­“Visionary organizations are creating and managing their Value Stream Networks and product portfolios in order to leapfrog their competition in the Age of Software.” [1]

—Mik Kersten

Value Stream Management in SAFe

Every business is a software business. To survive and thrive in the digital age, enterprises must deliver innovative, digitally-enabled business solutions faster than the competition. This requires a radically streamlined, frictionless solution delivery life cycle that produces continuous value for customers.

Value stream management (VSM) is the label for a growing category of integrated principles, practices, and tools aimed at enabling this kind of delivery system. VSM stresses the importance of accelerating value flow throughout the whole process—across all functions from concept through delivery—to enable enterprises to sense and respond to market opportunities at hyper speed. By 2023, 70% of organizations will use value stream management to accelerate the delivery of customer value. [2]

Enterprises using SAFe have an advantage. VSM is inherent in the principles, practices, and tooling that power SAFe implementations (Figure 1).

Figure 1. SAFe inherently supports VSM
Figure 1. SAFe inherently supports VSM

This paper explains the fundamentals of VSM and describes how SAFe helps enterprises build market-leading VSM capabilities.

Introduction to Value Streams

Value streams are core to VSM and are the primary delivery mechanism in SAFe. Understanding the structure and importance of value streams themselves is the first step toward effective value stream management.

A value stream is the set of steps an organization executes to deliver a solution to the customer, from initiation through value realization. The specific configuration of steps is unique to each value stream but generally involves defining, building, validating, and deploying one or more solutions, as shown in Figure 2.

Figure 2. A basic development value stream
Figure 2. A basic development value stream

Value streams are persistent, enduring for as long as customers continue to place orders or request enhancements to the associated solution. Each value stream contains:

  • All the steps necessary to convert a customer need into a valuable solution
  • The people who perform the steps
  • The systems they use to do their work
  • The flow of information and materials necessary to fulfill that request

Value streams in today’s large enterprises can be complex, spanning multiple functional boundaries and spawning countless cross-team dependencies. This complexity often results in fragmented delivery processes with clunky handoffs, breakdowns in communication, and substantial delivery delays.

The purpose of VSM is to bring order to this chaos so that work can flow smoothly through the organization and culminate in the right solutions being delivered to the right customers at the right times.

SAFe – A Portfolio of Value Streams

In SAFe, value streams are organized into portfolios, as Figure 3 illustrates. Each value stream delivers one or more solutions—in the form of products and services—to the customer. Budgets are allocated directly to value streams, funding the people, systems, and materials required to deliver those solutions.

Figure 3. A SAFe portfolio consists of one or more value streams
Figure 3. A SAFe portfolio consists of one or more value streams

SAFe Portfolios also align value streams to enterprise strategy, which ensures that solutions are designed to produce compelling business outcomes.

VSM Principles and Practices

Value streams are fundamental to lean thinking. Lean is an extensive body of knowledge and set of practices that improve efficiency by reducing delays and eliminating non-value-added activities. Lean thinking enables VSM when it permeates the entire organization and guides practices at every stage of delivery.

Lean thinking is summarized by the following five principles. [3]

  1. Precisely specify value by specific product
  2. Identify the value stream for each product
  3. Make value flow without interruptions
  4. Let the customer pull value from the producer
  5. Pursue perfection

In SAFe, these five principles of Lean thinking are the foundation of VSM. They provide a shared mindset for everyone involved in managing value streams and guide their behavior toward common goals. Each principle is described below along with specific elements of SAFe that support it.

#1 – Precisely Specify Value by Specific Product

This first principle underscores the importance of understanding customers’ needs and quantifying the value inherent in the solutions delivered to them. The solution itself holds the value—not the project, initiative, or process that produces it—and that value is ultimately determined by the customer.

Traditional delivery approaches emphasize project execution over value delivery. However, customers do not care about a company’s projects or processes; they care about the products and services that benefit them. This principle forces a shift away from a project-oriented delivery mentality to a product-oriented one (Figure 4).

Figure 4. Lean thinking moves the focus from projects to products
Figure 4. Lean thinking moves the focus from projects to products

A product-focused value stream is always grounded in the needs of the customer and calibrated to deliver the solutions that generate maximum business value.

Customer Centricity and Design Thinking Foster Value Creation

A product focus helps generate a customer-centric mindset that turns market needs into desirable, viable, feasible, and sustainable solutions. In SAFe, design thinking facilitates the continuous exploration of customer needs and the identification of solutions that generate business value (Figure 5).

Figure 5. Design thinking helps to locate and specify value
Figure 5. Design thinking helps to locate and specify value

Features are individual units of value that satisfy a customer need. Features have differing levels of relative value to customers. In SAFe, they undergo economic prioritization using the Weighted Shortest Job First (WSJF) method. This method favors features that offer the fastest opportunity to deliver the greatest value, as depicted in Figure 6.

Figure 6. WSJF prioritizes work based on value and time
Figure 6. WSJF prioritizes work based on value and time

Outcomes Quantify Value

Determining precisely how much value solutions deliver requires objective measurement—specifically, measurement of business outcomes achieved.

SAFe utilizes Key Performance Indicators (KPIs) as a way to measure these outcomes. KPIs are context-dependent and tailored for each value stream. Examples of KPIs are shown in Figure 7.

Figure 7. Example KPIs for different types of value streams
Figure 7. Example KPIs for different types of value streams

Identifying and measuring business outcomes are critical activities that help an organization evaluate the effectiveness of each value stream and guide ongoing improvements.

#2 – Identify the Value Stream for Each Product

VSM requires a detailed understanding of how work flows through the organization to create valuable products and services. This flow of work is the value stream and contains all the people, processes, tools, and information necessary to deliver value. Delays anywhere in this system result in delays in delivery to customers.

Locating these delays is critical to VSM. Value stream mapping accomplishes this by visualizing the end-to-end delivery process and measuring performance at, and between, each step. In Figure 8, delays in the value stream map clearly indicate major interruptions in the flow of value.

Figure 8. Value stream mapping reveals sources of delay
Figure 8. Value stream mapping reveals sources of delay

This holistic view of the value stream reveals where improvement efforts can best be applied. Very often these sources of delay are hidden between steps, where work changes hands.

Organizing around Value

Once a value stream has been identified, the first step toward managing it efficiently is to align the people who do the work. This requires people from different departments and specializations to come together as a unified, cross-functional team, as illustrated in Figure 9.

Figure 9. People aligned to the value streams they support
Figure 9. People aligned to the value streams they support

Unlike project teams, these teams are long-lived networks of individuals within a shared business domain. Organizing people according to the value they create—not the internal functions or cost centers they support—aligns them more closely with customer needs and significantly reduces delays caused by interdepartmental handoffs and miscommunication.

Realizing Value Streams with Agile Release Trains

In SAFe, value streams are realized by one or more Agile Release Trains (ARTs). Each ART is a cross-functional team of Agile teams that plans together, executes together, and delivers solutions on demand, as shown in Figure 10.

Figure 10. An ART contains the people who to work in the value stream
Figure 10. An ART contains the people who to work in the value stream

Typically, 50-125 people in size, the ART is the core delivery mechanism in SAFe and, as such, the primary VSM engine. The ART gives life to the value stream and demonstrates Lean thinking throughout, continually building solutions, measuring value delivered, and learning from the results.

Building Really Big Systems with Solution Trains

Many big systems—healthcare networks, aircraft, automobiles, satellites, medical imaging devices, and logistics systems for example—require more than one ART, which must work in synchronization.

Solution Trains provide this capability. As depicted in Figure 11, a Solution Train is composed of multiple ARTs, all organized around a shared value stream.

Figure 11. Solution Trains enable delivery of large solutions
Figure 11. Solution Trains enable efficient delivery of large solutions

The ARTs that power a Solution Train regularly align on what to build and how to synchronize execution. Solution Trains typically are a combination of internal teams, suppliers, and even customer teams. They are all part of the value stream and, therefore, must collaborate to maintain efficient flow.

#3 – Make Value Flow without Interruptions

Once value streams are identified and teams are aligned directly to the value streams and enterprise strategies they support, the value stream must be cleared of wasteful activities that needlessly delay solution delivery. This third principle of Lean Thinking guides VSM activities toward clearing bottlenecks from the value stream so that value can flow continuously from concept to delivery.

Accelerating Flow with Small Batch Sizes

Removing major sources of delay from the value stream often is simply a matter of reducing the amount of work traveling through the system at a given time. As illustrated in Figure 12, smaller batches foster a more continuous delivery flow, allowing value to accumulate frequently and incrementally.

Figure 12. Small batches accelerate value flow
Figure 12. Small batches accelerate value flow

Operating with smaller batches is a time-tested, proven way to reduce delay and accelerate value flow and, thus, is a core part of any VSM strategy. Small batches are encouraged and supported through SAFe’s Kanban systems, short iterations, backlog refinement events, WSJF prioritization practices, and the Lean Startup cycle.

Enabling Flow with a Continuous Delivery Pipeline

In addition to reducing batch sizes, applying Agile and DevOps practices significantly reduces delays in the value stream. Agile fosters iterative development, frequent customer feedback, and high productivity of self-organized, cross-functional teams. DevOps increases the speed and reliability of product delivery through cross-team collaboration, value stream automation, and strict adherence to built-in quality. This is how an ordinary value stream evolves into a Continuous Delivery Pipeline (CDP), which consists of continuous exploration, continuous integration, continuous deployment, and release on demand capabilities, as depicted in Figure 13.

Figure 13. SAFe's Continuous Delivery Pipeline enables uninterrupted value flow
Figure 13. SAFe’s Continuous Delivery Pipeline enables uninterrupted value flow

The CDP is always ready to respond to market opportunities and threats. It is a perpetual-motion engine that continuously explores market needs, continuously builds and tests innovative solutions, and is capable of releasing value to customers on demand.

#4 – Let the Customer Pull Value from the Producer

Even the most efficient value stream is futile if it produces products or services its customers do not want. This Lean principle guides organizations to configure value streams to deliver solutions that customers pull into the market based on their actual needs, rather than solutions that teams push into the market based on what they think customers need (Figure 14).

Figure 14. Push-based vs. pull-based delivery
Figure 14. Push-based vs. pull-based delivery

Traditional, push-based delivery systems favor big, infrequent releases that typically deliver too little value too late. The solution is to instead create a pull-based flow, where small batches of work are prioritized and delivered based on frequent customer feedback.

A simple yet powerful way to implement pull-based delivery is with a Kanban system. These are visual representations of the value stream (or portions of the value stream) that help regulate efficient flow through the system, as shown in Figure 15. Kanban systems are inherently pull-based and enforce small batches through work-in-progress (WIP) limits applied at each step.

Figure 15. Kanban systems foster pull-based processing
Figure 15. Kanban systems foster pull-based processing

Releasing Value on Demand

Solutions should be architected to support pull-based flow. Many legacy enterprise solutions are large, complex, ‘monoliths’ that require long and painful release cycles. Changes to these systems are generally pushed to all customers and users at once, often creating value for some but disruption for others.

In SAFe, as Figure 16 illustrates, large systems are decoupled into ‘value streamlets’ so that their unique sub-systems can be updated independently. This allows the organization to deliver value on demand to specific customer segments at a time.

Figure 16. Value streamlets facilitate pull-based delivery
Figure 16. Value streamlets facilitate pull-based delivery

#5 – Pursue Perfection

Even when defined and streamlined in the ways described above, Value streams themselves do not guarantee lasting competitive advantage. Value Stream Management, therefore, is an ongoing practice that continually optimizes the value stream in the pursuit of maximum flow and quality. The following practices help guide the journey.

Applying Systems Thinking

Every value stream must be managed as a complete, end-to-end system. Improving one isolated piece produces local gains but often degrades the system as a whole.

Applying systems thinking allows the organization to approach perfection across the entire value stream rather than just in select areas. This also ensures that VSM ultimately benefits customers and the enterprise, not just the teams doing the work.

Measuring Progress

An organization pursuing delivery perfection must regularly assess its value stream against defined performance targets. Proper metrics, both quantitative and qualitative, provide a foundation for effective decision-making, replacing opinions with facts.

Flow metrics (Figure 17) offer a comprehensive view of the work moving through the value stream, how fast it is moving, and how predictable and efficient flow is from end to end.

Figure 17. Flow metrics measure delivery performance throughout the value stream
Figure 17. Flow metrics measure delivery performance throughout the value stream

VSM captures and surfaces these measurements to gauge the overall health of the value stream and reveal major bottlenecks.

Improving Relentlessly

Improving the value stream is not enough. To win in the digital age, enterprises must relentlessly improve their value streams. This requires the pursuit of perfection to be encoded in the DNA of everyone involved in the value.

Relentless improvement is built into SAFe. Regular Inspect and Adapt (I&A) sessions focus entire ARTs at a time on identifying inefficiencies and creating plans for addressing them. Teams review their own performance and plan needed improvements in iteration retrospectives. Design thinking practices, frequent system demos, and SAFe’s core values of alignment, built-in quality, transparency, and program execution all are designed to stimulate continuous feedback, learning, and improvement.

Leading by Example

The pursuit of value stream perfection is significantly accelerated, or hindered, by the actions of leaders in the organization. For most organizations, Lean thinking represents a big shift from the status quo. Influential people are needed to lead the organization by example through the transition so that the natural discomfort of systemic change does not cause the organization to regress back to traditional, ineffective ways of delivering.

Leading by example involves developing and demonstrating authenticity, emotional intelligence, life-long learning, professional growth, and decentralized decision-making. These leadership characteristics are a core part of SAFe’s Lean-Agile Leadership competency.

VSM Tooling

Applying the five principles of Lean thinking and the associated SAFe practices mentioned above will help an enterprise develop VSM as a core discipline. But to truly optimize a value stream for maximum efficiency, value realization, and competitive advantage, tooling is required. Value stream management solutions provide this capability.

Put simply, VSM solutions track flow across the value stream. They monitor value stream performance from end to end, collecting data from activity tools, DevOps toolchains, and manual sources, aggregating it into a central system and analyzing it for bottlenecks. Such a continuous, system-wide view of flow through the entire value stream makes every step of the delivery process transparent and reveals bottlenecks that would otherwise be difficult and time-consuming to find.

The following Scaled Agile Platform Partners offer VSM tooling that natively complements SAFe practices and the five principles of Lean thinking. [4]

Figure 18. Scaled Agile's VSM tooling partners
Figure 18. Scaled Agile’s VSM tooling partners

Summary

Value Stream Management is a leadership and technical discipline that enables maximum flow of business value through the end-to-end solution delivery life cycle. SAFe enables VSM through its inherent alignment to the fundamental principles of Lean thinking, a multitude of practices that build efficiency directly into value streams, and a network of prominent VSM tooling providers. Enterprises that embrace VSM and practice SAFe are well-positioned to thrive in the digital age.

 


Learn More

[1] Kersten, Mik. Project to Product: How to Survive and Thrive in the Age of Digital Disruption with the Flow Framework. IT Revolution, 2018.

[2] Gartner, Inc. “Predicts 2021: Value Streams Will Define the Future of DevOps.” Gartner, 2020. https://www.gartner.com/en/documents/3991376/predicts-2021-value-streams-will-define-the-future-of-devops.

[3] Womack, James P., and Daniel T. Jones. Lean Thinking: Banish Waste and Create Wealth in Your Corporation. New York, NY: Free Press, 2003.

[4] https://scaledagile.com/business-solutions/find-a-partner/

 

Last update: 7 September 2021

 

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