The best descriptions I have ever heard for throughput or time to market were: “Customer to Cash” and “Concept to Cash”.
Minimizing the time between the customer go ahead and payment is an increase in revenue. Analogy: Right now you get paid a certain amount every 2 weeks let’s say. If you can find a way to get paid that same amount ever 12 days…every 10 days…if you get paid every 7 days you now make twice as much. Same for a company.
Reducing time from “Concept to Cash” gives you a serious competitive edge. The ability to put new products on the market before your competitors, the ability to adapt to changes in the market to keep your product relevant.
TTM is a holistic metric. It includes both the tech and biz parts of your company. It is an opportunity to get them to work together to be more profitable and competitive. This does not mean other metrics are completely useless but all too often companies focus only on the techies and how long it takes them to build when in reality the waste between steps have more impact to the throughput of the whole system.
Have the whole company see its throughput as something everyone is responsible for, have the whole team row in the same direction.
“If you could get all the people in an organization rowing in the same direction, you could dominate any industry in any market, against any competition” – John Kotter, Heart of Change
by Michael Badali