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Value Stream Management in Software Development: Definition, Benefits and Challenges

May 16th, 2023
Agile Data-Driven
Business Value
Data Driven Companies
Data-Driven Decisions
Project Costs
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In today’s world, businesses depend heavily on software to continuously provide top-notch features and updates to remain competitive. CIOs feel immense pressure to deliver high business value in shorter time frames while optimizing costs and talent. However, there is no one-size-fits-all strategy for success, so many organizations fall short in their quest for efficiency and business value.

One strategy is to focus on customer needs and satisfaction by providing the best value in top quality and reliable software as fast as possible. This entails continuously improving your CI/CD pipelines, your DevOps teams’ performance, and ultimately your entire deployment process. But it’s easier said than done, and transforming your delivery process to align with your business goals is a complex endeavor. To this effect, effective value stream management is a great way to gain end-to-end visibility over your entire value stream. This will allow you to promote a culture of continuous improvement and optimizing flow efficiency by using actual collected data instead of guesswork.

Value streams refer to the sequence of tasks and activities that a company performs to fulfill customer requests. Effective value stream management aligns business objectives with the deployment process in a customer-centric approach that prioritizes delivering better customer value faster.

Implementing DevOps value stream management is easier when using value stream management platforms (VSMPs). These help you have end-to-end visibility of your deployment process and teams’ activity and performance that will influence productivity and overall efficiency. Waydev uses complex flow metrics to provide deep insight into the flow efficiency. This encourages data-based decision-making and better control over the entire software delivery process, leading to the desired business outcomes and better value for customers.

What is DevOps Value Stream Management and Why Use Them?

In a software development environment, value streams can be defined as the steps taken to convert a business idea into digitally enabled solutions to answer customers’ requests. How you get from the concept phase to delivery can be organized in development value streams (DVS) – a series of activities that organize the workflows, the processes, the tools, and the people involved to create value for customers.

DVS are generally compatible with an Agile environment and with DevOps teams because both encourage high performance at a fast pace. Value stream management characteristics include:

Implementing this management model is no easy task, and it takes skilled executives to make the transition between a traditional approach and a more efficiency-driven one designed to keep up with the ever-changing tech industry. 

What Is Value Stream Management and Why to Implement It

Value stream management enables companies to improve the workflow in software delivery and gain visibility of the interconnected value streams throughout their project. By implementing value stream management, organizations foster environments where teams may work efficiently, focusing their efforts on what works while looking at the software development lifecycle from the stakeholder’s perspective.

Implementing value stream management in your organization is a complex process that entails transitioning from a traditional approach to an updated one – from a Waterfall approach, where the teams are siloed, with many dependencies, to a customer-centric approach in Agile that encourages a more collaborative and transparent delivery process.

Here is how to implement value stream management:

  1. See where you are in terms of daily processes, practices, steps in handoffs, and delegation of tasks. Assess the current value stream for comparison value. 
  2. Identify a value stream – consider product requests and how you can size your work batches (think smaller workpieces for easier management).  
  3. Establish clear OKRs and KPIs for implementing the value stream management model. 
  4. Do value stream mapping of all the steps, resources, and people involved in the value stream. 
  5. Use a VSMP to quantify performance and delivery process.  
  6. Analyze the collected data, focusing on efficiency in using resources, time-to-market, and steps that could add more value to customers.  
  7. Continuously improve and solve issues to optimize the delivery process and get the best value for customers as fast as possible, with minimal waste.

Here is a guideline of what a successfully implemented value stream management model looks like:

  1. CIOs can focus on specific value stream mapping and use the analysis and insights to improve development processes.
  2. It provides end-to-end visibility into each of the organization’s value streams and how they are connected to understand dependencies, shared resources, and services.
  3. It enables them to optimize the time to market – the period between ideation and value delivery – ensuring that consumers benefit from fast improvements that constantly enhance user experience.
  4. It enables engineering leaders to accurately and automatically quantify team progress and organizational metrics, identifying bottlenecks and offering improvement guidance.

Difference Between Value Stream Mapping and Value Stream Management in Software Development

Value stream mapping and management are associated concepts in software development that help organizations improve flow and reduce waste. Here are the key differences:

Value Stream Mapping

Value Stream Management

Value stream mapping creates a static visualization for analysis, while value stream management puts those insights into action through continuous improvement driven by new behaviors and experiments. Together, they offer a powerful strategy for improving flow and value in the software development process.

What Are Value Stream Management Platforms (VSMPs)?

To measure their organizations’ results, value stream managers assess the entire software delivery process, from idea to production, to identify potential silos, bottlenecks, and inefficiencies. Once these are evaluated, the intelligence obtained may be used to optimize processes and contribute to the organization’s overall digital transformation. But to do that, they need proper tools with useful metrics – these are DevOps value stream management platforms.

Waydev does just that by enabling tech leads to improve software delivery processes, providing a value stream management platform for fully accurate reports that are automatically generated, such as:

Calculating software project costs
With Waydev’s Project Costs Report you can accelerate innovation by optimizing costs for key initiatives and deliverables

Value Stream Management Benefits

Implementing value stream management as a business model can positively impact your organization and streamline your operations. Here is a list of the main benefits you can get from value stream management software:

Value Stream Management Breaks Down Operational Silos

An important step in promoting continuous improvement to your tech organization is identifying silos where teams work isolated from each other and from the overall business objectives and the big picture. This doesn’t help both production and workflows, so finding a better model that streamlines operations is crucial. Implementing value stream management tools enables CIOs to take measures to make the SDLC process more transparent.

This helps teams see their codebase, PRs, and tickets from sprint to sprint more clearly, and it fosters a more collaborative environment. The high level of visibility offered by value stream management software enables each professional to understand how their work affects others and that cross-functional teams can thrive, as it creates a culture where people collaborate to deliver the utmost value. To review the effectiveness of the collaboration stream between engineers, Waydev’s Review Collaboration Report provides engineering leaders with complex data on who reviews whose PRs, who reviewed the most/least PRs, and who submitted the most/least PRs.

review collaboration report Waydev

Value Stream Management Sets Accurate Benchmarks

By mapping value streams and analyzing their organization’s end-to-end process of delivering value, tech leaders know how long it takes to deliver value to customers, making it easier to create benchmarks and compare projects and work overtime from one sprint to another.Having a value stream manager job means ensuring that organizations have the necessary information to continuously improve their performance, identify areas that lack efficiency, and manage end-user expectations. With platforms like Waydev, you can automatically gather all the data you need for setting realistic OKRs for your teams’ work and performance.

Value Stream Managers Help Identify Waste

An important role of value stream management is to identify any activity that doesn’t add value to the customer experience or product but instead consumes resources. Value stream managers have a clear view of each step involved in SDLC, from initial business ideas to delivering value to customers. This enables them to identify problem areas that waste resources in terms of time, and money spent, such as too many dependencies, too many steps in handoffs, and insufficient automation and testing that allow too many bugs and downtime.

Value Stream Management Measures DevOps Performance and Deployment Efficiency

Focusing on value streams in software development inevitably leads to a focus on DevOps. While having CI/CD in place is the first step towards elite performance, a well-defined value stream management will give CIOs a clear understanding of important metrics like deployment frequency, lead time to changes, mean time to recovery, or change failure rate – in short, the DORA metrics. Measuring even the slightest improvements in DevOps journeys can be complicated, but Waydev enables you to filter DORA metrics, tracking delivery performance across master, development, or QA giving you clarity on each value stream.

Value Stream Management Challenges

While the value stream management model brings many advantages and positive impacts to your organization, implementing it comes with its set of challenges. After all, changing and aligning your organization to business trends is not always easy.

Here are some of the most common challenges with implementing value stream management in your tech business:

  1. Resistance to change – value stream management model implies continuous improvement and not just a one-time effort. Value stream managers must adapt quickly to the ever-changing tech environment and business requirements; otherwise, things will spin out of control fast. 
  2. Lack of resources – like any other business model or framework, implementing value streams requires time and money investment. Stakeholders must understand the importance of allocating resources to align their business goals to the new model that promotes continuous improvement. 
  3. Ineffective leadership – value stream managers must know how to properly assess current workflows, processes, everyday practices, and dependencies. Guesswork and going on gut feelings can be deceiving and put them on the wrong track in optimizing the value stream model. 
  4. Lack of tools – value stream managers also need to choose the right VSMPs to help them collect this data and make informed decisions. Putting this data in context is another important skill.

How to Measure Workflow Through Value Streams in Software Delivery?

Defining Value Streams

First, map out the significant value streams in your software delivery from vision to deployment. Common streams include feature requests, defects, technical improvements, and infrastructure changes. Define each stream’s workflow stages.

Selecting Metrics

Determine the most relevant throughput and cycle time metrics for each stream and stage to indicate workflow efficiency. Examples could include:
Features, Idea backlog size, Time from request to delivery, Defects, Time to first response, Time to resolution, Improvements, Change failure rate, & Deployment frequency.

Visualizing Workflow

Use boards, charts, and diagrams to dynamically display workflow metrics by stream and stage over Time. Make the current system flow and trends visible to all teams.

Finding Constraints

When delays, bottlenecks, or work-in-progress limits are revealed, the metrics point teams directly to opportunities to improve flow. Dig into the slowest stages to address constraints through process changes or added resources.

Informational process flow through value stream performance indices and graphs enables teams to work jointly to enhance movement, expedite product release, and cultivate superior software functionalities as systems mature.

Metrics for Assessing Value Stream Management Implementation

DevOps value stream management fosters a culture of continuous improvement, where the goal is optimizing your workflows and practices to maximize customer value. But in order to improve a concept, you need to break it down into clear elements and use data to measure it and compare results over time. This helps you understand whether the performance and efficiency are improving over time or if progress is lacking.

The best way to measure how efficient your efforts are in implementing value stream management is by using VS metrics. Having end-to-end visibility of your value streams is a great benefit of this model, and you can do that using tools – VSMPs and specific metrics that can help your efforts.

DevOps Metrics

DevOps metrics are important for measuring the throughput and stability of value streams, showcasing their evolution and overall health. Since DORA metrics are closely linked to VSM, monitoring them has become a go-to practice for value stream managers that want to identify inefficiency, waste, and bottlenecks and use the data to streamline and enhance operations. By monitoring the DORA metrics over time and perfecting them, you get better efficiency of the value stream. Here are the four DORA metrics that help you track DevOps practices:

  1. Lead Time for Changes (LTTC) – is a velocity metric that tells you how much time passes between the first code commit until delivery. This metric is essential for measuring DevOps performance because it shows the length of the deployment process and how effective your DevOps teams are in delivering value to customers.
  2. Deployment Frequency (DF) – this metric shows how many times DevOps teams deploy quality code into production (that doesn’t result in bugs, issues, and downtime). DF tells you a lot about your teams’ capabilities, and it’s an opportunity to identify bottlenecks and improvement areas.
  3. Change Failure Rate (CFR) – this metric speaks to the stability of your code by counting the number of released code changes that result in failures. A high CFR can indicate issues with DevOps performance or insufficient automated testing before submitting code to production.
  4. Mean Time to Recovery (MTTR) – is a velocity metric indicating how long it takes DevOps teams to restore services when in downtime. This metric measures your team’s response time to problem situations and their capabilities to restore services by finding the right solutions fast.

Waydev enables you to track your organization’s value streams by using our all-in-one DORA metrics dashboard. The four metrics help you track DevOps teams’ performance by pulling automated data into the VSMP and comparing them over time to assess progress.

Flow Metrics

Flow metrics are used to accurately measure an organization’s capacity to deliver critical business capabilities to focus on the delivery flow, assessing its speed. These metrics will help value stream managers to understand, measure, and optimize the flow of work through the value streams.

  1. Throughput – a metric to show how effective your value streams are by measuring the total number of work items completed within the VS over a period of time.
  2. Work in Progress Limits (WIP Limits) – refers to limiting the amount of work opened in a certain time frame. This helps you focus your efforts better and not lose control over the value streams.
  3. Defect Density – analyzes the number of defects in a given amount of work, giving you important data regarding the efficiency of your value streams.
  4. Time to First Value – this metric tells you how long it takes for customers to enjoy the software products or features from the purchase time.

Implement Value Stream Management to Streamline Your Business

Implementing value stream management in software development enables organizations to break down silos, enhance collaboration across teams, optimize DevOps practices, and improve workflows. In order to get started with VSM, CIOs need to identify the desired outcomes, OKRs, and KPIs and identify the best ways to assess their completion and general progress. 

Waydev can help tech leaders implement the value stream management model and encourage a culture of continuous improvement by providing the necessary metrics and automated data collection. Our solution enables you to automatically evaluate and monitor DORA metrics and access a series of reports, from templates to customized versions.

Contact us today to understand how we can help you implement value stream management solutions.

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