More and more, we are seeing that traditional metrics applied to business systems modernization do not suit program deliveries. Choosing the wrong metrics can result in not only irrelevant or inaccurate reporting on progress and outcomes, but can actually undermine the entire process of successful systems modernization.
Don’t panic – although the old metrics are out, new metrics are in.
Much of this mismatch stems from the misunderstanding of how to track and measure progress between Waterfall and Agile projects. Traditionally, many software development companies have utilized the Waterfall Model for measuring project development. In the Waterfall Model, large sub-systems or systems are implemented steadily over long periods of time and delivered in single major increments.
For an enterprise system, this period of development is often five or ten years; an eternity in the current world of software development. Project progress for this model flows in one single direction, hence the name “waterfall”, from requirements, to design, to development, and then to testing and deployment.
The measurement of success for the Waterfall Model depends on:
- how much effort and time has been expended,
- the production of documentation supporting the phases of work,
- the number of features implemented, and
- the eventual measurement of outcomes tied to the cost-benefit analysis.
While these metrics are straightforward, as systems development has gained agility and flexibility, they are no longer good measures of progress or quality. Instead, in a rapidly changing business and technological environment, more relevant indicators pose questions such as:
- Was the process productive?
- Is this solution still relevant?
- How well did it meet the needs of your end users?
- Have you really produced the best possible outcome?
Fortunately, there is a way of answering all of these questions with one solution: strategic outcome-based metrics. The basic idea behind strategic outcome-based metrics involves five elements:
1. Understanding the organization’s purpose
Although this part sounds basic, understanding what your organization does, whom it serves, and where it is going are the necessary first steps to any project.
The best place to find this information would be in your organization’s mission and vision statements, which should respectively tell you how to achieve your organization’s objectives and where you wish your organization will be in the future.
Understanding the what, why, and where of your organization provides a broad understanding before narrowing in on a focus.
2. Choosing the focus
Once you have established an understanding of your organization’s current state and proposed direction, it is time to create your own framework for defining and measuring success. This can be done by choosing a focus or by selecting a set of dimensions for measuring how well your organization is performing in certain areas. Some examples include a focus on suppliers, customers, the outside community, your internal employees, or the external environment.
Make sure the dimensions of your focus are clear and balanced.
3. Identifying the results to achieve
Once you have selected the dimensions of your focus, it is time to identify what success looks like in each one. By painting a picture of what success will look like, you will eventually be able to look at your organization and decide how well – or how poorly – it matches the picture.
What success will look like in each area is ultimately up to you and your organization’s objectives, but it is important to determine them from the start.
It is also necessary to define concrete success measures and time-phased targets to accomplish. Make sure that your perspectives framework properly aligns with your strategic plan and organization-wide goals.
4. Defining the actions to take
At this point it is time to evaluate your organization’s current situation, including strengths, weaknesses, and how accurately your organization is achieving the results you decided you want to achieve in step three.
This evaluation may be formal or informal, as long as it provides you with an idea of what actions you will need to take to close the gaps between your desired results and your actual outcomes. Make sure to update your strategic plan with these actions.
5. Developing the feedback system
The final step, developing the feedback system, is perhaps what makes the strategic outcome-based model so significant.
First, you must make sure that you completely and comprehensively understand your client’s requirements and needs. Then, your job is to create a system for collecting feedback from your client and data processes to assess whether or not you have met these needs.
How effective were your processes? What could be done to improve them? Welcome failures and deficiencies as opportunities to learn and improve. After all, sometimes the only way to be more successful in your organization’s future is to learn from past mistakes.
As your organization evolves to adapt to changing environments, don’t forget to make sure that your metrics are evolving too. With every, new day comes growth in technology and new metrics for success. Use this simple, five-step process to ensure that strategic outcome-based metrics are your metrics of today.