Software teams unknowingly paved the way to modern business by operationalizing Agile practices. Since the dawn of the millennium, they’ve been working cross functionally to release better quality software faster. In the meantime, C-suite executives have been warned that their organizations need to become agile just to survive in today’s era of digital disruption.
More recently, businesses have been executing digital transformation initiatives that change the way the company thinks, operates and engages with customers and partners. Now, they’re embracing value stream management to ensure that they’re actually delivering value.
“Digital transformation has accelerated the need for organizational agility, but if you’re not delivering the kind of value customers expect, your ROI will suffer,” said Laureen Knudsen, chief transformation officer of Broadcom‘s enterprise software division. “Value stream management helps ensure that you’re focusing on what matters most to your customers.”
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In a recent BizOps Coalition survey, 83% of business and technology leaders said that organizational agility is critical for their businesses in 2021, but only half rate their digital maturity good or excellent. Similarly, 95% believe that digital transformation is about business outcomes but 62% admit their companies are adopting technology for technology’s sake. Worse, only 50% of business technology requests cite actual business objectives.
Contrast that with the operating norms of the market movers and shakers and the fundamental issue is that the company is operating in silos, which slows value delivery and impedes data flows.
What’s Driving the Need for Value Stream Management
Countless cloud-native companies have disrupted entire industries because they have a more compelling value proposition. For example, why wait for a taxi if a driver can be at your door in less than five minutes? Digital disruptors are systematically eliminating friction in value chains.
Importantly, they’re also disrupting themselves because soon after their innovation changes the rules of the game, competitors adopt the same strategy. Since no one innovation will continue to provide a sustainable competitive advantage forever, they experiment fiercely, failing from time to time, in an effort to discover the next thing that will move markets.
“Companies are finding that they have more people devoted to software development than any other part of the company now because with digital transformation, every company is a software company,” said Knudsen. “John Deere has more software developers than hardware engineers. Even local restaurants now have apps.”
However, not all organizations are able to provide the same level of value because some of their operating models are outdated. They’re clinging to rigid hierarchies and siloed operations when value streams must flow throughout the organization.
How to Affect Value Stream Management
Organizational agility, digital transformation and value stream management all require a cross-functional operating model that encourages cooperation and collaboration.
“You have to optimize processes end-to-end,” said Knudsen. “It’s looking at entire processes and really streamlining all of that. You start with the value you want to provide your customers and involve all of the pieces of your organization that will be required to deliver that value. The company wins and the customer wins.”
Meanwhile, the entire company should have adopted an ethos of continuous improvement that applies to everything – careers, operational efficiency, customer relationships, growth and even the definition of success.
“You need to get comfortable with the fact that even at the strategic level, you don’t know the fastest path to value, so you want to get something in the hands of customers as quickly as possible so you can get that feedback which will tell you you’re on the right track,” said Knudsen. “You also need to keep your eye on the market because in 2021, we’re going to see a lot of new things we haven’t seen before.”
Surprisingly, 97% of survey respondents claim to have agile teams and great agile tools, but only 3% running their business on data. Nearly seven in 10 are unable to create business metrics from their data and three quarters don’t have real-time data available for timely decision-making. Organizational leaders can sense there are bottlenecks and constraints impeding value delivery but it’s difficult to pinpoint where they are without data.
A value stream management solution can help provide the kind of visibility modern organizations need to make accurate, timely decisions.
Master Value Stream Management
Join Broadcom for the Value Stream Management Summit online, June 23, 2021, which will address the strategic and tactical issues today’s companies must master.
Learn more on our registration page.
Content provided by SD Times and Broadcom