Understanding VSM
Section 2, Implementing Value Stream Management (VSM) - To Improve IT Value Streams, of this book provides comprehensive guidance on the methods and tools associated with VSM and introduces some of the leading VSM software products. We'll also introduce basic VSM concepts in Chapter 6, Launching the VSM Initiative (VSM Steps 1-3) Before we get to those subjects, this preliminary section aims to explain the relevance of VSM in helping organizations realize value.
Building on the foundations of Lean
If you only read recent literature on VSM, you may come away thinking VSM is an enhancement to Agile and DevOps practices that's limited to improving IT-related value streams. That's a mistake, as the practices originated Lean Manufacturing and Lean Development strategies that go back to the TPS evolution. Japanese industrial engineers Taiichi Ohno and Eiji Toyoda helped define these practices from 1948 and 1975. Toyota maintains and continues to refine its lean practices as part of its The Toyota Way initiative.
Toyota's Lean manufacturing and Lean production development practices created a significant competitive advantage that the rest of the world began to notice. By 1979, and under the guidance of James P. Womack, Ph.D., MIT initiated a multi-year International Motor Vehicle Program (IMVP) research program to study automotive value chains and Lean processes worldwide.
In 1991, James P. Womack, Daniel T. Jones, and Daniel Roos published the results of their work in a book titled The Machine That Changed the World: The Story of Lean Production, which helped make Lean production mainstream globally. Though their work focused on the automotive industry, in the epilogue of their book, the authors point out that they fully expect lean production to become the 21st century's standard global production system.
Business entities must adopt Lean production processes to compete effectively, while also leveraging IT to provide products relevant within our digital economy. The software industry was quick to see the advantages of implementing lean production concepts. Leading the charge were Mary and Tom Poppendieck, who wrote the famous book (at least in the Agile community), titled Lean Software Development: An Agile Toolkit.
Those of you who would like to learn more about Lean production and Lean software development can read my previous book, Scaling Scrum Across Modern Enterprises. Specifically, Chapter 5, Driving Business Value through a DevOps Pipeline, introduces Lean production concepts, while Chapter 6, Launching the VSM Initiative (VSM Steps 1-3) introduces Lean practices in software development.
VSM is about improving an IT organization's Lean value streams but does not replace Agile's values, principles, and practices. IT's current trend is to concatenate Lean and Agile practices as an integrated strategy, with VSM the glue that binds them together. Let's see why.
Building on Agile
VSM cannot be limited to merely installing a new discipline of agile software development. That strategy would be a bit of an overkill. For example, Dave Thomas wrote an important article titled Agile is Dead (Long Live Agility) (at https://pragdave.me/blog/2014/03/04/time-to-kill-agile.html) that suggests we've overly complicated the concepts of Agile software delivery. He's not wrong.
If we accept Dave Thomas's premise that we are already making agile software delivery too hard, what value does the additional overhead and complexity of VSM provide? It's a good question, so let's take a closer look at the origins of VSM concepts and processes and how they affect IT value delivery organizations.
Defining VSM concepts and processes
The term VSM did not originate as an IT-related acronym. For example, Peter Hines et al. use the term in their book Value Stream Management: Strategy and Excellence in the Supply Chain (Hines et al., 2000). Their book documents a research program involving nearly 20 manufacturing, retail, and service companies. Conducted by the Lean Enterprise Research Centre (LERC), the study's objective was to apply lean production concepts to understand value and waste in the supply chain environment.
The conglomerate's broader goals were to improve, expedite, and sustain development activities across supply chains, primarily in the automotive, electronics, and fast-moving consumer goods markets. The authors use the term VSM to communicate their findings that Lean enterprises must install and manage long-lived programs to reduce waste actively and continuously across their supply chain value streams (Kaizen).
In its modern context, VSM is a lean business practice to improve software value delivery and the efficient use of IT resources. Employing Lean Software Development concepts, VSM helps IT organizations improve the flow of value to their internal and external customers.
The modern context of VSM also centers on using software tools and integrated platforms to improve DevOps pipeline flows. However, organizations that employ Lean Software Development practices can achieve many Lean production improvements without using VSM tools. Always remember—methods come before tools!
Similar to how DevOps pipelines integrate and automate an IT organization's development and operations-oriented (development and operations) processes, VSM tools help integrate and automate Lean value stream improvement activities. Modern VSM tools also provide direct capture of metrics and analytics to guide improvement options. Modern VSM tools help integrate and automate value stream mapping, measuring, monitoring, and analyzing activities across DevOps pipelines. They also support the improvement of all organizational value streams.
Still, we need to build our foundation on proven VSM methods before leveraging the tools.
Learning methods before tools
Don Tapping, Tom Luyster, and Tom Shuker present a rigorous VSM methodology in their book Value Stream Management: Eight Steps to Planning, Mapping, and Sustaining Lean Improvements (Create a Complete System for Lean Transformation!) (Tapping, Luyster, and Shuker, 2003). Their book describes VSM as a data-centric and analytical approach to plan and link value stream initiatives.
The purpose of Tapping's, Luyster's, and Shuker's book was to simplify the Lean Development concepts of demand-based pull, flow, and production leveling as an eight-step process to help accelerate, coordinate, and sustain Lean Development practices, which they called VSM. In later books, Tapping and Luyster applied their VSM concepts to all organizational value streams, such as manufacturing, customer services, engineering, payables, and—of course—IT.
Both Don Tapping and Tom Luyster were kind enough to allow us to incorporate their eight-step VSM approach as the foundation VSM methodology for this book. However, from Chapter 6, Launching the VSM Initiative (VSM Steps 1-3), through Chapter 10, Improving the Lean-Agile Value Delivery Cycle(VSM Steps 7 and 8), this book applies their VSM methodology to improve flows across an Agile-based team's implementation of CI/CD concepts and tools.
Their eight VSM steps are listed here:
- Commit to Lean.
- Choose a value stream.
- Learn about Lean.
- Map the current state.
- Determine Lean metrics.
- Map the future state.
- Create Kaizen plans.
- Implement Kaizen plans.
Note that Tapping and Luyster's eight-step VSM process does not explicitly identify IT practices—that's because IT is just another value stream among many in the Lean enterprise. On the other hand, as noted previously, IT is a critical development-oriented value stream that supports virtually all other organizational value streams in a digital economy.
This book's central premise is that IT product requirements and Product backlog items can come out of any value stream across an organization, some supporting internal customers' needs while others support external customer needs. Similarly, some IT development teams may support individual internal or external value streams in a multi-team agile development environment. Nevertheless, VSM's foundational Lean-improvement concepts apply universally.
Chapter 6, Launching the VSM Initiative (VSM Steps 1-3) contains detailed descriptions of each of the eight process steps as a general approach to employing Lean practices organization-wide, including IT. But before leaving this section, let's take a quick look at how the IT industry currently views VSM.
Implementing VSM in IT
Chapter 6, Launching the VSM Initiative (VSM Steps 1-3), explains how to identify value streams before mapping the current and desired future states. Identifying value streams is the more challenging of the two tasks and the most critical, as everything related to making lean-oriented improvements starts from there.
Traditionally, software development teams think of instantiating functional and non-functional requirements as software features and functions. However, in the Lean/VSM model, the development and operations teams focus on improving activities to deliver a continuous customer value flow.
Customer requirements do not go away in software development teams operating as value streams. Functional and non-functional requirements, along with bug fixes and addressing technical debts, all become inputs to the development-oriented value streams. The outputs are developed features and capabilities. Those are important concepts to keep in mind when we get to Chapter 6, Launching the VSM Initiative (VSM Steps 1-3).
In a modern context, VSM implements methods and tools that help organizations increase the value they deliver to customers by optimizing workflow across their value streams. Moreover, VSM often employs software technologies to integrate suites of tools to form robust VSM platforms (VSMPs).
One of the industry-leading VSMP vendors, Plutora, in their article titled Value Stream Management Platforms (at https://www.plutora.com/), lists nine key VSMP capabilities that help organizations to achieve their software goals, as shown here:
- Tool integration and interoperability
- Common data model
- Mapping people, processes, and data
- Governance and compliance
- Value stream key performance indicator (KPI) data capture and measurement
- Data analytics and analysis
- Dashboards and visualization
- Financials and budgets
In Section 2, Implementing Value Stream Management (VSM), of this book, you'll learn how these VSM capabilities help an organization improve its value streams. Plus, you will learn the basic methods that implement these capabilities. But since this is the main topic of this book, let's first look at how industry analysts assess the importance of this emergent field in IT.
Promising VSM growth
VSM applied to software development practices, and especially VSMPS, are both considered emergent concepts. However, several leading IT industry analysts, such as Forrester Research, Inc. and Gartner, Inc., now consider VSM a vital requirement and an exponentially growing trend.
For example, Forrester publishes a periodic Forrester Wave™ for VSM, with assessments of the leading VSM vendors by scores and weightings. The latest version, Forrester Wave™: Value Stream Management, Solutions, Q3 2020, provides assessments of the 11 leading VSM vendors.
Likewise, Gartner follows the VSM industry and recently released its Gartner Report titled [Gartner] Predicts 2021: Value Streams Will Define the Future of DevOps. Gartner states: [to] accelerate development and enable continuous delivery of customer value, organizations need to reach the next level in their agile and DevOps practices. I&O leaders and application leaders must focus on value stream management to maximize flow, improve delivery efficiency and drive innovation.
In the report, Gartner goes on to list its strategic planning assumptions for VSM, as follows:
- By 2023, 70% of organizations will use value stream management to improve flow in the DevOps pipeline, leading to faster delivery of customer value.
- By 2023, the use of value stream delivery platforms to streamline application delivery will grow from 10% to 40%.
- By 2023, 60% of organizations in regulated verticals will have integrated continuous compliance automation into their DevOps toolchains, improving their lead time by at least 20%.
- By 2025, 60% of I&O leaders will implement chaos engineering to add resilience and velocity improvements to value stream flow, increasing system availability by 10%.
- Through 2025, 20% of enterprises will go beyond SRE by adding IT resilience roles to improve resiliency posture between product teams and traditional DR.
(Gartner, Predicts 2021: Value Streams Will Define the Future of DevOps, Daniel Betts, Chris Saunderson, Ron Blair, Manjunath Bhat, Jim Scheibmeir, Hassan Ennaciri, October 5, 2020)
VSM appears to be growing in use and here to stay. Now, let's take a quick look at how VSM is complementary to DevOps practices.