As business and IT leaders look to the year ahead, what are their key objectives? A new survey offers key insights into how leaders’ top priorities are evolving and some of the key challenges they’re confronting heading into the year.
This third annual survey, sponsored by Broadcom and conducted by Dimensional Research, offers a current look at the state of Value Stream Management (VSM) adoption and benefits. In this post, I’ll provide a recap of some of the key takeaways from this new research.
Respondents were queried about their top-level areas of focus for 2024. For the second year in a row, increasing customer value was cited as a top-three objective. In fact, with a 56% response, improving customer value was the second-rated answer, falling just two percentage points below the top-rated response, reducing operating expenses. In the survey, growing profit margins was the third-rated response.
The survey found organizations are extending and expanding their VSM initiatives. Year-over-year data shows steady progress in terms of the overall use of VSM. In total, 96% percent of those surveyed are in some phase of the move to VSM, whether in initial planning or a subsequent stage.
Between 2023 and 2024, more companies have moved from early planning into pilot initiatives and are increasing the use of VSM for product lines across the enterprise. 30% of respondents will either have a single product or individual product line leveraging VSM over the course of 2024. In addition, more than one-quarter (28%) will have multiple product lines using VSM, which represents an important step forward in VSM maturity.
96% of respondents say their organizations have already obtained benefits from their VSM initiatives. Further, the top-rated benefit was that VSM has helped fuel digital transformation progress, which was cited by 38%. Respondents indicated VSM has also helped their teams increase customer value (33%), improve organizational alignment (33%), enhance transparency (32%), and speed delivery of solutions to customers (31%).
In the year ahead, businesses confront several high-level challenges. When asked about these hurdles, the most common response was inefficient processes, which are an issue for just about half of all respondents. In addition, 40% of respondents also stated that they’re contending with these three challenges: collecting data, measuring customer value, and having siloed teams. The good news is that teams with mature VSM capabilities are well positioned to make significant strides in each of these areas.
In organizations with the most mature VSM disciplines, there is widespread engagement, including individuals from across the organization who are aligned around value streams. To gauge progress in this area, the survey polled respondents on which teams were actively participating in value streams.
The good news is that the most crucial teams are involved. The top three responses were product management (48%), software development (48%), and DevOps (44%). While these are the key teams, the fact that less than half of respondents selected any of these responses means there is work to do. As VSM approaches continue to mature, involvement of these three groups—and teams from across the organization—will keep increasing.
VSM isn’t a quick fix; it represents a journey of transformation in people, process, and technology. Currently, however, teams are contending with many technology-related obstacles. The top challenges outlined above can all be helped, or hurt, by the technologies employed. In addition, respondents were also queried on their visibility into work progress. Eight out of ten respondents indicated that they don’t have solid visibility across their value streams, rating their visibility as mediocre (50%), poor (25%), or a complete “black hole” (5%).
For many of these teams, reliance on spreadsheets and disparate point tools are the cause of this poor visibility. Further, one-half of respondents don’t have a solution that enables them to centralize product lifecycle data. By implementing unified, comprehensive VSM solutions, teams with mature implementations have been able to overcome these hurdles.
As mentioned above, boosting customer value represents a top-level priority. When teams set out with a focus on improving customer value, the question becomes how do you know if you’re making progress? While 99% of respondents report that they’re measuring customer value, just 5% of respondents are measuring all six customer value metrics, as outlined in Broadcom’s VSM Maturity Model. This means that in many organizations, teams have a limited or potentially inaccurate view of this critical aspect.
These survey results make clear that the adoption of VSM has become ubiquitous, and the potential benefits are enormous. VSM promises opportunities to boost alignment and facilitate digital transformation. However, to date, many technology implementations have limited teams’ visibility, which inhibits the benefits realized. In 2024, teams will make strides in this endeavor, setting the stage for VSM and digital transformation success.
To learn more, be sure to view the complete report, 2024 Value Stream Management Trends. This report offers results from the survey, an analysis of the key findings, and background on the survey’s scope.