The value-driven transformation: Mastering value flow to supercharge your digitalisation journey

Narendranath P N,
Practice Lead of Technology - Products & Solutions,
Temus

The past couple of decades (often called the “Age of Software”) have brought in a Cambrian explosion in terms of technology platforms and software development methodologies. Largely, it has been the Big Tech firms and a few Start-ups who could derive most business value out of them. Traditional Enterprises and Public Sector organisations can struggle to derive full value despite massive investments in technology, internal teams, and external service providers.

Temus believes that economic and societal value can be unlocked when people, process and technology come together seamlessly across value streams and deliver confidently throughout a transformation journey. This often starts with connecting portfolio management and value stream management (VSM) practices to improve the performance of every stage of a product development lifecycle, from planning to delivery to outcomes.

Defining value streams and flows with digital transformation

A value stream is a sequence of activities an organisation undertakes to deliver service for a customer request. Most value streams cut through multiple functional departments in an organisation to deliver exceptional service. In a Service Industry (non-manufacturing) context, a Business or Operations value stream (e.g., Loan Request to Service) consists of mainly People (E.g, Loan Processing officers) and the Solution or Products ( E.g. Core Banking App) that enable people.

Once we learn to see the value streams, we must continuously accelerate the value flow.

Challenges Faced by Governments and Large Enterprises

In traditional large organisations, the Products and Solutions utilised within a Business/Operations value stream have a Development or Product Value Stream. This Development or Product Value Stream serves as a pathway through which requirements from the Operations value stream flow and are subsequently transformed into features within a Solution. At a high level, it consists of the following activities: ideate, create, release and operate. However, due to various barriers, the organisational structure and processes of the traditional organisation often impede the smooth flow in a Product Value Stream.

Another challenge is that there is a gap between investment or effort that is made and the end results or value delivered by IT.

A fundamental reason for this is that IT is often managed essentially on a project-by-project basis, supported by legacy management frameworks and measurements that are simply re-purposed and mal-adapted to the age of software.

Example 1: The Singapore Digital Government Blueprint reflects the government’s ambitions to overcome some of these barriers by 2023: all government services to have end-to-end digital options; cross-agency data fusion to take less than 7 working days, among others. How do we continue to deliver on this ask?

On top of that, the Business – IT disconnect is still not bridged except in Big Tech firms (where business is run by technical people). For example, concepts that are well understood by IT like Technical Debt and Story Points are meaningless to business leaders who manage IT initiatives as Projects measured by time and budget considerations (rather than outcomes and operationalisation).

Example 2: Financial institutions, for example, frequently undertake digital transformation initiatives to enhance customer experiences and streamline their operations. However, the lack of a common language between business and IT teams can hinder the success of these projects. For instance, business teams may have a primary focus on meeting customer demands, driving revenue, or enhancing user experiences. However, they may not effectively communicate these priorities in a way IT teams understand. Conversely, IT teams may prioritise technical stability, scalability, or cost-effectiveness over immediate business needs, resulting in a misalignment of objectives and project outcomes that do not fully satisfy business requirements.

One solution to these problems is to move IT away from a Project-based model to a Product-based model. Shifting from project to product changes the company’s focus to outcomes and growth instead of activities and programs. A recent benchmarking report from Planview analysed over 3,600 value streams and found that, on average, only 8% of what's planned by Agile teams actually gets delivered. A project funding model encourages (or even mandates) creating large batches of demand that far outweigh delivery teams’ capacity to execute.

Maximising Value Flow through Value Streams

The first step in shifting to a Product Model requires an understanding of how to identify Development or Product value streams and accelerate the flow through them. Visionary organisations are now connecting their Product Value Streams to Portfolio Management. This helps them not only serve their customers and citizens better but also measure and accomplish business outcomes.

Organisations gain visibility into the current state of initiatives, financials, resources, and risk across all systems, teams, and tools. With these insights, they have the transparency needed to create alignment in deciding how value can be maximised to achieve targeted objectives.

Learn more about driving change in large, complex government organisations here: https://flowframework.org/ffc-podcast/bryon-kroger/. In this podcast episode of Mik + One, Planview’s Dr. Mik Kersten and Bryon Kroger, former co-founder and COO of the USAF’s Kessel Run, discuss the remarkable story of Project Kessel Run at the U.S. Airforce, and how they adopted a “think big, start small” strategy to software transformation.

Temus x Planview collaboration

Planview aims to improve time-to-value and predictability, increase efficiency to unlock capacity, and de-risk your strategic bets.

Working with Temus consultants, who bring in many years of transformation experience and are certified Flow Advisors, we aim to help accelerate our customers’ value stream management (VSM) and project-to-product journey.

Temus’ vision to value proposition

Professional expertise is the most efficient way to implement digital transformation – pace of change and market expectations make staying relevant to customer requirements difficult for companies to do on their own.

Temus understands the drivers, needs and challenges in this transformation. We have helped clients globally in doing so. We are delighted to share these perspectives with you and working with you to accelerate your transition.

Our vision-to-value proposition ensures that we help the companies we work with visualise their goals in terms of realistic milestones, before implementing and optimising their digital transformation journey for a sustainable and meaningful transition and growth. We believe that economic and social value can be unlocked when people, process and technology come together seamlessly across value streams.

Stay tuned for an upcoming webinar on 29 August 2023 where Senior Value Stream Architect Lee Reid from Planview will join me to discuss how we can prime both the public and private sectors for the future of connected work, and delve deeper into value-driven transformation.

References

1. “Project to Product: How to Survive and Thrive in the Age of Digital Disruption with the Flow Framework”, Dr Mik Kersten
2. “Value Stream Mapping: How to Visualize Work and Align Leadership for Organizational Transformation”, Karen Martin, Mike Osterling