Strategizing around value streams is a crucial step in implementing SAFe (Scaled Agile Framework). It requires identifying operational value streams, development value streams, and the people needed to build and support these solutions. This step is hard work and cannot be breezed through – it will lay the foundation for the rest of your SAFe journey.
We start this process by asking ourselves what products or solutions we want to align our business with?
This allows us to identify priorities for our business and prevent any product gaps from popping up later on down the road.
Let’s start by reminding ourselves what value streams are and defining the two types of value streams.
Types of Value Streams
A value stream is essentially a series of steps required for value delivery. A value stream begins with a trigger – a client request or event that starts the process – and at the end of it, the client or customer receives value in the form of a product or solution.
It is important to emphasize that a value stream also includes people and systems necessary for the customer value to be delivered, as well as the value flow of information and material.
There are two types of value streams – operational and development.
- Operational value streams – The purpose of an operational value stream is to deliver a product or solution to the client. This is a product that has already been developed and is ready for use.
- Development value stream – The purpose of a development value stream is to build and test products or solutions before delivering them to the end-users.
Once we have identified our two value streams, we need to understand how each contributes to delivering business results.
The operational value streams deliver the actual products or solutions to the customer. This is what generates revenue for the business, and it is crucial that these streams are always available to fulfill clients’ requests.
The development value streams build new capabilities, which may be used in future operational value stream projects or even by other teams within the organization.
One type of stream cannot function without the other. Operational value streams cannot work without the development value streams to support them.
SAFe primarily concerns itself with development value streams. However, development value streams cannot be identified without first identifying the operational value streams.
Identifying Operational Value Streams
In value stream management, operational value streams can be categorized into four groups:
- Fulfillment value streams – Steps required to process a customer request, deliver a product or service with the help of digital technology and receive payment. Examples include fulfilling an eCommerce order and providing a consumer with a loan or insurance.
- Supporting value streams – End-to-end processes (workflows) for a range of supporting activities, such as annual audit, employee hiring and retention, completing an entire sale cycle, supplier contracts, etc.
- Manufacturing value streams – Steps required to convert raw materials into a product intended for sale to the customer. These include various consumer products (vehicles, appliances, furniture, etc.), medical devices, and more.
- Software product value streams – Offering and supporting software products such as applications of different kinds, SaaS platforms, and others; software delivery.
For smaller businesses, identifying their operational value streams is relatively simple – they usually have a single value stream that touches all of their customers, such as a single product or service they are offering.
However, this may require a great deal of effort and analysis for larger or more complex organizations. It is crucial to understand the broader purpose of such an organization and all the different elements that make its core operations possible. The operational value streams should be documented to identify the steps required for each one.
Here are some questions that can help in the process of identifying operational value streams:
- What market segments do you serve?
- What are the products or services that you offer consumers or other businesses?
- What are the larger subsystems to these products or services?
- What key system operational capabilities are you enabling?
- What key business initiatives are targeted?
The answers to these are a good start to defining the operational value streams in your organization.
Look at the Big Picture
Often, organizations make the mistake of identifying operational streams that are way too small. If your stream starts with input from a process before it and ends with output for a process after it – you can stop right there. You actually need a bigger picture that starts from the customer’s perspective and ends with their satisfaction. For process improvement, make sure you are looking at the entire workflow.
Identifying Customer Solutions
When you know what your operational value streams are, you need to determine the solutions that those streams provide to customers. You also need to pinpoint the people that develop those solutions.
You must visualize the connections between each solution and the step in the operational value stream that it supports. One operational value stream may have more than one solution attached to it.
Lastly, you should have a good idea of the number and locations of people involved in each solution. Ask the following question:
- Who must collaborate, and how often to contribute to the operational value stream?
To identify the best development value streams, you need to consider potential bottlenecks in handoffs and dependencies in the social structure of your organization.
Identifying Development Value Streams
As mentioned before, a development value stream includes all the steps required to build a solution, from idea generation and development all the way through testing. You must define how one or more development value streams will support each operational value stream.
A vital step in identifying the development value streams is considering what the stream triggers are.
A ‘trigger’ is an event that causes a development value stream to start. There are three common types:
- Customer trigger – when the customer requests a product or service and, in turn, requires further work from your organization (for example, when an online shopper places an order).
- Business process milestone – any significant event that affects business processes, such as changes in the company’s strategy or direction.
- System trigger – another system event that causes the development of a solution, such as an update to existing software or adding new features.
The triggers you discover in your planning process will help you determine how many development streams you need.
Keep in mind that it is essential that your development value streams are independent of each other. Even if there is more than one, they need to be focused so they can deliver value quickly. This will also help you identify the people needed for each development stream.
People working in development teams can come from all types of departments – marketing, legal, IT, security, support, finance, and more. Don’t focus only on Agile teams – be sure to consider every department that is working on or contributing towards each solution for this step.
Value Stream Identification vs. Mapping
Even though certain SPCs (SAFe Program Consultants) might use the terms value stream identification and value stream mapping interchangeably, these are actually two separate concepts.
Value stream mapping is a technique used to define, analyze, and optimize the value streams within an organization over a longer period of time. The goal of a value stream map is to identify waste in those processes so that they can be improved.
Value stream identification refers specifically to identifying value streams to launch ARTs (Agile Release Trains) – the step that comes right after completing the value stream identification.
One doesn’t replace the other. Value stream identification will likely prove that you need to invest in value stream mapping further down the line.
Technical Architecture Overhaul
As complicated as it may sound to restructure your business architecture, it is just as challenging to restructure your technical architecture. Technical architecture can be filled with outdated systems, redundancies, hard-coded variables, and a lot of room for improvement.
The transformation begins with restructuring your technical architecture by refactoring, modularizing, and reducing technical debt.
Once the technical architecture has been restructured, you can identify and implement new technologies to improve efficiency.
This is one of the most challenging steps in transitioning to SAFe, but it will pay off in the long run when your organization becomes more efficient, scalable, and agile.
Identifying your business’s operational and development value streams will help you begin implementing SAFe more easily. Strategizing around value streams is the foundation of your agile release train system. It cannot be ignored in planning for a successful transformation to SAFe.
This process will require a great deal of planning, time commitment, and dedication. It will be an uphill battle, but it is possible to reach the summit of your destination with SAFe.
Remember that the primary goal of aligning your business around value streams is to deliver value quickly to customers. It is not just about improving processes or increasing efficiency – it’s about providing the best possible solutions for your clients and empowering your employees to do their jobs well.
If you’d like to know more about strategizing around value streams and transforming your business to achieve success with SAFe, feel free to contact the i4 group. We will be happy to share more information about how best to implement this strategy.