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Measuring the Flow of Value Using Flow Metrics

In the age of digital transformations, IT organizations and large enterprises are embarking on Agile transformations to stay competitive in their rapidly evolving markets and industries. Many large organizations adopt an Agile scaling framework such as Scaled Agile Framework (SAFe), Large Scale Scrum (LeSS), Scrum at Scale, Spotify model or even create their own way of scaling Agile with the goals of reducing waste, increasing efficiency and predictability, becoming more innovative, and getting products faster to market. Anyone that has had the experience of going through an Agile transformation knows how challenging and complex an undertaking it is and being able to change the way a large organization is structured and operates is a huge accomplishment in an of itself.

For a large enterprise, an Agile transformation is a significant investment and the question that often comes up is: How effective has the transition to Agile been? Which can lead to: How do you measure that? Some Agile scaling frameworks like SAFe provide recommendations on metrics while other frameworks provide very little in terms of guidance on metrics leaving it up to the organization to figure it out. As a result, this can lead organizations to focus on output metrics like story point completion, number of user stories complete, and team velocity. But what do these metrics really tell you about the impact of your Agile transformation?

A common aspect among Agile frameworks is the focus on outcomes which emphasizes a product and value-oriented approach. This contrasts with the traditional project-oriented approach that is output, budget and milestone focused that most large enterprises are commonly transitioning from. In Mik Kersten’s book, Project to Product, he presents his concept of Value Stream Metrics as a way to correlate the flow of business value through a value stream to the business outcomes. Kersten defines two sets of Value Stream Metrics: Flow Metrics and Business Results. Flow Metrics are quantitative measures of the flow of value through a value stream. While Business Results are both quantitative and qualitative measures of the value delivered to the business or customers and the happiness of teams in the value stream. By measuring the flow of value in relation to business outcomes, it can provide insight on how efficiently value is flowing to the business and whether the value delivered is meaningful and impactful to the business. They can also highlight potential bottlenecks within value streams and stimulate a dialogue between development teams and the business on driving investment in improvements to accelerate desired business results.

In this article, we will focus on the types of Flow Metrics, what they measure, and how Jira Align can be used capture them for features (or epics). Flow Metrics consist of four types of measures: Flow Velocity, Flow Time, Flow Load and Flow Efficiency.

Flow Velocity

Flow Velocity measures the number of units of value that are completed in a specified time period (ex. Program Increment, quarter, year) within a value stream. Flow Velocity is not as granular a metric as team velocity which measures story points. Instead, Flow Velocity measures completed increments of value like features that used in SAFe. By gaining visibility into number of delivered units of value, it can help raise questions about improvements required to increase the Flow Velocity in order to meet the desired business goals of an organization. The Work Tree report within Jira Align provides metrics on the work item acceptance at the Epic, Feature, Story and Task level within a Program Increment, release or quarter. The red squares in the example below highlight where to find the Flow Velocity for features completed by the Mobile program across three program increments: PI-3, P-4, and PI-5. The example illustrates a program with a decreasing Flow Velocity over three Program Increments.

 

Work Tree.png

Flow Time

Flow Time measures the time elapsed when work is started on a unit of value within a value stream to when it is released to a customer. Extensive Flow Times are indicators that impediments and inefficiencies within a value stream are present and improvements are required. Flow Time differs from Lead Time in that Lead Time measure the time it takes value to flow through the end-to-end process while Flow Time is measured when work has actively started to when work is final completed (including any waiting time) and value is released to the business. In Jira Align, Flow Time can be derived using the Process Step Cycle Time report which tracks the average cycle time in days that features are in pre-defined developmental process steps within a value stream. In the example below, a value stream consisting of a single program, Jira Align Training Program, was set up with four developmental process steps for features: New, Active, Waiting and Done. Features are moved into the developmental process steps on the Feature Backlog - Kanban Process Step View based on the current state of the features. Flow Time is calculated by adding the Average Active Time with the Average Wait Time which is 4.67 days. In order to view the Process Step Cycle Time report and Backlog - Kanban Process Step View in Jira Align, a value stream must be created for a program.

Flow Time.png

Flow Load

Flow Load measures the number of units of value that are in progress also known as work in progress or WIP. It is a leading indicator that can be correlated to inefficiencies within a value stream. A high Flow Load may indicate that too many units of value are being worked on in parallel thus reducing output. Flow Load can be gathered in Jira Align through the Backlog - Kanban State View. In the example below, the red square highlights the number of features in the In Progress state on Feature Backlog - Kanban State View for a program. The Flow Load can be tracked for each sprint over the course of a Program Increment or quarter to gain perspective into trends within a program.

Flow Load.png

Flow Efficiency

Flow Efficiency measures the proportion of time that units of value are actively worked on compared to the total Flow Time. A low Flow Efficiency may indicate that the flow of value is stagnating in the waiting step due to bottlenecks or inefficiencies which result in larger queues and more WIP. The Process Step Cycle Time report in Jira Align can be used to derive the data required to calculate the Flow Efficiency of a value stream. In the example below, the Flow Efficiency is calculated for a value stream consisting of a single program in Jira Align. As in the Flow Time example, the value stream was set up with four developmental steps for managing features on the Backlog - Kanban Process Step View.

Flow Efficiency.png

Flow Metrics can help organizations gain valuable insights with understanding how efficiently value is flowing through their Agile value streams. They also can highlight the effectiveness of an Agile transformation and the progression from a project to product-centric approach for an organization.

2 comments

Mike C I'm New Here Nov 23, 2020

Hi, thank you for this article.

Is there a way to view the trend of flow efficiency and flow time over time, so we can see the effect of process improvement changes over time?

Like Martin Dowie likes this
Sam Tsubota Atlassian Team Apr 07, 2021

@Mike C There isn't a way to directly view a trend of flow efficiency and flow time over time in Jira Align. You could create an Objective and associate Key Results in Jira Align to track these metrics overtime. Then use the Check-In functionality of Key Results to track the flow efficiency and flow time over a specified time period. The trend can be viewed on the Key Results metrics dashboard.  If you have Jira Align Enterprise Insights, you could create a report or dashboard to show the trend in a Business Intelligence tool like Tableau or Power BI.

Screen Shot 2021-04-07 at 4.46.19 PM.png

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