All About Value Streams with Ramesh
What are Value-Streams?
Value streams are a representation of all the activities related to providing value to a consumer or end user. This value can be in terms of a Product or a Service that is offered by the Enterprise. For an enterprise, think about what is the problem that our customer is facing and how we can alleviate or solve it for them, through a solution. If you can, articulate it sequentially. then all those steps put together is called a Value Stream. You can actually think of it as a little water stream in the nature – that is something moving, delivering a stream of value. For an Enterprise, the Value achieved is directly correlated to the Value offered to the Consumer. You might have multiple value streams for a given Enterprise, depending on the multitude of Customers to whom you are offering Products and Services. You might provide service to a partner; you might offer a service to the end-user; you might offer a service to the actual company with multiple users.
A little water canal, something moving, delivering a stream of value
How do Value-streams fit into Lean Enterprise?
Going back to the definition of value streams, we know that it involves the sequence of steps on delivering value. Now, by working through these steps in the most optimal and productive way, we tend to offer solutions to the Customers. That is where you lean on the essence of the lean way of working. Lean is all about reducing wastage and optimizing the flow. So having a Value-Stream supported by lean methods is crucial for lean enterprises. Otherwise, the enterprise becomes very bloated, and plenty of wastage happens if you don’t include lean way of thinking.
How do you use Value-streams in Lean Portfolio Management?
Initially, during the identification of the Value-stream, we provide or think in terms of a customer. Let’s call it an Operational value stream or more of a Productized value stream. The Initial solution offered to a customer may be at a very high level with lot of ambiguity. It may not have enough fidelity when you start bringing that concept into the enterprise and start thinking about the strategic way we can offer this value to the customer. In order to pursue this, we have to convert a strategy and an abstract idea into a tangible artifact such as epics, features, and other artifacts.That segment or the whole activity, happens in the lean portfolio (LPM) segment of SAFe. So that’s why having that operational value stream or a productized value stream concept is very important to be well understood as it will influence the work downstream. Then, identifying the initiative to execute on it becomes an essential aspect of the LPM or Lean Portfolio Management segment’s value streams.
What are the benefits of organizing around Value Streams?
You’re going to have a better, more optimal flow of value. You have reduced delays. You are focused on delivering a specific product or a solution. You have a leaner process, etc…
What is value stream management?
That’s a fascinating question. There is no specific definition that I could immediately refer to, but, in general, managing this multitude of value streams to ensure that they are always aligned to your strategic business initiatives. That’s what falls into the purview of value stream management that includes certain activities by portfolio-level people, such as investment management, based on the value stream. How are you changing the funding investment? How you measure the efficiency of the value stream. Are we delivering value? How much we spent on it? One should know these lean governance aspects and be able to identify the actual value to make it a tangible way to convert into artifacts like epics and all in general Value stream management, in my view, is very diverse and if you ask ten different people. You will find 20 different answers.
What is VSI?
VSI stands for Value Stream Identification. It is an activity to identify all activities and steps associated with providing value delivery to your customer in terms of a product or a service. For a VSI workshop, you need to have right people in the room from various segments of your organization such as the SMEs from sales, marketing, IT, product side of things, Finance, legal etc. They will be collaborating in identifying these sequence of steps that help with the value being delivered to the customer. Identifying these steps is called value stream identification. It’s a pretty involved exercise that we recommend to all the customers.
We need to understand that the earlier this VSI is done, the better will be the outcomes as it helps with alignment of the enterprise in the right direction. Let’s look at a small example of buying a house. What do we do? Do we just walk into Walmart and buy a home? No, we don’t do that kind of stuff. We look at a multitude of things. Like is this the perfect time to buy? Do we have the stamina to pay? Is this the right place for the schools if you have kids, right? Whatever your attributes are. Are we near electrical lines? Are we near dumps? We are going to review all these things. If we can do that in our personal lives, we can do it for an organization. At the same time, we offer a product or service to the enterprise or the enterprise’s customers. Why don’t we review that? Why don’t we perform those sequence of steps? That just goes out of my mind(blows my mind). I cannot fathom it enough.
What is VSM?
VSI is about identifying the value streams, which happens at a very high level. The same thing, as you trickle it down; you identify the products based on the value streams identified. As you come up with the artifacts, refine them and add them to the backlogs. Finally, they get worked on at the Train level or the Team level to eventually be delivered as the products. If you can map these team level processes identify the various elements of delay from one step to another into a flow – that is called VSM.
“This process of identifying or mapping the steps involved within the delivery of value at Team level is the value stream mapping. All the steps, like the simple example in software development, identify the requirements, perform some analysis, think at the feasibility and then work on building it and so on and so forth till the end. Now if you ask the question “What is the time spent in the above flow”? – It then falls into the Value stream mapping aspect.
What are some tips for identifying value streams effectively?
To identify value streams effectively, we first need to have knowledgeable people in the room. It’s imperative. It’s not one of those siloed conversations where one or two people like you and me sit in a room and try to figure it out. It is for an enterprise. We have to identify a value stream for whole enterprise and not just for one team. So when you talk of an enterprise, you need to understand how many people are required to build that solution or product. It takes a village to make a product as they say, so we need to identify the sales in charge. What is his mental model? Who is directing the development, your development managers? What are their mental models? Who is the enterprise architect? How does he think about this? What is his mental model? Who are the product guys, or the solution guys, their business executives? What are they? We need to call all of them so that you can have an adequate map. So I teach an iterative process. So in terms of best practices, have the right people in the room depending on the context. We need to make sure it is iterative. It is not a once in for all done kind of thing. We have to go through it iteratively since every time you start visualizing it, new ideas will come to people. In simple words value stream identification exercise is more of a living breathing exercise.
As you go through it, as the value gets delivered, you might need to adjust the values from immediately to within a month, depending on the market changes. These are a couple of good suggestions that I would recommend, and we cover all of these as part of our Value Stream Identification Workshop. It’s a half a day workshop we offer at AgileFire. It’s a useful workshop. I love it!
What is the difference between VSI and VSM?
VSI typically happens at a very high level, rather abstract in nature, to identify the customer’s steps to get to a solution. Think of it that way, but with VSM you are working at a product level. When you are building the product, be it a software product or hardware product, you want to put in a layer of time spent to identify the delays and remove them. VSM is granular in nature. VSI is a kind of high-level 30,000 foot level in nature. That’s the main difference.
…somebody who has experience with value stream identification should be present at least for the first 1 or 2 times
Who should lead the value stream identification?
Typically somebody who has experience with value stream identification should be present at least for the first 1 or 2 times when the clients are performing Value Stream identification Workshop. Otherwise, it goes down the drain. People have no clue how to lock it down properly, and any misguidance that happens at that level will impact how the trains are found below, how the teams are found below, and the products you are building. So at the end of the day, there’s a lot that rides on doing these value streams, VSIs, properly.