Feb 08 2023

What Is Value Stream Management and How Can It Benefit IT Leaders?

Implementing value streams may take time, but it could help demystify DevOps across organizations.

Many discussions around DevOps and agile development are about the high-level benefits of software and how the technology flows throughout an organization. Although developers understand this process, it may not be well known throughout the business. However, a recent emerging concept called value stream management is helping developers share this specialized knowledge with the rest of their organizations.

In some ways, it is not a new concept at all, but an older one that takes the high-level thinking of managing a supply chain and applies it to the software development process.

What Is Value Stream Management and Why Does It Matter?

Value stream management, also known as value stream mapping, is a management technique that increases the flow of business value from customer request to customer delivery. It streamlines the path a customer request takes internally before it is delivered in the form of value. This value could be a final product, data generated by executing on a value stream or a service being offered to a customer.

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What Is the History of Value Stream Management?

Value stream management has a long history dating back to the early 20th century. Rooted in lean management philosophies, it was first introduced in the 1915 book Installing Efficiency Methods by Charles E. Knoeppel.

After describing the step-by-step process of engineering belt joints, Knoeppel breaks down how analyzing each step is additive and can help analyze efficiencies. According to Knoeppel, the biggest benefit of this approach is actionable data.

“The cumulative effect of all the work that has been done as outlined in the previous chapters, is to furnish a steady stream of valuable data,” Knoeppel writes. “In other words, the ‘by-product’ of the efficiency works is facts, perhaps of no real value in themselves, but full of possibilities if used properly.”

In the 1980s and ’90s, value stream mapping gained more popularity. In the 1996 book Lean Thinking, authors James P. Womack and Daniel T. Jones explain how a value stream manager is often separated from the traditional workflow of the organization in deciding how a process works.

“The value stream manager develops the vision for the product, determines the Current State of the value stream, and then envisions the Future State,” the authors write. “She or he then treats the functions as the suppliers of the essential inputs (for example, engineering, operations, purchasing, sales, lean knowledge) needed to reach this state. If the functions fail to perform, the value stream manager typically goes directly to the CEO, the COO, or the director of the office of value stream managers, to describe the problem, get to the root cause, and install a fix.”

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How Can Value Streams Be Applied to Software Development?

According to a recent Forrester report, one of the biggest benefits of value stream management is its ability to simplify software language for a business audience and bridge a core communication gap.

Nanette Brown, a senior member of the technical staff at Carnegie Mellon University’s Software Engineering Institute, says that the parallels between lean management’s use in the supply chain are also important for businesses. “Value stream mapping is rooted in lean thinking and reflects the lean philosophy’s emphasis on respecting and engaging employees in value delivery and improvement efforts,” she says.

Brown also ties this work to the Agile Manifesto, a development philosophy that has shaped the process of building software over the past two decades. “Value stream mapping views workflow through the lens of value delivery,” she says.

As the Forrester report notes, this supply chain philosophy corresponds to how software development works. And because it is in a more business-friendly language, it is easier for nontechnical people to understand the general concepts.

This is one of the reasons more enterprise leaders are considering proof of concept and full-blown installations of value stream management, the report notes.

However, implementation can be time-consuming and less developer friendly. Many value stream management solutions must be integrated with an API layer. Once integrated with this platform, data can be captured but the process is complicated and take several months.

Nanette Brown
Increasingly IT, infrastructure, and security are deeply interwoven into the value proposition of every enterprise.”

Nanette Brown Senior Member of the Technical Staff, Software Engineering Institute | Carnegie Mellon University

Value Stream Management: How Can It Improve DevOps?

Value stream management presents a rare opportunity to improve existing DevOps and agile processes. It may take months to implement, but it can ultimately improve workflow.

“Increasingly IT, infrastructure, and security are deeply interwoven into the value proposition of every enterprise,” Brown says. “Expanding value stream mapping beyond functional silos and into enterprise flows will help to surface these strategic connections and ensure alignment between the enterprise mission and IT, security and infrastructure.”

That said, there are limits to how far the comparison between software development and the physical supply chain goes. Brown says that one key difference is that value can be extracted throughout the process of building software in the form of data or knowledge, whereas in a supply chain, the value comes in the form of the final result. Software tends to have a value-add discovery process, meaning it acquires knowledge as it moves through the workflow.

She adds that “while manufacturing seeks to stamp out process variance, in software development, a certain amount of variance is inherent due to its focus on knowledge acquisition and the intangible nature of software development work items.”

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What Are the Steps for Building a Value Stream?

As a Google Cloud guide explains, building a value stream map requires a few basic steps. These include:

  1.  Bringing together stakeholders across the product management team to define the various parts of the value stream.
  2. Identifying different parts of the value stream, which generally represent five to 15 “process blocks” across different parts of the process.
  3. Analyzing each state of work within the value stream to determine any potential challenges with flow.
  4. Measuring key metrics across each step, including lead time between steps, the amount of time it takes to process each item and the percentage that have been completed.

Implementation is complex, but with these steps in place, your organization can manage the process and track where each task stands. For one thing, it allows for additional traceability, making it possible to audit the infrastructure and gradually build with approaches like continuous delivery in mind.

Considering all of this, implementing a proper flow that meets your organization’s needs might require some high-level thinking to get everything into place, something that a solution like CDW DevOps services is well positioned to offer. After all, investing in an effective value stream means finding efficiencies wherever you can.

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