What is Operational Value Stream in SAFe?
Project management was invented once upon a time by the humanity. Of course, it was very useful. It helped people learn a lot. For instance, they started learning how to make bulletproof plans and they learned the complex science for estimating deliverables. With project management, those days, companies were able to know what type of returns they get from the money they invest. Years and even decades passed by in this manner. Then came a new competitor named Agile was full of energy, innovative and young. It challenged project management. After many years, it has started winning battles as well. Are you planning for an Agile setup in your organization? Identification of value streams is the first step in Agile Transformation.
What are Value Streams?
Value streams are a group of procedures that a business can use for the implementation of solutions. These are solutions that should provide an ongoing flow of worth to customers. When it comes to the SAFe portfolio, it will have single or more value streams. Every stream is devoted to building and supporting a group of solutions. These solutions can be anything like systems, services or products sent to customers. It can either be within or outside the organization.
In short, a value stream is an end-to-end business process. It also denotes the associated steps that a business takes for the release of something worthy to customers. When it is put into practice, it will look like many teams working together in teams of teams. It is referred to as Agile Release Trains, flights or tribes to coordinate, plan and manage work together.
Value streams vary from traditional project models in many ways. For instance:
- They encompass cross-functional teams, long-lived teams and teams of teams. But, temporary models will have groups organized around a particular project.
- In value streams, teams operate on a continuous basis. So, they can put continuous improvement into practice. On the flip side, temporary teams always start from zero. So, they will have a very meager chance to improve efficiency and the resulting performance.
- As you can understand from the name, value streams bring together work back to the utmost value that it carries to a business and/or its customers. In the case of traditional project models, the original value is generally concealed. This concealing is done by project-centric metrics like on-budget and on-time.
What is an Operational Value Stream?
Operational Value Stream shortly called OVS is an order of activities required for delivering service or a product to a customer. Some instances encompass product production, order fulfilling, providing a loan, admission of a patient and his/her treatment in the case of a hospital or delivery of a technical service. Here, most of the workforce works in operational value streams. These streams often directly serve the customers. At times, businesses also use this technique for marketing its product or service. Even, they can complete a sales and then can process an order, produce products and provide delivery and support-related services. When the customers’ needs are addressed with the answers they already have, businesses can turn healthy and profitable. This is what the operational value stream is all about. Nevertheless, when you take the case of SAFe guidance, they pay attention to teams working around development value streams.
In the development value stream, crucial activities like supporting digital-enabled solutions, innovation, implementation, and defining them happen. Nevertheless, the customers attended by them either live in the business or close to the endpoint of an operational value stream. It means that it becomes important for a business to understand its operational value streams. Only then, the business can develop effective solutions and can implement them. Also, when a business understands operational value streams, it can understand its customers. It is something crucial for Design Thinking and Customer-Centricity. The concept of the value stream is the basics to SAFe. In the same way, development value streams hold the basic business structure in SAFe. When you take a Scaled Agile Framework portfolio encompasses these streams. Each is devoted not only to the building but also to standing by the side of a group of solutions.
Types of Operational Value Stream:
Scaled Agile operational value stream is focused on taking the solution that the Development Value Stream has developed to the end-user. It is again divided into four kinds of operational value streams:
Fulfillment Value Stream:
It encompasses steps required for fulfilling the request of a customer. For instance, a customer places an order for a business’s product online. For this order, the business fulfills the demand of the customer by delivering the ordered product.
It is a type of operational value stream because the first step in this process begins with the display of its product by a business online. Then, a customer finds the product and places his order for the product. Thirdly, the vendor receives the order and then packs the product as per the requirements of the customer. Then, the logistics team contacts the customer, and finally, the order is delivered to the customer.
Manufacturing Value Stream:
In this type, the raw materials are turned into products that customers can buy. The trigger for this type of operational value stream is receiving orders from customers. The first step in this process is obtaining material, which is followed by the creation and management of inventory. Thirdly, the actual product production happens. Then, the product is tested and validated. Finally, it is released to customers.
Software Product Value Stream:
This type denotes software programs that customers use. The software product value stream begins with the sales cycle followed by contracts. The third step here is providing customers with the solutions they need. Once the solution is delivered, then comes providing the required support to customers.
Supporting Value Stream:
This type involves a combination of steps that supports the present processes that a business follows. The list of actions required for conducting a yearly audit in an organization are suitable examples for supporting the value stream.
As you can gain information from the above types, you can understand one thing. You cannot find all sections and departments in an organization engaged in creating value streams. Yes, you have guessed it right. Many sections or departments work together for a single value stream together. The overall goal is to achieve organizational growth.
How To Identify Operational Value Streams?
Value streams offer the very fundamental and essential know-how of how a business serves its customers. Without any substitutes, an enterprise develops its performance in an ongoing fashion. The business lead does it by not only identifying but also evaluating and improving the value streams. When talking about development value streams, their purpose is to generate and improve the products and systems that are used by operational value streams. This is why it is important to gain knowledge on these two value streams for business performance. The problem with value streams is that they cannot illuminate themselves. Further, they are tough to understand as well. This is why SAFe consultants and lean leaders of these consultants generally take the responsibility. Yes, they take steps to gain knowledge and help teams improve how the system of a business supports operational value streams.
To help those taking care of this work in an organization, SAFe Agile Framework provides a group of questions in the picture below:
Source: Scaled Agile
Once a business identifies value streams as per the image above, here is another image that will help with capturing the attributes and purpose of a particular value stream:
Source: Scaled Agile
Operational Value Streams and the Journey with Customers:
A business can get many purposes solved by understanding operational value streams. Once a business identifies, development teams and operations squads can use Design thinking and customer-centricity. By doing this, the business can discern what a customer feels, thinks, and does when he/she goes through the offerings of the business. In turn, both the development and operations team in an enterprise can find ways for the creation of a better experience for customers.
With a view to enacting the journey of customers, many Developers create and stand by the side of internal operations that are used by operational value streams. When these systems are improved, the journey of external customers also improves. In the same way, they help people operating the systems and their customers. In these circumstances, Design thinking and customer-centricity apply equally.
What to Know About Value Stream Mapping?
When you learn about the SAFe operational value stream, you should know about value stream mapping as well. It is nothing but a combined procedure, wherein a team of stakeholders explains everything about a value stream. They explain its hand-offs, steps, and slowdowns. This explanation will highlight the entire lead time required for meeting a request. Also, it will highlight the areas of improvement. Here is an image to explain value stream mapping:
Source: Scaled Agile
From the image above, you can understand that the waiting period between steps takes a major part in the lead time. But, when you get a closer look, you will find one thing. It is that the entire time to process is as less as 5 per cent of the lead time. The normal desire will be to bring down processing time. It is good. But, giving more attention to processing time may at times create a negative impact on people, quality and culture. As a result, there can be an increase in the entire lead time. Also, there are greater chances of reduction in economic results.
Nevertheless, the natural human tendency is that we hate waiting time. The good thing about SAFe is that its focus is to directly address this issue.
References:
- https://www.scaledagileframework.com/value-streams/
- https://www.scaledagileframework.com/operational-value-streams/
- https://blog.planview.com/operational-vs-development-value-streams-whats-the-difference/
