The Rise of Value Stream Management (VSM)

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In 2006, I got a call from a Forrester analyst. I was in the midst of wrapping up my thesis and spending most of my days coding, and had no clue as to why an analyst would want to talk to me. I then found out that analyst was Carey Schwaber, the daughter of Scrum co-creator Ken Schwaber. She was very interested in a developer perspective on a new tool category she was researching called Application Lifecycle Management (ALM). I shared my thoughts, and she published the report ALM 2.0: Getting Closer, But Not There Yet. I was happy to see some of the developer-centric concepts for key criteria. In the years that followed, I was amazed to see the impact that the concept ALM made on the entire tool landscape.

Today marks the final nail in the coffin of ALM. It had a good decade-long run and helped get many people thinking beyond the code, to the lifecycle of the application as a whole. But digital innovation is not about applications. It is about the value that we deliver to the customer. We now have a much clearer sense of the disciplines involved in delivering that value, ranging from business planning to product management, Agile development, DevOps, and Service Management. Each of these disciplines is about how we deliver value, and the past decade of tool innovation has made that much easier to do. However, as with ALM, something needs to tie all those tool siloes to work together. That new tool category is called Value Stream Management (VSM). VSM is a management technique or 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 to shorten time-to-market, increase throughput, improve product quality and optimize for business outcomes. In Project to Product, I claimed that this new tool category would become the underpinning of digital transformation, and quoted the original report by Christopher Condo and Diego Lo Giudice, wanting to pay tribute to two of the people trailblazing the definition of this new category.

 

Many years ago, VSM started as a vision that some of us shared for the industry, but the recent report, The Forrester Wave™: Value Stream Management Solutions, Q3 2020 makes it clear, in my opinion, that it is now a category that has come of age. This is because it is impossible to succeed in a large-scale digital transformation without VSM. We are seeing that this category has attracted the attention of established innovators, such as ServiceNow, as well as new ones, such as digital.ai who bring together the CollabNet, VersionOne and XebiaLabs tools into a single umbrella. Along with Tasktop, we believe these are the major players in VSM.

What’s exciting about a new space that’s already delivering customers such significant value, is the different paradigms that form. At the highest level, there are three VSM platform segments that have emerged (which are covered in the Now Tech: Value Stream Management Tools, Q2 2020). Two of them are:

  • Standalone VSM: The vendor provides a VSM solution that is independent of any stakeholder tool. The benefit here is support for tool choice, heterogeneity and rapid time to value in deploying on existing toolchains.
  • Integrated VSM: The vendor provides a VSM solution that builds on one or more of the stakeholder tools that they provide (eg, an Agile development tool). The benefit here is tight integration with that stakeholder’s tools.

It has been an amazing experience to collaborate with others to get us past the limitations of ALM and help bring this category to life. As the CEO of Tasktop, I’m also thrilled for our VSM platform to be named a leader in The Forrester Wave™: Value Stream Management Solutions, Q3 2020. In the end, organizations will be leveraging the benefits of multiple vendors, and for many of our customers that includes the solutions provided by ServiceNow and digital.ai. But I fundamentally believe that every large organization needs a VSM solution that is decoupled from their tools, as toolchains will continue to evolve. Not only does a pure play platform enable choice, but it also enables speed to value that, in Tasktop’s experience, is measured in days, not weeks or months.

There is another dimension in VSM paradigms, and that is how value is measured in value streams. This is where I’m thrilled to see the impact that the Flow Framework® defined in Project to Product is making. I put the Flow Framework out there for everyone in the community to leverage, and to help the industry move from proxy metrics to end-to-end value metrics, which are representative of how customers perceive value. These two metrics paradigms are:

  • Silo Metrics: These are metrics specific to a tool silo, i.e., a segment of the value stream. For example, Agile burn up and burn down charts, or code-commit to code deploy metrics, give us measurement of a portion but not all of the flow. These metrics often come from a single tool or two adjacent tools in the value stream. They are important to measure for optimizing practices, but not for optimizing the value stream.
  • Flow MetricsThese are end-to-end metrics that take into account the entire flow across a value stream. For example, to understand the overall Flow Velocity (how much is delivered) or Flow Time (the end-to-end time to market). These metrics need to span all people, practices and tools in the value stream.

Your VSM strategy will be the foundation of your digital transformation and the shift from project to product. In formulating that strategy, be sure to understand the platform and metrics paradigms that you are deploying, whether that is pure play or tool-based. And no matter what paradigm, make sure that in addition to tracking silo metrics, you have a strategy for Flow Metrics in place. With these end-to-end metrics, you will be able to manage your value streams–with silo metrics alone they will be managing you.

Congratulations to all vendors evaluated in the above mentioned Forrester Wave™ report, as we believe each of them is hard at work at creating new paradigms and helping pave the path for organizations to thrive in the Age of Software!

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