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InfoQ Homepage Articles Value Stream Mapping and Value Stream Management: How They Can Work for You

Value Stream Mapping and Value Stream Management: How They Can Work for You

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Key Takeaways

  • Value stream mapping is a largely qualitative tool that creates visibility into the waste in a system while also creating alignment around ways to improve. Where available, the qualitative, more anecdotal data, gathered in the mapping exercise can be supplemented with quantitative data from systems or process tracking.
  • Value stream management codifies the system, allowing for continual monitoring and management.
  • Both value stream mapping and value stream management are powerful tools. They complement one another to provide clarity into an organization's delivery systems. They are both tools that can be leveraged to improve an organization’s decision-making.
  • Although value stream mapping or value stream management could be used alone, together they will provide a more complete picture.
  • Apply mapping to create common understanding and discover new insights, apply management to continually monitor and improve
"Whenever there is a product for a customer, there is a value stream."

- John Shook and Mike Rother, "Learning to See"

Creating more value for customers is a core business strategy. With more technologies being developed, companies have been optimizing their technology delivery to get the best value out of their products or services.

Instead of focusing on individual functions, companies are now developing interest in the end-to-end value chain.

Software has become so ingrained in our society that company leaders and management have taken an active role in making sure the process is both driving value for the business and keeping it profitable. In a way, every organization has become a software company.

Unfortunately, businesses have found that even after investing considerable time and resources in transforming their technology capabilities, they struggle to achieve these goals.

Often the alignment of business vision, strategies, and goals is not always clear.

While methodologies such as Agile and DevOps may have been implemented, there is often still a disconnect between software delivery and the overall business value.

How can we make introducing change more successful? The answer may be identifying and managing value streams.

As defined by iSixSigma:

"A value stream is all the steps (both value-added and non-value-added) in a process that the customer is willing to pay for in order to bring a product or service through the main flows essential to producing that product or service."

The value stream is the series of steps taken from the concept to delivery of the product or service to a customer. For example, if we want to provide a refreshing drink we might source the ingredients, a glass, make the drink, deliver it to the customer, and receive payment. The steps in the value stream are:

  1. Step 1: Source the ingredients
  2. Step 2: Get a glass
  3. Step 3: Make the drink
  4. Step 4: Deliver it to the customer
  5. Step 5: Receive payment from the customer

By this definition, if we stop at step 2 our value stream is incomplete. We need to complete production and delivery of the product to complete the value stream.

As this states, you need to optimize more than just the software delivery process. You need to understand how end-to-end flow creates value for your customers. Businesses that can identify their value streams will be able to focus on strengthening value-added activities and minimizing nonessential ones. The practices of value stream mapping and value stream management can help with this. To create an even more holistic view we can further enhance our understanding using other Flow Engineering practices, such as outcome, dependency, and capability mapping. Flow Engineering addresses how to improve flow over the next 3-6 months, and value stream mapping is a core practice.

Both value stream mapping and value stream management stem from lean philosophies aimed at increasing operational efficiency while reducing risk and waste. They maximize customer value by helping companies see and improve their value stream thereby optimizing flow. Focusing on taking a customer-centric approach will generate higher returns for the company.

The question now is: what are value stream mapping and value stream management? Both have the acronym VSM, are they the same thing? If not, how do we differentiate one from the other?

Let us consider each in turn and how they compare.

What is value stream mapping and how does it benefit an organization?

Value stream mapping is a lean management tool that enables any organization to "map" or examine their end-to-end process of delivering value. It allows for a better understanding of all value-added and non-value-added steps in the value chain. As a management tool, value stream mapping offers companies a high-level perspective into how all their products and services deliver to customers. It is a holistic approach that involves documenting, analyzing, and improving the flow of resources to produce a certain product or service. It enables companies to visualize how each team performs their work, how teams fit together, and where improvement can be made.

Value stream mapping, when operationalized, will alter the governance of an organization. This process identifies sources of added value and unnecessary waste along a company’s value chain. When pinpointed, optimization decisions can be made about how to increase and eliminate these metrics to improve current processes overall.

Most people trace back the origins of value stream mapping to Toyota Motor Corporation’s "material and information flow," which was outlined in John Shook and Mike Rother’s book Learning to See published in 1999 and other books. Its roots however are far older, dating back to process mapping techniques in lean manufacturing popularized in the second half of the 20th century.

As this value mapping technique grew in popularity among manufacturing businesses, other industries began to adopt the process. Especially software development, IT operations, and marketing. The advent of Agile and DevOps brought a subsequent application of Value Stream Mapping practices to knowledge work. Now, we are seeing a resurgence in interest in the topic.

Value stream mapping can range from simple to complex, depending on the scope of product development and the number of areas involved. It can be used to make a comprehensive visualization of a highly complex process or focus on a specific segment. Regardless of the type of product or service produced, value stream mapping enables all types of organizations to perform more efficiently.

To perform value stream mapping, teams collaborate to create the following components:

  • Current state map: the current method by which products or services are produced for customers.
  • Future state map: the target state of value stream we are looking to create.
  • Action plan: the steps we’ll take to learn how to move from the current state to the future state.

In its simplest form, a current state value stream map might look as follows:

In this simple example, with a target outcome of improving our time to market, we can immediately see a number of areas where we would want to dig deeper to determine causes and identify opportunities. For example:

  • There is a long wait time (3 days) in the hand-off of work from development to testing. There may be ways to better align these areas or even eliminate the hand-off altogether by integrating UAT testing into the delivery team.
  • The longest part of the delivery process is spent in UAT testing, over 50% of the time. We could investigate what is causing that and develop ways to reduce it, perhaps through test automation.
  • It takes 4 days for a request to be reviewed and made available to the delivery team. Depending on the context of the request and the organization, there may be ways to restructure the intake process to reduce this.

Having the teams discuss what they see from the value stream map they’ve created will generate many unexpected insights too. There are often small changes to processes that can greatly impact the overall system but that are not immediately visible to the individual teams. The value stream mapping exercise itself creates the space to discuss these new perspectives.

For example, we could create a future state map that combines the UAT testing activities to coincide with smaller incremental deliveries within development. This might look as follows:

The last stage would be to document our action plan to implement the changes we want to experiment with, using the maps as a guide. A lot here depends on the context that the teams bring to the table. It can help to have somebody from outside the teams facilitate the conversation as this will help to remove focus on individual agendas that might arise.

Throughout, we have also created a high-level time diagnostic, one that even at this coarse granularity provides insights. Where possible, we can further enhance our learning with data from systems involved in the process.

With value stream mapping, teams can determine where the value is created and where it is not. It also determines how each team contributes to the actual value of a particular product or service. Value stream mapping also improves productivity and business efficiency by identifying waste, pain points, and bottlenecks; encouraging cross-functional collaboration; and enhancing product or service quality.

It is this cross-functional collaboration that creates the real benefits of Value Stream Mapping. For many, it may be the first time seeing the end-to-end system, and with that comes understanding. The collaborative nature of creating the Value Stream Map enables those involved to understand each other's roles in delivering value, further cementing a common vision. I often like to say, paraphrasing Eisenhower, that the true value of a VSM exercise is in the mapping, not the map.

Creating a value stream map alone is not enough for a company to be more effective in meeting deadlines, making deliverables, and reaching KPI goals. Mapping out a value stream is essentially crafting a view into how a company generates value for its customers. It is a powerful tool to reduce waste and create alignment, but it represents a static point in time. To further help it is necessary to have the value stream map constantly updating as you make changes to your products and services. By monitoring your value streams you can see the impact of planned and unplanned events, guiding your decision making. Having this would allow you to adjust to keep on track and ensure you are going in the right direction, even when external events might threaten to derail you.

Enter value stream management. If mapping is collaboratively creating the map, management is about managing your organization using a continual understanding of the state of your value streams.

How does value stream management differ from value stream mapping?

Value stream management begins with value stream mapping. After getting an end-to-end visualization of their value streams, organizations need to put practices into place to refresh the map with updates as change occurs. To measure how the value stream is changing, data is gathered using measurements, metrics, and KPIs. Using these metrics, company leaders can see the impact of each organizational effort in delivering value. They can then implement actions based on these metrics and measure their progress against KPIs. Typical metrics to measure are throughput, lead time, flow efficiency, and work-in-progress.

Forrester Research used the term value stream management to describe a software development process from end to end. According to Forrester Research’s definition, value stream management is:

"A combination of people, process, and technology that maps, optimizes, visualizes, and governs business value flow through heterogeneous enterprise software delivery pipelines."

In a nutshell, just like value stream mapping, it facilitates the end-to-end process between ideation and customer delivery and examines the work performance within organizations, functions, and departments. The goal is to optimize business value and eliminate waste from the development and delivery processes. It also aims to remove disconnections between processes, improving efficiency and quality, only on a continual basis.

Value stream management explicitly targets the governance of an organization, encouraging the adoption of a more systems thinking centered approach. By employing value stream management, an organization can then observe if the strategies that they choose to conduct are effective and then make informed decisions regarding how to proceed.

A key difference between mapping and management is often based on qualitative information, whereas management works best when relying on quantitative data pulled from the systems doing the work.. To illustrate this idea, one must first understand that the initial value stream map is based on the thoughts, impressions, opinions, and ideas of a company’s different stakeholders. Value stream management then codified the map, providing a tool for decision-making within the organization. To simplify the data gathering and visualization process, you can implement a Value Stream Management Platform (VSMP). Examples include Tasktop Viz and Plutora.

Value stream management is all about optimizing your organization for the delivery of value to customers.

That is not to say that value stream management is more important than value stream mapping- far from it, actually. Instead, both value stream mapping and value stream management have their own places in a company’s decision-making. Both of these tools have different uses and work off of each other.

For value stream management to be effective, operational and skill-centric silos must be broken down, cross-functional team collaboration must be implemented, value stream governance must be embedded in the software delivery process, and workflows must be automated. This will empower organizations to not only create new value but also help ensure continuous improvement in their Agile and DevOps practices.

This more continuous nature of value stream management is a clear difference. A value stream map can be created during a single collaborative meeting with a company’s stakeholders, perhaps taking a few hours. It is done by assessing the current state of the company and creating a plan for it. Once the plan has been created the process of value stream mapping ends.

Managing, monitoring, and governing a value stream on the day-to-day and finding ways to improve the initial plan is the very core of value stream management.

Once using value stream management, a company can return to the initial value stream map as a baseline to demonstrate any significant changes. Conducting a new value stream mapping exercise can be used to both:

  • Validate the current state of the value stream management practice
  • Realign the teams to value streams
  • Create a new baseline

Repeating this continuously provides the greatest benefits from combining the two practices, something the platforms simplify for you.

When organizations adopt value stream management, they can efficiently gather data, track performance over time, and improve their value delivery pipelines. Value stream management enables them to monitor their actual lead time, cycle time, and throughput, as well as create more realistic goals and better alignment across the organization.

For a value stream map to be highly effective in improving a company’s outcomes, data has to be gathered and monitored over time. Actively overseeing and assessing the data allows a company to track the effectiveness of its initial plan, while also seeing points of improvement. These points of improvement are then implemented into the next iteration, and so on and so forth.

There are many benefits of implementing value stream management. As we enter the next age of software development, value stream management empowers businesses to make data-driven decisions and more efficient investments. This capability could even protect your organization from sudden social and economic disruptions. For example, understanding value stream data will enable companies to intelligently realign resources, support stakeholders, and track progress as the company shifts to remote work during community restrictions.

Value stream management allows for greater visibility into an organization's current value streams, allowing for their continual testing and evolution.

For example, applying value stream management to an organization’s release planning strategy. By pinpointing where and when value is being generated within a product’s release timeline, they’ll be able to employ strategies to increase productivity and minimize waste. With value stream management, a company would be able to quantify whether or not the strategies employed were actually effective, something that has traditionally been difficult to do.

Conclusion

Value stream mapping and value stream management are useful tools in driving business value, creating higher engagement, and enabling faster innovation.

Value stream mapping provides a collaborative cross-functional environment to visualize how work is done and identify bottlenecks. The narrative created in a value stream mapping exercise is a powerful tool to create common understanding and alignment.

Value stream management quantifies and solidifies much of what we see in the adoption of DevOps practices. It allows organizations to visualize the flow and rapidly identify constraints in their systems. It opens up the door to a more holistic view of how an organization delivers value.

Combined with value stream mapping, value stream management creates a value-focused conversation that can help organizations overcome barriers to adoption. To truly get the value from the tooling, businesses need to take it beyond technology to look at the end-to-end customer journey.

When implementing value stream management, it is important to consider that not everybody will be motivated by the data. Some people may feel the visibility to be intrusive. To counter this, leaders need to develop a culture that encourages psychological safety, and collaborative approaches like Value Stream Mapping can greatly help with this. With this in mind, combining value stream management and value stream mapping can produce great results to help you drive your organization forward.

A great precursor to a value stream mapping exercise, and a part of a Flow Engineering strategy, is to use Outcome Mapping to feed the Value Stream Map. Through adopting outcome mapping, a company can provide a better definition of their value, guiding their creation of the initial map. You can read more about Outcome Mapping here.

About the Author

 Peter Maddison is in the business of helping organizations introduce new ways of working. He is highly experienced in accelerating delivery practices and is equally comfortable talking about business strategy as he is talking about IT.

 

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    One of the best articles I've read on the subject. Nice work!

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