e-book

Flow Metrics: A Business Leader's

Guide to Measuring What Matters in
Software Delivery

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The emergence of Flow Metrics, presented in
Dr. Mik Kersten’s the Flow Framework™, arrives
at a crucial time for global enterprises. While
the need to deliver more value from software is
well-documented, there has been no real form of
measurement that can tell organizations if their
transformational efforts are working - until now.

The Flow Metrics—Flow Velocity, Flow Efficiency,

Flow Time and Flow Load—combined with Flow
Distribution provide a window into the enigmatic
world of software delivery. These business-centric
metrics provide a common language between
business and IT so that you can make collaborative
decisions around software delivery to achieve
innovation velocity.

Use this guide to:

• Measure what matters in software delivery
• Make your transformational efforts count
• Rapidly create new products and services
that align with your customer needs and your
business' long term vision

Why Flow Metrics?

Previous attempts at measuring software delivery at scale have failed because they’re based on proxy
metrics (for example, counting the number of lines of code committed or the frequency of deployments).
These metrics represent local activities and optimizations that are not directly linked to business outcomes
such as revenue, customer responsiveness and retention. While trillions are being invested in IT, from
new tooling and talent to methodologies (Agile, DevOps, SAFe), to costly accompanying training and
consulting, many businesses and IT leaders lack the means to establish whether they are really improving.

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 682
Business Results Flow Velocity Flow Distribution

VALUE COST
flow items completed
Revenue $1,200,000 CFTEs $72,160
# of Renewals 120 Customer Acquisition $200
# of New Sales 190 40 100

30 75
QUALITY HAPPINESS 20
Avg: 21
50
Escaped Defect Ratio 5% eNPS 7 10 25
Production Incidents 11 Turnover Rate 9%
0 0

Edit View Details Help Explore Throughput Help Review Allocation

75 18 17%
Flow Load Flow Time Flow Efficiency

active or waiting flow items, on average days to close a flow item, on average % of cycle time spent in active states

20 25 40

15 15 30
Avg: 21 Avg: 11 Avg: 11
10 10 20

5 5 10

0 0 0

Help Estimate Workload Help Analyze Speed Help Find Bottleneck

What are Flow Metrics?

By crunching the objective data that is captured from integrated software delivery toolchains—across
teams, tools and departments—organizations can generate clear business-centric metrics to improve cross-
organizational decision making, helping to answer crucial business questions such as:
• How is your software delivery impacting revenues, quality and costs?
• What’s slowing your value delivery down?
• How are your DevOps, Agile, SAFe transformations performing?
• Where should you strategically invest to improve business outcomes?

These are questions that Flow Metrics can help answer along with the corresponding business results—
Value (benefit to business), Cost (the cost of operating the value stream), Quality (of product), Happiness
(engagement of those doing the work). These metrics present a new approach in measuring software delivery
value streams against business outcomes:
Flow Velocity: Is value delivery accelerating?
Flow Efficiency: Is work upstream (ideate stage) in a wait state holding up delivery?
Flow Time: Is time-to-value getting shorter?
Flow Load: Is demand outweighing capacity?

Flow Velocity, along with Flow Time, are what Carmen DeArdo—author of Standing on Shoulders: A Leader’s
Guide to Digital Transformation—calls “the money metrics”. They tell you how much business value you’re
delivering, and how quickly. While the money metrics are naturally the most appealing, the supporting
metrics—Flow Load and Flow Efficiency—indirectly impact these money metrics:
• Flow Load tells you if your work in progress (WIP) is overloading your teams.
• Flow Efficiency helps you identify where long wait states (especially upstream in the ideate/planning
stages) are impacting your Flow Time.

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 All these metrics center around the principle that all software-related
work—design, development and delivery—must be creating value for
the business. And if the work isn’t creating value, then why are you
doing it?

The Flow Framework categorizes this type of work into Flow items that represent value
creation and protection:
Features (business value)
Defects (quality)
Risk (security and compliance)
Debt (impediments to future delivery)

Flow Velocity - How Fast are We Delivering Business Value

Through Software Delivery?
Flow Velocity is a measure of productivity and is one of the “money metrics.” It tells you how many items
were completed over a given period of time (week, or month over month). Tracking your Flow Velocity over
an extended period provides historical data so that teams can see if their delivery rates have improved,
helping them to provide more accurate estimates/forecasts on how much work (and value) they can deliver.
Adapted from the Agile concept of velocity by determining how many units of work (e.g. story points) are
delivered in a specific time frame (for example, a two-week sprint), Flow Velocity applies this same concept
to the four Flow items that represent value to your customers. A simpler, less granular measure, Flow
Velocity doesn’t rely on estimation of the size or scope of work, or the priority of each Flow item. It assumes
that business prioritization and value definition has already been done and is focused purely on the end-to-
end movement of Flow items (which are representative of all of the work being delivered).

Optimizing Batch Flow

Focusing on end-to-end flow is important
because measuring software delivery
throughput is nothing like traditional
manufacturing at scale. The same scales of
economy do not apply. Because software
delivery is knowledge work, the transaction
cost (cost of deploying the software) goes
up with a large batch size due to multiple
dependencies: late feedback, code versions,
bug tracking, status reports and other
complexities. And until the product is in
production, supporting the user and obtaining
their crucial feedback to improve the product,
there is no value being realized, so the holding
cost (cost of delay) goes up. To optimize the
batch size, you should look to break down
work, striking a balance between the two costs.

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Visualize your Velocity
It’s important to monitor and track your Flow Velocity in a way that is easy for the human eye to consume.
Forget spreadsheets, you should aim to visualize the data in a way that can instantly show the viewer how
many items you delivered this month.

Flow Velocity

Case Study 1: A Simple Change Leads to a Big Win

Case Study 1: 95% support tickets eliminated

Flow Velocity in Action Case Study 2: Flow Time cut by 50% + Flow Velocity doubled

One organization, a large U.S. healthcare specialist, was suffering from a very high help-desk call volume for
a product used by 22,000 clinical practitioners that was, in turn, impacting developer capacity for feature
development. Most of the tickets were not software defects, rather a misunderstanding of new capabilities
that could be resolved through conversations. However, this overhead was consuming a lot of bandwidth
and slowing down the value stream’s ability to develop new features.
Engineering suspected that the weekly release of new capabilities and changes to workflows was too much
for this user community of clinical practitioners to absorb. The hunch was clearly confirmed by their Flow
Metrics. And by analyzing their Flow Distribution, they could see that their workload was highly skewed
towards defects, with little left for feature work (read more about Flow Distribution on page 9).
Using their hypothesis that the cadence of weekly feature releases was too rapid for the user community to
absorb, they created a simple experiment to see if they could remedy the situation. They artificially slowed
down releases to every four weeks, coinciding with a monthly newsletter. The newsletter, produced with the
communications and training departments, called out all the things that would be changing in the upcoming

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release. Maintenance releases continued to be weekly. The result of this quick and simple change was that
95% of the tickets were eliminated.

Case Study 2: Sometimes Quick Wins means Long Term Customers

A software company had a low Flow Velocity for features and long Flow Time that was impacting
improvements in customer renewal rates. Across a double month period, Flow Time took 20+ days on average
as the value stream was focused on “home runs”— big, thorny, deal-breaking features for their largest customers
— when the business could actually make lots of customers happy — and secure in their renewals — with small,
quick wins.
An experiment was hatched to dedicate one day a month to “quick wins” — mostly user interface (UI) and
usability debt items. The Product Value Stream Lead worked with the business to prioritize and in just one
quarter, Flow Time was cut by 50% and Flow Velocity doubled. Not only were they able to meet their
renewals target, but employee happiness (measured via eNPS) improved greatly, because they were able to
deliver more value faster and pay down UI debt that had been accumulating for some time.

Flow Efficiency - What Value-adding Work is Actively being Worked On?

“If you measure anything, measure time” - Dominica DeGrandis
A major part of Flow Metrics is tracking all the work that goes into planning, building and delivering a
product for the business. Just as it’s important to track how much value you’re delivering, how long work
is taking, and how much WIP your teams have, it’s also vital to track what work is actively (code, test,
automation, designing and all that creative work) being worked on to identify where waste and wait states
are holding up value delivery. Flow Efficiency helps determine the proportion of your Flow Items (features,
defects, debt, risk) are actively being worked on.
If your Flow Efficiency is low, it’s an indication of waste – items stagnating in a wait state for some reason.
You can see a domino effect: the more items you have waiting means the more WIP (Flow Load) and the
larger the queues in the value stream. As queues grows, waste increases through overutilization and context-
switching, adding further delay. Using the Flow Efficiency metric, you can readily see excessive wait times
and work to reduce or eliminate bottlenecks.
It’s important to note that this metric is based on Flow Time (elapsed time work takes to be completed
from the moment it enters the value stream), not cycle time (the time it takes to complete a single step in
the manufacturing process). Flow Efficiency, therefore, captures wait time both upstream and downstream,
monitoring the whole value stream and process from end-to-end.

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Flow Efficiency in Action

Case Study: When is Work Really “Done”?

An enterprise’s value stream often comprises many work states and transitions. So many variations can make
it extremely difficult to identify where work is actually waiting. It’s important, then, to be able to abstract this
information. The Flow Framework enables you to do that by enforcing four key states: new, active, waiting
and done.
One large U.S. healthcare organization was able to use the Flow Efficiency metric to improve their
processes. While they had a strong Flow Velocity, the team happiness was very low with complaints around
too much context switching.
By using Flow Metrics in relation to feature work, they could see that there was high Flow Load and strong
cycle time. Curiously, their Flow Efficiency indicated that there were nearly no wait states. By digging
deeper, they could see that many work items were stuck in an active state, with a team of eight working on a
staggering 120 “active” items.
In this story, which was similar to another story at a large financial services firm, the Flow Efficiency was
actually a false positive. It highlighted that they needed to rethink how they tag work, enabling them to
improve the way they work. This is something they would not have focused on without the visibility provided
by Flow Metrics.

Flow Time - How Fast are We Delivering Business Value?

Every second counts in software delivery. That's why Flow Time — the other “money metric” alongside Flow
Velocity — is so important to IT and business leaders. A measure of speed and predictability, this metric
tells you what your time to value is, helping you answer that frequent complaint, "Why are things taking so
long?” Crucially, this metric enables you to be more accurate with your time-to-market forecasts, improving
customer relations and retention, as well as supporting the business in its financial planning.

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 Flow Time

Flow Time helps clear up the confusion that lingers around time measurement in software delivery. In
Lean manufacturing, there are two key metrics used for process improvement: lead and cycle time. The
former measures the entire process, from when a customer first makes a request to completion, and is all
the customer cares about. The latter refers to the time it takes to complete a step in the process (such as
development). The problem with these metrics in software delivery is that they’re too ambiguous. Delivery
lead time, for instance, is used by DevOps teams, referring to code commit to deploy, measuring only the
delivery pipeline on the “right side” of the value stream (the Release stage).
Instead of developer-centric measure of time, we need a customer-centric measure like Flow Time, which is
simply the elapsed time work takes to be completed from the moment it enters the value stream (approved
by business stakeholders) to completion (end user obtaining value from product), including both active and
wait states, including weekends and off-hours. By analyzing trends over time, the metric can tell you if your
acceleration investments are actually improving your time-to-value. Flow Time appeals to business and
product owners as it can tell them how long a request takes to be completed once it has been approved. It
enables you to be approximately right, instead of exactly wrong.

Flow Time in Action Flow Time reduced by 50% across two-month period

Case Study: Cut Waste in your Processes for Happier Employees

One software company observed that Flow Time for defects was too long. This directly impacted the Flow
Load, with the organization identifying a high defect load across a three week period. Flow Time to repair
was long and the happiness of both users and testers was at risk. The Value Stream Architect examined
the underlying factors and found the bottleneck. They found the longest wait state was in “code review.”
Working with the Engineering Lead, they decided to initiate a trial whereby they release low risk defects
without a code review, while maintaining the process for more complex code changes. They then monitored
the reopen rate to see if it had a negative before doing it at scale. Flow Velocity went up, Flow Load went
down (ensuring teams didn’t burn out from context switching) and Flow Time was reduced (from 22 days to
11 days over a two-month period).

Flow Load - Is Demand Outweighing Capacity?

“Too much WIP is the enemy of productivity.” Dominica DeGrandis
The happiness and engagement of the people who plan, build and deliver software has a direct correlation
on the productivity and quality of their work. Combined with the rise of burnout in IT staff, it’s not surprising
that there’s a renewed focus on ensuring teams are not being overburdened with the digital demands of the

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 Flow Load

business. After all, you want the people who best understand how to create value through software to be
empowered, healthy and motivated. Flow Load is an important measure in that respect — as well the key to
understanding problems in both Flow Velocity and Flow Time.
Flow Load measures the number of Flow items being actively worked on in a value stream, denoting the
amount of WIP. If the total number of items being worked on (either in an active or waiting state) in a value
stream is too great, there will be a negative effect on output. Tracking Flow Load shows changes in Flow
Velocity and Flow Time, showing the business the point at which taking on too many Flow items at the same
time reduces output.
Excessive Flow Load can be correlated with with inefficiency. As Donald Reinertsen emphasizes in his book
The Principles of Product Development Flow, when WIP is high, queues are high. By tracking Flow Load,
you can set a level that maximizes Flow Velocity and minimizes Flow Time — such as increasing workload
for seasoned teams working on a mature product value stream, but reducing it for a smaller team on an
exploratory product.

Tracking work through Flow Distribution

All product value streams should have a healthy and dynamic mix of these Flow items in order to maintain
Flow Velocity and accelerate the delivery of business value. That’s where Flow Distribution comes in. By
tracking the proportion of Flow items, they can can be adjusted to meet the most pressing business needs,
as well as provide data-driven analysis for important discussions around trade-offs with the business.
As Dominica DeGrandis, author of Making Work Visible puts it, "A decision to do one thing is a decision to
delay something else." For example, high Flow Velocity for features for a new product release is great, but
often it comes at the expense of working on other items, like bugs and technical debt, that will undermine
the value of the product moving forward.

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Flow Distribution can also be set for an entire organization in order to deliver a high-level business goal.
Bill Gates did this, for example, with Microsoft’s Trustworthy Computing initiative, focusing the company on
risk and security improvements. If your organization is under threat from a more nimble company, for exam-
ple, you may want to move from an old platform to the cloud, and optimize software delivery to bring new
features to customers rapidly. This measure is tuned to the investment necessary for success in a particular
value stream – and it is also the metric needed for refining investments over time.

Tailor your Value Stream to Deliver Business Results

At Tasktop, we saw a pattern emerge while working on Tasktop Hub. Creating the initial release required
tremendous focus upon delivering the needed features in order to successfully launch. However, investing
in more new features meant taking on more technical debt. Seasoned product managers will be familiar with
this trade-off. For Tasktop, the time-to-market was more important than delivering new features faster after
the initial release, so we decided that taking on the additional debt was the best path for this value stream.
From our work with numerous Fortune 500 companies, we knew that post-release Flow Distribution could
reasonably slow and so we were comfortable with the decision. Technical debt tends to compound and
so organizations making this decision should be prepared to pay the piper at some point. You must decide
whether this is a sustainable practice for a particular product. It is the business-level understanding of the
current and future Flow Distribution that allows adjustments to business initiatives to be made. Its power is
that it allows business leaders to do the same kind of planning that product and engineering teams already
do as a matter of course.

Request a Flow Framework Executive briefing for your organization

Global enterprises require a better way of measuring the business impact of their IT investments. Moving
away from managing IT as a set of projects and as a cost center, the Flow Framework bridges the gap
between business strategy and technology delivery. By creating an organization-wide feedback loop, you
gain access to powerful Flow Metrics for data-driven continuous improvement that tells you if the needle is
moving in the right direction.

The Flow Framework centres around four key questions around your product delivery:
• Who is your customer? • What are the value streams?
• What value is the customer pulling? • Where is the bottleneck?

Adopting a value stream approach forces conversations around the flow of value and the work that relates to
it. By connecting the team and tools who plan, build, deliver and support your software products, by measur-
ing the flow of business value they create and protect, and correlating it to business outcomes and strategy,
you can:
• See the end-to-end flow of business value in real-time
• Instantly spot bottlenecks before it’s too late
• Test hypotheses based on real-time data from every value stream
• Rearchitect your organization around maximizing flow for true Enterprise Agility

With a steely focus on business results instead of activities, the framework focuses on helping you track,
manage and improve your investments in automation and Agility to determine if you really are getting faster
at responding to your customers. And if not, provide insights into what you need to do to fix it.

Request a Flow Framework Executive briefing to begin your Project to Product journey.

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 Half of the Fortune 100 is utilizing Tasktop and realizing significant value from the
Flow Framework™ as they transform from project to product.

Tasktop Viz introduces turnkey

metrics to improve your cross-
organizational decision-making,
helping you:
• Implement the Flow Framework™
(created by Dr. Mik Kersten, author of
Project to Product, founder & CEO of
Tasktop)
• Support a smooth transition from
project to product
• Master software delivery at scale
• Survive digital disruption in the age of
software.

Integration Patterns: Architecting your value

stream for speed and quality

Discover More Which Integration Solution Is Right for You?

Value Stream Management and Value Stream

Mapping - A complementary approach to
delivering greater value through software

ABOUT TASKTOP
Tasktop® is the leader in value stream integration and visualization. It catalyzes the shift from Project to Product for global enterprises and
governments, enabling them to innovate and thrive in the Age of Software. Its software development offerings leverage the Flow Framework® to
create customer-centric value streams and measure end-to-end business outcomes. Unlike data lakes and custom reporting solutions, Tasktop’s Flow
Modeling ensures correct, scalable and turnkey Flow Metrics. And unlike Agile or IT tool vendors, Tasktop’s Flow Fabric enables end-to-end visibility
across all leading vendor tools, maximizing investments in tool platforms, enabling the best-of-breed and future proofing tool chains.
tasktop.com

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