To survive and thrive in today’s digital age, organizations are increasingly reshaping their software development strategy from a traditional project-dominated model to a product delivery model. Shifting to a product delivery model re-orients teams to focus on delivering meaningful software that creates value for customers and drives business outcomes, instead of measuring success by completing projects on-time and within budget.
A project-to-product transition starts by understanding value from the customer (external) and business (internal) perspective. For example, the customer may value new capabilities that improve the usability of an application and so, the business would accordingly realize value delivered based on improved user experience scores and the number of new customers acquired as a result of introducing these capabilities. With a clear understanding of value, you can build teams around end-to-end value streams that are aligned to specific customer and business value needs. You can set up multiple, parallel value streams around products, product families, or grouping of capabilities according to the different types of value they deliver. Organizing cross-functional teams into value streams not only gives them complete autonomy over all the steps it takes to deliver a product from concept through production to the hands of customers but also, minimizes unnecessary handoffs so that value creation and delivery can be streamlined and managed. Unlike projects that have a fixed start and end date, value streams are designed to deliver incremental, continuous value to customers with fast feedback loops that fuel continuous improvement.
Once value streams are in place, it is vital to conduct Value Stream Mapping to visualize all the activities in the product delivery process, from a whole systems standpoint. The main goal of this lean management technique is to get a holistic picture of how work flows through the software pipeline, determine where value is added and where it is not, understand the root cause of waste, and identify optimization opportunities to produce the most value for customers in the most efficient way possible. To realize the full benefits of Value Stream Mapping, make sure you look at improving the whole process instead of one area since most waste occurs between steps and also, because localized improvements could potentially create problems with other activities. Besides process efficiency gains, this exercise increases communication and collaboration between each role in the software delivery process from strategic planners, project managers, business analysts, QA, and developers all the way to IT operations. Value Stream Mapping helps leaders make more informed strategic planning and investment decisions that address process, resource, and technology gaps across value streams.
While Value Stream Mapping is a highly beneficial exercise, it often demands a significant investment of people and time to do it, so it is important to balance potential value with the work required to conduct it. However, you can right-size it for your needs, and start by mapping a single value stream. Here is a quick guide on how to create your first value stream map:
- Select a Value Stream: collectively decide on which value stream to map. You can narrow your options to the value stream that is the most wasteful, has the biggest impact to the customer, or represents a new product line. Try to avoid analysis paralysis and simplify the selection process by picking the value stream that you feel has the most noticeable room for improvement. Also, determine the start, and end points for the value stream mapping exercise – the start point could be an approved customer request, and the end point could be when the product is delivered to production. To limit the scope of this exercise, you can select different start, and end points to focus on a slice of the value stream.
- Assemble the Right Team: depending on which value stream you have decided to map, make sure all the relevant stakeholders from various functions are involved in the mapping exercise. It is important to engage experienced individuals who have the practical knowledge to effectively map the value stream, and the authority to implement improvements. Level-set with the team by explaining the objective of the exercise, and which customer/business problems it is intended to solve for.
- Develop the Current State Value Stream Map: many use post-it notes on a whiteboard or a kanban board to define the basic steps in the selected value stream. It helps to start from the end of the process and work backwards to avoid mapping all the possible paths a value stream could take. After the basic steps have been outlined, you can add extra detail with relevant metrics such as Process Time (PT), Lead Time (LT), Percent Complete and Accurate (%C&A), Work in Process (WIP), Activity Ratio, and Rolled %C&A. This data provides critical insights into how long it takes to complete a single unit of work, the quality of work delivered, the accumulation of work between processes, and more. Now that the team has complete visibility into the end-to-end process, they can start troubleshooting where value is gained or lost, and fix issues that are hindering the flow of value.
- Develop the Future State Value Stream Map: once process improvements are identified, the mapping team will need to put together an implementation plan to gradually introduce changes, and measure their impact over the course of 30, 60, 90 days. A future state map needs to be created for each stage of the implementation plan and should include projected metrics. It provides teams with measurable objectives to work towards, allows them to track whether their changes are having the intended impact, and course correct as needed to reach the desired future state.
Value Stream Mapping can be conducted regularly to make iterative, continual improvements to the value stream. Be sure to socialize the tangible results from this exercise with the rest of the organization to encourage other teams to try it for their value streams. Value Stream Mapping is typically the first brick of the foundation for a broader Value Stream Management program. As the organization matures in its adoption of value streams, it will need a more sophisticated way to measure the performance of multiple, parallel value streams and their aggregate impact on business outcomes and customer results. Implementing a well-integrated enterprise-scale Value Stream Management solution with robust analytics will be critical.
According to a Forrester study conducted on behalf of CollabNet VersionOne, VSM users outperform their peers in their ability to map and analyze, visualize, and govern value streams across the software planning, development, and delivery lifecycle with margins ranging +18 to +27 percentage points. This means that VSM users are far better positioned to: identify and resolve disconnects and redundancies in the end-to-end stream from business making a request to IT delivering it in production, give different user views into where value is generated or lost, and fine-tune the planning and management of products, human and digital resources, work items, and releases. Download the full study Holistic Solution Drive the Value in Value Stream Management, to read more recommendations on how you can get started with your VSM journey.
CollabNet VersionOne and XebiaLabs are recognized leaders in the Value Stream Management space and together provide a cohesive solution, spanning concept through cash, that enables organizations to capture, create, deliver, and measure the flow of value through their software lifecycle.