from productivity to profitability by saket bansal - lean india summit 2014
Post on 02-Jul-2015
347 Views
Preview:
DESCRIPTION
TRANSCRIPT
© 2014 iZenBridge | CONFIDENTIAL
From Productivity to Profitability
Saket Bansal
© 2014 iZenBridge | CONFIDENTIAL
From Productivity to
Profitability
By Saket Bansal, SPC
© 2014 iZenBridge | CONFIDENTIAL
About Me
© 2014 iZenBridge | CONFIDENTIAL
The Goal
We want to ………
products faster
build / sell
Image Source : Diego Barbieri / Shutterstock.com
© 2014 iZenBridge | CONFIDENTIAL
Why Agile?
• Increase Productivity
• Improved Project
Visibility
• Ability to manage
changing priorities
• Improve team morale
• Enhance Software
Quality
© 2014 iZenBridge | CONFIDENTIAL
Metric we care the most
Velocity
© 2014 iZenBridge | CONFIDENTIAL
Focus Remains
Productivity Utilization
© 2014 iZenBridge | CONFIDENTIAL
Queue Size Vs. Capacity Utilization
Source : The Principles of Product Development Flow ,
By Donald G. Reinertsen
© 2014 iZenBridge | CONFIDENTIAL
Productivity and Work In Progress
© 2014 iZenBridge | CONFIDENTIAL
Kent Beck's value stream map
Lean Software Development: An Agile Toolkit By: Mary Poppendieck; Tom Poppendieck
© 2014 iZenBridge | CONFIDENTIAL
Optimize as Whole
…getting each machine to work as efficiently as possible does not
work as well as maximizing efficiency of the production flow in its
entirety. Focus on the whole process – from the beginning
(concept) to the end (consumption).
Lean-Agile Software Development: Achieving Enterprise Agility
Alan Shalloway, Guy Beaver, James R. Trott
© 2014 iZenBridge | CONFIDENTIAL
Easy … so where is the problem?
© 2014 iZenBridge | CONFIDENTIAL
Value Stream Management
A company that maintains a single management system throughout
the value stream will see a 25 percent to 30 percent cost advantage
over competitors
Peter Drucker, Management Challenges for the 21st Century,
Harper Business, 1999, p. 33.
© 2014 iZenBridge | CONFIDENTIAL
Watch the Work Product
“Watch the work product, not the worker.
In product development our greatest waste is not
unproductive engineers, but the work products sitting ideal
in process queues. “
The Principles of Product Development Flow , Donald G.
Reinertsen
© 2014 iZenBridge | CONFIDENTIAL
Metrics
Process
Output
Outcome
Process Process
© 2014 iZenBridge | CONFIDENTIAL
What to Measure?
Cycle Time Velocity
Velocity / Capacity
……
Value Point
Delivered
……
© 2014 iZenBridge | CONFIDENTIAL
Beyond Proxy Variables
• Should we delay the release by
one month to fix the defects ?
• Should we reduce the cycle time
by adding one more team?
• Should we delay the release to
add functionality?
• Should we delay the project by
one month to get more
innovative ?
© 2014 iZenBridge | CONFIDENTIAL
The Economic View
Value
added
Risk
Cycle Time
/ Delays
Product
Life Cycle
Profit
© 2014 iZenBridge | CONFIDENTIAL
Five Economic Objectives
Source : The Principles of Product Development Flow , Donald G. Reinertsen
© 2014 iZenBridge | CONFIDENTIAL
Sample Economic Framework
0
200
400
600
800
1000
1200
1 2 3 4
Product Life Cycle Profit
Life Cycle
Profit
Product
Value
Development
Expense
EMV of
Risks
Cost of
Delay = - - -
© 2014 iZenBridge | CONFIDENTIAL
“There is nothing so useless as doing efficiently that which
should not be done at all.” —Peter F. Drucker
© 2014 iZenBridge | CONFIDENTIAL
Summary
• Organization should focus
more on profitability
• Productivity variables should
be measured with care.
• Optimize the whole
• Project situation affects
multiple variables , so do not
just measure one
• Create Economic model for
project
• Economic View helps in better
decision making
© 2014 iZenBridge | CONFIDENTIAL
References
• The Principles of Product Development Flow , Donald G. Reinertsen
• Lean Software Development: An Agile Toolkit , Mary Poppendieck; Tom Poppendieck
• Lean-Agile Software Development: Achieving Enterprise Agility :Alan Shalloway, Guy Beaver, James R. Trott
Twitter : @saket_tg
Email : saket.bansal@iZenBridge.com
Web : www.iZenBridge.com
LinkedIn : www.linkedin.com/in/saketbansal
YouTube : www.youtube.com/izenbridge
top related