“47% of software is not measured against business impact” – The Inaugural State of Value Stream Management Report is Out!

Value Stream Management ReportValue Stream Management Report
“As tech giants and startups disrupt every market, those who master large-scale software delivery will define the economic landscape of the 21st century, just as the masters of mass production defined the landscape in the 20th” Dr. Mik Kersten, CEO and founder Tasktop, author of Project to Product

As we continue to waft through the fog in the post-pandemic world, we know one thing to be true: software is the dividing line between success and failure. In the last year, the digital-first economy has made the five tech superpowers even richer, with a combined revenue of more than $1.2 trillion. With their business models tightly aligned to their software delivery capabilities, these digital disruption machines grow stronger by the day. With this in mind, never has Value Stream Management (VSM) for software delivery been more important; it enables large-scale organizations to compete in the digital age.

Today marks a significant moment for VSM, with the launch of the inaugural State of Value Stream Management Report. This independent study from the Value Stream Management Consortium (VSMC) further proves that we are firmly in the Age of Software, with VSM at the forefront. Building on the gains of Agile and DevOps, VSM takes a systematic approach to the flow of business value across the complex software delivery process from customer request to delivery and back through the all-important feedback loop for continuous improvement. With this holistic end-to-end view, leadership and teams can work together to remove the impediments impacting their customer responsiveness and pivotability on an ongoing basis.

The publication could not have arrived at a better time; the report features key insights into the established practice that helps us to better understand and augment its potential when we need it most. VSMC received global feedback from technical and business professionals for this landmark research, indicating the desire to learn more about how VSM works to further the conversation between business leaders and technologists and improve the business performance of software delivery.

The report highlights several areas where we see companies struggling to achieve true business modernization with software:

  • 47% of software developed has no measured business impact
  • 67% of respondents either didn’t or rarely measured the actual value realized by new features in their product
  • Only 53% of respondents said they do measure business results

The lack of measurement or alignment with business results is worrying, if not surprising. We’ve known for many years the high levels of waste in software work; a 2018 Pendo report found that 80% of features are rarely or never used (equating to $29.5 billion a year in assets being squandered). VSM encourages us to go back to basics and ask ourselves why are we building a software product and for whom? And is it actually improving how we operate and innovate?

Data-driven VSM—through end-to-end Flow Metrics—forces us to plug the leak and begin protecting our bottom line. All software delivery work that creates and protects value in a specific product value stream is mapped to specific value units (features, defects, risk and debt). And each product value stream is aligned with an explicit business outcome (such as time-to-market, customer responsiveness, retention, staff turnover, etc.).

Through this complete view in a business context, technology leaders and their teams can cut through the malaise of proxy metrics, siloed perspectives and conflicting opinions to accelerate decision-making from a customer’s POV. The objective data becomes a linchpin for discussions around prioritization, trade-offs and resource allocation.

With Tasktop Viz®—the only turnkey Flow Metrics tool—we can glean objective and actionable insights, in real-time,into the waste and wait times stopping us from delighting customers, both internal and external. Crucially, they also ensure that we’re not overworking our teams, ensuring employee engagement and happiness is a key business priority.

Other key findings include the finding that software development, completely disconnected from any meaningful work product, is not a solid way to work; that working with value streams doesn’t always require a major organization redesign; and that a lack of understanding of value streams was a key barrier to DevOps adoption.

This report serves as the benchmark for those working in VSM and aiming to keep pace with competitors. It shows us what we can aspire to and focuses our attention on the processes and tactics that will advance the entire community.

Download the entire report here.


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