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What is Value Stream Management and Why it’s so Important!

  • 12-13 min read
  • September 22, 2021
  • 👍 Rating — 5 (5 votes)

If you are a founder or CEO of a company, you will undoubtedly attest that innovation and software implementation is a top priority for any business. It is the software that helps improve the company’s performance and stay ahead of the competition. Today’s top priority is transforming the way software teams work and the value that software innovation brings to the company.

Businesses want better software that is delivered faster, with zero tolerance for disruptions or security breaches. And to keep up with software-driven innovation, you need fresh approaches that allow teams to focus on what brings or creates the most value. It is why organizations are working to optimize software development and IT transformation through Agile and DevOps practices. These new, more iterative approaches have paved the way for greater collaboration and transparency among software development teams and open the door to automation, efficiency, and greater flexibility in alignment with customer needs and business goals. It is where value stream management (VSM) comes in.

You, as a business owner, prepare the foundation for all business transactions. Ultimately, you will shorten time to market, speed of production and improve your brand’s quality to increase your product launch revenue. With the best solutions at hand, you will control the value stream when you select the best service provider in the market, which is GBKSOFT.

What is value stream management?

Value stream management is a management technique or practice aimed at increasing the value stream for a business from a customer request to delivery to a customer in the shortest possible time. His systematic approach to measuring and improving flow helps organizations provide complete visibility into the end-to-end software lifecycle to understand better the value they bring, identify waste, and improve process efficiency to optimize the value stream for customers.

Agile planning was developed for the rapid creation of value, and the DevOps approach was developed to accelerate the design and delivery of digital products to the consumer. The increasing complexity of these processes has led to creating a new category of products – Value Stream Management (VSM), value stream management – that transform the Agile + DevOps environment into a digital business driver.

Value Stream Management solutions capture metadata at every step of the value creation process to track progress, status, and state changes for epics, user stories, development tasks, artifacts moving in the value stream. At the same time, they visualize processes, data state, provide practical recommendations based on analytics and AI and ML algorithms, which allows numerous teams to manage value streams.

It is VSM that helps identify non-productive activities and focus on value and provide information and end-to-end data for all stages, from planning to operation to all stakeholders.

VSM tools are thought to be designed to collect information from which tool users drive value workflow, but there are other benefits of value stream management systems:

  • uniting different teams through the consolidation of value creation steps,
  • integration of DevOps tools into a single toolchain,
  • generating reports in real-time for all conveyors of software delivery,
  • the ability to track the status of creating a digital product from various angles: business, development, operation.

Value Stream Management tools are often perceived as just another task management system, which is fundamentally wrong. VSM solutions cover the entire software development life cycle, from creating an idea, capturing metadata from all automatic and manual actions during production and delivering advanced technical and business analytics at all stages, and consolidating data from many projects.

VSM solutions accelerate the return on investment (ROI) between Agile and DevOps. VSM tools measure business development value and performance metrics, such as mean time to repair (MTTR), cycle time, and latency cost. These metrics inform product development and priorities, help identify ways to optimize software delivery and orchestrate the delivery process.


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What is a software delivery value stream?

A value stream is a sequence of actions an organization takes to meet customer needs. Customers can be external (customer-centric value streams) or internal (value streams). This approach puts the customer in the center of attention, thereby facilitating companies’ transition from an economic orientation to a product operation model or from project to product. The value stream also helps you look at business processes at the macro level to identify ways to improve them. Those who want to take this approach are wondering: How can you deliver value to customers through innovation – without delay, but with improved quality and lower costs?

VSM puts the customer in the center of attention

What goes through the value stream for software delivery?

Value is what customers are willing to exchange a product or service for (time or money). Therefore, the units of value that pass through the software value stream are called “stream items.” All activity should be directed towards creating these flow elements. There are four elements:

Flow Items Delivers Pulled By Description Examples
Features Business value Customers New value added to drive a business result; visible to the customer Features, User stories, Requirements
Defects Quality Customers Fixes for quality problems that affect the customer experience Bugs, Problems, Incidents
Risks Security, governance, compliance Security and risk officers Work to address security, privacy and compliance exposures Vulnerability fixes, Regulatory requirements
Debts Removal of impediments to future delivery Architects Improvement of software architecture, operational architecture or ways of working Tech debt, Upgrades, Process change

The goal of VSM practice is to increase the speed of flow elements through the value stream.

How are software value streams different from pipelines?

Lean thinking and value stream originated in manufacturing but are also in demand in software delivery thanks to the DevOps movement. Since developers are more likely to release code changes thanks to Agile, DevOps shortens deployment times.

Lean thinking and value stream originated in manufacturing

Companies that have implemented DevOps have reduced the time to deploy changes from a few weeks to a few times a day. It is essential to focus on the lead time. Otherwise, you will not be able to optimize the entire flow, but only part of it. That will ultimately lead to unpredictable consequences.

Time to Value End-to-End Lead Time

It is also essential to understand that once companies start using Agile and DevOps, they cannot quickly accelerate the delivery process, eliminate failures, etc. But that doesn’t mean the lean methods are appropriate for product development.

The lean methods for product development

Lean product development is a much less developed practice. Of course, this approach involves removing waste and reducing effort but does not recognize repetition. According to this practice, each function is different, offering design, technical and economic solutions at every stage. And the work goes through many iterations that add value rather than waste.

As far as the software’s work in the pipeline is concerned, it should be predictable and mechanistic, with minimal change in results and no rework.

How can you optimize an end-to-end value stream if made up of two different parts of the value stream? A concept needs to be developed that takes into account the complexity of value stream management.

A framework that was developed by Mick Kersten

Let’s look at an example of a framework that guides and measures the path to a product and an organization’s ability to innovate quickly. As a result, companies can manage their value stream, given the complex nature of software development.

How to measure flow across software delivery value streams

To optimize the process, you need a deep understanding of how to carry it out. The creative software development process is iterative and is often presented as a complex flowing network of planning, design, and engineering communications. In the work process, there is a change of participants at each stage, and the product’s transformation takes place. For example, upon completing a particular phase, testing occurs, and security problems may be identified, which means that the work will return to the engineering department.

The infrastructure for developing and delivering flow elements through a value stream is complex, and to understand how efficient a flow is, we need flow metrics.

Flow metrics abstract away from details such as team structure, technical architecture, and tool implementation.

With these metrics, you can understand the value of the business and what can be improved. Collaboration between experts helps create these metrics in the value stream, and the flow elements we talked about earlier are the basis for their creation.

5 metrics to understand the value of the business according to VSM

Let’s take a closer look at what each of the indicators is responsible for.

Flow Velocity
The number of flow items of all kinds completed in a given period or throughput and indicates the speed at which value is delivered.
Flow efficiency
The ratio of active time to latency from the total stream time. With this metric, you can determine when the number of waste increases or decreases in the processes.
Flow Time
The metric measures the time it takes for flow elements to go from “start-up” to “shut down,” including wake and wait times, and determine when cycle times are increasing.
Flow Load
This metric measures the number of flow items currently in use in a particular value stream, which helps control over and underutilization of value streams. Insufficient use of VSM can result in decreased performance.
Flow Distribution
It measures the ratio of four flow elements completed in a given period of time. It allows you to prioritize certain types of work in a certain period to achieve the desired result.

By understanding your product’s value streams, you can determine where the flow is slowing down – where the constraint is interfering with the delivery of business value – and initiate corrective actions.

Improving flow through value stream networks

Three principles to improve flow in VSM for software delivery:

# 1 Connection

This principle involves removing waste from value streams by identifying necessary and unnecessary work that does not add value. If the work does not add value, it should be either cut or removed.

Some obstacles may prevent you from using this principle:

  • Reduced productivity due to inefficient processes (manual data transfers, sending out emails that you don’t track, etc.)
  • Excessive traceability. It refers to the work of companies that are strictly regulated (medical activity, automotive, finance, etc.). According to the legislation, these companies are forced to create reports that reflect all activities. Often these reports are created manually, which affects the cost and carries risks for the company.
  • Disruptions from the introduction of new technologies or reorganization of production (and mergers and other changes) can have a detrimental effect on the value stream.

Following the Flow Framework proposed by Dr. Mick Kersten, value stream networks require an information highway that connects tools and synchronizes data exchange. The backbone also defines the routes that business value can take through the value stream network.

Connectivity Index

The highway must eliminate fragmentation and information bottlenecks by connecting all the participants and the tool.

# 2 Visualization

This process helps teams see real-time value streams through dashboards and quickly resolve issues that arise.

When using value stream management solutions, it is possible to build a map of the path that value passes from start to finish based on the data that has been collected. This approach allows you to determine where the work slows down and accumulates, and then you can determine the fastest way to create a product.

We believe visualization helps developers and business owners to be on the same page. Without this, it isn’t easy to find mutual understanding.

# 3 Measurement

Those companies that still rely on experience and expert opinion rather than data risk losing their positions shortly if this has not already happened.

Jeff Bezos urged his shareholders to resist proxy decisions. Instead, you should find metrics that directly correspond to business results.

Today we have hundreds of different indicators, processing which you can get answers to almost any question. Organizations typically associate their transformation with process, activity, and operational efficiency, which point to places that need optimization.

The problem lies in the fact that these metrics are not always directly related to business results, and it isn’t easy to see the whole picture based on them. Developers can deploy a software product several times a day, but this is not directly related to business needs.

Pay attention to the flow metrics, which represent the best data for software delivery. If you can improve your flow, you are on the right track to achieving your desired goals. They give a clear indication of whether your flow is healthy, trending positively, and whether they can support the desired business results.

A closer look at flow metrics reveals where work is slowing down or bottlenecks. In the figure, we drew an analogy with the human body, where the diagnosis and treatment of an ailment are necessary for the body to function correctly. Solving specific problems and optimizing certain operations can unblock the flow for the entire value stream.

Therefore, VSM solutions are a “must-do” for those companies that want to quickly adopt new technologies, efficiently plan their work in the face of continuous changes, and effectively develop new products.

Value stream management is a management technique or practice aimed at increasing the value stream for a business from a customer request to delivery to a customer in the shortest possible time. His systematic approach to measuring and improving flow helps organizations provide complete visibility into the end-to-end software lifecycle to understand better the value they bring, identify waste, and improve process efficiency to optimize the value stream for customers. Agile planning was developed for the rapid creation of value, and the DevOps approach was developed to accelerate the design and delivery of digital products to the consumer. The increasing complexity of these processes has led to creating a new category of products – Value Stream Management (VSM), value stream management – that transform the Agile + DevOps environment into a digital business driver.
Enterprise value stream management provides a holistic approach to application development and delivery, applying Agile-plus-DevOps principles throughout the product cycle. As a result, organizations receive the following:

  • Process and flow improvements
  • Increased management transparency
  • Compatible data and measurements by instrument
  • Reduced deployment delays and errors

These benefits apply to all stakeholders – from portfolio to program, graduation, and team.

The tools needed to manage value streams are those used for planning, roadmap, requirements management, source code management, issue tracking, test management, release automation, etc. Some of these tools are:

  • GitLab
  • CloudBees
  • DevOptics
  • CodeBeamer ALM
  • Blueprint Storyteller

Summing up

Business competition is growing every day and meeting customer expectations. Development teams need to work faster and more efficiently than ever before. Value Stream Management empowers teams to continually improve their software delivery activities to add even more value to their customers. It includes the ability to enhance product quality and improve processes with each sprint gradually. It is through value stream management that organizations can realize the desired Agile + DevOps performance.


Do you feel that your business needs a modern software solution?


Expert & Evangelist in business optimization tools like fintech, logistics, on-demand services apps who will help you to understand the core ideas of the outlined themes by my articles.
Alexandra Rostovtseva


Being a proficient leader with over 10 years of experience in Project and Product Management, Business Development and Sales, I have strong skills in Negotiations, Crisis, Client and Risk management. Being an outstanding communicator I’m also a good mentor and leader in the tech industry. Experience and expertise are the key foundations in my ability to provide deep insights into the industry and as result I’ve also been published or was a contributor to several tech and business articles.
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