Using value stream management and mapping to boost business innovation

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The emergence of value stream management as a concept applicable to software delivery signals a change in the winds for traditional enterprises in a software-driven world. Finally, “non-tech” organizations have a practice available that is focussed on extracting more business value from IT.

By combining the people, processes and technologies that map, optimize, visualize and control how value flows across the software delivery pipeline, organizations can now level the digital playing field.

At the same time, all this talk of value streams and value stream mapping -- also acronymized as VSM -- is causing some confusion. Isn’t that an old Lean manufacturing method used by the likes of Toyota, et al.?

While the two “VSMs” are different concepts, they are not mutually exclusive. In fact, they’re rather complementary. To understand how both practices work, we must first define what they are and what they can do.

Value Stream Mapping

Value stream mapping is an exercise to analyze the efficiency of the activities that deliver customer value. Typically accomplished using paper and post-it notes, value stream mapping exercises customarily map two states: the current state and the desired future state to reduce waste.

Physically mapping out your value stream on a large wall is an excellent first step to provoke necessary conversations and find solutions to fragile processes. Former federal contractor and program manager Paula Thrasher experienced this first hand when her teams suffered from:

  • Data quality issues on high profile federal government agency mission
  • Siloed teams with poor communication and collaboration
  • Improvements in one functional area that created new problems downstream

Figure 1 - Value Stream Mapping exercise

The experience report generated by value stream mapping exercise (Fig. 1) allowed constructive conversations on what was and wasn’t working, revealing that improvements in one functional area had created new problems downstream. The consensus found the current approach insufficient. The group collectively found a solution to the abstract data quality issues that they couldn’t see before.

Because the eight different functional teams involved in delivery were in the same room looking at the same visual, it created a common understanding of the issues they faced. The conversation changed from finger pointing and blame to proactive action that would benefit all of the teams and the larger enterprise.

Now Thrasher’s team better understands what impedes flow in their value stream, providing them with a baseline to begin improving their processes. They may not have the data yet, but they know where the data points are (where and how work is flowing, what team, what tool, etc.). From here, they can take those data points and begin to connect them through value stream management.

Value stream mapping purists may argue that the above exercise is not the real process because traditional components such as the time metrics, activity ratios and future state were omitted. Fear not, these components are included in a full-blown formal value stream mapping exercise. However, teams such as Thrasher’s have made substantial improvements from shorter versions of the exercise by making work visible. The net result is a compelling change in the right direction.

Value Stream Management

Value stream management is the practice of improving the flow of the activities that deliver and protect business value -- and prove it. It’s a nascent digital-concept that measures work artifacts (collaborative work items such as features, epics, stories, defects) in real time to visualize the flow of business value and expose bottlenecks to optimize business value.

A significant strength of this practice centers around how and where work is undertaken. This activity is captured through the work items mentioned above in the toolchain, providing a traceable record of how software is planned, built and delivered.

In August 2018, Forrester published a report on the emerging market for Value Stream Management tools that described the following goals:

  • Unify end-to-end visibility of software development
  • Unify the capture of data, events and artifacts within the process
  • Define and visualize key performance indicators (KPIs) that are meaningful to the business.

In this VSM, the examination of real-time data collected from the artifact network of work-items focus on business outcomes. It’s useful to view the value stream architecture to see what’s happening on the business transformation side to help manage the value stream. Product management centric leader Kristen Biddulph experienced this first hand when her teams suffered from:

  • Dependencies on upstream teams created long wait times
  • Invisible work in portfolio planning created uncertainty for downstream development teams
  • Annual planning and funding cycles resulted in a burdensome estimation process

Figure 2 Value Stream Architecture

By analyzing the value stream architecture, it was discovered that 50 percent of the time and budget was spent in the project portfolio management (PPM) planning stage, where business initiatives and impact assessments occurred. The ‘creation’ section of the value stream was receiving all the attention when in reality the bottleneck was at PPM (Fig. 2).

As a result, approval was obtained to experiment with cross-functional teams to enable a continuous planning and delivery effort and reduce duplication of work. The first experiment resulted in a 64 percent improvement in cycle time. Leadership was smitten and funded further experimentation.

The Common Benefits of Value Stream Management and Value Stream Mapping:

  • Both look at delivering value from a whole systems perspective.
  • Both help people see how work flows and to reach agreement on how well the process works.
  • Both uncover waste.
  • Both help people reach agreements on what changes should be made to reduce waste.
  • Both are created by the practitioners who do the work.

Key differences

Value Stream Mapping
Value Stream Management
Reducing waste
Optimization of business value
Typically, six-month lead time for a two- to five-day event
Linear, sequential
Non-linear, end-to-end network
Starting Point
Front-end - business side
Anywhere -- business or production
Work Items
Work (widgets) created between teams
Business-related flow items; feature (business value), defects (quality), risk (compliance, security, vulnerabilities), tech debt (impediments to future delivery)

When to do Value Stream Management vs. Value Stream Mapping?

Value stream management and value stream mapping are highly complementary. The latter is an exercise that can kick off, or be part of, an ongoing value stream management practice.

Perform Value Stream Mapping When:

  • You can physically get everyone together in the same room for a few days
  • When you don’t have funds or buy-in yet for digital transformation

Perform Value Stream Management When:

  • You have value stream integration between tools that captures real-time data. This is the ground truth for what work is actually flowing and provides metrics that address business needs
  • When the goal is to enable product-oriented teams to reduce costs and anti-patterns associated with project-centric managed teams.

If value stream mapping is a once a year activity, the resulting snapshot in time can provide a baseline for a more in-depth understanding of where value is created and lost. However, big batch size efforts with long lead times often result in lethargic progress. Increased momentum is gained with swift, consistent change.

Consider the rapid growth of Slack; it went from being valued at $0 to $4 billion In just four years, 77 percent of the Fortune 100 use its software and it has four million active daily users.

Accelerate Business Value by Visualizing It

An essential part of managing a value stream is to make the work visible for everyone to see. value stream mapping is a good first step toward that goal.

A value stream management approach, augmented by value stream management tools, helps organizations streamline and accelerate value delivery. And the solution to seeing and managing the value stream is embedded in the tools that software delivery practitioners use to provide value to customers every day.

In the true spirit of lean and agile, organizations can start small, experiment, identify what works and begin rolling out the benefits across the value stream, right up to the business level, putting them in good stead to execute a tangible ongoing digital transformation.

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