Performance measurement in Agile development organizations

Abstract

Performance measurement plays a key role in enabling continuous improvement in Agile software development organizations. While previous studies and experience reports have suggested various metrics, little is known on the metrics and practices that Agile organizations use to measure their performance in practice. Particularly, there is a knowledge gap regarding the use of metrics on organizational level, even if Agile development methods are being increasingly adopted also by large organizations. This thesis aims to fill this gap by investigating what kind of performance objectives Agile development organizations have on different organizational levels and which metrics are used to measure them.

The study follows qualitative research tradition and employs case study as its primary research method. The primary data consists of 10 semi-structured interviews conducted in two development units of a large multinational corporation operating in the financial sector. The interview participants represent a variety of Agile roles, from product owners to developers and executive management. The results are analysed through qualitative content analysis and triangulated by using documents as a secondary data source.

The findings reveal that performance objectives in Agile development organizations address three key performance dimensions: customer value, financial value and performance of internal processes. In addition, the results suggest that performance dimensions of collaboration and culture and innovation and learning are important in enabling performance. Objectives, metrics and their prioritization were found to differ across organizational levels. Based on the findings, the study suggests a framework and identifies best practices for selecting performance objectives and metrics in Agile development organizations.