Flow Efficiency And Why Most Software Teams Are Inefficient

[Dave O_Donoghue]

The title might sound provocative — but it reflects a very real truth: most software teams are far less efficient than they think.

While metrics like velocity and cycle time are useful, flow efficiency uniquely emphasises how much time is spent doing actual work versus time spent waiting or experiencing delays. And that matters — because as teams and organizations scale, so does the risk of process inefficiency, hidden blockers, and slow delivery.

What Is Flow Efficiency and Why It Matters

Flow efficiency measures the percentage of time a work item spends in value-adding activity compared to its total time in the system. In simple terms:

Flow Efficiency = (Active Work Time) ÷ (Total Cycle Time)

Let’s say ten issues spent a combined 200 days in your delivery system — but only 80 days of that time were spent in active work (like development or testing). The flow efficiency is:

80 ÷ 200 = 40%

That means 60% of the time was spent waiting — often in queues or handoffs like “Ready for QA,” or during unexpected blockers.

Why the Numbers Are So Low

You might think 40% is low. Here's a reality check:

In all my experience calculating flow efficiency for teams new to flow metrics, the best score I’ve seen is 47%. Most are significantly lower.

So why is that?

It’s not that teams aren’t working hard — often, it’s the opposite. Low efficiency is usually caused by too much demand on limited capacity, poorly designed workflows, uncontrolled dependencies or an uneven spread of capacity across the system. Teams are constantly busy, but work waits in queues, transitions, or handoffs — creating hidden delays.

Once teams see the waiting time in their system, they can begin to fix it. But until then, these inefficiencies stay invisible.

How to Calculate Flow Efficiency in Jira

To calculate flow efficiency accurately, you need to know how long each issue spends in each status — and whether that status reflects active work or waiting.

You also need to account for “blocked” time — when an item is technically in a working state, but progress has stalled.

Evaluating just one item isn’t useful. You need a broader view across all work moving through the system to see patterns and systemic waste.

How to Track Flow Efficiency in Jira

If you have an Atlassian Analytics license, good news: it includes Value Stream Management (VSM) dashboard templates containing several flow metrics, including flow efficiency.

If you don’t have a license, here are three alternate approaches to consider:

1. Jira Server + SQL Queries

If you're on Jira Server/Data Center, an admin can extract time-in-status data from the underlying database using SQL. You can then calculate flow efficiency manually in spreadsheets.

2. Manual Export + Spreadsheet Analysis

Use a Marketplace app that exports time-in-status data. This can then be processed in a spreadsheet to calculate flow efficiency and other metrics.

This is the approach I used for years — and it became the motivation behind building Delivery Flow for Jira, a lightweight way to visualise flow efficiency directly inside Jira.

3. Jira Automation + Custom Fields

Use Jira’s built-in automation rules to record timestamps as issues enter and exit key statuses. Store this timing data in custom fields, and use it to calculate active vs. total time per issue.

This is a viable and low-cost option, especially for teams that want more control over what they track without relying on external apps.

While it doesn’t work retroactively and requires effort to configure per workflow, it can be a powerful, lightweight solution for ongoing flow tracking.

Why This Matters

Teams often obsess over metrics like velocity or cycle time because they provide meaningful insights into how long work takes.

However, unlike flow efficiency, these metrics don’t reveal the real problems inside your delivery process.

Flow efficiency surfaces the invisible delays — the queues, blockers, dependencies and poorly designed workflows — that slow your team down.

It gives you a clear, actionable picture of what needs to be fixed so you can deliver value even more efficiently to your customers.

Final Thought

You don’t need a massive VSM suite to understand where your process slows down. Pick one method from the list above and start tracking flow efficiency across your Jira projects.

It’s a critical step toward building a faster, healthier, and more predictable delivery system.

Happy flowing 🚀