As businesses evolve, introducing Value Streams as part of a modern approach to IT Service Management is now high on the priority list of a growing number of CIOs and senior IT Leaders.
Building on the webinar we delivered recently on the same topic; this discussion paper introduces Value Streams and their importance in modern Service Management strategies. In it we will discuss different stakeholder perspectives in the organisation, and how they are important in driving value to end customers; how Value Stream Mapping and Optimisation is beneficial for aligning Service Management goals with corporate objectives; and some of the key considerations to bear in mind when going through the process of Value Stream Mapping.
Why are Service Value Streams important?
IT and wider business objectives are often partially but not totally aligned. Business leaders now need IT to underpin and drive change and innovation, to make sure their organisation is responsive and adaptable to business and market needs. Although valuable, your current IT Service Management and Delivery approach will need to evolve to enable this shift. Whilst `IT based` metrics such as high availability, SLA adherence and effective change control are valuable, evolution is needed to ensure that your IT strategy and day-to-day Service Delivery and Operations are enabling business goals to be achieved.
This means re-thinking your Service Management approach to focus on different priorities –
- Efficiency – measuring, optimising, and improving operational efficiency and speed
- Quality – ensuring that customer expectations are continually understood and met
- Cost – driving down and removing operating costs, and handing the subsequent savings back to the wider business
To enable this to happen successfully, you need to take a close look at how you currently deliver IT services and where improvements can be made. This is where the concept of value streams comes in, to ensure you fully understand business objectives and how these will be supported through your end-to-end IT Service Delivery Eco-System. This starts with getting to grips with your services, products, and customers.
Value & Value Streams
Value Chains and Value Streams aren’t new concepts.
Lean IT has its roots in Lean Manufacturing and emphasises the importance of eliminating waste and only performing activities which benefit the customer. Value is always specified from the customer perspective.
IT4IT Reference Architecture also incorporates Value Streams as core to the business of managing IT.
ITIL® 4’s definition of Value Stream is “a series of steps an organisation undertakes to create and deliver products and services to consumers”, all working across the ITIL® 4 Service Value Chain (SVC) (Axelos Limited, 2020).
Whereas ITIL® 4 focuses on delivering value, it doesn’t quantify what value is or what is important. This is because what is important for your organisation may not be a priority for another. However, whether your primary goal is operational stability, customer service, or speed to market, what is consistent across all of these is that understanding the customer and effective stakeholder interaction is needed to add value. Value co-creation is all about focusing on what is being delivered, and how. This needs a holistic view of the Service Delivery organisation, across all key elements, not just processes and technologies. ITIL® 4 focuses on four dimensions of Service Management, building upon and enhancing the key constructs of ITIL® v3. ** The four dimensions are summarised on the next page.
Value Streams are a series of steps in value creation, ensuring that your organisation can work flexibly and co-operatively in delivering value across all key areas.
The Service Management context
ITIL® 4 describes an Operating Model and construct containing key activities from the Service Value Chain – Plan; Improve; Engage; Design & Transition; Obtain/Build; Deliver & Support.
It outlines the overall value chain concept, starting with `Demand’ on the left, and culminating in `Value` on the right. This is a high-level framework approach that can be used to fit the needs of your organisation.
Focusing on the value stream element (represented in the grey hexagon in the middle), there are six key elements to this –
- Plan – making sure there is a shared organisational view of what needs to be achieved and how
- Engage – engaging with stakeholders to make sure their needs are met
- Design & Transition – creating new and changed services that meet stakeholder expectations
- Obtain & Build – defining the service components, making sure that they are available when needed
- Deliver & Support – being able to support new services as required
- Improve – continually improving & optimising
An example of a Value Stream
An example of a Value Stream is a New Joiner process, as it is an important process that depends heavily on your processes and tools, or those of your service provider. The demand is triggered by the HR process to on-board a new employee, and an example Value Stream on the back of this would look as follows –
The above shows a real-life example of where a Value Stream can be applied and will add business value. It describes the processes and practices at each stage, the importance of tool sets and integration points, culminating in gathering customer feedback and continually refining and improving the services being delivered. Optimisation in any Value Stream is about looking at process steps and touch points, integration points, and creating an end-to-end Value Stream where contributions from all areas can be improved as required. It emphasises the importance of moving away from a siloed, departmental approach to an end-to-end perspective where all key areas collaborate and work closely together.
From an ITIL 4® perspective, all optimisations can be considered within the four dimensions of Service Management, and are all equally important in mapping out and delivering effective value streams –
- Information & Technology
- Partners & Suppliers
- Organisation & People
- Value & Processes
When considering Value Streams to map, it helps to initially use a process where there is direct customer interaction as the benefits can more quickly be shown.
Techniques to understanding the Customer Journey
Developing User Stories around the customer persona is an effective technique in Value Stream Mapping. From the example above relating to the New Joiner Process, you may consider what else the customer may want from the on-boarding process, what else will drive value for that customer, and ensure that the customer journey has been correctly understood –
When conducting Value Stream Mapping, it is also vital to understand the needs of each stakeholder or stakeholder group. Below is a simple, visual representation of what this may look like, illustrating the value statement or areas of importance, for each stakeholder –
Value Stream Mapping requires a detailed understanding of each stakeholder, their objectives, and the `must haves`, and `nice to haves` they require from the Value Stream.
An approach to Value Stream Optimisation
Despite every organisation having different objectives and drivers, and even though there is not an approach that will suit every scenario, there is a logical sequence you can follow to ensure that Value Stream Mapping is effective and beneficial –