The most cited goal of being agile is speed, and yet this measurement is often the most poorly defined. How fast do we need to deliver value to our customers, and what are the advantages? Should we target a one-month turnaround time for new requirements, or one week? How much additional revenue will we generate if we reduce our delivery time by half? How about support speed, should we aim for 5 minutes, 1 hour, or next business day?
There are no easy answers to these questions and yet without a clear understanding of how quickly we need to deliver value, an organisation can spend significant time and effort on time-reduction initiatives, only to find that their revenues, or customer satisfaction levels are still the same.
We recommend three considerations for establishing a sensible target: price, cost, or competitive advantage.
How much is the customer willing to pay?
The price that a customer is willing to pay is justified by the value the customer expects to receive in return. This may be a rational justification (e.g. time/cost-savings), or an emotional perceived-value (e.g. branded products).
It is important for the Agile Team to work directly with the Customer to understand how they justify pricing, before working on solutions. This is to avoid developing offerings that the Customer would never consider.
Will it save us money?
Review your product, or service efficiency by comparing the:
– costs of long manual processes and legacy software/infrastructure, with the
– cost-savings from increased automation and lean process reengineering
If the latter is more cost-effective overall, you may justify an efficiency enhancement that provides an inherent increase in speed.
How fast is our competition?
Speed can be a competitive advantage for both profit and non-profit organisations. Both of whom can utilise speed to increase brand reputation and market-share. Even government agencies that are not driven by market-share can increase their domestic and global reputation by delivering value quickly to citizens and foreign investors.
One difficulty that will need to be overcome is where to obtain the baseline data on how fast competitors, or similar organisations are. Market research organisations may have industry benchmarks that can be utilised; however, you must be sure to validate the data to conduct a reasonable ‘apples to apples’ comparison.
Time to Value
Time to value (TtV) is an end to end measurement. From the customer, to the customer. Each product, or service will have specific value streams that enables value realisation for their customer. Common examples include:
- Granting Access (e.g. signing-up, onboarding)
- Providing Something New (e.g. major or minor changes)
- Getting Support (e.g. help, assistance)
- Obtaining Information (e.g. FAQ, User Guides)
- Termination (e.g. ending a subscription, offboarding)
Each value stream can be measured, from the time the customer makes the request, to the time that value is realised. Note, that value realisation occurs after value delivery and must be confirmed each time.
- Time to start using
- Time to resolve
- Time to implement
- Time to fulfil
- Time to terminate