I will not surprise anyone if I say that a lot has changed in the last year. Value flow management (VSM) is certainly no exception. This is an area that has undergone massive evolution in a relatively short time. A year ago, the focus was on education and awareness of the principles of VSM and its benefits. Now VSM is gaining global acceptance and interest from top analysts in the industry. There is also a rapid shift from investigation and discussion to implementation and optimization.
Broadcom Software recently hosted a Summit to manage the flow of value, which highlighted real stories and proven lessons from some of the world’s largest companies. The following is a summary of what’s new and what’s next for VSM.
Get end-to-end visibility
Once considered a methodology exclusive to IT and DevOps, VSM is now used to align the entire enterprise and is the connective tissue between strategy, development and customer value.
The focus now is on end-to-end visibility and the use of real-time data to cover everything from flexible planning to new software delivery and product launches. We worked with a global technology firm to consolidate tools and data into a single integrated platform for managing work, teams and budgets. This enabled managers to make the best prioritization and capacity decisions, manage delivery teams more effectively, and coordinate work around customers and business goals.
Construction of new structures
Teams are beginning to reshape their organizational structures around value streams. With these structures, cross-functional teams across the organization are equipped to better focus on delivering value to customers. By moving from project financing to product financing, teams can gain greater coherence around what customers want – and gain the ability to deliver when they want.
“Ultimately, through VSM, you organize how customers determine value,” explains Barbara O’Connor, director, Enterprise Agile Office Digital Transformation Organization, Unum. “When you do that, it really changes people’s thinking and discussions. Instead of talking about my process and your process, we talk about the elements that support value delivery. ”
Use indicators to achieve OKR alignment
Moving forward, teams will begin to reorient their performance and rethink how they value and motivate people. Thus, the movement towards focusing on goals and key results (OKR) is of paramount importance. Development is not about the number of points in history. For IT operations teams, these are not service level objectives (SLOs). Rather, these teams and businesses are concerned with indicators such as hourly sales. Through OKR, people across the organization will better understand how they contribute to top-level goals.
“What we hear from customers is that OKR will enable people to really understand the purpose of their work and how their work is in line with organizational goals,” said Jean-Louis Vinho, Product Manager, ValueOps, Broadcom Software Group. “When employees get this visibility, they are happier and more productive.”
Expansion of VSM beyond the enterprise
VSM will also begin to cover the expanded development and delivery ecosystem, which now includes not only full-time employees in the organization, but also external contractors and service providers.
This will also extend far beyond development. When you think of a commercial airline manufacturer, their value streams don’t just consist of software development. It includes a complex supply chain, with suppliers supplying everything from seats to gauges and engine components to provide enhanced safety for their customers. VSM will allow data aggregation, which helps teams effectively analyze value delivery, no matter how large or complex the value flow. This foundation will allow teams to continue to scale the strength of VSM.
Improving efficiency and finding ways to dispose of waste are definitely key results of VSM, but it’s not really the end game – the end game is ultimately efficiency. It’s not just development or IT operations, it’s financing, planning, marketing, delivery, sales – it’s an exercise for the whole team that leads to maximum value for the customer.
VSM allows teams to better understand the work involved in the flow of end-to-end value. By properly applying VSM principles, teams can promote a customer-oriented approach that allows for faster and more frequent value delivery. When teams understand how their work affects the client’s results, they are happier and more satisfied with their work.
To learn more about how customers navigate their VSM journey, be sure to watch 2022 Flow Flow Summitwhich is already available on request.