I’ve started reading “The Goal” again by Eliyahu M. Goldratt for probably the 7th time now. Every time I read it I always find it fascinating and find there are many things to take away and ponder. Right now I’m pondering just some of the high-level stuff from the context of IT. Now if you’ve read “The Phoenix Project” by Gene Kim, Kevin Behr and George Spafford, then you will probably appreciate the limitations and issues in doing this. However, I have my reasons which are based around the idea of making progress towards a more ideal way of working rather than by trying to just enforce a new way of working on a system (something each of the books encourages and portrays).

So, let’s start from the top.

The Goal

The Goal is pretty much always the same, to make money. There is nothing new here and nor is there any need to vary the language

Measures

“The Goal” sets out 3 key measures to use to help determine whether more money is being made: Throughput, Inventory and Operational Expense. There are some definitions provided for these from “The Goal” which I will outline below, but I will also add a few comments which put them into the perspective of IT and Software.

Throughput

Throughput is the rate at which the system generates money through sales.

In terms of IT this could be considered as the rate of exercising a complete and full vertical slice of money-making business functionality which completes in full.

Inventory

Inventory is all the money the system has invested in purchasing things which it intends to sell.

There are a few comments here.

Firstly, the “thing” referenced is a full vertical slice of business functionality which makes money. “Purchasing” means getting the feature built ready to be exercised.

Inventory, therefore, is the money spent (invested) creating (purchasing) all features (things it intends to “sell”) that are both feature complete and in progress.

Operational Expense

Operational Expense is all the money the system spends in order to turn inventory into throughput.

For example:

  • Servers
  • Electricity
  • Marketing
  • Monitoring
  • Essentially the cost of running and selling the “thing”

Close

I’m going to leave this here for the moment tbh. I need to think a little more about some of this and make sure I’m happy with it, so please consider this a living document and feel free to check back soon. If you’d like to know when I post updates, then please send me an email indicating as such (I don’t send out spam and I don’t do marketing. The day I do, I will use different means for people to consent to that and your details will never be added to any marketing lists without your consent).