As teams in global organizations look to meet their most vital digital transformation objectives, Value Stream Management (VSM) keeps getting more important. Broadcom recently commissioned an extensive survey to track how teams are progressing in their digital transformation and VSM initiatives. Read on to see some of the top takeaways from this research.
Introduction: Tracking the Progress of VSM Initiatives
For today’s global enterprises, markets and competitive landscapes keep getting more chaotic and disrupted. Threats and opportunities both arise with unprecedented speed, which places an increasing premium on agility.
It is for these reasons that digital transformation remains such an important endeavor. However, for many organizations, attaining top digital transformation objectives remains stubbornly out of reach.
While the concept of Value Stream Management (VSM) has been around for decades, it has only been relatively recently that momentum behind this approach has grown dramatically. While the reasons for this are many, one top-level explanation is that VSM holds the potential to eliminate many of the most significant obstacles that currently stifle digital transformation.
To gain insights into how organizations are faring in their VSM adoption, and key trends emerging as we enter 2023, Broadcom recently commissioned some extensive industry research. Conducted by Dimensional Research, this survey polled more than 500 IT and business leaders. Survey respondents came from five continents and represented a wide range of industries.
The findings from this survey are now available in a report, which is entitled 2023 Value Stream Management Trends. In the following sections, we’ll offer some of the key insights from this report.
1. Enterprise Leaders are More Focused on the Customer Than Ever
When asked about their top strategic business focus for 2023, 58% of respondents cited “increasing customer value,” the highest-rated response. In a similar survey conducted the previous year, this objective was ranked third.
The report authors state, “It now seems companies are shifting focus from rushing products to market that risk decreasing customer value with defects, bugs, or quality problems to a clear focus on maximizing customer delight with value and quality.”
Teams are using a number of metrics to gauge their progress in enhancing customer value. More than 50% of respondents are tracking such metrics as customer satisfaction (via surveys, Net Promoter Scores, and so on), sales, and customer adoption.
2. Stubborn Obstacles are Impeding the Attainment of Key Objectives
As they look at the challenges they’re facing heading into 2023, senior leaders can be forgiven for having a sense of déjà vu. More than two-thirds (68%) of respondents said their businesses continued to be plagued by a long-standing issue: the disconnect between software development and business strategy. An even higher percentage of technology teams, 72%, are frustrated by business leaders’ constant changing of business priorities.
The challenges don’t stop there. Since the advent of the pandemic, supply chains have presented challenges for businesses in a range of industries—and supply chains remain the highest-ranked challenge as teams enter 2023. 49% of respondents said ensuring their company has reliable supply chains is a top challenge.
As part of the survey, the report authors conducted additional interviews with a number of executives. In these interviews, many respondents cited challenges with physical supply chains as well as digital, including services and applications from external providers.
A CIO for a financial institution put it this way: “Common perception is banks provide all the services internally, but as an industry we don’t. If you think of the digital supply chain for a consumer loan, we leverage third parties for credit scores, background checks, title companies, and federal programs like Freddie Mac and Fannie Mae. So efficient supply chains are key to our profits.”
Data collection (46%) and process inefficiency (44%) were the second- and third-ranked challenges.
A VP at a global technology company explained, “Our business and IT processes have radically changed over the last few years. They work but aren’t very efficient. It is key that we go back and improve those processes, and we need increased visibility into what the current processes are and data to measure them, so we know they are getting better.”
3. VSM Adoption is Widespread and Growing
While VSM as a concept has been around for some time, it is clear that this approach has been gaining major momentum in recent years. Now, the consensus around VSM is nearly unanimous: 92% agree that VSM can help optimize the product lifecycle. Further, 86% have adopted VSM or plan to. By the end of 2023, 60% of organizations will be shipping products using VSM.
The survey also revealed that digital transformation initiatives are tightly aligned with VSM. 95% of organizations currently advancing VSM initiatives are also pursuing digital transformation.
4. Teams Are Looking for a Single VSM Solution
In interviewing a subset of respondents, the report authors asked about the causes of continued disconnects and misalignment. These respondents often cited constrained information flow, a lack of a single source of truth, and inconsistent priorities around customer value.
A unified VSM solution can help with addressing these issues. Given that, it’s no surprise that 90% of respondents said they want a single VSM solution. These respondents also indicated that a single solution could be used across the entire company, empowering both business and technology teams. Respondents also indicated such a solution could enable them to accelerate the delivery of customer value.
As the report authors state, “Without data captured into a single repository, often no one is looking at all the data.”
When asked about key characteristics of a VSM solution, 81% agreed that having a tool that was adaptable to their specific organization’s needs was either “extremely” or “very” valuable.
5. VSM is Delivering Significant Benefits for Digital Transformation
For teams that have implemented VSM, a vast majority of respondents, 95%, report that VSM has helped deliver key benefits. When asked what benefits VSM has already delivered, six responses were selected by one-third or more of survey participants. Topping the list were increased transparency (42%), improved organizational alignment (39%), faster delivery of solutions to customers (38%), and improved data-driven decision making (37%).
The research shows that those building VSM capabilities are seeing an improved ability to measure and track customer value, which, as outlined earlier, is the top strategic imperative for leaders.
Here’s how the report authors explained it: “The research also found companies with a VSM practice have significantly better tools and processes to capture and track these customer value metrics than those without VSM.”
An executive director of a financial institution explained, “Our VSM initiative provides a lot more visibility across the value chain and more opportunity to capture information and inject customer value.”
This recent survey offers some compelling proof points of the power of VSM. As they head into 2023, those businesses that have established VSM practices are better positioned to achieve their digital transformation objectives and to deliver more value to customers. To learn more about VSM adoption and benefits, be sure to download the report, 2023 Value Stream Management Trends.