Evidence-based management (EBMgt or EBM) is an emerging movement to explicitly use the current, best evidence in management and decision-making. Its roots are in empiricism and have become widely practiced in the medical field and in policy-making. These are quality movements aimed at applying the scientific method to evaluating practices with the goal of optimization instead of relying on what Gunther Verheyen, a pioneer in Evidence-based management, describes as “guesses, assumptions, hierarchy, gut feel, seniority, and other opaque and subjective factors.”
Evidence-based management takes cues from ‘evidence’ that properly illustrate the impact that the software is having on the market it’s being released in, keeping its users and its competitors in scope, and reflecting the value the software brings to the company. Evidence of the value of software is collected on the outcome of development. The growth and survival of companies that sell software as a service depend on the quality of the software that they deliver with their services. With evidence at hand, revision and optimization of a company’s practices will positively influence any company’s value. Verheyen states that “managerial decisions over the creation of the software, the selected process and practices, can then be made against the assumption of improving the value. Assumptions obviously need to be frequently validated, hence the need for regular updates of evidence, the detection of patterns, and the correlation with the adoption of process and practices as reflected in secondary evidence.”
There are many methodologies and approaches to implement evidence-based management, and they all share these characteristics:
- identify and diagnose organizational compatibility with the proposed update by analyzing current processes and the value of implementation
- discuss and test a theory that will prove that the proposed update will be effective, then identify the impacts of the update if it is implemented
- the conscious creation and inclusion of a counter-fact: what would have occurred if the update had not been implemented?
- measure organizational value by outlining and quantifying current value of process and software, opportunity cost of implementation and its effects
- if the proposition seems optimal and beneficial, beginning iterations of implementation of the proposed update
- examination of both direct and indirect effects that occur because of the update
- identification of the uncertainties and controls for other influences outside of the update that may have an effect on the outcome of implementation
- testing and implementation in other projects, where necessary
Evidence-based implementations should flow in a cost-benefit framework created to estimate a payoff if the update was to be implemented. Since there is a difficulty in quantifying some effects and outcomes of the update, it is mostly focused on whether or not benefits will outweigh costs of implementation, like time allocation. Verheyen states that, “Software development delivers products that are often critical, to society, and for the survival of its producing organizations.” It’s important to employ evidence-based management in software development in order to mitigate risk of loss of important capital, data, and even lives. Verheyen does not oust the importance of using intuition and experience in software development, but rather calls for use of evidence-based management to compliment it. He points out that, “unfortunately most organizations are overly focused on how the software is being produced, not on the outcome. In terms of value of software, such evidence is of secondary importance. It serves internal organizational purposes only, with little meaning over the outcome.”
With the right mindset, evidence-based management can ensure that your company is making the right moves, at the right times, for the right reasons.