Capacity or Efficiency

Jim Highsmith wrote an interesting blog ¹ on the impact of the velocity measurement on Agile programming methods. Velocity is a measurement for how fast a group of programmers complete tasks. I've seen velocity graphs at team Scrum meetings. Usually, the velocity isn't fast enough to complete all the team hoped. For most of my team it means we were too ambitious and underestimated the effort needed. This isn't a bad thing when you acknowledge we use Scrum methods because we've never done these things before. If we had done them before we could use Project Management methods. I believe Jim's concern is managers use velocity as a measurement of efficiency rather than a measurement of capacity.

If velocity is a measurement of efficiency, individuals are accountable - they aren't working smart enough. If velocity is a measurement of capacity, managers are accountable - they aren't setting priorities, hiring enough workers, or assigning work to the right individuals. I believe velocity is a measurement of capacity - we've never done a project like this before. The process is cut the project into small pieces, you concentrate on those pieces and if you're too ambitious, you push the excess on to the next round. So you keep moving toward a goal. There is no way to be efficient - we're stepping into the unknown and probably the unknowable.

In call centers we have a similar measurement - it's called average handle time or AHT. Accountants like AHT, it gives them a way to measure the cost of a call center, but is it a measurement of efficiency or capacity. For one thing, there is an uncontrollable variable - the skill and knowledge of the person on the other side. If the calls are transactional, the impact of the other persons skill can be minimized. AHT might be used as a measurement of efficiency. If the calls are technical, the impact can go way up - unless you have a very select group of  customers with a set minimum skill level, a manager should treat AHT as a measurement of capacity and hire accordingly.

1. Velocity is Killing Agility, Jim Highsmith, retrieved 8 November 2011