While it may feel like the world has been “going digital” for the past decade, the impact of the events of 2020 has laid bare the reality of what being digital really means: the ability to swiftly and continuously support the needs of customers and employees when they need it most. Waking up as a software company in the Novel Economy, many organizations have realized that they have been too focused on using IT to maintain operations and enhance existing processes, instead of creating new tangible value to innovate and remain competitive.
For many CIOs and other IT leaders, the sudden shift to a virtual enterprise exposed the shortcomings in their digital journey in terms of operational competency, market response and adaptability. It also emphasized why a different approach to measuring and managing software delivery at scale is needed. Now more than ever before, every organization must meet end-user needs where they count. Only through this customer-obsessed lens will they keep pace with the tech oligopoly and other digital-competent companies.
The huge popularity of value stream management (VSM) in software delivery— Forrester, GigaOm and Research In Action have published reports on the market in recent months—stems from its ability to help IT leaders to better align their software delivery with business outcomes and strategy. With the right data and mindset, they can secure buy-in with key decision-makers to make a strong case for investment where it matters.
What is Value Stream Management (VSM)?
Value stream management is a practice that focuses on increasing the flow of business value from customer request to customer delivery. Its systematic approach to measuring and improving flow helps organizations shorten time-to-market, increase throughput, improve product quality and optimize for business outcomes.
VSM is witnessing rapid adoption across major industries, from telecommunications and finance to healthcare and pharma. Despite large investments in Agile, DevOps, Scaled Agile Framework® (SAFe®), Large-Scale Scrum (LeSS) and other ways of working, most enterprises are still not adequately responsive or adaptive. What exactly is impeding the end-to-end flow across their product value streams that’s holding them back from innovating? VSM helps answer that question.
The diligent work of Condo and the Forrester team in understanding the VSM market provides a clear and comprehensive overview of the practice. Forrester defines VSM as, “A combination of people, process, and technology that maps, optimizes, visualizes, measures, and governs business value flow (including epics, stories, and work items) through heterogeneous enterprise software delivery pipelines. VSM tools are the technology enabling the practices of VSM.”
Writing in a recent blog, Condo lays out the challenge that faces modern enterprises: “Application development and delivery (AD&D) leaders focusing on velocity and cadence are finding there’s more to software delivery than going fast. These leaders are realizing that shifting their focus from outputs to outcomes can provide greater insight than velocity alone. Using value stream management (VSM) tools, AD&D leaders gain better insight into their organization’s processes for delivering software and whether or not they’re delivering value.”
Given that enterprise software delivery is a complex adaptive process, it can be easy to be overwhelmed by all the moving pieces. The aim of VSM aims to simplify everything. The concept allows organizations to take a step back from the complexity and focus on the overarching flow of business value. By measuring progress against business goals and tightening the feedback loop, the software delivery organization can be better supported to build and improve products and services that continuously delight customers.
Are You Only Measuring Two Inches of a 12-inch ruler?
“Measuring only one area of the value stream is like only using two inches of a 12-inch ruler.” John Willis, Senior Director of the Global Transformation Office at Red Hat, co-author of The DevOps Handbook – Mik + One (Project to Product) Podcast, Episode 17: John Willis (September 22, 2020)
The question on the lips of many IT leaders is: Why am I not seeing the results I was promised? Completed sprints, more deploys per day, more SAFe certifications mean little if you can’t quantify the impact on the business.
These existing metrics only help improve flow if that silo is itself the bottleneck. When you consider most wait times exist further upstream to development, it’s paramount that our focus begins measuring the whole system. Once you have identified where your bottlenecks are, you can use your discipline metrics to probe and investigate the issues at hand. The flow diagnostic of a Tasktop customer below perfectly illustrates how little actual development time is used in the delivery of a product:
With the rise of VSM comes a new form of measurement. These end-to-end value stream metrics, known as Flow Metrics, measure the rate of business value delivery for software products through the lens of your customers (whether internal or external) to help enable you to understand your current state. They enable you to go beyond anecdotal opinions and proxy metrics to really get to the truth of what is impeding delivery.
Presented in a vocabulary that business and IT leaders understand, Flow Metrics help you determine where work is flowing, and more importantly, where it’s not. They provide shared visibility into business and development metrics for everyone involved in the value stream. That includes leadership, who often face an uphill battle to balance resources and budgets across the portfolio. Once you have your baseline, you can prioritize investment and set targets to track the progress of your improvements.
Early VSM adopters are already gleaning objective real-time insights into their flow to remove bottlenecks and make better decisions. Many fleet-footed IT leaders are already reaping the benefits of measuring and improving value stream flow in real-time with out-the-box Flow Metrics:
- A healthcare leader doubled its feature Flow Velocity, introducing new business capabilities faster than ever
- A telecom giant was able to change its outsourcing strategy and renegotiate better terms with its managed service partners
- An online investment firm discovered the system bottleneck impeding digital channel innovation and began working to dismantle it
- IT and business consulting firm CGI unlocked capacity equivalent to over 7,500 days per year
Register for a Value Stream Management Workshop
We run highly interactive VSM workshops to kickstart your VSM journey:
- Identify and measure value and protection in software products
- Analyze a baseline of software delivery performance using Flow Metrics
- Pinpoint bottlenecks, reduce waste and improve velocity
New e-book: A Deeper Dive into Data-driven VSM
The role of IT leadership is more important than ever in the digital-first climate. This e-book provides a comprehensive overview of what value stream management in software delivery is and the role of Flow Metrics in helping them to convince the business to sign off on funding and investment where it’s most needed.
In this new e-book, you will learn:
- What data-driven VSM is and why it matters
- How to continuously measure value streams to optimize flow
- How conversations around flow are enhancing collaboration between business and IT leaders
- How leading organizations are using real-time Flow Metrics to improve responsiveness and adaptability