If you’re an enterprise-level business, you’ll be no stranger to managing a portfolio of initiatives. It can be easy to get weighed down by all of the detail involved in project execution. Making sure that no budgets or timeframes run over for any task or initiative is not only an exhausting endeavour for your teams, it’s also not an effective way to manage the entire portfolio. Why? It lacks efficiency.
Value Stream Management is an increasingly popular mindset and way of organising the portfolio of work.
Instead of chasing all the loose ends, it allows you to channel your focus on what’s really important. Instead of watching over everything, you can just keep your eye on the key decisions and insights that matter.
In this guide, we’re going to show you exactly how to align business strategy with effective delivery through the lens of value stream management.
What is value stream management?
This management mindset is all about delivering objectives in the most effective way possible. It’s about looking at the value your business provides and how your work contributes to that value. You can then prioritise portfolios and decision-making around your value streams to decrease complexity, accelerate innovation and eliminate wasted work.
Value stream management ensures all stakeholders have a shared understanding of the value generated and time-to-value of the portfolio of work.
Things that customers pay you money for equates to the value you deliver. Your unique value propositions also play a part here. Why would a customer choose you over a competitor?
Let’s say you’re managing an airline. What could ‘value’ look like for you?
✓ Offering better value for money on flight prices
✓ Offering an enhanced on-flight experience
✓ Making it easier for customers to book flights
For your business, these are all necessary to deliver a good service to customers and offer value.
If you look at these values, this could create a multitude of different types of initiatives. This could include product-based agile initiatives for app software, or more traditional initiatives around resource improvements for hiring, cost-reduction for more competitive pricing and perhaps equipment or hardware to improve the overall experience.
Value streams help you strategise processes so that you’re enhancing the value you provide for the end user. They look at the individual activities and processes that make up your business. Does your customer care about X, Y and Z? Does it contribute to the value they’re paying you for? If not, then you should question whether you should remove a process or activity from your business operations.
What is a value stream?
Value streams can be defined as the set of processes that produce value for a customer.
In essence, value stream management is a mindset that helps you manage projects through a critical lens. If it’s not adding value to your business, then it’s not worth wasting valuable resources on.
A value stream is the reason you do things. They will always be unique depending on your business, as every company has its own objectives and values.
There is no specific number of value streams required, either.
The question you will always need to ask is whether a project or task is contributing to the overall objective of a value stream. If not, then it can be brushed aside. It won’t contribute to your overall objectives.
That’s just one facet. Another consideration is restructuring your funding to make it simpler to manage.
Visualising and mapping your value stream
Value streams can be placed into two categories: operational and developmental.
Operational value streams are the processes required to deliver value. Let’s return to our airline example and take a look at the potential value stream of “offering an enhanced experience for your customers.” The first step is to breakdown the customer journey across every touchpoint or interaction. An example of the existing processes and systems is outlined below.
These activities are all necessary to deliver a good service to customers. Any one of these or all of them could be improved to enhance the overall experience.
If we look at a more product-focused value stream, such as enhancing the booking experience, this is more likely to result in a developmental initiative to improve the booking app. This would be approached in a different way, such as in the below agile product development cycle.
Restructuring your hierarchy
Inevitably, you may then need to reevaluate and restructure your hierarchy of work to reflect the new “value” lens. Why? It allows you to visualise and organise your work and show clear traceability from the value stream through all the initiatives delivering that value. Anything that you can’t “place” requires some evaluation.
Budget a team instead of a project
Instead of monitoring all initiatives and tasks, part of this process allows you to move budget tracking and decision-making further up the hierarchy. Instead of funding individual initiatives, you fund the teams assigned to a value stream. This will empower teams to pivot and adapt as inevitable change occurs.
You still monitor and report the progress of the execution initiatives, but if the budget or deadlines marginally go over on single items within a value stream, this is no longer immediately a trigger for escalation and lengthy governance. Instead, it results in a strategic review of the value that “change” would provide within the initial guardrails that have been set for the value stream. Instead of managing hundreds or thousands of individual tasks, you could instead apply the approvals and governance to a small number of value streams.
Essentially, this means that you don’t have to waste unnecessary time, energy and resources on heavy governance and approvals within the individual initiatives. Instead, you can bring the focus back to the overarching value streams, meaning you can manage 10 budgets instead of hundreds.
How can value stream management help your business?
When executed well, value stream management should achieve the following:
✓ Improved Execution – Better alignment to strategic objectives.
✓ Simplified Funding & Decision-making – Save time and resources while increasing the output of value-driven work.
✓ Improved Insights – Help keep stakeholders informed to enhance collaboration and make better decisions.
✓ Increased Value – For you and your customers.
✓ Increased Business Agility – Improve productivity and velocity.
How can you build value streams for your business?
This mindset involves organisational change and won’t be implemented overnight. But, with the benefits that your enterprise could gain, it’s certainly worth exploring. Even if it’s not for your business and you decide another system would be more appropriate, looking at your portfolio through the value stream lens can still provide valuable insights.
As there is currently no universal, out-of-the-box solution or fully documented methodology, consulting advice and real-world experience of how other organisations are addressing this change can make all the difference. A PPM software specialist can bring this expertise and help you implement and integrate the right solution for your business.
At Ignite Technology, we’re a Tier 1 supplier of Broadcom’s Clarity software, which allows you to build and implement value streams as a way of managing your enterprise. It also provides maximum flexibility in how you organise and visualise your work. Contact us to find out more or book a demo with one of our software specialists.
If you would like to learn more about the topics covered in this article, you can watch our presentation from the Ignite Technology ValueOps MEA Summit.