Evidence Based Management (EBM)
Measuring value to enable improvement and agility
What is Evidence-Based Management?
Evidence-Based Management (EBM) is a framework organizations can use to help them measure, manage, and increase the value derived from their product delivery. EBM focuses on improving outcomes, reducing risks, and optimizing investments. It is developed and sustained by Ken Schwaber and Scrum.org.
Why Evidence-Based Management?
Software is an integral part of most people’s lives, and companies who have never considered themselves to be players in the tech market are competing on their software capabilities. For benefits such as better alignment of IT and business stakeholders, increased predictability, and lowered risk, Scrum and other agile methods of software development have become the de facto standard for most organizations. However, Scrum and agile adoption is neither complete nor as effective as it could be with agile practices being forced into organizations that are neither adaptive nor Agile in nature. Being able to turn these benefits into a competitive advantage for the organization will only be possible when changing the organizations that agile IT operates in.
Agile organizations know that frequent inspection of results limit the risk of disruption. Their leaders manage investments based on ROI and value. At the same time, they work to influence the organization to create a culture that allows it to take advantage of opportunities before their competitors do.
Evidence-Based Management helps organizations put their right measures in place to invest in the right places, make smarter decisions and reduce risk using an iterative and incremental approach. This empirical method alongside the agile principles and values enables successful steps of change for the organization.
Start by looking at Value
Organizations invest in agile processes, tools, training, and coaching, but how much are they getting back? Has product delivery improved? How much happier are customers? Are employees satisfied and enabled? Traditional metrics might give you insight into improvements of operational efficiency but the real conversation is about the value created for your organization by the improved processes.
EBM looks at 4 Key Value Areas. Defined measures will vary by organization, but all 4 areas contribute to an organization’s ability to deliver business value. KVA goals and example measures for each area are further defined in the EBM Guide.
|Key Value Area (KVA)|
|Current Value||Measures value delivered to customer or user today|
|Unrealized Value||Measures value that could be realized by meeting all potential needs of the customer or user|
|Ability to Innovate||Measures the ability to deliver a new capability that might better serve a customer or user need|
|Time to Market||Measures the ability to quickly deliver new capability, service, or product|
Understand your capabilities to determine next steps for improvement
Embracing agile ways of working, such as iterative development, continuous integration, and test-driven development are only the first steps of an organization’s ability to deliver high quality software to its customers. Optimizing value delivery requires integrating the work of multiple Scrum Teams and ensuring that the entire organization can absorb the frequent product innovations coming from those teams.
The key to understanding results and measures is in the ability to inspect and adapt based off that information. Examining the 4 Key Value Areas in EBM will help shine a light on an organization’s capabilities and product delivery practices. It drives the ability to make informed and evidence-based decisions for organizational learning and continuous improvement. Creating a culture of continuous improvement puts organizations on the path to competitive advantage.