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What is Value Stream Management? Complete Guide

Gursimran Singh | 20 December 2022

What is Value Stream Management and Why do you need it?

Introduction to Value Stream Management

Every IT organization is shifting its focus to generate more business value. They aim to build better software with faster delivery and zero tolerance for security breaches. The company's performance is now measured based on customer experiences, digital products, and revenue generation. They are all trying to achieve the KPIs(Key Performance Indicators) that prove the increased software quality and better customer experience. And while many businesses have already adopted a few methodologies such as Agile, DevOps, and SRE to support their development initiatives, they are still struggling to know exactly what value is derived from their software development efforts. VSM(Value Stream Management) can be critical in answering these questions. It adds business value to the flow from a customer request to customer delivery.

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What is Value Stream Management?

According to Forrester, "Value Stream Management is a combination of people, process and technology that maps, optimizes, visualizes, measures, and governs business value flow through heterogeneous software delivery pipelines from idea through development and into production." (Forrester 2020)

The client is at the center of value stream thinking, which aids in shifting IT companies from an internal, project- and cost-centric focus to a product operating model. Thinking in this approach allows you to zoom out of the intricacies and look at business processes from a macro perspective, allowing you to uncover strategic methods to improve them.

The macro business process of software delivery in a value stream map includes four phases, and each phase has a set of disciplines, and VSM makes them stronger.

Below is a list of disciplines that are improved with effective VSM:


  1. Project & Portfolio Management
  2. Enterprise Agile Planning
  3. Product Management
  4. User Experience Design


  • Application Development
  • Build and Packaging
  • Quality Assurance


  • Release and Deploy Automation


  1. Incident Management 
  2. Logging, Monitoring, and Alerting  
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What happens in the absence of VSM?

  • Misalignment of the IT teams' vision, strategies, and goals with the business's vision, strategies, and goals.
  • Measures of focus lead and lag are missing, which are both critical.
  • Inability to provide better visibility and traceability of results, resulting in a lack of awareness about what should be kept and improved.

Why is Value Stream Management needed?

Identifying the flow of work across the value stream from idea to software deployment is very important. We must ensure that the feedback loops are appropriately enforced so that the customer or user gets the commercial value. We expect to see limitations, bottlenecks, capacity problems, redundancy, negative emotions that affect behaviors and performance, or any other waste that could prevent the organization from accomplishing its objectives in the flow.

We may assess, strategize, and constantly improve based on the goals and business outcomes by understanding the end-to-end flow (value and time) and applying best practices and empirical research. These things aren't easy to do and require the right individuals and a higher level of innovative engagement.

Every company should strive to improve its responsiveness and success by minimizing the time it takes from idea to software delivery and value realization. Every strategy must have an execution plan and KPIs to fulfill its objectives from the organizational level down to the team level.

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What flows in a Value Stream?

Customers are willing to trade an economic unit (time or money) for something that has value. Flow Items are the value units flowing in the software value stream. All the efforts across the teams are applied to creating these flow items.g

There are four flow items in the software delivery value streams:

  1. Feature: It adds a new business value to the product, driven by the result, which is visible to the customer.
  2. Defect: It delivers quality to customers by fixing the bugs or problems affecting the overall customer experience.
  3. Risk: Security and Risk officers stresses that the part that product should be secure, less vulnerable, and should meet the governance and compliance rules. 
  4. Debt: It involves improving and refactoring the software and operation architecture.

What are the Advantages of Value Stream Management?

By applying VSM strategies, teams can achieve these advantages:

  • Boost alignment:  New way to promote trust and improve decision-making, ultimately bringing teams from all over the company together.
  • Improve effectiveness: Enables teams to identify better and communicate ideas, prioritizing and planning more effectively.

Finally, teams improve their ability to deliver client value.

  • Maximize efficiency:  Improves teams' capability to prioritize, plan, and build value streams, allowing them to operate with remarkable agility.

Teams can improve the efficiency and velocity of  streams by better coordinating resources and capacity with business goals.

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How to perform Effective Value Stream Management?

ConnectVisualize, and Measure are the three tenets of optimizing flow in software delivery value streams.


This principle strives to eliminate waste from value streams by identifying necessary and unneeded non-value-adding work.

Unnecessary work that doesn't add value should be removed, and if the work is necessary but doesn't add value, it should be automated.

A few inhibitors are involved in the flow, which we can overcome by automating workflows. The identified inhibitors are:

  • Lost Productivity
  • Burdensome Traceability
  • Frequent Disruption


Visualization is the most effective tool for reinforcing those discussions and demands. Teams can gather around dashboards and solve problems together if you can display live value streams in a visual format. 

Based on the data that has been collected, we can create a path where value passes from start to finish. This method allows us to figure out where the work slows down and accumulates, and then we can figure out how to make a product as quickly as possible.


Typically, organizations identify transformation with the process, activity, and operational efficiency, all of which point to areas that need to be improved. 

The issue is that these metrics aren't necessarily directly tied to business outcomes, making it difficult to understand the whole picture based on them.

Developers can deploy software multiple times daily, although this is unrelated to business requirements.

Pay attention to the flow metrics, which provide the most helpful information for software development. If you can increase your flow, you'll be well on reaching your objectives. They provide a clear indicator of whether your cash flow is healthy, trending upward, and capable of supporting the intended company outcomes.

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Value Stream Management makes the software delivery efficient by connecting the people, processes, and technology, eliminating the bottlenecks and risks and reducing inefficiencies.

Organizations need the right platform to capitalize on the benefits of VSM, one that promotes agile management at an unprecedented scale. To do so, Organizations need an end-to-end view of value streams throughout the entire business, not just IT.

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