Use Process Efficiency Metric to Compare Team Performance Instead of Velocity

In Scrum, we measure performance using velocity. However, one team’s velocity cannot be compared to the velocity of another since it is a relative measure that is only of meaning to the team using it. So can we objectively measure the performance of teams?

To help teams reduce waste and improve their delivery speed, they need to focus on measuring and optimizing Process Efficiency. Process Cycle Efficiency is a metric that comes from Lean Manufacturing. It describes the relative amount of time spent on adding value vs. not adding value to the product (or story).

We need to define two metrics first to get to the Process Efficiency metric:

The first metric is Cycle Time. Cycle Time represents the total amount of time spent on realizing the story. To calculate Cycle Time, teams must keep track of when they start work on the story and when it’s in production.

The second metric is Interruption Time which is the sum of the time the team was interrupted, where each interruption is measured in working hours. Calculated for each interruption as Time Work Resumed — Time Start of Interruption.

Examples include, but are not limited to:

1. Meetings;

2. Manual Testing;

3. Manual Deployment;

4. Working on something else than the story;

5. Non Team members that prohibit the team from adding value (e.g., security checks).

Process Efficiency is defined as the time spent adding value to the story as a percentage of the total time spent on the story. Calculated as: (Cycle Time — Interruption Time) / Cycle Time

So, for a team that has worked on a story from Monday 9 AM to Friday 5 PM the Cycle Time is 40 hours (given an 8-hour workday). Assume that the team had 5 meetings which took a total of 5 hours. And they had to wait for approval from an external party before they pushed their product to production for 10 hours. In this example the process efficiency is (40 — (5+10)) / 40 = 25 / 40 = 5/8 = 62.5%.

Process Efficiency is a team metric that helps teams get an insight into how efficient they are in realizing their stories. It can vary greatly depending on a number of factors, ranging from 0% to 100%. Process Efficiency can, together with Lean practices, help a team to improve their way of work and become more efficient.

Source: Process Efficiency — Adapting Flow to the Agile Improvement Effort; F. Verbruggen, J. Sutherland, J. Martijn van der Werf, S. Brinkkemper, A. Sutherland, 52nd Hawaii International Conference on System Sciences, Wailea, Hawaii, 2019