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Last Updated May 13, 2021 —

VSM means doing agile at speed and at scale

Incorporating all aspects of value creation into one stream makes teams able to work towards the goal of delivering more value to customers and other key stakeholders.

Value Stream Management

Value stream management (VSM) is a relatively new concept that has roots in the Agile methodology. Its ascendence comes at a time when many organizations are just beginning to come to grips with other frameworks like agile and DevOps. Most organizations gravitate towards agile frameworks because they promise more efficiency and faster changes, making products both cheaper to produce and more responsive to evolving conditions. Many organizations have also had agile transformation forced upon them as a result of the COVID-19 global crisis. 

Organizations not intimately familiar with Value Stream Management may ask: "How does it fit with these other agile approaches we've been adopting?" Or, more directly, they may ask: "Why do I need VSM if I already have agile and DevOps?"

The primary answer to the latter question is that VSM, agile, and DevOps are not mutually exclusive. Principles of agile are baked into VSM, and VSM in many ways represents an extension of the short cycle/fast feedback approach championed in DevOps. So, by adopting VSM, you are continuing along your agile digital transformation journey but with a broader look at all activities organization-wide, not just those directly involved with digital product creation/curation.

More importantly, though, VSM lets you do agile, DevOps, and other digital transformation methodologies better. Many organizations struggle to apply agile across silos, and others may struggle to determine ways to align agile workflows towards outcome-focused company goals. VSM does both ⁠— It enables agile at scale and at speed while focusing on the priorities that matter most.

VSM:

  • Maps the workflow architecture of your organization, contextualizing policy or process changes in this reality
  • Expands the DevOps cycle envelope to all aspects of the product lifecycle, including planning, monitoring, and customer feedback
  • Integrates tools across the entire product pipeline
  • Monitors metrics by gathering data across all moments of the value stream, creating a single view
  • Aligns business objectives across teams using value-focused metrics

Effectively, VSM represents the final elimination of organizational silos. By incorporating all aspects of value creation into one (or a few) streams, all teams can finally begin to work in concert towards the same goal of delivering more value to customers and other key stakeholders.

With VSM, agile and data work hand-in-hand to accelerate value creation

VSM is achieved by taking the following steps:

  1. Audit all current processes to trace how product and value flow through your organization, task by task
  2. Aggregate data across all of these processes to form a single picture of metrics like lead time, user attrition, the defect escape ratio, security/governance/compliance data, etc.
  3. Use metrics to derive insights for process improvements; focus on enabling agile teams to be able to perform better work, faster, with clear guidance on best practices and support from leadership
  4. Measure the results of these improvements, and repeat the process

In effect, VSM applies the lessons learned from agile and DevOps and applies them across the entire value stream. 

Having access to metrics across the entire pipeline is a critical ability for the following reasons:

  • Hastens the pace of work
  • Eliminates key bottlenecks introduced by the perception of risk and uncertainty

By monitoring metrics across all stages of work, higher-level approval of new process or product changes can come faster, thanks to VSM's focus on demonstrable value creation. Without gated approvals, DevOps and product teams can work at their own pace, seeking to achieve targets like lower cycle times and a better customer experience with each new sprint.

In other words: VSM and analytics, working together, visualize bottlenecks to value creation and seek to eliminate them either through automation or hastened approvals. With visibility into value creation across the entire product stream, work can be conducted more agilely and more quickly on a more consistent basis, across the entire organization.

VSM channels agile towards a greater purpose

In many cases, the adoption of agile and/or DevOps processes is considered the final stage of achievement for digital transformation. Many organizations seek to further automation or modify processes as needed, but they have difficulty measuring internal performance in aggregate. Without this view of performance, and the directive to respond to feedback with improvements, progress along the digital transformation journey plateaus. This reveals itself in an organization that has difficulty improving metrics like cycle time beyond the current threshold. They may also fail to realize their original expected digital transformation outcomes, including achieving a measurable return on investment from their digital transformation initiatives.

In a recent webinar on why organizations should consider value stream management, Christopher Condo, Principal Analyst from Forrester, emphasizes how this problem arises when an organization isn't driven by a focused set of well-defined, value-focused goals. They may get caught up in the act of completely implementing the architecture, frameworks or methodologies and think that the full implementation of them means success. In reality, full implementation is the first step in reaching the desired outcomes. 

As proscribed by the VSM steps above, once agile/DevOps processes are in place, their outcomes must be measured by monitoring key metrics like cycle time, release frequency, unplanned work, and overall customer satisfaction. The feedback generated should inspire further improvements to processes, technology, or other areas that touch the value stream. Instead of considering the use of agile or DevOps as a final destination for digital transformation, the organization should consider the outcome of those transitions as the marker of successful implementation. They can aim for outcomes that reveal:

  • Shorter cycle times
  • More releases
  • Better responsiveness to changing conditions
  • Less resistance and hesitance in decision-making related to innovation

Condo further reveals that when an organization has a DevOps process in place and declares, "we're done," it may neglect to put the customer experience within the dialogue. Customer feedback and monitoring data supply critical information to guide agile/DevOps decisions.

VSM solves both main problems:

  • It channels digital transformation towards a purpose (value), then uses that purpose to guide architectural decisions as well as small decisions regarding individual releases or work items
  • It also incorporates later stages of the product lifecycle in a data-based way, ensuring organizations understand the outcomes of their work, not just the outputs

Yet one more issue raised by Condo is that organizations can fail to perform agilely when they get stuck on yearly planning cycles. It means they're still, "doing waterfall at the top level because that's how the budget ends up working." What they need instead are shorter feedback cycles. Value-focused information, revealed through data, can go a long way towards inspiring more frequent meetings on process improvements, "and driving needed changes without prolonged latency."

VSM can help enterprises achieve agile at scale

One major aspect that slows down agile work is that organizations discover introducing scale can hurt the functions that matter most.

The Project Management Institute notes that when organizations, "decide to scale agile across the enterprise, they often find that what worked well for a team of five to nine people does not scale well without modifications. Teams are not always aligned with the needs of agile, which makes successfully implementing agile on projects with larger teams and greater complexity more difficult."

Digital.ai's own 2020 Annual State of Agile Report shows the following barriers to scaling agile:

Many of these challenges relate to issues VSM can solve. Most organizations are resistant to change because the stakes (risks vs rewards) are not clear, and there is not a clear purpose to the transformation. Zeroing in on value can help achieve easier buy-in for needed process changes by showing stakeholders the metrics that matter most. These may be changes needed to fully implement transformation, or in the case of many companies to further the gains realized by transformation and break past the current performance plateau.

Focus on value to reduce team misalignment

The Disciplined Agile Delivery (DAD) method for scaling agile, suggests that a "goal-driven approach [...]guides people through the process-related decisions that they need to make to tailor and scale agile strategies, given the context of the situation that they face, to achieve the outcomes that they desire".

Further, integrating products along the toolchain to create a complete value stream and giving all workers a clear view into processes and metrics can iron out performance inconsistencies across teams.

Another challenge can come in the form of disjointed team coordination. "Coordinating the contributions of multiple teams to a single product delivery cycle can be hard, no matter what development method you choose," says Carnegie Mellon's Software Engineering Institute. As an example, they suggest that "if your teams use different iteration lengths, you will want to look for ways to synchronize the endpoints of iterations."

In this way, VSM can help align teams and the definition of done with outcomes focused on value delivery, not just the delivery of a specific work item. The MITRE Corporation's AiDA project suggests that "adapting Agile practices to larger projects requires sound engineering and management discipline to ensure successful integration of multiple smaller development efforts to support the objectives of the larger project."

VSM can provide the roadmap for understanding how the parts come together to form the whole, leveraging value stream maps to provide guidance and data to provide context that all teams will appreciate.

The role of resistance in holding back agile transformation

Culture resistance is yet another product of risk aversion and a response to the unknown. "But that's how we've always done it…" is a common refrain, and a symptom of pain experienced as a result of taking risks or trying new things. Within this mentality, legacy is seen as safe, hamstringing agility. Many organizations exhibit this behavior when they deploy agile in isolated digital product silos but attempt to maintain waterfall control over the main arms of corporate management. 

Harvard Business Review, in an article discussing agile at scale, admits that "it’s not unusual to launch hundreds of new agile teams only to see them bottlenecked by slow-moving bureaucracies."

When faced with these challenges of achieving the desired outcomes of digital transformation, one can draw the overarching conclusion that VSM puts stakeholder concerns foremost by prioritizing visible metrics that indicate performance for specific goal outcomes. VSM also integrates tools to improve visibility and coordination, and channels all efforts towards top priorities related to value for the business and the customer.

VSM is agile smarter, better, faster, stronger

Adopting VSM does not mean throwing out the baby with the bathwater in terms of redirecting digital transformation. In reality, there's no need to choose between VSM and agile/DevOps, and there's no need to "replace" them with VSM.

Instead, VSM extends agile and DevOps principles into all facets of the company, aligning directives from the top down while also assuring stakeholders of value prioritization using metrics sourced from the bottom up. Organizations struggling with agile at speed or scale can achieve more at a greater velocity and more consistency thanks to VSM principles and platforms’ capabilities.

Learn more about how Value Stream Management enables better agile organizational performance and better products in our recent webinar: "Why Organizations Should Consider Value Stream Management"

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