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The most relevant measure in the race to success is performance, but how do you tangibly measure performance rather than rely on opinions and guessing?
The KPIs of an APMO (agile program management office) are the key performance indicators that will help you measure your success. Before we can tell you what they are, let’s take a step back and talk about some basic Agile concepts. The first thing to understand is the difference between metrics and KPIs. Metrics provide quantitative data on how well something has been done, while KPIs offer information on how well activities or processes have been executed. Both can be used to evaluate progress, and as such, it is vital to understand them before deciding which ones are relevant for your team’s goals. To make this easier, we will go over a few of the most common types of metrics/KPIs associated with APMO, their role, and why they would benefit your team.
What is the role of an APMO in portfolio management?
Good APMO methods in an organization are capable of conducting enterprise-wide agility and directing it towards specific business objectives, such as:
- Driving innovation
- Accelerated time to market
- Higher returns on investment
The overall job of a PMO is to oversee multiple initiatives, programs, and/or portfolios at various locations. This leads to the question of how effectively a single person can achieve such a widespread and challenging task. While technically a one department job, this kind of task requires a massive effort to perfectly allocate time and resources. It creates a situation in which a PMO would masterfully complete two out of three tasks, but partially lose momentum on the third one. This is where the APMO comes into play. An APMO:
- Removes constraints
- Sets priorities to optimize work delivery
- Promotes the freedom to develop solutions
- Promotes the accountability for outcomes of those solutions
- It is more in tune with customer needs
Why are KPIs important for APMOs
KPIs show overall progress and manifest goals in a more visible light. They give a clear picture of how far a PMO has advanced since their last evaluation. Easily visualized through KPIs, any PMO will be able to tell if their performance is growing or declining. With that knowledge, the department can choose which aspects of their work they should change or improve, and which ones are already performing well. Comparing overall gradings from KPI charts helps with comparing the quality and productivity of separate work aspects. For example, let’s say that the department has two tasks and one is done slightly better than the other. They will need to improve their quality on the work directed towards the task that proved to be more challenging. If afterward they get the same grade for the first task, which was good to begin with, and a new grade for the second task, which is now higher rated than the first one, they improve the quality of work directed to the first one. This way, constant growth is certain through the continuous upwards race for quality.
How to calculate KPIs from an agile perspective
To measure the KPIs of APMOs is fairly similar to measuring traditional ones. Following some fundamental performance indicators common for many departments, one can calculate the overall success and quality rate of any PMO. The only real difference between calculating the KPI of a traditional PMO and an APMO is taking into consideration that additional element of agility. As an APMO sets different goals than a traditional one, different things should be monitored. There are many ways to accomplish the same goals, so monitoring processes that someone is not even aiming to achieve is a waste of time.
The best place to start measuring an APMO’s KPIs is to set up a list of business goals aligned with predicted achievements. Once these have been set, the only thing left is to monitor them and compare the results. Although seemingly simple, this task might prove quite a chore; therefore, here is a simple starting point:
How to identify and measure metrics and KPIs of an APMO
To correctly identify the key indicators of any department, it is relevant to understand the department’s main task, as well as which other tasks they are expected to handle. This might vary from company to company; therefore, it sometimes falls to the evaluator to decide what the exact indicators might be. Each portfolio must establish the minimum metrics to track:
- Strategy implementation
- Budget alignment
- Continuous improvement
Some of the more specific portfolio metrics related to a certain set of products and services, and the tools used to track them include:
- Employee engagement using surveys
- Customer Satisfaction using a Net Promoter Score
- Partner and vendor health using surveys
- Business Agility using a self-assessment
- Portfolio Performance using an Objectives and Key results LPM self-assessment
- Value Stream Assessment using Value Stream KPI’s (see next section)
- Program predictability measures
- Time-to-Market using number of releases and cycle time data
- Continuous Improvement using self-assessments at all levels
- Quality using defunct counts, cycle time, support call volume, and escaped defects
Some important KPI’s of the APMO are related to the Value Stream. They include:
- Revenue
- Operating Margin
- Market Share
- Solution Usage
- ROI
- User and Business Owner satisfaction
- Absolute costs and ratios for new development versus sustainment
- Net promoter score
- Feature time cycle
What are the benefits of being agile when it comes to measuring and tracking performance metrics?
As expected, agility proves as beneficial for KPIs as it is for many other aspects of business organization. A few key factors lead to this conclusion, but the main and most obvious one is simply put – flexibility. An agile development team can achieve advancements a traditional one could not reach in a much longer time period. Depending on the level of agility the program is capable of showing, it can speed up processes to upgrade their productivity much faster, it can create much less friction in the transition, etc. But the real advantage is the ability to change. A very agile team can easily shift its productive power towards any newly set goal, simply diverting it from its old target, therefore losing almost no productivity in the process.
This kind of agile work requires more common KPI checks as it can quickly shift its dynamic after seeing relevant information. Regular KPI monitoring should be a key factor of its functionality and continuous improvement. The more common the checks, the more common the transfers of energy and productivity. This would usually result in lost productivity, but thanks to the perks of an agile program, this allows strategic placement of resources.
When should you start monitoring your KPIs?
There is no exact or straightforward answer to the question of when to start monitoring KPIs. It is a constantly required element that might come in handy during each situation entirely depending on context. In a perfect situation, regular KPI checkups should be held to keep track of where productivity is headed, where the most workforce is focused, and so on. This kind of information is as relevant at the founding of a company as it is in its late phases of the development process and expenditure. While in these later phases, it is not simply a useful tool to grow faster but a necessary part of the working dynamic. For a company of significant size to grow, every element needs to be taken into consideration.
Starting KPI monitoring early on to keep track of progress can ensure much better growth for any business. This provides a constant improvement in work and work conditions. It is also a morale boost, creating a “how far we’ve come” dynamic by comparing beginning KPIs with those produced recently. It provides for a constantly growing business, active engagement of all team members, and a very healthy and happy work environment that shows progress and visibly respects individual growth.
The i4 Group can be of aid if you are looking to start working with an APMO – they offer various types of training covering a range of topics that are relevant to agile methodology, which are essential to starting your agile transformation.
