Measuring Impact
We all like to work on impactful projects. But figuring out what that means is quite the challenge.
In our case, we talk to a lot of different groups within the company that want to work with us on new digital projects. Some of them are pretty far along their digital transformation journey, others still think that Excel is the best thing ever (which I have to reluctantly agree to, but that’s a different story.) Some already have an agile mindset, others are stuck in the past of strict hierarchies and top-down decision making. That is fine, we all come from different places.
But what they all have in common is this: When asked how they will measure the success of this new project, if they have one metric which could tell them the money spent improved their business, they have problems formulating a clear answer. Most often they tell us “We want to be perceived as being innovative!”, to which I often would like to reply “Alright then, show me how innovative you are by coming up with a meaningful measurement of the project’s success.”
But sarcasm doesn’t really fly within corporations.
According to Gardner’s Paul Proctor, the best KPIs are leading indicators, have a clear relationship to a business outcome, address a specific audience, can be understood by non-IT people and can drive action when they change from good to bad.
So let me propose an easier metric for internal projects: How many people will use it in their daily work? Multiply that by the number of times they will use it, how much time they will spend using it and some guesstimation on their daily or hourly rate, and I think you’ll have a good approximation to the value it represents and I’d say it relates to all five of Paul’s attributes of a good metric. More users means more usage, and that means the project has more impact. Nice. Easy.
But I was told recently that the number of users is a terrible metric and that the measurement of value comes from the customer’s perception of value.
Here’s the thing: Even a MVP (Minimal Viable Product) style project takes multiple engineers up to three month, so we are usually talking about a six figure cost. If people who have no clear idea of how to measure success are now tasked with the definition of a project’s value, I’d say we’ll risk wasting resources.
To address this, we either need to find a way to reduce costs in a meaningful way (perhaps by increasing the usage of nocode or lowcode tools for simple business applications), or we improve the situation by defining a simple but nonetheless easy to apply metric, then show our customers that the cost/benefit ratio isn’t looking that rosy, and help them find a different solution to their needs, besides investing lots of money into a custom developed application only two people will use twice a year. Maybe spending €1000 on a Excel training might be a better investment?
And that way we can spend more time working on really impactful projects.
#winwin #digitaltransformation #YAGNI
