It would surprise absolutely no one if I were to say a lot’s changed in the past year. Value Stream Management (VSM) is certainly no exception. It’s an area that has seen massive evolution in a relatively short time. A year ago, the emphasis was on education and getting informed about VSM principles and its advantages. Now, VSM is garnering global adoption and the interest of top industry analysts. There has also been a quick shift from investigation and discussion, to implementation and optimization.
Broadcom Software recently hosted a Value Stream Management Summit, which highlighted real stories and proven lessons from some of the largest global enterprises. Following is a summary of what’s new and what’s next for VSM.
Gaining End-to-End Visibility
Once thought of as a methodology exclusive to IT and DevOps, VSM is now used to align the entire enterprise and is the connective tissue between strategy, development, and customer value.
The focus is now on establishing end-to-end visibility and leveraging real-time data to encompass everything from agile planning to new software delivery and product launches. We’ve worked with a global technology firm on consolidating tools and data into a single, integrated platform for managing work, teams, and budgets. This enabled executives to make the best prioritization and capacity decisions, lead delivery teams more effectively, and align work around customer and business objectives.
Building New Structures
Teams are beginning to reshape their organizational structures around value streams. With these structures, cross-functional teams across the organization are equipped to better focus on delivering customer value. By moving from funding projects to funding products, teams can gain greater alignment around what customers want—and gain the ability to deliver when they want it.
“Ultimately, through VSM, you’re organizing around how customers define value,” explains Barbara O’Connor, Director, Enterprise Agile Office Digital Transformation Organization, Unum. “When you do that, it really changes peoples’ mindsets and discussions. Instead of talking about my process and your process, we’re talking about the elements that support value delivery.”
Harnessing Metrics to Gain Alignment on OKRs
Moving forward, teams will start to reorient their metrics and rethink how they evaluate and incentivize people. With this, the move to focus on objectives and key results (OKRs) is paramount. For development, it’s not about the number of story points. For IT operations teams, it’s not about service level objectives (SLOs). Rather, for these teams and the business, it’s about metrics like sales per hour. Through OKRs, people across the organization will better understand how they contribute to top-level objectives.
“What we hear from customers is that OKRs will enable people to truly understand the purpose of their jobs and how their work aligns with organizational goals,” states Jean-Louis Vignaud, Head of ValueOps Products, Broadcom Software Group. “When employees get this visibility, they are happier and more productive.”
Extending VSM Beyond the Enterprise
VSM will also start to encompass the extended development and delivery ecosystem, which now includes not only full-time employees within the organization, but outsourced contractors and service providers.
This will also extend well beyond development. When you think about a commercial airline manufacturer, their values streams aren’t just composed of software development. It includes a complex supply chain, with vendors delivering everything from seats to gauges and engine components all to provide advanced safety for their customers. VSM will enable the aggregation of data that helps teams effectively analyze value delivery, no matter how large or complex the value stream. This foundation will enable teams to continue to scale the power of VSM.
Improving efficiency and finding ways to remove waste are definitely key outcomes of VSM, but that’s not really the end game—the end game is ultimately effectiveness. It’s not just development or IT operations, it is funding, planning, marketing, delivery, sales—it’s a whole-team exercise that leads to maximum customer value.
VSM enables teams to better understand the work involved in the end-to-end value stream. Through the proper implementation of VSM principles, teams can promote a customer-first approach that enables faster and more frequent value delivery. When teams understand how their work impacts the customer outcomes, they are happier and more satisfied with their work.
To learn more about how customers are navigating their VSM journey, be sure to watch the 2022 Value Stream Management Summit, which is now available on demand.