A value stream depicts how “a business delivers end-to-end stakeholder value.” Because a value stream envisions value delivery across business units, product lines, and even organizational boundaries, value streams provide a way for all stakeholders to perform situation analysis, craft a common strategy, and implement that strategy based on a consensus-based solution. This is an essential planning concept when multiple, fragmented processes slow or hinder the delivery of stakeholder value.
Consider, for example, a customer of one set of products or services requesting information about, or help with, a different set of products or services. It is not uncommon to find no recognition that an individual or organization is already a valued customer. Parallel, fragmented processes across various business units and product lines — along with different views of customer, account, and related information — alienates customers, business partners, and other stakeholders. Process improvement initiatives only deal with issues such as this from a silo-oriented perspective. Value streams, however, break down these silos so that the business can view a stakeholder in the same way that a stakeholder views the business — as a unified business entity.
With so much of business architecture’s emphasis being on capability mapping, beginning initiative analysis and planning with the value stream may seem counterintuitive, but value streams are an ideal starting point for business planning because of their stakeholder focus. While capability-driven planning enables a focused, synchronized approach to investment analysis, capabilities alone provide limited insights into stakeholder value analysis. Value streams, on the other hand, provide excellent insights into various aspects of the business from a stakeholder perspective.
If, for example, it is difficult for a customer to move through the end-to-end acquisition cycle for a product, then analysis, planning, and investment allocation can focus in on the Acquire Product value stream. This analysis perspective allows executives to balance tactical versus strategic options that deliver stakeholder value while ensuring that the inquiry-to-payment-and-collection cycle is efficient from an internal perspective. And because business architecture supports the concept of value stream/capability mapping, capability-based investments and priorities are determined based on which stages of a given value stream are top priority.