VSM helps businesses visually illustrate, analyse and improve every step in delivering a product or service.
Any business that interacts with customers should recognise the importance of providing value. Without demonstrable, quantifiable value, customers fail to make the transition from buyer to enthusiast. However, as markets grow and audiences discover ever more purchasing options, it’s becoming increasingly difficult to create value propositions that stand out from the crowd. Value stream management and value stream mapping may offer the solution.
Value stream mapping (VSM) is a subset of value stream management, which is the process of integrating every aspect of your business workflow—the end-to-end process of developing and delivering software to your clients. Value stream management operates in a continuous cycle starting with the feedback from clients that drives demand, and ending with the operational management of the features that support that demand, which in turn drives new feedback. This business workflow is supported by the integration of technical solutions at every step of the way, from prioritising and planning to building, testing and deploying, and onto operational and service management.
But integration only describes the mechanics of value stream mapping; true value comes from value—customer value, specifically. Workflow has to be able to optimise the flow of value to the client, and by extension, the business. Additionally, effective VSM helps identify and resolve the bottlenecks, viewing your business as an integrated stream, not a series of individual points. Value stream mapping describes the reporting aspects of value stream management.
Mapping places value front and centre throughout the entire development and delivery process. Taking the form of highly-visual flowcharts, VSM uses symbols and directional arrows to represent work tasks and information flows. But where VSM differs from traditional flowcharts is in its focus on value. Every item associated with every step in the process is quantified as adding (or not adding) value, as seen from the customer’s view point. The business may then review, revise or reconsider those tasks that do not add obvious customer value.
Value stream mapping is a part of the Lean approach to business—maximising value while minimising waste. Lean defines ‘value’ as anything that the customer is willing to pay for. This includes relevant services, products, features, support etc. Waste describes steps or aspects of the process that customers are not interested in paying for, such as defects, wait time, low-value features, unnecessary documentation or approval processes, task switching and searching for information.
The purpose behind value stream mapping is relatively straightforward: helping your business visualise and improve entire processes, identifying and distinguishing between value-adding and wasteful steps. You can then streamline those processes to deliver increased customer value.
The end result is a structured picture of how items flow through the value stream, and where changes may be made to improve the collective process. In other words, VSM is about reducing the wasteful steps that stand in the way of delivering undiluted customer value.
As demand increases and development processes get more complex, it can be easy to lose sight of the customer. VSM realigns that focus, identifying those aspects of your processes that your customers actually care about. It puts the spotlight on their needs, their wants and their concerns, and helps you create the quickest, most efficient route to customer satisfaction.
In essence, value stream mapping acts as the customer’s representative, making sure that their voice is being heard throughout every step of development.
Additionally, VSM breaks down damaging information silos. It provides a unified view of overall processes to everyone involved, from business leaders and department heads to team members. Every player can see their specific contribution, where it fits in as a part of the whole, and how it contributes to a valuable, customer-focused end result. And, by creating a holistic snapshot of your existing processes, you can easily compare prior states to revised approaches, and evaluate if the changes have made a positive impact.
Finally, VSM is an exceptional tool for bringing key actors and decision makers together on a shared vision. In a relatively short amount of time, you can align teams and departments, get buy-in from leaders and establish vital objectives and KPIs.
Although value stream mapping is always focused on customer-centred value, it may play different strategic roles. Depending on the specific goals that a company or department wishes to accomplish, VSM applied at different levels and involving different teams and stakeholders can bring direct benefits to every aspect of a business. Executives and team leaders may employ VSM as a strategic tool to help clarify and simplify business-wide initiatives. At the same time, developers and specialists benefit from VSM by creating more-direct roadmaps and less wasteful production processes, allowing them to consistently produce more and better products.
But regardless of the advantages value stream mapping delivers throughout a business, in the end, it’s the customer who benefits most. VSM empowers organisations to provide their buyers with improved quality on fewer resources, and to always be working to improve their offering. By focusing on value, first and foremost, VSM businesses more consistently meet and exceed customer expectations.
The VSM end product is essentially a flow chart, but if you’re just getting started with VSM, there are some important things you’ll need to do before you get the whiteboard markers out. Here we detail the key steps of VSM.
Your first step is to determine which product’s or product family’s processes you would like to manage. Be aware that new teams or those without VSM experience may require some VSM training.
Value stream mapping provides significant benefits across entire companies. That said, revising established processes can be a difficult, time-consuming and expensive endeavour. Before you get into the heart of the VSM process, you’ll first need to make sure that leadership is on board and willing to offer its support. Consider starting with a simplified VSM demonstrating potential value, and sharing it with your decision makers before you get into anything more comprehensive.
Identifying the issues that may be limiting perceived value for the customer is a necessary early step. What are your customers’ concerns? Where are they demanding change? What might be prompting them to leave? Your customers are the ones who define which steps in your processes are ‘valuable,’ so incorporate any relevant data or analysis that is available to help you determine which issues are standing in the way.
The value stream covers every step involved in producing and delivering a product or service, but your VSM does not have to. You can decide for yourself how much of the value stream you want to focus on. Take the time to determine the scope of your VSM project, so that you can remain focused on the areas that matter the most right now.
With the scope of your project firmly in mind, go through the process steps included in delivering the product or service. As you do so, pay close attention to the information flows and work activities themselves, and whether they produce customer value. Evaluate performance at each step, and add your process data to your value stream map.
Take a close look at every step in the process. Which steps are valuable, and which steps wouldn’t customers care about if they were removed? Which ones consistently create noticeable results? Which ones are available when they are needed? Which ones are able to meet customer demands? And finally, which steps are flexible enough for use between multiple products within a product family?
How a product moves from one step to the next can have a significant impact on the end-user experience. Map out relevant communication touchpoints and identify areas where products and information flows are moving freely without noticeable delay, as well as areas where inventory levels might indicate bottlenecks or other issues negatively impacting product movement.
Considering each step in the process, map out process and lead times. Remember, value is the goal, but waste is what you are trying to find and eliminate. Count and monitor inventory levels throughout the process, make note of inefficiencies and identify any imbalances between processing times and lead times. This will give you a clear idea where the waste is on your map, so that you can take steps to get rid of it.
At this point, your value stream map should be essentially complete. Take a step back and view it from a big-picture angle. Seeing everything as it moves and works together will make waste stand much more clearly.
With the problems in your processes clearly identified, your final step is to now create an ideal value stream map, free of unnecessary waste and fully devoted to value. This map will serve as a goal for your business, guiding work and facilitating communication, and potentially extending across departments, so be sure to work with your leadership. Having an ideal VSM you can implement in place of existing processes is the final goal of value stream mapping, so take your time and get it right.
As previously noted, VSM defines waste as anything that does not provide direct customer value. Here are several types of waste that value stream mapping can help identify and eliminate:
Goods being moved from one location to another; this includes excess movement and double handling.
Costs, time and effort associated with identifying and correcting defects or other mistakes.
Production that outpaces demand. Overproduction usually results in more changes than the customer can consume, and can negatively impact productivity, quality and production flow.
Doing more work or having more steps in a product or service than the customer needs. This may result in unnecessary motion, as well as poor layout and communication.
Products, people or equipment that are not currently engaged in moving the process forward.
As you get ready to start with value stream mapping, here are four best practices to help you get the most out of it.
As you create your VSM, don’t worry about producing something visually refined. Instead, use paper or a whiteboard as you document your steps and identify waste areas. When you’ve finalised the VSM and are ready to create your ideal version, then you can use dedicated software to make something worth sharing across your organisation.
Don’t confine your value stream mapping to a single location. Wherever possible, go to where steps are occurring and experience for yourself the reality of what is going on. If you fail to ‘walk’ the entire value stream, and instead rely on assumptions and second-hand accounts, you will likely miss out on vital insights.
Walking the value stream shouldn’t be a one-time thing. An initial walkthrough to get a general overview of the stream, followed by more detailed walkthroughs to identify specific areas of concern, helps create a more comprehensive picture. Many businesses also find that walking the stream in reverse (from end-product to initial production) provides better insight into certain issues.
VSM is about improving your processes. As such, it’s never enough to simply understand how something is done; you need to ask why it is done the way it is. Keep asking why until you uncover the root causes and original intentions behind specific steps, so you can revise, replace or remove them if necessary.
According to the Forrester Wave™: Value Stream Management Solutions, ServiceNow is among the top VSM solutions providers in the world. Leveraging capabilities from a combination of DevOps and ITBM, utilising the Now Platform, and operating in conjunction with Governance, IT Operations Management, IT Service Management and Risk and Compliance, ServiceNow VSM provides businesses with several key benefits. These include:
Customers should be the focus of every business, and value is a primary focus of nearly every customer. Make value your focus as well, with VSM from ServiceNow.
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