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.

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William Ulrich

William M. Ulrich is a Senior Consultant with Cutter's Business & Enterprise Architecture practice. He has advised Fortune 1000 companies, government agencies, and high-tech firms on information management, legacy transformation, business architecture, business capability mapping, business continuity planning, organizational change, and partner alliances.

Discussion

  2 Responses to “Value Stream’s Role in Project Planning”

  1. Hi William … we have a stakeholder engagement process based on uncovering value exchanges between roles. The analysis of the ‘value stream’ is documented in a role to role interaction diagram showing how value flows between organisational roles.

    What I have found however in most business analysis situations the ubiquitous business process /swimlane flow chart is used more so than an interaction chart. These BPM charts tend to emphasis the process withing a silo and the exchange part is usually a simple ‘transport’ arrow from one lane to the other.

    To change this I think we need to shift the thinking from the value being predominantly in the exchange between roles/silos rather than the activity inside roles/silos. I think this is the essence of what you are arguing if I’m not mistaken.

  2. You are correct in your assertion for the most part. The value stream focuses on achieving value for the initiating stakeholder(s) with participating stakeholders identified on a stage by stage basis. The real focus on value streams is on achieving value for the initiating stakeholder. The stakeholders within each stage are merely to keep the value stream moving to the next stage and ultimately to completion. You may want to look at section 2.4 of the Business Architecture Body of Knowledge Handbook at wwww.businessarchitectureguild.org.

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