Value stream management is needed now more than ever — here’s why

Agile transformation brings benefits like increased innovation, lowered production costs, and improved responsiveness to rapidly shifting market demands. However, organizations should recognize that agile frameworks like DevOps, Scrum, or Kanban cannot by themselves align teams towards more efficient value creation. 

Instead, a framework is needed that can thoroughly examine how value is created within an enterprise and how it travels to that business’s end customers. This perspective reveals needed end-to-end process optimizations that align all teams and activities behind greater value creation. These new end-to-end processes reflect the enterprise’s true “value streams,” business lines that drive revenues, reputation, and other long-term performance goals. 

Value stream management (VSM) is the only effective means of radically rethinking end-to-end processes from the perspective of their customers, and then managing those revised processes effectively. Organizations that embrace VSM channel every effort towards their most important business outcomes. A VSM platform supplies the technology that ensures the organization has the tools, views, and information needed to stay on the path towards realizing this vision.

The past few years have been marked by unpredictable business disruptions and rising industry competitiveness. If they want to survive, businesses must be capable of understanding what factors matter most to their customers. They must then be prepared to align all activities towards delivering on these factors, time and time again. To do that, they need value stream management.

VSM addresses the challenges that can lead to digital transformation dissatisfaction

Our Digital Transformation Progress Report found that 79% of organizations say they’re at least halfway through their digital transformation efforts. But, while 95% of respondents reported their overall transformation program was going well, a staggering 91% say they would like to “get more” out of their initiatives. In the same vein, 54% of respondents report that the transformation may have hurt their bottom line, and 49% report that they aren’t getting the positive results they expect from their digital transformation efforts.

When polled about the key challenges preventing digital transformation from delivering the results they expect, respondents said the following:

• Lack of visibility within the pipeline and between organizational silos
• Lack of clear, objective metrics reporting with context from the entire value stream
• Process inefficiencies, bottlenecks, and increasing organizational complexity
• Difficulty adhering to processes, governance, and compliance mandates
• Challenges with ensuring the quality, integrity, and security of software prior to delivery without slowing release velocity

There are many reasons that so many businesses encounter these same challenges. And one of the biggest reasons is that organizational leaders lack visibility into specific processes, departments, and teams. Instead, each one tends to operate within its own silo. Understanding all the steps needed for an end customer to receive some form of value from inter-corporate activities — i.e. tracking an individual value stream from start to finish — can be difficult. If value streams aren’t understood and visibility between silos is limited, managing value stream-based outcomes can be impossible.

What organizations need is a clear guiding light that can help them restructure everything around their actual value streams — not just departments and teams and activities, but the entire organization’s way of thinking. Value streams are the most effective method of doing this because they reflect how value is created, maintained or destroyed, and ultimately delivered to customers. A value stream viewpoint also reflects the ways value is created or diminished from the view of internal organizational stakeholders

The power to re-align teams and processes towards value streams — definite contributors to enterprise value, as opposed to arbitrary factors — is a game-changer. Gartner predicts that 70% of organizations will adopt VSM to improve DevOps pipeline flow within the next two years Gartner even goes as far as to describe VSM as the “future of DevOps.”

VSM has the potential to not just replace existing legacy holdout practices but to reinvigorate organizational activities while keeping them aligned, regardless of pre-existent silos.

How a VSM platform makes VSM goals achievable

The concept of value stream management is a human one that must ultimately be guided by human decisions and priorities. In other words, VSM isn’t so much a specific workflow or framework, or piece of technology. It’s a way of rethinking everything — ditching the assembly line mentality of the early 20th century, while also bringing the agile revolution of the early 21st century in line with our most dire business priorities.

But, even if VSM is more of an idea than a piece of technology, true VSM is made much more feasible with the right platform available. 

A VSM platform capable of delivering on digital transformation promises has the following criteria:

• Purpose-built solutions that represent or embody qualities of best-of-breed applications for their respective DevOps discipline
• End-to-end integrations, including linkages between pre-existing software investments
• Automated data import from systems of record, enabling near-real-time metrics monitoring
• Cross-functional controls bridging multiple steps in the pipeline, with multiple views that obliterate siloing and fragmentation
• AI/ML-driven analytics, capable of delivering game-changing insights, guiding decision-making, and forging a path towards greater automation

The overarching theme is that a VSM platform should tie everything together. All activities across each respective value stream, agnostic of what traditional “department” they take place in, should be represented. Management should be capable of monitoring and controlling key activities across an individual value stream from within one convenient dashboard. Data should be leveraged from across the entire process and irrespective of organizational silos, providing a single source of truth for contextualized KPIs.

Overall, the organization should be capable of not just tracing value as it flows but also controlling it, seeking the outcome of maximum value delivery while keeping things efficient and encouraging proactive innovation.

The world is unstable, unpredictable, and unreliable — VSM means your company doesn’t have to be

All organizations are now digital organizations, whether they realize it or not. Regardless of the products an organization offers, many of its most critical activities now take place digitally: supply chain management, point of sale, customer support inter-corporate communication, and team collaboration. The pandemic proved that organizations can no longer survive clinging to the “old way” of doing business. Remote work and sudden business environment disruptions forced many enterprise activities — and consumer activities — online.

In the midst of all this uncertainty and instability, one thing is certain: each enterprise must understand how it creates, maintains, and delivers value in order to find continued success. VSM provides the only means to visualize and monitor value flow and creation.

• It connects individual tools to create an end-to-end pipeline with greater visibility and control
• It provides insights courtesy of your own data in order to guide decision-making and answer burning questions in minutes, not months
• It ensures adherence to your organization’s vision as well as initiatives for security, governance, compliance, and digital product integrity
• It creates a consensus among key stakeholders when it comes to what activities matter most towards value creation and what dire changes are needed

As the world continues to grow, evolve, and be unpredictable, a VSM platform ensures you are prepared and informed. Organizations equipped with VSM platform capabilities are more able to adapt and continue delivering value efficiently. Therefore, organizations must embrace VSM if they want to be able to understand why what they do even matters to their customers — and how to make it matter even more with each passing day.

To get a better look at the nature of VSM and how all the peices fit together download our VSM eBook now.