The Value Stream Management Consortium (VSMC) has become, over the past three years, a pivotal entity in championing the principles and practices of Value Stream Management. Their insights, drawn from a diverse pool of survey respondents, provide a comprehensive view of the VSM landscape. The State of Value Stream Management Report 2023, in particular, stands out due to its inclusivity, drawing data from respondents across various organizational sizes, ranging from nimble startups with 1-99 employees to massive enterprises boasting 50,000+ personnel.
Diversity also shines through in the sectors represented, with voices from industries as varied as finance, non-profit, government, education, healthcare, technology, manufacturing, travel, and professional services. This comprehensive data set ensures the insights are holistic, representative, and, most importantly, actionable across sectors.
Survey respondents serve in one of three primary roles within their organizations: those creating products, services, or platforms; executive decision-makers; and individuals driving transformative change within their organizations. The perspective isn’t limited to just a few roles in an organization’s hierarchy. Feedback has been integrated from a wide spectrum of positions, such as software engineers, product owners, value stream architects, DevOps engineers, release or environment managers, and even the strategic vantage point of the C-Suite.
In this era where every business is intricately interwoven with technology, understanding the nuances, challenges, and opportunities presented by VSM is not just beneficial—it’s imperative. The 2023 VSMC report provides these insights, charting a clear path for businesses aiming to optimize their value streams and drive continuous improvement.
- The Power of Value Stream Management Platforms (VSMP): Elite performers aren’t merely adopting VSM practices; they are leveraging specialized platforms to amplify their efforts. Their inclination to utilize a VSMP is markedly higher than their lower-performing counterparts. With dedicated platforms, the emphasis on measuring value outcomes becomes more pronounced, fostering a culture of accountability and results-oriented strategies.
- The Rise of Continuous Value Measurement: In the swiftly changing terrain of today’s business world, the definition of value is not stagnant but constantly evolving. The report highlights a 15% surge in the adoption of continuous value measurement, enriched by real-time feedback from customers. Additionally, a 5% increase in reporting value to business stakeholders speaks volumes about the heightened awareness and importance businesses are attaching to this metric. Continuous evaluations, fortified by these feedback systems, guarantee that organizational endeavors are consistently in sync with the goal of producing concrete benefits. Notably, the data suggests a trend: elite performers are more inclined to report value to their CEO and business stakeholders, whereas lower performers tend to relay information to no one at all or their CIO/CTO at best.
- Increasing Customer-Centricity: A significant trend observed is the shift towards a more customer-centric approach as companies adopt VSM. Organizations are not just focusing on internal efficiencies; they are keen on understanding and catering to end customers’ needs and preferences. By aligning value streams with customer journeys and incorporating continuous feedback loops, businesses can ensure they are creating products and services that genuinely resonate with their target audience.
- Creating Value Hypotheses: Increasing the practice of creating value hypotheses before initiating new product development is gaining traction. It involves laying out clear assumptions about the expected value a particular initiative will deliver. Feedback loops play a pivotal role in validating or refining these hypotheses. By incorporating real-time feedback, teams can align their efforts more closely with the value they aim to deliver, ensuring a laser-focused approach throughout the development process.
- Decreased Lead and Cycle Times: One of the most tangible benefits of adopting VSM is the reduction in lead and cycle times. The 2023 report indicates that teams with interconnected value streams are significantly more likely to achieve shorter lead times. This acceleration in delivery, combined with enhanced quality and increased business and engineering alignment, positions organizations to respond rapidly to market changes and customer needs.
These insights, while valuable on their own, truly shine when viewed through the lens of the pain points they address. Contextualizing these insights against the challenges faced by technology leaders:
- Agility Challenges: The unpredictability in delivery, slow time-to-market, and missed commitments are often the bane of many technology leaders. By interconnecting value streams, organizations can drastically reduce lead times, making delivery more predictable and agile.
- Transformational Woes: The inability to measure the real value of transformational efforts can be disheartening. The rise in continuous value measurement offers a tangible metric to track and optimize these efforts.
- Bridging the Business-Technology Divide: Elite performers’ inclination towards entirely digital products and platforms highlights a harmonized business-technology strategy. It’s a blueprint for other organizations to emulate, ensuring that business and technology are not just aligned but deeply integrated.
- Process and Technological Inefficiencies: The emphasis on VSM practices, especially the utilization of dedicated VSMPs, addresses the challenges of outdated technology and inefficient processes. It offers a roadmap to streamline operations, prioritize tech debt, and mitigate risks.
- Quality Assurance: With VSM, quality is not just an afterthought; it’s integrated into the value delivery process. This proactive approach reduces incidents and outages and ensures a high standard of delivery.
For technology leaders, especially those at the director level and above, internalizing these insights and integrating them into their operational framework can be transformative. It offers a clear path to not only address prevailing challenges but also to future-proof their organizations in an ever-evolving technological landscape.
In summation, the insights from the State of Value Stream Management Report 2023 are more than just data points; they are signposts guiding technology leaders toward a future where value delivery is consistent, agile, and impactful. As the boundaries between business and technology continue to blur, VSM and VSMPs will play an even more critical role in ensuring that organizations remain competitive, innovative, and value-driven.
To delve even deeper and gain a holistic understanding of the VSM landscape, the Forrester Wave™: Value Stream Management, Q4 2022 is an invaluable resource. It offers a comprehensive analysis, reviews, and recommendations, ensuring that technology leaders are always at the cutting edge of VSM practices.