Building a Strong VSM Foundation: The Role of VSM Platforms

Authors: Ravi Sawant, Sharat Kunduru

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Overview

Our VSM knowledge journey continues today as we delve into the rapidly evolving VSM solutions landscape. This thought leadership article aims to demystify the landscape, explore the prominence and necessity of VSM platforms and solutions, and unpack the capabilities and benefits they offer.

Are VSM platforms yet another set of tools organizations need to invest in? Can they adopt VSM without a platform, leveraging existing tools?

While process and people transformation remain key imperatives for successful VSM adoption (discussed in detail in previous articles), a robust VSM solution backbone is essential to scale. It not only supports new ways of working but also accelerates the pace of transformation.

Current VSM Solution Landscape

While Value Stream Management (VSM) might be a relatively new concept, value streams themselves are already present in every organization.

Think about it: the flow of work from initial ideas to delivering value to customers is inherent to any business operation. The challenge lies in the fact that most organizations haven't yet adopted a value stream mindset in their daily operations and management. They often operate in silos, focusing on individual stages without considering the entire value stream.

This disconnect begs the question: if value streams exist, shouldn't there be tools with enterprise capabilities to manage their various processes across the organizational functions and silos?

The answer is yes. For simplicity if we examine an ideal development value stream flow and its different stages, you'll likely find that most organizations already have enterprise capabilities deployed to manage and optimize one or more of these stages.

The following section explores the VSM solution capabilities landscape. We'll categorize these capabilities into two groups: Core VSM Capabilities and Supporting Enterprise Capabilities.

Core VSM capabilities are specifically designed to manage the flow of value, while Supporting Enterprise Capabilities contribute to optimizing the value stream but have broader functionalities within the organization. We'll focus on the capabilities themselves, not on specific vendors offering these tools.

Why You Need an End-to-End VSM Platform

Many organizations rely on a patchwork of ERP / CRM solutions, project management tools, Agile methodologies, and DevOps toolsets to manage various stages of their value streams. While these tools provide valuable capabilities for assessing the market demand, customer management, pipeline generation and management, strategizing, planning, and development, they fall short when it comes to true Value Stream Management (VSM).

Here's why:

• Information Silos and Workflow Bottlenecks:

Each tool operates in its own silo, creating fragmented information across the value stream. Bottlenecks and inefficiencies are hidden in plain sight, hindering organization’s ability to deliver value quickly.

Imagine working on a complex puzzle – you have all the pieces, but without seeing the complete picture, it's nearly impossible to assemble it efficiently.

Disparate tooling can also lead to workflow bottlenecks, with manual data entry and integration issues causing delays. Optimizing individual stages might lead to local improvements, but without a comprehensive view, the overall value stream flow might still be suboptimal, and the remaining stages of the value stream may not benefit from optimization in individual stages.

• Limited Visibility Beyond Planning:

While Agile and project management have improved visibility into work planning, they often focus on the initial stages, neglecting the entire value stream lifecycle. What happens after planning? Or for that matter, what happens before planning during the strategy phase? What external and internal factors are reviewed and at play? Build activities, quality assurance (QA), compliance validation, and go-to-market activities are critical stages as well that traditional VSM approaches might overlook. This necessitates manual tracking of work items across these stages, which is not only error-prone and time-consuming, but can also lead to misrepresentation of progress.

Imagine steering a ship – you need to track its course throughout the entire journey so that you can navigate to your destination safely, not just the initial departure point.

• Manual Effort and Inconsistent Data:

Manually tracking the status of work items across various stages is a recipe for errors and wasted time, especially when managing thousands of items per release cycle. This approach can lead to inaccurate reporting and hinder informed decision-making. Additionally, the flexibility given to delivery teams in choosing their tools for planning, development, and management of work can exacerbate the problem. This resulting landscape of disparate tools creates significant complexity in gaining the necessary transparency into overall work item progress and status. It also makes quick business pivot decisions nearly impossible to make.

To further complicate matters, human biases and variations in understanding work statuses can also contribute to inaccuracies.

Essentially, it's like trying to manage a complex project with a spreadsheet – it can work initially for small projects, but as the project grows in scale, the spreadsheet becomes unwieldy and prone to errors.

• Fragmented Data and Siloed Decision-Making:

Individual stages generate valuable metrics, but focusing solely on them creates a limited view. These metrics often paint a partial picture, neglecting the bigger picture of the value stream. Additionally, valuable business-related metrics like customer adoption data and lifetime value often reside in separate applications.

This fragmentation hinders a holistic view of performance across the value chain. It's like looking at a financial report that only shows specific line items – you miss the crucial context needed to understand those line items and make sound financial decisions.

Manual updates to business insights in separate systems can also be error-prone, biased, leading to inaccurate data that hinders informed decision-making.

• Limited Visibility Breeds Siloed Improvement and Missed Opportunities:

Without a clear view of the entire value stream, fostering continuous improvement becomes a significant challenge.

Lack of visibility creates information silos, with teams focused on optimizing their own individual stages using stage-specific metrics which are aligned to their team level objectives.

This siloed approach hinders collaboration and makes it difficult to identify bottlenecks or inefficiencies that span multiple stages. It's like trying to optimize a factory assembly line by focusing on individual stations without considering the overall flow of materials and production. Without a holistic view, teams might inadvertently shift blame for slowdowns or performance issues, leading to finger-pointing and a lack of collaboration. This hinders a unified approach to optimization. Establishing a baseline for value stream performance is crucial for measuring progress and identifying areas for improvement.

Without a clear baseline, it's difficult to track the effectiveness of improvement initiatives and ensure continuous optimization. It's like trying to improve your running time without knowing your starting point – you have no way to measure progress.

VSM Platforms

Now let's enter the realm of VSM Platforms. These are purpose-built technology platforms designed to address the gaps and limitations mentioned earlier. In general, most VSM platforms offer:

• Seamless Integration and Mapping Capabilities:?Effortlessly connect your existing tools and visualize your entire value stream for a holistic view.
• Actionable Insights:?Gain real-time visibility into bottlenecks, performance metrics, and key DevOps Research and Assessment (DORA) indicators to identify improvement opportunities.
• Orchestration Power:?Streamline workflows, automate tasks, and ensure smooth handoffs between stages for faster time-to-market.

VSM platforms are a relatively new player in the market landscape, but their adoption is rapidly increasing. Gartner in its Hype Cycle identifies 25 must-know emerging technologies, VSM is one of the key technologies in that list.

These hype and emerging technologies are expected to greatly impact business and society over the next two to 10 years and will especially enable CIOs and IT leaders to deliver on the promise of digital business transformation.?

The Power of Purpose-Built Technology

The key advantage of VSM platforms over a mix of separate tools like enterprise integration platforms, release orchestration systems, and analytics platforms lies in their focused approach.

VSM platforms are niche technology solutions designed specifically for value flow optimization. Unlike cobbling together various tools, VSM platforms offer pre-built functionalities that cater to common VSM needs.

Here's what sets VSM platforms apart:

• Pre-Built Integrations and Insights:?Most vendors in this space offer pre-built integrations and insights that are essential for VSM, such as value stream mapping and visualization capabilities, DORA and Flow metrics, and integration packages with leading software vendors. These integrations enable stage-specific functionalities within the value flow.
• Focus on Optimization, Not Replacement:?VSM platforms don't aim to replace your existing tools that manage different stages of the value flow. Instead, they act as a complement, leveraging existing functionalities while adding valuable features that further optimize the entire flow.

VSM Platform Capabilities and Benefits

In this section we will dive deep into the core functionalities of VSM platforms and explores the significant benefits they offer for organizations seeking to optimize their value streams. We will look into each capability and explore some practical use-cases that highlights the benefits of that capability.

1. Value Stream Mapping:Visualizing Flow for Efficiency

VSM platforms empower you with visual mapping capabilities, enabling you to depict:

• Stages of the Value Stream:?Clearly represent each step in your value stream, from ideation to delivery and beyond.
• Processes, People, and Systems:?Identify the key players and tools involved at each stage of the flow.
• Interactions and Dependencies:?Visualize how different stages interact and expose any potential dependencies that might hinder progress.

These visual representations not only enhance comprehension, but also offer practical benefits:

• Enhanced Visibility and Increased Alignment:?Complex value streams become easier to understand, potentially revealing hidden issues through clear visualization. Mapping fosters a shared understanding of the value flow across teams, breaking down silos and aligning everyone towards a common goal.
• Simplified Change Management:?Dependencies become readily apparent, allowing for the impact of potential changes (adding a new team, updating processes) to be analyzed and mitigated.

2. Value Stream Integrations: Simplifying Connections and Boosting Efficiency

VSM platforms are a game-changer when it comes to connecting the various tools used throughout your value stream. Unlike generic integration tools, VSM platforms offer some key advantages:

• Pre-built Connectors:?There is no need of complex coding. VSM platforms come with ready-made connectors for popular applications like Jira, Rally, Clarity, ServiceNow, Salesforce, Microsoft ADO etc. Think of it like having a pre-wired toolbox with all the right tools for the job.
• Drag-and-Drop Configuration:?No technical expertise needed! VSM platforms offer user-friendly interfaces that let you configure connections with a simple drag-and-drop action. It's as easy as connecting the dots.
• API Access for Advanced Users:?If a pre-built connector isn't available, VSM platforms still have you covered. They offer API access for those on your team who are comfortable with coding, giving them ultimate control over integrations.

These seamless integrations translate into real benefits for your teams:

• Increased Efficiency:?Automating data exchange between tools within your value stream saves valuable time. Imagine work items automatically flowing from your project management tool to your development tool, with updates reflected in both places. No more manual data entry!
• Automated Value Stream Mapping:?Once you've created your initial value stream map, integrations can automate updates to metrics and the map itself. This makes it simple to compare different versions and see the impact of changes you make. Think of it like having a self-updating roadmap for your value stream.
• Flexibility with Standardization:?VSM platforms allow teams to use the tools they prefer while ensuring everyone has access to the same standardized data. This gives teams the flexibility they need to be productive while providing leadership with a unified view of the entire value stream.

By simplifying connections and automating tasks, VSM platform integrations help streamline workflows and boost efficiency across your entire value stream.

3. Metrics and Insights: Making Smart Choices with Clear Data

VSM platforms act as a central information hub, gathering valuable metrics that can help you make smart choices about your value stream. They provide a wide range of metrics across different categories, allowing you to tailor your view based on your specific needs. We'll explore some key categories below:

• Delivery Performance: This is a critical category. Here you'll find metrics related to how quickly work gets done, such as lead times and defect density. Lower is typically better, indicating faster delivery with minimal bugs. VSM platforms can often pull this data directly from ALM (Application Lifecycle Management) tools, but even if you're using a variety of systems across the flow, the VSM platform can capture it all. That way, you have a complete picture of how fast work is actually moving. Think of it like having a single dashboard for all the traffic lights on your delivery highway – no more avoiding delays! On top of that, VSM platforms can also track other delivery metrics like velocity and burndown charts, which provide gauges that show you how quickly work is progressing throughout the entire pipeline. And let's not forget QA metrics, keeping those defect rates low is important too.
• Customer Happiness: This is another critical category. VSM platforms can even tie in metrics like Net Promoter Score (NPS) or customer churn rate. Happy customers are key to any business, so being able to see how your value stream is impacting that happiness is important.
• DevOps Performance: If you are following DevOps practices, VSM platforms can track DORA metrics which can help us see how well your development and operations teams are working together. Faster deployments, lower change failure rates – that's what we're shooting for.

Putting it All to Work: Gain Actionable Insights

Having all this data in one place allows you to:

• Track performance as it happens:?Monitor key metrics like lead time or defect density in real-time, allowing you to identify and address issues quickly.
• See Everything at Once:?VSM platforms combine metrics across categories and present them in clear dashboards for different teams. Imagine having all the information you need readily available, without getting lost in mountains of data.
• Fine-Tuning Your Value Stream:?Leverage flow metrics to pinpoint areas for improvement and optimize your value stream for maximum efficiency.

By utilizing VSM platforms and the wealth of data they provide, you can make informed decisions, streamline your value stream, and achieve the results you desire.

VSM Platform Considerations

So far, we've discussed the theoretical benefits of VSM platforms. But when do organizations in the real world actually consider adopting one? What is the right time? Here are some key considerations that can help clarify when VSM platform adoption makes sense.

Btw, there is VSM platform and then there is VSM solution. What is the difference?

These terms have become quite interchangeable, depending on who you heard them from.

VSM Platform:?A relatively new term coined by Gartner, a VSM platform acts as a central hub. It connects to all existing tools within your value streams and ingests data from every stage of the lifecycle. This comprehensive data collection allows it to provide a holistic view of your entire value stream, often in the form of a visual map.

VSM Solution:?A broader term, VSM solutions encompass various specialized tools offered by vendors. These tools traditionally focus on specific stages of the value stream lifecycle, like strategy management, project management (PPM) and application lifecycle management (ALM), or DevOps, CI/CD, and release management. Think of them as specialized toolkits for different parts and stages of your value stream.

VSM Platforms and Solutions: Working Together

While VSM platforms offer a holistic view of the value stream, VSM solutions address specific needs and capabilities within different stages of the value stream. Here's how they work together:

• VSM Solution Providers are Evolving:?Many VSM solution providers are now incorporating VSM platform capabilities into their offerings. This creates a more comprehensive solution. They achieve this through acquisitions of existing VSM platforms or by enhancing their existing solutions to include platform-like functionalities.
• Complementary Functionalities:?For instance, you might find a VSM solution provider that excels in PPM and ALM, while another focuses on DevOps. A VSM platform can leverage data from these specialized solutions to provide a complete picture of the value stream.

In essence, VSM platforms and solutions work together to optimize your entire value stream.

By combining the strengths of both, organizations can gain a comprehensive view and address specific needs within the value stream lifecycle.

VSM Platforms and Solutions: A Piece of the Value Stream Management and Optimization Puzzle?

While VSM platforms and VSM solutions offer important capabilities to optimize value flow, a robust value stream management and optimization strategy requires focus on four key dimensions aligned with value stream management principles:

• Process:?This involves identifying, mapping value streams, and optimizing processes in individual stages. Techniques like SPM, Agile, and DevOps can be leveraged to increase transparency, efficiency, and predictability of processes.
• People:?Moving teams from silos to restructure and align around a common value stream is crucial. Ensuring teams have the right skills and are empowered in their new roles fosters collaboration, communication, and ultimately, more effective value streams.
• Technology:?The right tools are essential. This includes tools that support specific processes, enable integrations between different systems, and generate valuable data and insights. VSM platforms and solutions fall into this category.
• Culture:?Ensuring that people at all levels, especially the leadership, understand the modern ways of working that focus on collaboration, continuous learning and experimentation, and a strong sense of customer centricity is critical for successful value stream optimization. Leadership buy-in is essential for this shift.

VSM platforms and solutions act as technology enablers, helping you map, integrate, and automate your value streams. However, remember they are just one piece of the puzzle and not a magic solution. They can only help you improve if your foundational practices and building blocks for value stream management are in place and strong. A holistic approach that considers all four dimensions – process, people, technology, and culture – will ultimately lead to a more optimized and efficient value stream.

When is the right time for organizations to adopt a VSM platform??

While VSM platforms offer significant potential for optimizing any type of value streams, it's important to approach their adoption strategically. Here's a two-step process to guide your decision if you are just starting out:

1. Focus on Core Stage Optimization:

Before considering a VSM platform, prioritize optimizing the core stages of your development value stream. This typically includes:

• Intake and Funding:?Streamline processes for capturing and funding development initiatives, potentially utilizing project portfolio management (PPM) capabilities and solutions.
• Work Planning:?Implement Agile methodologies and best practices for work breakdown, execution, and task management.
• Delivery:?Integrate continuous integration and continuous delivery (CI/CD) practices to automate testing and delivery processes.
• Reporting: Establish clear and consistent reporting practices to track key metrics at each stage of the value stream. This might involve utilizing existing data sources or implementing lightweight reporting tools.

Optimizing these foundational stages improves data quality for VSM analysis later on. It also provides a clearer understanding of your current value stream’s performance and potential bottlenecks.

2. Leveraging VSM Platforms for End-to-End Visibility:

Once the core stages are optimized, a VSM platform can deliver significant additional value. Here’s how:

• End-to-End Visibility and Insights:?VSM platforms provide comprehensive mapping, integration, and orchestration across the entire development value stream. This sheds light on any remaining gaps and inefficiencies, allowing you to identify areas for further improvement.
• Strong Foundation for Growth:?A well-optimized value stream with a VSM platform in place creates a strong foundation for future expansion. You can leverage this platform to expand the scope of your value streams beyond just development activities.

Another dimension to also consider here is the scope of what defines the value stream here. In an ideal world, we would say that it should start with an idea/concept and end with customer value realization; but in reality, the team that is trying to optimize might want to focus only on the business stages (ideation, funding, and planning) and not try to optimize the later development or release stages as they have no organizational influence there. In that case, the value stream scope is restricted to only the initial stages.

Likewise, if the scope of the value stream is limited to development focus only – because the purview and influence of the development leaders are limited to the development part of the broader value stream – that's okay. It's important to remember that progress is incremental, and you need to start somewhere instead of waiting for a perfect utopian scenario when the entire organization is on the same page.

We Just Started VSM: Does a Platform Add Value Now?

You've just started your VSM adoption journey with a single development value stream. Is a VSM platform worth considering at this point?

A VSM platform can definitely provide additional value by further optimizing your development value stream, as long as you've already addressed some of the fundamental building blocks as discussed above. However, it's important to understand the scope and complexities of your value stream and weigh the return on investment (ROI) before deploying a platform.

For a single, simple development value stream, the ROI of a VSM platform might not be ideal.

“Complexity Triggers Platform Value”

The true value of VSM platforms emerges as the scope of VSM increases within your organization. As more teams and departments are involved, and value streams become more complex with numerous dependencies, mapping, integrating, and orchestrating them becomes time-consuming and prone to errors. Here's where VSM platforms shine.

Organizations typically find a platform's ROI improves when they've achieved success with optimizing a few value streams and are ready to scale VSM across the organization. This can be a top-down push for broader adoption, or a natural progression after initial VSM wins.

We want to further optimize our value stream. While we've adopted PPM, Agile, and CI/CD practices, we're still seeing gaps in our value flow. This makes it difficult to justify the ROI of a VSM platform at this time. What should we do?

Great work implementing PPM, Agile, and CI/CD! But those value stream gaps are slowing you down. You might be considering a VSM platform, especially for integrating all disparate solutions in the value chain. However, if your budget is tight and a full-fledged VSM platform isn't in the cards right now, particularly when the integration scope is limited to just PPM and Jira, here are some cost-effective ways to optimize:

• Streamline and Integrate:?Focus on tightening up processes across PPM, Agile, and CI/CD. Look for opportunities to eliminate bottlenecks and make workflows smoother. Then, utilize native APIs or your existing Enterprise Integration platform (if you have one) to connect your tools and improve information flow.
• Data-Driven Decisions:?Once you've integrated your tools, leverage an analytics platform to pull valuable data. This data will be crucial for identifying areas for improvement within your value stream.

In most such cases, our experience shows that organizations have built competencies within specific stages of the broader value stream, but in silos. However, most of these stages are still isolated or have limited automation and integration, resulting in limited information flow between them. This creates an enormous amount of manual work. If you are in such a situation, you need to get back to the basics that we have highlighted in this article, like clearly identifying and mapping the various stages in your value streams. You also need to understand the areas that work efficiently well. Trying to fix and solidify the foundational building blocks, such as processes and team alignment, is critical.

Such organizations can also consider leveraging their existing tools to map and integrate the value stream, generating necessary insights and filling in the gaps in parallel. This can be done while the broader exercise of defining a streamlined value stream for the future is underway, which obviously requires more political capital and time.

VSM Trends and Future Outlook

The VSM solution landscape is evolving rapidly, and we expect organizations to continue investing in advanced capabilities that further empower value stream optimization. VSM platforms, in particular, are likely to see significant investments in the near future. Here are some key trends we anticipate:

• Vendor Consolidation:?As vendors expand functionalities and offer more comprehensive VSM solutions, we might see some consolidation within the VSM market through acquisitions or mergers. This will likely lead to a smaller number of dominant VSM platform providers.
• Expanding Capabilities:?Incumbent vendors focusing on specific value stream stages will likely broaden their offerings to encompass more stages, providing a more holistic VSM solution. We've already seen traditional PPM vendors offering Enterprise Agile Planning (EAP) capabilities, and some DevOps vendors venturing into EAP. Additionally, established vendors are increasingly acquiring dedicated VSM platforms, further accelerating this trend.
• Packaged Add-ins Proliferation:?VSM platforms will likely continue to offer a wider range of out-of-the-box add-ins to integrate with the growing ecosystem of tools used throughout various value stream stages. This will allow organizations to rapidly deploy and reduce the time-to-value for value stream integrations and mapping.
• Automating Business Metrics:?Business and customer metrics (OKRs, KPIs) are critical, especially in strategy and planning stages, where they are used to prioritize initiatives and adjust strategies based on business performance. Currently, most organizations, even those using VSM platforms, still manually capture and maintain these metrics in separate strategy management systems. For example, if a business objective is to increase cloud adoption with key results like the number of apps migrated or built on the cloud, the current approach often involves manually collecting data from various sources and updating it for senior management consumption. VSM platforms can revolutionize this process by integrating with source systems (like asset management systems in the above example) and automating the collection of such business metrics.
• Enhanced AI-powered Analytics:?VSM platforms already collect vast amounts of data from various tools and processes within the value stream ecosystem. By leveraging advanced AI and analytics on this data, valuable insights can be derived to further accelerate value stream optimization. This could include predicting bottlenecks, analyzing potential impacts of value stream changes, and proactively assessing the risks associated with modifications.
• Increased Reach and Adoption:?We can expect more organizations investing in VSM platforms. To deliver even greater value, these platforms might introduce capabilities to expand their reach beyond the value stream, potentially integrating and mapping functionalities with additional systems like Finance ERP, HR, and Supply Chain systems. This can further enhance value stream mapping and provide even more comprehensive insights.
• Focus on User Experience:?As VSM platforms become more complex, we might see a focus on improving the user experience (UX). This could involve intuitive interfaces, customizable dashboards, and data visualization tools that make it easier for users to interact with and interpret VSM data.
• Security Considerations: As VSM platforms become central hubs for integrating and collecting data across various systems within the value stream, security becomes paramount. There's a growing recognition, championed by industry leaders like my colleague and friend Sesh Ramasharma, MBA, CISSP, CCSP and the DevSecOps movement, that security shouldn't be an afterthought. It needs to be embedded throughout the entire product development lifecycle, including the early stages where investment decisions and organizational portfolio strategies are formulated. By prioritizing security from the outset, organizations can build VSM platforms with robust security measures in place to protect sensitive data. This proactive approach mitigates risks and fosters trust in the VSM platform as a reliable and secure data repository.

DevSecOps and VSM Alignment:

It's worth noting that the DevSecOps philosophy, which emphasizes integrating security considerations throughout the development lifecycle, aligns perfectly with the goals of Value Stream Management.

By adopting DevSecOps principles within the VSM domain, organizations can ensure that security is woven into the fabric of the value stream, from ideation and planning to development, deployment, and ongoing operations. This holistic approach creates a more secure and trustworthy value stream ecosystem.

By staying informed about these trends, organizations can make informed decisions about their VSM strategy and leverage the power of VSM platforms to optimize their value streams for maximum efficiency and effectiveness.

Summary

While complete VSM adoption across organizations is still in its early stages, the solution landscape is rapidly evolving.

The Gartner Hype Cycle identifies Value Stream Management (VSM) as one of the key emerging technologies expected to dramatically impact businesses and society over the next decade. This recognition underscores VSM's potential to empower CIOs and IT leaders to finally deliver on the promise of digital business transformation.

New capabilities and features are constantly emerging, aimed at accelerating VSM adoption. VSM solutions, including both stage-specific tools (DevOps, PPM, Agile) and comprehensive VSM platforms, play a critical role in this journey.

Many organizations have already implemented stage-specific optimization practices. The next step for many will be adopting VSM platforms. As highlighted earlier, VSM platforms offer significant potential for accelerating value delivery, increasing workforce productivity, and ultimately, improving customer value. These platforms are attracting significant investment from traditional VSM vendors, and we can expect to see even more innovation in this space in the near future. However, it's important to carefully evaluate the ROI potential of a VSM platform before making an investment decision.