How VSM Helps Drive Business Value of Enterprises in the New Normal

In Business Value, Digital Transformation, Value Stream by Soumya Menon

Are you struggling with driving digital transformation and business value in the midst of the new normal? Are you even sure what the new normal is? In Gartner’s recent article A Framework for Executive Decision Making During COVID-19, they stated that “executives must consider three different criteria when making strategic decisions during a global pandemic.” While their article focuses specifically on the current health crisis and two of the criteria are outside of ConnectALL’s domain, the first of their three criteria — protecting the financial stability of the enterprise — is critical any time businesses are forced to undergo a dramatic shift, and is what this blog will discuss.

As more companies venture into the uncharted waters of virtual work and remote project management, the need to review and reprioritize the digital transformation strategy and align it with business value is more important than ever. As Gartner states, “Even in a global pandemic, to remain in business and employ people, organizations must generate revenue, reduce risk and consider costs.” If you don’t have an official strategy, this is the right time to create one. Digital transformation is the integration of technology into all areas of business operations, changing how an organization delivers value. 

The solution to the digital transformation challenge is value stream management (VSM), which is the process of analyzing your software delivery value stream and looking for areas to improve, with the goal of achieving certain outcomes. VSM uses lean principles and systems thinking and can give you a clearer sense of where to go and what you need to do, with an end goal of accelerating software delivery and increasing revenue. 

Managing flow across your SDLC value stream and applying it to all development, testing, deployment and ops support activities will help eliminate operations chaos and optimize value, which in turn reduces costs. No other method provides deep and true data-driven insights. Analyzing the flow of work, identifying deficiencies and then redesigning the value stream to accommodate how the information should flow will accelerate the benefits of continual digital transformation. 

With the new normal, it is imperative for organizations to consider focusing more on empowering employees, engaging customers, transforming service offerings, and optimizing and orchestrating ops. The goal is to drive business value and generate revenue while minimizing risk. Business value and risk will shift and flex as the pandemic progresses, but should be considered at each stage. VSM helps businesses reduce risk and cost, leading to faster delivery in order to generate revenue. 

What you can’t measure, you can’t manage

To strategize or review your business transformation strategy, you need to understand every factor that has contributed to where your business stands right now. Start with an assessment of your value stream and the current state of your business and SDLC. This will open up plenty of avenues to optimize different areas of your business, get rid of wasteful spending, and improve development, delivery and ownership costs.

One example of this: by analyzing and documenting end-to-end activities, constraints and costs of executing your current SDLC processes, you can reduce your testing cycles by at least 60% (i.e., if your testing cycles are at 14 days, you can reduce it to one day). This reduces the overhead costs of testing  and enables teams to respond quickly to customer requirements and promote changes to the product, contributing to new innovations, which in turn drives customer loyalty and revenue. 

The value stream visually and quickly reveals with granular clarity what, why and how you need to improve a particular cost and efficiency constraint so that you can make the best decisions for optimization.

Mapping the value stream exposes your current process constraints and quality inflection points that create wasteful spend, and captures your costs for each activity center and supporting infrastructure. Achieve a quantifiable, data-driven business transformation through which you can safely make decisions that will improve your business outcomes.
Assess your value stream and look at ways to optimize your SDLC to drive business value. Contact us to find out how we can help you.

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