What is value stream management?
Value stream management is a practice that primarily focuses on improving the flow of value delivered to a customer. When applied to application delivery, it is a systematic approach that can help businesses oversee and measure how valuable the whole process is end-to-end.
Imagine application delivery as running a coffee shop. With value stream management, managers can use tools (such as mapping the whole coffee brewing-to-serving journey) to measure where the most valuable process is, where mistakes and inefficiency occur, and where waste is produced.
“Do customers leave because ordering and payment take too long?”
“Are we overordering ingredients and wasting money?”
With value stream management, you can pinpoint where optimization is needed and devise solutions, such as creating self-service ordering or adjusting recipes, to ensure that all resources are being fully utilized.
The result? Happier customers who can get their coffee faster, and your shop saves money and can focus on developing new recipes and ventures.
Now, back to the world of application delivery: value stream management helps connect C-suite and DevOps teams and align their actions to improve customer satisfaction.
When value stream management runs at full speed, your business and tech teams can accurately identify where values are generated and which processes require improvement. Your business can then double down on what works and eliminate inefficient and redundant processes. As a result, your tech operation can ultimately become a powerful value driver with less cognitive load and frustration
What is a value stream?
A value stream refers to all the steps involved in realizing a product or a service from conception to the hands of a happy customer.
Value streams in application delivery
In DevOps and application delivery, value streams can include all activities such as requirement gathering, design, coding, testing, deployment, monitoring, etc. Not all activities in the application delivery cycle add value for the customer, so value stream management is critical for identifying the steps that genuinely contribute to bringing value.
Why is value stream management important in application delivery?
In traditional enterprises, when a new initiative arises, meetings are set up consisting of representatives from different function-based teams. Each representative focuses on their area of expertise but not beyond. When they come together to discuss whose responsibility it is to do what (application development, budgeting, infrastructure, security, analytics, etc), they have little incentive to seek out the best overall user experience and product value. As long as they do their parts well enough, the baton is passed to the next team.
This happens partly because they are not experts in anything other than their fields, but it is also partly due to a lack of a continuous improvement mindset and accessibility to insights into value generation.
What does this mean for business owners and managers? It is extremely difficult to measure the true value of your organization’s work. For CTOs, it’s hard to pinpoint what specific benefits and impact your tech team is bringing to customers and the whole business.
According to The State of Value Stream Management Report 2023[1], teams who have not achieved any Value Stream Management steps are over 3 times more likely to have the longest lead time, over 3 months, than those who have started with value stream management steps[1]. Value stream management combines concepts in agile and DevOps and emphasizes aligning tech outputs with business strategic initiatives. As a result, it is incredibly important to integrate value stream management in your application delivery process, both from the business and tech perspectives.
How do you optimize DevOps with “Value Stream Management”?
If you are interested in demonstrating the value brought by DevOps and optimizing your overall application delivery value, here are three ways you can leverage value stream management:
1. Value Stream Mapping
Value stream mapping is like a map charting treasure hunt for valuable application features. It tracks each step the application manifests, from the initial idea to reaching the customer. It highlights activities that add real value (like coding or testing) and those that don’t (e.g., replying to form requests, or silo communication).
This focus on value is vital for optimizing DevOps. By mapping your current workflow, you can identify bottlenecks that slow down delivery, like handoffs between development and operations. Maybe code reviews take too long, or deployments are held up in a queue. VSM exposes these roadblocks and offers insights into where improvements and optimization should take place.
When you see waste, you can create a streamlined process, e.g., by adopting automation, using CI/CD tools or end-to-end platform engineering solutions to streamline processes, avoid human errors and improve security.
By identifying and then focusing on activities that deliver value, DevOps teams can release features faster and more efficiently and decision-makers have more data-driven insights into creating profitable business strategies.
2. Performance Metrics & Analytics
Accurate and reliable performance metrics and analytic standards are critical in tracking progress, identifying problems and bottlenecks, and measuring overall value. Generally, two metrics are used for value stream management: Flow Metrics and DORA Metrics.
Flow metrics measure productivity through:
- Velocity – speed of delivery. E.g., How fast are we delivering a feature?
- Throughput – the amount of work done. E.g. For how many features can we ship in 1 month?
- Flow efficiency – “How much waste or hurdles do we encounter?”
- Flow risk – “What factors are stopping us from smooth delivery?”, “Do we have delays and what is causing them?”
DORA metrics measure DevOps performances with 4 key measurements:
- Deployment frequency –the times of successful deployment
- Lead time for changes – tracks the time for a change
- Mean time to restore – average time to resolve an incident in production
- Change failure rate – the percentage of deployments that result in production failures.
3. Continuous Improvement
Value stream management is not a one-time fix but an ongoing process that requires a continuous improvement mindset. As product needs and operational resources change, our goal is to constantly look for ways to improve the efficiency and effectiveness of your value streams.
How can businesses benefit from value stream management regarding application delivery? Results from the 2023 VSMC Report show “that elite performers are more included to report value generated to their CEO and business stakeholder, whereas lower performance tends to relay information to no one at all or their CIO/CTO at best.”
Source: VSMC report
Managing your business’ value streams can lead to:
- Shortened lead and cycle time – Connecting value streams means teams are 4 times as likely to have a lead time of less than 1 hour[1].
- Shorter time-to-market – so you can deliver new products, services or applications faster, increasing your competitiveness and revenue.
- Higher application quality – thereby making your customers happier, with positive reviews, loyalty and referrals.
- Higher employee engagement across teams – as a result, avoiding silos, enabling teams to have an overview of the big picture, and boosting efficiency.
- Smarter investment and decision-making – all provided by data-driven insights.
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References:
1 Source: The State of Value Stream Management Report 2023, P.23
