014/09/07/inside-lead-time-distribution/ [Accessed 08-Feb-2018]
Chapter 2 - Lead Time
AndersonCarmichael2016 - David J Anderson, Andy Carmichael. Essential Kanban Condensed. Blue Hole Press, 2016.
Berardinelli - Carl Berardinelli, ‘A Guide to Control Charts’. [Online] https://www.isixsigma.com/tools-templates/control-charts/aguide-to-control-charts/ [Accessed 12-May-2018]
Brodzinski2012a - Pawel Brodzinski, 2012 ‘Slack Time’ 10-05-2012. [Online] http://brodzinski.com/2012/05/slack-time.html [Accessed 08-Feb-2018]
Carroll2016 - Ian Carroll. ‘Why You Might Be Wasting Your Time with Story Point Estimation’. Solutioneers (blog), 30 January 2020. https://www.solutioneers.co.uk/why-you-might-be-wasting-your-timewith-story-point-estimation/
Ma2011 - Dan Ma, 2011 ‘When Bill Gates Walks into a Bar’ 04-09-2011. [Online] https://introductorystats.wordpress.com/2011/09/04/when-bill-gates-walks-into-a-bar/ [Accessed 12-May-2018]
Novkov2017 - Alex , 2017 ‘Track Your Aging Work In Progress’ 23-02-2017. [Online] https://kanbanize.com/blog/aging-work-in-progress/ [Accessed 12-May-2018]
Savage2012 - Sam L. Savage, The Flaw of Averages: Why We Underestimate Risk in the Face of Uncertainty. John Wiley & Sons,2012. For a shorter explanation by the same author see: Sam L. Savage, 2002 ‘The Flaw of Averages’ 11-2012. [Online] https://hbr.org/2002/11/the-flaw-of-averages [Accessed 18-May-2018]
Talai2014 - Nader Talai, 2014 - ‘Does size matter?’ https://cdn2.hubspot.net/hubfs/2495218/valueglide_dec2016_files/DOCs/AgileOrganisation_EstimationJourney.pdf
Vacanti2015 - Daniel S. Vacanti, Actionable Agile Metrics for Predictability: An Introduction. Daniel S. Vacanti, Inc, 2015.
Vacanti2018 - Daniel S. Vacanti, 2018 ‘Actionable Agile Metrics with Daniel Vacanti’ 14-01-2018. [Online podcast] https://podcast.agileuprising.com/actionable-agile-metrics-with-daniel-vacanti/ [Accessed 12-May-2018]
Chapter 3 - Forecasting and planning
Anderson2011 - David Anderson, 2011 ‘Predictability and Measurement with Kanban by David Anderson’ 17-10-2011. [Online] https://vimeo.com/32436546 [Accessed 18-May-2018]
Bakardzhiev2014 - Dimitar Bakardzhiev, 2014 ‘#NoEstimates Project Planning Using Monte Carlo Simulation’ 01-12-2014. [Online] https://www.infoq.com/articles/noestimates-monte-carlo [Accessed 21-Jun-2018]
Brodzinski2015b - Pawel Brodzinski, 2015 ‘Economic Value of Slack Time’ 29-01-2015. [Online] http://brodzinski.com/2015/01/slack-timevalue.html [Accessed 18-May-2018]
GermanTankProblem - ‘German tank problem’. [Online] https://en.wikipedia.org/wiki/German_tank_problem [Accessed 08-Feb-2018]
Kingman Formula - Invistics, 2017, ‘The King of Manufacturing Equations’ 28-03-2017. [Online] http://www.invistics.com/the-king-of-manufacturing-equations/ [Accessed 18-May-2018]
Magennis2015 - Troy Magennis, 2015 ‘Agile 2015 - Risk - The Final Agile Enterprise Frontier’ 06-08-2015. [Online] https://github.com/FocusedObjective/FocusedObjective.Resources/blob/master/Presentations/Agile%202015%20-%20Risk%20-%20The%20Final%20Agile%20Enterprise%20Frontier%20(Troy%20Magennis).pdf [Accessed 18-May-2018]
Public GitHub repository for Business Metrics book - https://github.com/SkeltonThatcher/bizmetrics-book. This has many useful spreadsheets to help you get started.
Reinertsen2009 - Donald G. Reinertsen, The Principles of Product Development Flow: Second Generation Lean Product Development. Celeritas Pub, 2009. Chapter 5 in particular.
Savage2012 - Sam L. Savage, The Flaw of Averages: Why We Underestimate Risk in the Face of Uncertainty. John Wiley & Sons, 2012. For a shorter explanation by the same author see: Sam L. Savage, 2002 ‘The Flaw of Averages’ 11-2012. [Online] https://hbr.org/2002/11/the-flaw-of-averages [Accessed 18-May-2018]
Sunk Cost Fallacy - David McRaney, 2011 ‘The Sunk Cost Fallacy’ 25-03-2011. [Online] https://youarenotsosmart.com/2011/03/25/the-sunk-cost-fallacy/ [Accessed 18-May-2018]
Vacanti2015 - Daniel S. Vacanti, Actionable Agile Metrics for Predictability: An Introduction. Daniel S. Vacanti, Inc, 2015.
Chapter 4 - Metrics for Flow
Anderson2013 - David Anderson, 2013 ‘Who is your Vice President of Delay?’ 24-10-2013. http://djaa.com/who-your-vice-presidentdelay [Accessed 02-Dec-2018]
BlackSwanFarming - Black Swan Farming, ‘Cost of Delay’. [Online] http://blackswanfarming.com/cost-of-delay/ [Accessed 02-Dec-2018]
Brodzinski2013 - Pawel Brodzinski, 2013 ‘Cumulative Flow Diagram’ 15-06-2013. [Online] http://brodzinski.com/2013/07/cumulativeflow-diagram.html [Accessed 02-Dec-2018]
Burrows2014 - Mike Burrows, Kanban from the Inside. Blue Hole Press, 2014.
Deming1982 - W. Edwards Deming, Out of the Crisis. The MIT Press, 2000.
ForsgrenHumbleKim2018 - Nicole Forsgren PhD, Jez Humble and Gene Kim, Accelerate: The Science of Lean Software and Devops: Building and Scaling High Performing Technology Organizations. Trade Select, 2018.
Forss2013 - Hakan Forss, 2013 ‘LKUK13: The Red Brick Cancer’ 03-12-2013. [Online] https://www.youtube.com/watch?v=sOb7Qqs2fe8 [Accessed 02-Dec-2018]
HumbleFarley2010 - Jez Humble, David Farley, Continuous Delivery. Addison Wesley, 2010.
Lowe2014a - David Lowe, 2014 ‘Little’s Law’ 28-10-2014. [Online] https://scrumandkanban.co.uk/littles-law/ [Accessed 02-Dec-2018]
Lowe2014b - David Lowe, 2014 ‘Little’s Law and CFDs’ 03-12-2014. [Online] https://scrumandkanban.co.uk/littles-law-and-cfds/ [Accessed 02-Dec-2018]
Lowe2015 - David Lowe, 2015 ‘Flow Efficiency’ 01-06-2015. [Online] https://scrumandkanban.co.uk/flow-efficiency [Accessed 02-Dec-2018]
MagennisSpreadsheets - http://bit.ly/SimResources contains many spreadsheet templates related to forecasting & modelling software flow, curated by Troy Magennis.
Reinertsen2009 - Donald G. Reinertsen, The Principles of Product Development Flow. Celeritas Pub, 2009. See Chapter 5 in particular.
Rothman2015 - Johanna Rothman, 2015 ‘Resource Efficiency vs. Flow Efficiency, Part 1: Seeing Your System’ 13-09-2015. [Online] https://www.jrothman.com/mpd/agile/2015/09/resource-efficiencyvs- flow-efficiency-part-1-seeing-your-system/ [Accessed 02-Dec-2018]
Skarin2008 - Mattias Skarin, 2018 ‘Agile game – Pass the pennies’ 08-09-2008. https://blog.crisp.se/2008/09/08/mattiasskarin/1220882915232 [Accessed 02-Dec-2018]
Vacanti2015 - Daniel S. Vacanti, Actionable Agile Metrics for Predictability: An Introduction. Daniel S. Vacanti, Inc, 2015.
Wester2016 - Julia Wester, 2016 ‘Flow Efficiency: A great metric you probably aren’t using’ 25-09-2016. http://brodzinski.com/2012/05/slack-time.html [Accessed 08-Feb-2018]
Yip2018 - Jason Yip, 2018 ‘Why T-shaped people?’ 24-03-2018. [Online] https://medium.com/@jchyip/why-t-shaped-people-e8706198e437 [Accessed 02-Dec-2018]
Chapter 5 - Metrics for Quality
Abela2006 - Andrew Abela. ‘Choosing a Good Chart’. Extreme Presentation (blog), 6 September 2006. https://extremepresentation.com/choosing_a_good-2/
Adzic2011 - Gojko Adzic, Specification by Example: How Successful Teams Deliver the Right Software. Manning Publications, 2011.
Big Buck Bunny - Wikipedia. ‘Big Buck Bunny’. In Wikipedia, 27 August 2019. https://en.wikipedia.org/w/index.php?title=Big_Buck_Bunny&oldid=912659532
Cazaly2019 - Lynne Cazaly. Ish: The Problem with Our Pursuit for Perfection and the Life-Changing Practice of Good Enough. Lynne Cazaly, 2019.
CrispinGregory2009 - Lisa Crispin and Janet Gregory. Agile Testing: A Practical Guide for Testers and Agile Teams. Pearson Education, 2009. p.79
Crosby1987 - Philip B. Crosby. Quality Is Free: The Art of Making Quality Certain. New edition edition. New York u.a.: Penguin, 1987. p.15
Dettmer2007 - H. William Dettmer. The Logical Thinking Process: A Systems Approach to Complex Problem Solving. ASQ Quality Press, 2007.
Knaflic2015 - Cole Nussbaumer Knaflic. Storytelling with Data: A Data Visualization Guide for Business Professionals. John Wiley & Sons, 2015.
Magennis2017 - Troy Magennis. ‘Data-Driven Coaching - Safely Turning Team Data into Coaching Insights’. 2017. https://www.infoq.com/presentations/data-coach/
Matts2013 - Chris Matts. ‘Introducing Staff Liquidity (1 of n)’. The IT Risk Manager (blog), 24 November 2013. https://theitriskmanager.com/2013/11/24/introducing-staff-liquidity-1-of-n/
North2017 - Dan North. How to Fail with BDD | SkillsCast. Skillsmatter, 2017. https://skillsmatter.com/skillscasts/10695-how-to-failwith-bdd
Reinertsen2009 - Donald G. Reinertsen, The Principles of Product Development Flow: Second Generation Lean Product Development. Celeritas Pub, 2009. p.55
RAS - Wikipedia. ‘Reliability, Availability and Serviceability’. In Wikipedia, 27 January 2019. https://en.wikipedia.org/w/index.php?title=Reliability,_availability_and_serviceability&oldid=880513040
Seddon2008 - John Seddon. Systems Thinking in the Public Sector. Triarchy Press, 2008.
Skelton2018 - Matthew Skelton. ‘5 Ways Site Reliability Engineering Transforms IT Ops’. TechBeacon, 9 October 2018. https://techbeacon.com/enterprise-it/5-ways-site-reliability-engineering-transformsit-ops
Chapter 6 - Metrics for Value
Adzic2013 - Gojko Adzic. ‘Scrum, Velocity, and Driving down the Motorway the Wrong Way’. Gojko’s Blog (blog), 12 September 2013. https://gojko.net/2013/09/12/scrum-velocity-and-driving-downthe-motorway-the-wrong-way/
DeMarco1995 - Tom DeMarco. Why Does Software Cost So Much?: And Other Puzzles of the Information Age. New York, NY, USA: Dorset House Publishing Co., Inc., 1995. p43.
Drucker2012 - Peter Drucker. The Practice of Management. Routledge, 2012. p.29
Hubbard2014 - Douglas W. Hubbard. How to Measure Anything Workbook. John Wiley & Sons, 2014.
McClure2007 - Dave McClure. ‘Startup Metrics for Pirates’. Business, 2007-08-08. https://www.slideshare.net/dmc500hats/startupmetrics-for-pirates-long-version
Perri2018 - Melissa Perri. Escaping the Build Trap. 1 edition. S.l.: O′Reilly, 2018.
Richer2017 - Julian Richer. The Richer Way. Cornerstone, 2017.
Young2014 - Chris Young. ‘Down To The Wire’, 2014. http://worldofchris.github.io/down-to-the-wire/