What are all the metrics used to find success or failure of Scrum Model in a company?

Question

1. How to conclude whether Scrum model fits for a company or not?
2. How long will it take to see the effect for a company of size 100 (employees)?
3. Will it effect in company's profit directly?
4. How to calculate profit or loss of a company after agile implementation?

Answer 1

1. There is no one answer to that. You will have to experiment or hire an experienced scrum coach to determine that with you.

2. I noticed immediate effects in almost all my scrum implementations.

3. Yes, good or bad... Scrum can do lot of pain to your organization if wrongly implemented or not appropriate to your company (see point 1)

4. You will have to measure things before, then measure things after

Answer 2

1. Scrum can scale well by adding a Scrum team composed of lower level Scrum teams. My Scrum coach said they had success with implementing Scrum in huge teams (500 people). I am guessing Google would be an example of this success (I don't know how many teams are organized as Scrum teams though, this information could be misleading).

2. Effects should be visible immediately.

3. It should be reflected in profits. Scrum is a risk reduction framework. It doesn't guarantee that you will be more productive, rather, it guarantees that problems will be visible, and waste will be reduced. Furthermore, results are measured using ROI, which should promise visible effects very soon.

4. Measure ROI before the transition to Scrum, but also measure things like job satisfaction, overtime hours, customer satisfaction, stakeholder satisfaction. If you are doing things in a fun, dynamic and fluid process with greater developer-customer-stakeholder satisfaction, even if the ROI is the same, I would think that this is a significant gain :)

Answer 3

1. Agile is a good fit for any company which has high uncertainty and needs to respond quickly to change. (If your company isn't doing that then you're probably going to be bought out soon by someone who is.) See "Waltzing with Bears" by Tom DeMarco and Timothy Lister if you want to know why embracing risk and uncertainty is a good thing.

2. There will be immediate effects. The first effect is usually fear. Transparency's a hard thing to adopt in a lot of organisations, so be prepared for a bit of push back. In companies where the adoption has been supported by appropriate high-level management practices, I've seen the fear dissipate fairly quickly. In companies where managers are command-and-control, or where bonus structures are designed to reward individual rather than collaborative efforts, you'll likely see the fear persist. Yes, effects should be beneficial, and should be visible immediately, but to say that this always happens would be disingenuous.

3. Absolutely, your profit and loss will be affected. You'll be in a position first of all to respond to innovations in technology and changes in the market, and secondly to create innovations of your own. This will help you find differentiators for your company - things that you do that nobody else does - and keep finding new differentiators as other companies inevitably catch you up. Again, see "Waltzing with Bears".

4. What NeoDesign said. You can't count the value of making the world a happier place to live, even if that also turns out to be a profitable thing to do. You might also grab a copy of David Anderson's "Agile Management for Software Engineering", which is full of neat equations for calculating the stuff you can count.

Edit: To answer your title question, I've been using Dreyfus models of Agile skills to measure the success of a transformation. With five levels from 1 to 5 - Novice, Beginner, Competent, Knowledgeable Practitioner, Expert - teams seem to be successful on an average of 3.0. I've suggested to clients that they can get rid of all the coaches at that point (I'm a coach). 2.5 is possible but painful. You'd have to get someone with experience of successful Agile skills to help you define the models.

You could also just measure the culture using the same model and the 5 XP values - Respect, Communication, Simplicity, Feedback, Courage. Most human beings score a 2; anti-patterns are a 1. A successful Agile team display more of these values than most people. It's a cheap way to check that your cultural change has happened, which I find leads to an easy Agile adoption if it hasn't already materialised. It's really difficult to game these metrics without getting huge benefits anyway, so I love these measurements.