In Lean, value is defined from the perspective of the customer. It is not what you or your shareholders consider as value, it is what your customers value. What value does your product or service, at the price you are offering it, provide to your customers? The best way to identify this is through dialogue with the customer. Once you understand what the customer recognises as value then you are ready to identify the value stream.
You need multiple steps to create value for your customers; the value stream has those steps. It includes the design of the product; how it flows from concept to complete design. It also includes information flow, order taking, scheduling and delivery. Finally, it includes the physical transformation of a product or the provision of a service.
Value streams cross over job functions, departments, and even span across multiple organisations.
Value Stream Mapping
Value stream mapping is a tool to understand the steps your product or service goes through to be provided to your customer. It is simply a mapping tool that provides you and your team with a clear understanding of the current state and allows you to visualise the future state. With the future state design complete you can develop an action plan to get you there.
Benefits of Value Stream Mapping
It enables you to see your business from the perspective of adding value to your customers. You will see unnecessary gaps and disconnections in the work while it is processing. It will assure you that your customers are receiving high levels of value and clarifying which steps are really necessary, therefore speeding up the delivery time of your product or service. Most of all, it will enable you to create satisfied customers who are receiving what they want, when they want it and in correct quantities.
Value Streams in Software Development
Software development is often plagued with delays and high costs, resulting in software that is not meeting the customers’ needs. The work that development teams do is hard to visualise, so waste abounds with the myriads of steps that are required. We are seeing long cycle times and expensive development processes which affects the ability of an organisation to change to the market or meet the needs of its customers. Software is no longer an enabler for most companies; it constrains them into one way of working that cannot be easily changed. If a company cannot overcome this they will struggle in the new and rapidly changing marketplace.
So how can value stream mapping help? Value stream mapping enables you to see the big picture and what is taking the time – not only work time but wait time. It focuses you on the value added activities and helps you see and remove the non-value adding activities. It unveils bottlenecks, costs of regulations and helps management see the cost of a project in the pipeline. It helps to bring about a collective understanding of the issues with a clear visual picture of any problems to gain agreement across siloed departments on the way forward, therefore providing a high-level map at the strategic level of how you deliver value to your customers. The current state map is an easy to understand picture of your processes and provides an excellent foundation for improvement.
Most businesses have given up and accept the slowness of software development and the constraints software has on their business. Value stream mapping provides an initial step for you to see the current state and then enables you to transform the way your software development works to a new way of working.
Below is an example of a value stream map for a typical software development process. As you can see there are short bursts of activity followed by long delays as the process moves through governance gates and sits in queues.
Whenever your work is sitting in any queues it is not earning money and is devaluing. Partially completed software adds no value to a company and achieves nothing. Lean’s focus is on completing this work in a minimal amount of time to add value to your customers. The goal is to remove all obstacles so there is flow.
It is important to look from the beginning of the process to see any waste developing through unnecessary or unused features through to the point where you can reduce the amount you are working on at any one time. Then you can reduce bottlenecks, handoffs and approvals so that work will flow. With this in place, you will be able to deliver to the market or your internal customers at a faster rate and begin gaining a return from your investment.
We can assist in facilitating your company through the steps of mapping its current state and an ideal state, and developing an action plan to make this happen. Understanding your value streams in software development is crucial for the rapid delivery of solutions to your customers. For more information please contact us about our enterprise services.