Agile Earned Value Metrics
For agile teams, earned value metrics is simple a way to measure and monitor an agile team. As long as the metrics are not used to drive performance but, instead used to understand throughput they can be a powerful aid. We will call this Agile Earned Value Metrics (AgileEVM).
In scrum or agile, we typically have a story as the fundamental unit of work being asked for. A team will then work on this request to complete the story. Stories are used to drive team work. With stories (chunks of work) we typically see a notion of story points for each story (story points is a relative sizing mechanism used to compare one story to another and gain an understanding of size over many small bites of work). Each story has a sharp definition of done or exit criteria that can be assessed for completion. Stories are shaped and written by analysis and through practice will tend to become roughly the same size chunk of work overtime. With story points we can form a stable baseline for understanding earned value metrics.
Our approach will be to understand our effort by using AgileEVM implementation according to the product backlog at hand and the demonstrable skill of the team. It is the demonstrable part that hinges EVM to an agile effort. Demo or demonstrably done in Scrum is formally called called Sprint Review in modern scrum. With a focus on stories we have AgileEVM. Note Value: is now anchored as a foundational concept by focusing on satisfying the request from an outside the team source (requests in agile projects are stories). By being fairly small or bitable chunks of work we have something that is granular enough to measure and allow us to pursue answers to the questions the business cares about.
- Am I getting what I paid for?
- Am I getting it as fast as I expected?
- How much value am I getting?
With the patterns of stories and story points we can setup and make use of the concepts of Earned Business Value. In Scrum, the Scrum Master or Agile Project Manager would be key to getting this setup and monitored so that we can inform decision making.