Every day, IT leaders address questions to help keep their team moving forward, which in turn keeps the organization moving forward.
Questions like:
- Where should the IT team spend their time?
- How should IT allocate resources?
- How can IT justify larger budgets and more investments?
In the past, IT leaders have taken a straightforward approach to answering these questions. They have broken down each question and explained in technical detail everything their team has accomplished and completed, no matter how small or mundane.
In other words, IT delivered outputs.
But in today’s world, outputs aren’t enough. The old approach to making decisions based on outputs is over. Because today, IT must deliver outcomes.
If an IT leader was to list only outputs without connecting them to any business outcomes to the C-suite in the hopes of securing more resources or larger budgets, the C-suite will look at them and ask: “How did this drive business value?”
Closing tickets, upgrading technology, and troubleshooting technical issues are an important part of the success of an IT organization. But IT leaders must do more than just list outputs. IT leaders must show how these outputs connect to the organization’s bottom-line goals, and IT’s role in delivering needed business outcomes.
Before an IT leader can decide on how their team should allocate its time and resources or how IT can obtain larger investments and partake in bigger initiatives, they must answer these questions:
- How did IT’s outputs reach the end customer?
- How did IT’s outputs help the customer achieve their goals?
- How did IT’s outputs increase revenue or decrease expenses?
- How did IT’s outputs help the business achieve its goals?
To find the answers to these questions, you have to follow the value stream.
What’s a Value Stream?
Steve Bell and Mike Orzen, authors of Lean IT define a value stream as a “sequence of activities required to design, produce and deliver a good or service to a customer and it includes the dual flows of information and material.” According to Bell and Orzen, a value stream consists of “all processes, tasks and activities used to bring a product or service from concept to customer and includes all information, work and material flows.”
In short, value stream is the steps taken by an organization to meet customer demands and bring value through a product or service to that customer. The value stream is the big picture look at how value flows through the organization.
How To Follow the Value Stream
Following the value stream means exactly that – following how value flows through an organization and identifying where there may be improvements that can be made. It is about gaining clarity around how value is delivered to the end user, and how to use value streams to help you make decisions in your IT organization.
For every initiative or project, IT leaders must be able to step back and ask, “where and how does this fit in a value stream?” If you’ve followed the value stream and there is no fit for the initiative, then why is it a priority?
Often when you’re following the value stream to determine the importance of an initiative, you will end up involving other departments and stakeholders. As noted above, the value stream is how value flows through the entire organization, not just within one department. Value streams will cross departmental boundaries and a collaborative approach is mandatory. Working in a vacuum will simply waste time and resources — time and resources that could have been better spent contributing to the value stream.
Now, in this digital world, this means understanding how technology contributes to the value stream. IT manages technology and technology will always play a role in the value stream. Understanding this relationship will give you a context for certain services or initiatives.
Map your Value Streams
How do you know if a technology, a specific investment, or an initiative is contributing to a value stream?
The answer is simple: map that value streams. A value stream map is a visual representation of how value flows through the organization. This visualization enables you “follow the value stream.”
Mapping value streams will:
- Identify cross-functional nature of work, which can avoid “siloed thinking”
- Identify waste such as bottlenecks or delays (very important for IT!)
- Allow teams to visualize the work and help the entire organization recognize how individuals and teams contribute to value.
How to Follow the Value and Map the Value Stream
No matter where you struggle with defining value or identifying the value IT drives, a value stream map is a place to start.
Mapping a value stream requires a cross-departmental team that includes IT. Silo thinking must not get in your way when you’re following the value stream, so include all stakeholders and make this an exercise in discovery.
To map a value stream, you have to define the focus of the map. A Value Stream Map doesn’t necessarily map all the paths that a process can take. It tracks one service or part of a process. So when mapping your value streams, start with services that have a role in the products or services that have the most impact on the organization. Ask yourselves what is the most valuable thing to the customer, what brings in the most revenue, or conversely, what costs the most for the organization? Start with focusing on the value streams where you get “biggest bang for your buck,” so to speak.
Map all the information including all the tasks being performed, who is performing them, and the technology involved with all of these tasks. It helps if you work backward. Work with the end outcome of a value stream and map out the process from there. Start with the end customer and the process will probably become much clearer.
In addition to mapping out each step in a process, be sure to map how information flows through each step in the process. Remember, you want all the key stakeholders in the room while you do this so that everyone knows how information flows and what is expected of them during each step of the process.
It’s also important to include timelines involved in each step of the process. Include lead time and actual time spent on production or in the product lifecycle to get an accurate view of how much time is needed for value to flow to the customer.
Finally, remember that value stream mapping is never a “one and done” activity. As new technology is introduced or customers’ needs change, your value stream maps will be revisited.
The next time you’re faced with a decision about an investment or project, take a look at the value stream. Using a value stream as your compass Following the value stream will always lead you to a path where you can contribute value to the organization.
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