Digital transformation remains critical for today’s enterprises. According to a recent survey, 96% of organizations are in the midst of a digital transformation initiative. The problem is that about the same percentage of organizations are contending with a significant challenge that stifles these transformations.
Digital transformations place a significant onus on optimized product delivery, which is a problem: 92% percent of respondents report that they are encountering product challenges due to poor visibility and inefficiencies across the product lifecycle.
These and other statistics are drawn from an extensive survey conducted by Dimensional Research and sponsored by Broadcom. The results from this research are now available in a 2022 Value Stream Management Predictions Report which offers compelling insights that business and IT leaders can draw from as they chart their organization’s path for 2022. Based on these findings, in the following sections, we provide our top three predictions for value stream management (VSM) in 2022.
Prediction #1: VSM Adoption Will Continue to Grow
The reality is that DevOps and agile approaches offered benefits, but they only focused on parts of the organization. The gains made in those areas tended to exacerbate the bottlenecks and friction created by other parts of the organization.
VSM offers a way to include the whole enterprise in optimized flows of work. In this way, leaders see that VSM can help their organizations optimize their digital transformation.
We’re seeing significant momentum around VSM adoption, and the stats from this recent report provide strong validation of this move. Leaders are looking to VSM to help optimize their organization’s digital transformation, improve workflows, gain improved data-driven insights, increase alignment, and ultimately improve their products’ return on investments.
While the acknowledgement of VSM’s benefits is widespread, the actual adoption and usage of VSM approaches is still in its early phases within many businesses. Consider that, while 99% state they already do, or believe they would, benefit from VSM capabilities, only 42% are actually using value streams today.
The reasons for this can vary. For some organizations, I think the reality is that, while the intent may be to implement VSM, the execution hasn’t kept pace. Why? When asked why VSM hasn’t been adopted, “lack of experience” was the top-rated response.
Just like DevOps, agile, and any other approach, VSM is a discipline, and it needs to be effectively executed if organizations are to see the outcomes desired. It is important to acquire the necessary expertise, implement VSM principles in a concerted manner, and measure progress to make sure you ultimately reach your desired outcomes.
In assessing organizations’ VSM progress, the following is another illustrative data point: Currently, only 18% are allocating resources at a sustained product level. The fact that so few have been able to establish a solid product focus offers a strong case for how far many organizations have to go.
For those new to VSM, one key concept is centered on the move to align around products rather than projects. While these terms may sound similar, the move is a fundamental one. [include link to DPM focused article?] Even starting with how to define what a product is can be a challenge. In a software business like ours, defining products can be fairly straightforward. On the other hand, for a company in the financial services sector, for example, which doesn’t sell discrete applications, establishing clear distinctions between projects and products, and gaining a consistent focus on products may be more difficult.
Prediction #2: VSM Will Help Solve Continuing Product Life Cycle Issues
Even after organizations have established agile and DevOps methodologies, many teams are still not getting the necessary insights and visibility into the work being done. Too often, teams are still resorting to using slides and spreadsheets to run the business. While agile principles were supposed to offer improved visibility, the reality is that, after initial phases, many teams still have a black hole in development in which months may go by without senior leadership really having a clear view of progress. Further, teams continue to struggle with inefficient processes and lack alignment with customer value.
Given these widespread issues, it perhaps shouldn’t be a surprise that, even in this time where it can be hard to get two people to agree to anything, 95% agree that VSM would optimize their product life cycles. In addition, 99% expect multiple benefits from VSM, with the highest percentages of respondents expecting such benefits as faster delivery of solutions to customers, improved data-driven decision making, increased transparency, and improved organizational alignment.
Prediction #3: By Leveraging VSM, Organizations Will Deliver Increased Customer Value
Within enterprises today, more than three-quarters of respondents (80%) report that they are still struggling with silos, and a similar percentage feel that these silos lead directly to reduced customer value. Quite simply, a big percentage are confronting silos, and see the negative impact they’re having.
Silos are evident any time people are throwing things over the wall to another team. This includes when strategy teams throw directives over to the execution team, when development hands off code to the quality team, when code is handed off to operations, and so on.
All these silos can be fixed with VSM. Plus, 98% agree that the right VSM Platform can help accelerate VSM adoption in 2022. With advanced VSM technologies, teams can begin to break down these silos. These technologies can provide data for every level of the organization, helping highlight the silos that exist, pinpoint where the problems are, and offer insights for eliminating them.
Further, with advanced VSM technologies, teams will be able to track and optimize every step in the product life cycle. With these solutions, you can define and administer value streams, and optimally manage the work that flows through those streams—from the first spark of innovation through production and on to customer delivery and feedback.
2022 is shaping up to be a big year for enterprise adoption of VSM, and for many to begin to realize the massive benefits this methodology promises. To learn more about the study and our top takeaways, be sure to download the report, “Value Streams are Accelerating Digital Transformation.”