Demystifying the term VALUE STREAM

One of the hottest topics around: value streams. I’ll demonstrate that this – once again - is old wine in new bottles, and maybe we should treat it as a hoax. It’s a term frequently used by consultants to masquerade that they haven’t been able to solve the previous challenge, and they’ve now found a new gimmick: “The Shiny New Thing That Really Helps” – as Paul Wilkinson would call it (TSNTTRH). ?That thing has a great sound to it and can confuse the customer for a long time – maintaining the consultant’s turnover at the desired level.

Sources

If you’re already read a lot about the topic of value streams, you may skip the analysis and jump to the conclusion at the bottom of this blog….

For those who are still curious, let’s start with some quotes from the world of vendors.

Forbes says: “Value stream management is a lean business practice that helps determine the value of software development and delivery efforts and resources.”

Forbes also says: “The concept of value stream mapping is a part of the lean approach that allows you to analyze the current state of your processes and build a better future state based on the series of events that take your product/service from initial concept to the finished product that the customer receives. This eliminates waste and allows you to prioritize based on your customers.” Also check Techbeacon.

As usual, this is based on a best practice approach: we improve our service quality by polishing the outside instead of curing the disease. These traditional best practice approaches have never delivered what was hoped for and they actually only boosted the complexity of modern economy. The series of blogs on demystifying the term maturity demonstrates that this best practice approach is predominantly used in the lower levels of the Value Maturity Model.

Often, value streams are perceived as software, especially by tool suppliers: “Value stream management (VSM) is a proven lean business technique that focuses on the value of software development and delivery initiatives across an organization's software development lifecycle (SDLC).” Of course, Forrester then investigates this and sells the usual expensive reports.

Software engineers (e.g. DevOpsInstitute) see it as a software thing: “Value Streams help ensure that software and services under development deliver value for employees or customers.”

And ChatGPT? When asked to define it, it produces this: “A value stream can be defined as the sequence of activities or steps required to deliver a product, service, or solution to customers while adding value and minimizing waste. It represents the end-to-end flow of processes, information, and resources needed to create and deliver the desired outcome.”

As with all hoaxes and SNTTRHs, we suddenly see ‘Value Stream Management software products’ that claim “Make work easier, faster and more accurate through a cutting-edge Value Stream Management software”. This reminds me of the mid nineties, when all ticketing systems turned into ‘ITIL tools’ overnight. More recently the same happened to the same ITIL tools when they miraculously turned into ‘ESM tools’.

Tasktop says: “Value Stream Management is a management technique or practice that focuses on increasing the flow of business value from customer request to customer delivery.” And “The term ‘value stream’ was born of the Lean movement to describe the material and information flow to create value. A value stream is the sequence of activities an organization undertakes to deliver on a customer need. (Martin, K. & Osterling, M. (2014). Value Stream Mapping. McGraw-Hill, p. 2-3.)”

Gartner of course assesses ‘Value Stream Management Platforms’ (VSMPs) in their typical technology-promoting guidance: “What are Value Stream Management Platforms? Value stream management platforms enable organizations to optimize end-to-end product delivery and improve business outcomes. VSMPs are tool-agnostic; they connect to existing tools and ingest data from all phases of software product delivery all the way from customer need to value delivery.” And then they also sell their expensive reports to the executive clients.

TOGAF defines a Value Stream as “The key value-creating activities for discrete areas within the Value Network where some unit of net value is created or added to the Digital Product as it progresses through its lifecycle”.

PMI, the Project Management Institute, says “A value stream begins, ends, and hopefully continues with a customer. A value stream is the set of actions that take place to add value for customers from the initial request through realization of value by the customers.”

SAFE even uses the term Operations Value Streams (OVSs): “Operational value streams (OVS) are the sequence of activities needed to deliver a product or service to a customer. Examples include manufacturing a product, fulfilling an order, admitting and treating a medical patient, providing a loan, or delivering a professional service.”

SAFE also uses Development Value Streams (DVS): “… the sequence of activities needed to convert a business hypothesis into a digitally-enabled Solution. Examples include designing a medical device or geophysical satellite, or developing and deploying a software application, SaaS system, or an e-commerce web site. Development Value streams are the primary organizational model in SAFe. A SAFe portfolio is comprised of them, each dedicated to building and supporting a set of solutions”.

SAFE also coined the term Value Stream Engineer: “The Value Stream Engineer (VSE) and Release Train Engineer (RTE) assist the value stream and release train execution as well as the processes. They intensify the manage risk, help guarantee value delivery, impediments and help drive nonstop development.”

KaufmannGlobal uses the term Value Stream Owner: “The Value Stream Owner is the individual or team responsible for the performance of an entire value stream. Usually this means a consolidation of functions and functional reporting. This may sound simple, but in practice it is extremely difficult to achieve.” And most likely, you should hire KaufmannGlobal to solve this… Rest assured – it is absolutely not difficult to achieve, if you can think out-of-their-box, as I’ll show you at the end of this blog.

As usual, there is an ISO standard for this: ISO 22468:2020, Value stream management (VSM)… For merely €176 you can buy a practice-based approach to this topic that has been promoted to a global standard.

We have a VSM Consortium …. For $99/year, you can become a member, but of course you can become a corporate partner for 10, 20 or 50.000/year .

We have Business Architecture Value Streams ad IT Value Streams…

And we’re so happy to announce that we now have Value Stream Architects!

We even see companies talking about Enterprise Value Stream Management.

Everything is a value stream

Value streams are not only turning into the new cash-cow of software vendors and consultants, other sectors also jump the bandwagon. We now see job ads for Value Stream Manager vacancies. Consultants are promoting their value stream guidance offerings. Trainers offer their value stream mapping masterclasses.

Value stream management got its own 3-letter acronym: VSM.

The main metrics? Lead time, cycle time, deployment frequency, and defects.

OK – it seems obvious by now:

The boys have found their new toys!

Or, as Paul Wilkinson would probably call this:

Value Streams: The Next Shiny New Thing That Really Helps!

When value streams are specified from a best practice framework perspective, the chaos is complete. Just look at what IT4IT has made of it… They define seven value streams: Evaluate, Explore, Integrate, Deploy, Release, Consume, and Operate, but they are all defined from the provider’s perspective. It’s like going back in time, and reversing the evolutionary steps we’re trying to take.

ChatGPT, when asked to explain further: “A value stream is a term that has been around for a while, but it has remained somewhat of a mystery to many people. The truth is that a value stream is simply a practical workflow that has been used for decades. It is essentially a way of mapping out the journey of a product or service from its inception to its delivery to the customer. At its core, a value stream is just a way of visualizing the processes, resources, and activities that are required to create a good or service and deliver it to the customer. The goal is to identify any areas of inefficiency in the process and make improvements that will lead to greater value for the customer. By clearly outlining the different steps and resources that are required to get a product or service from point A to point B, companies can gain insight into ways to streamline their processes and make them more efficient. The concept of a value stream is nothing new, but it is a valuable tool for businesses of all sizes. By taking the time to map out the journey of their products or services, companies can identify areas of improvement that will help them become more efficient and deliver more value to their customers.”

Another ChatGPT essay says: “The term ‘value stream’ originated in the manufacturing industry, specifically within the Toyota Production System (TPS) in the mid-1900s. It refers to the end-to-end process of creating a product or service, from raw materials to delivery to the customer, with an emphasis on identifying and eliminating waste.

The concept of value stream mapping was later developed as a visual tool to help identify and analyze the flow of materials and information through a process, enabling organizations to improve efficiency and reduce costs. Value stream mapping has since been adopted by various industries, including healthcare and software development.

While value stream and workflow can be used interchangeably in some contexts, value stream typically encompasses a broader perspective that includes all aspects of the process, such as customer demand, supplier relationships, and feedback loops. On the other hand, workflow often refers to the specific steps and tasks involved in executing a process.

In recent years, the concept of value stream has also been applied to non-manufacturing areas such as marketing, where the focus is on identifying and optimizing the flow of value to the customer. Overall, the term value stream represents a holistic approach to process improvement that prioritizes delivering value to the customer while minimizing waste.”

Demystifying the term ‘Value Stream’

By now, it may be clear that the concept of a value stream has been around for many decades. It relates to delivery of value to customers. Positioned on the Value Maturity Model, this means it finds its place at level 4: the customer-driven level.

It’s also clear that it relates to an end-to-end approach of that value. This says that all partial approaches that have an internal focus (levels 1-2-3 of the Value Maturity Model) fall off the scale. Therefore, best-practice frameworks like ITIL or IT4IT are inherently unsuited for the concept of Value Stream.

So, how can I use the concept of Value Streams?

Applying a methodical, principle-based approach like USM will solve this. USM defines service delivery at the end-to-end customer-driven level (4), and it removes the complexity of the management system and your daily routines, by reducing its redundancy.

Redundancy is the archenemy of efficiency.

To create the most efficient service management system and your routines for delivering your customer-driven services, you’ll have to remove all redundancy from the elementary level of the (pure) process – as USM does. If you learn how to do that in a methodical way, you’ll find the maximum efficient process model of no more than 5 pure processes, and you’ll be able to create any and all value streams with a set of no more than 8 universal workflow templates for all your routines: end-to end and customer-facing.

The concept of value stream can now be used interchangeably with the USM concept of end-to-end customer-driven routine, based on these universal templates. When applied to only the process dimension, it will tell you all about the logic of your service delivery in terms of the universal process architecture for service providers.

When applied to the process and the people dimensions, it will tell you all about your local procedures: who is assigned and allowed to do what (in your local organization or team).

And when applied to the process, the people and the technology level, it will tell you all about your work instructions: the practices you use to deploy your procedures to any practical situation (with your local tools).

All of this is described in the analysis of the daily routine, according to USM.

If you understand and apply this, it will hugely simplify your service delivery and your customers will (finally) be at the core of your service management system.

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