What is Value Stream Management?

Digital value streams are the linked set of activities that deliver software-based capabilities that power business value streams. Every digital value stream spans five canonical phases: Plan | Build | Test | Deliver | Run.

Digital value streams power business value streams, the linked set of activities that deliver value to end customers, suppliers or employees. Unlike digital value streams, business value streams vary widely in their phases. An example business value stream in banking is mobile banking or even consumer banking writ large. An example business value stream in insurance is claims processing, from submission through closure. An example business value stream in telecom is customer on-boarding. Since every company in virtually every industry today is software driven, every company’s competitiveness is dependent on their digital value streams.

Every business value stream requires one or more digital value stream, since every business value stream is powered by digital systems, which are often thought of as digital products, complete with product managers and owners. Today’s reality for business value stream owners is that they have minimal visibility and considerable frustration regarding the value their digital value stream is delivering. Meanwhile, the digital value stream owner is drowning in complexity and lacking the systemic ability to exploit the proven practice of Value Stream Management. This results in competitive weakness, especially when challenged by digital-native competitors who rapidly and continuously deliver high-quality digital value.

Using value stream management tools, organizations gain wide-angle visibility into the interconnected processes that make up the SDLC, from ideation to software delivery. This enables software development and IT teams to better analyze each touchpoint throughout the value stream to improve workflows, eliminate waste, increase automation, and remain compliant.

Value stream approaches put the customer at the center. They help forward-thinking software development organizations shift from a features-and-functionality approach to a product operating model.

These best practices take an economic view and apply system thinking to build incrementally with fast, integrated learning cycles. Focusing on alignment, built-in quality, and transparency is essential.

At its core, value stream management provides a macro view of the SDLC. It helps organizations discover hidden silos, roadblocks, points of risk, and inefficiencies among cross-functional teams. Once found, these teams can address these issues and focus on maximizing value for customers during each step of development. Understanding the vital role value stream management plays in scaling Agile and DevOps transformations is essential for software companies of all sizes.

Without holistic data-driven insights from value stream management, it can be challenging to effectively manage modern software development and maximize value delivery.

Providing a view of the entire SDLC, value stream management enables software teams to identify and examine critical elements through the lens of the customer. This perspective also helps teams quickly catch issues or delays, eliminate wasteful activity, and create room for innovation.

AI-powered root cause analysis identifies bottlenecks that slow down the time to market. When teams find the cause of inefficiencies and waste in development and testing processes, they can improve them to maximize productivity.

With each release, it is important to measure and eliminate the points of risk that can impact product quality. So, teams need to identify risk early. Value stream management helps identify potential downstream process delays before they happen. Trend and data behavior make SDLC processes more predictable, empowering teams to see patterns that might decrease performance across your value stream.

In addition, value stream management can help organizations see how some established practices—such as user interface standardization—impact time to market, risk management, and value generation.

Value stream management harmonizes a company’s critical software development efforts. It provides a holistic lens into the end-to-end software development process across a broad spectrum of variables. It is essential to maximizing business value creation, customer satisfaction, and ultimately, competitive advantage.

A modern, end-to-end value stream management platform doesn’t just provide real-time insights. It also facilitates the ability to take action where and when necessary. Value stream management platforms are flexible systems that can integrate with your existing toolchains. At the same time they provide extended functionality and capabilities, including predictive AI, smart automation, and continuous quality.