Demystifying

the term
VALUE STREAM

A publication of the SURVUZ Foundation

DEMYSTIFYING THE TERM ‘VALUE STREAM’

COLOFON

Title: Demystifying the term VALUE STREAM

Author: Jan van Bon

Publisher: SURVUZ Foundation

Edition: First edition, September 2023

© 2023 SURVUZ
All rights reserved. No part of this publication may be reproduced in any form
by print, photo print, microfilm or any other means without written permission
by the publisher.
Although this publication has been composed with much care, neither author,
nor editor, nor publisher can accept any liability for damage caused by possible
errors and/or incompleteness in this publication.

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DEMYSTIFYING THE TERM ‘VALUE STREAM’

FOREWORD
The term ‘value stream’ is subject to a serious hype. As usual with a hype,
providers jump the bandwagon when they see opportunities to get turnover in
a new market – even if it is an existing market that is just relabeled. Customers
are then simply mislead: the providers repackage existing stuff in a new
wrapping and sell it as if it’s a new thing – that everyone should be using: the
Shiny Object Syndrome1. That’s how new markets are created without
providing any added value.
If you look through the hype around ‘value streams’, you’ll find a topic that is
(still) of serious interest. It relates to the big question “How are you going to
deliver the things your customers ask for, and how will you manage that as
effective and efficient as possible?”
That question is not new at all. We’ve done that for ages. Delivering end-to-end
services to customers, and trying to do that as efficient and effective as
possible, with workflow technology. That doesn’t require a new label. It has
always just required a systematic and methodical approach to get the job done
the best way you can.
We don’t need a new label to sell something as a new approach when it’s still
the same thing… That would only add a new layer to the existing complexity,
while we all know that we should reduce that complexity. But hey – complexity
has always the best business model ever, so we can’t stop the shiny new
objects to be thrown at us on a daily base.

Don’t fall for it!

This little e-book should help you see the light at end of the rabbit hole.

1 Possibly the very first publication of the term was by Rob Whiteley in 2010 ( [Link])

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CONTENT
1 DEMYSTIFYING THE TERM ’VALUE STREAM’ .............................................................................. 4
1.1 Sources................................................................................................................ 4
1.1.1 Forbes ........................................................................................................................................... 4
1.1.2 Software........................................................................................................................................ 4
1.1.3 Tasktop ......................................................................................................................................... 5
1.1.4 Gartner.......................................................................................................................................... 5
1.1.5 TOGAF ........................................................................................................................................... 5
1.1.6 PMI ................................................................................................................................................ 5
1.1.7 SAFE .............................................................................................................................................. 6
1.1.8 KaufmannGlobal ........................................................................................................................... 6
1.1.9 ISO ................................................................................................................................................. 6
1.1.10 VSM Consortium ........................................................................................................................... 6
1.1.11 Fancy terms ................................................................................................................................... 7

1.2 The common denominator ................................................................................. 7

1.3 Everything is a value stream ............................................................................... 8
1.4 Best practices...................................................................................................... 8
1.5 ChatGPT .............................................................................................................. 8
1.6 So, what is it? ...................................................................................................... 9
2 HOW CAN I USE THE CONCEPT OF VALUE STREAMS? ............................................................. 11
2.1 The structure of a value stream ....................................................................... 11
2.2 All value streams follow the process logic ....................................................... 12
2.3 Start at the beginning, not at the end .............................................................. 14
3 CLOSING REMARKS ................................................................................................................... 17

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1 DEMYSTIFYING THE TERM ’VALUE STREAM’

One of the hottest topics around: value streams. I’ll demonstrate that this –
once again - is old wine in new bottles, and we should treat it as a hoax or fake
news. It’s a term frequently used by consultants to masquerade that they
haven’t been able to solve the previous challenge, and they’ve now found a
great new solution: “The Shiny New Thing That Really Helps” – as Paul
Wilkinson would call it (SNTTRH). That thing has a great sound to it and can
confuse the customer for a long time – maintaining the consultant’s turnover at
the desired level.

1.1 Sources
If you’ve already read a lot about the topic of value streams, you may skip this
analysis section and jump straight to Section 3: Conclusion. For those who are
still curious, let’s start with some quotes from the world of vendors.
1.1.1 Forbes
Forbes says: “Value stream management is a lean business practice that helps
determine the value of software development and delivery efforts and
resources.”
Forbes also says: “The concept of value stream mapping is a part of the lean
approach that allows you to analyze the current state of your processes and
build a better future state based on the series of events that take your
product/service from initial concept to the finished product that the customer
receives. This eliminates waste and allows you to prioritize based on your
customers.” Also check Techbeacon.
As usual, this is based on a best practice approach: we improve our service
quality by polishing the outside instead of curing the disease. These traditional
best practice approaches have never delivered what was hoped for and they
actually only boosted the complexity of modern economy – which is the
business model of so many providers. The series of blogs on Demystifying the
term ‘maturity’ demonstrates that this best practice approach is predominantly
used in the lower levels of the Value Maturity Model.
1.1.2 Software
Often, value streams are focusing on software, especially in the eyes of tech
providers: “Value stream management (VSM) is a proven lean business
technique that focuses on the value of software development and delivery
initiatives across an organization's software development lifecycle (SDLC).” Of
course, Forrester then investigates this and sells the usual expensive reports.

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Software engineers (e.g. DevOpsInstitute) see it as a software thing: “Value

Streams help ensure that software and services under development deliver
value for employees or customers.”
As with all hoaxes and SNTTRHs, we suddenly see ‘Value Stream Management
software products’ that claim “Make work easier, faster and more accurate
through a cutting-edge Value Stream Management software”. This reminds me
of the mid nineties, when all ticketing systems turned into ‘ITIL tools’ overnight.
More recently the same happened to the same ITIL tools when they
miraculously turned into ‘ESM tools’.
1.1.3 Tasktop
Tasktop says: “Value Stream Management is a management technique or
practice that focuses on increasing the flow of business value from customer
request to customer delivery.” And “The term ‘value stream’ was born of the
Lean movement to describe the material and information flow to create value.
A value stream is the sequence of activities an organization undertakes to
deliver on a customer need. (Martin, K. & Osterling, M. (2014). Value Stream
Mapping. McGraw-Hill, p. 2-3.)”
1.1.4 Gartner
Gartner of course assesses ‘Value Stream Management Platforms’ (VSMPs) in
their typical technology-promoting guidance: “What are Value Stream
Management Platforms? Value stream management platforms enable
organizations to optimize end-to-end product delivery and improve business
outcomes. VSMPs are tool-agnostic; they connect to existing tools and ingest
data from all phases of software product delivery all the way from customer
need to value delivery.” And then they also sell their expensive reports to the
executive clients.
1.1.5 TOGAF
TOGAF defines a value stream as “The key value-creating activities for discrete
areas within the Value Network where some unit of net value is created or
added to the Digital Product as it progresses through its lifecycle”. It’s not just
value streams, it’s also value networks.
1.1.6 PMI
PMI, the Project Management Institute, says “A value stream begins, ends, and
hopefully continues with a customer. A value stream is the set of actions that
take place to add value for customers from the initial request through
realization of value by the customers.”

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1.1.7 SAFE
We have SAFE Value Streams…. SAFE even uses the term Operations Value
Streams (OVSs): “Operational value streams (OVS) are the sequence of
activities needed to deliver a product or service to a customer. Examples
include manufacturing a product, fulfilling an order, admitting and treating a
medical patient, providing a loan, or delivering a professional service.”
SAFE also uses Development Value Streams (DVS): “… the sequence of activities
needed to convert a business hypothesis into a digitally-enabled Solution.
Examples include designing a medical device or geophysical satellite, or
developing and deploying a software application, SaaS system, or an e-
commerce web site. Development Value streams are the primary organizational
model in SAFe. A SAFe portfolio is comprised of them, each dedicated to
building and supporting a set of solutions”.
SAFE also coined the term Value Stream Engineer: “The Value Stream Engineer
(VSE) and Release Train Engineer (RTE) assist the value stream and release train
execution as well as the processes. They intensify the manage risk, help
guarantee value delivery, impediments and help drive nonstop development.”
1.1.8 KaufmannGlobal
KaufmannGlobal uses the term Value Stream Owner: “The Value Stream
Owner is the individual or team responsible for the performance of an entire
value stream. Usually this means a consolidation of functions and functional
reporting. This may sound simple, but in practice it is extremely difficult to
achieve.” And most likely, you should hire KaufmannGlobal to solve this…

Rest assured – it is absolutely not difficult to achieve, if you can

think out-of-their-box, as I’ll show you at the end of this e-book.

1.1.9 ISO
As usual, there is an ISO standard for this: ISO 22468:2020, Value stream
management (VSM)… For merely €176 you can buy a practice-based approach
to this topic that has been promoted to a global standard.
1.1.10 VSM Consortium
Value stream management got its own 3-letter acronym: VSM, and of course
we have a VSM Consortium …. For $99/year, you can become a member, but of
course you can become a corporate partner for $10.000, $20.000 or
$50.000/year.

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1.1.11 Fancy terms

We have Business Architecture Value Streams ad ITSM Value Streams…
We have Value Stream Mapping…. and Value Stream Metrics…
We have Value Stream Managers….and Value Stream Owners…
We have Value Stream Analytics… and Value Stream Analysis (VSA)
We have Value Stream Design… and Value Stream Culture…
We have Value Stream Optimization… and Value Stream Improvement…
We have Value Stream Integration… and Value Stream Coordination…
And we’re so happy to announce that we now have Value Stream Architects!
We even see companies talking about Enterprise Value Stream Management.

1.2 The common denominator

In all these descriptions and definitions, what is the common denominator?
ChatGPT, when asked to define it, produces this:

“A value stream can be defined as the sequence of activities or

steps required to deliver a product, service, or solution to
customers while adding value and minimizing waste. It
represents the end-to-end flow of processes, information, and
resources needed to create and deliver the desired outcome.”

All quotes in the previous sections acknowledge indeed that a value stream
interfaces with the customer. It starts and ends with the customer. But then
what is the difference with all the other things we have studied for over 100
years in the customer-provider relationship? Were those not interactions that
started with a customer request? And didn't we describe those in terms of the
realization, up to and including the delivery of the requested thing to the
customer?

Of course we did. And of course it’s the very same. It’s just
wrapped in a new package. It’s a hoax. The next Shiny New
Thing That Really Helps.

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1.3 Everything is a value stream

Value streams are not only turning into the new cash-cow of software vendors
and consultants, other sectors also jump the bandwagon. We now see job ads
for Value Stream Manager vacancies. Consultants are promoting their value
stream guidance offerings. Trainers offer their value stream mapping
masterclasses.
The main metrics? Lead time, cycle time, deployment frequency, and defects.
OK – it seems obvious by now: The boys have found new toys!

1.4 Best practices

When value streams are specified from a best practice framework perspective,
the chaos is complete. Just look at what IT4IT has made of it… They define
seven value streams: Evaluate, Explore, Integrate, Deploy, Release, Consume,
and Operate, but these are clearly not limited to the customer perspective. It’s
like going back in time, and reversing the evolutionary steps we’re trying to
take.

1.5 ChatGPT
ChatGPT, when asked to explain further: “A value stream is a term that has
been around for a while, but it has remained somewhat of a mystery to many
people. The truth is that a value stream is simply a practical workflow that has
been used for decades. It is essentially a way of mapping out the journey of a
product or service from its inception to its delivery to the customer. At its core, a
value stream is just a way of visualizing the processes, resources, and activities
that are required to create a good or service and deliver it to the customer. The
goal is to identify any areas of inefficiency in the process and make
improvements that will lead to greater value for the customer. By clearly
outlining the different steps and resources that are required to get a product or
service from point A to point B, companies can gain insight into ways to
streamline their processes and make them more efficient. The concept of a
value stream is nothing new, but it is a valuable tool for businesses of all sizes.
By taking the time to map out the journey of their products or services,
companies can identify areas of improvement that will help them become more
efficient and deliver more value to their customers.”
Another ChatGPT essay says: “The term ‘value stream’ originated in the
manufacturing industry, specifically within the Toyota Production System (TPS)
in the mid-1900s (as Michel Baudin documented). It refers to the end-to-end
process of creating a product or service, from raw materials to delivery to the
customer, with an emphasis on identifying and eliminating waste.

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The concept of value stream mapping was later developed as a visual tool to
help identify and analyze the flow of materials and information through a
process, enabling organizations to improve efficiency and reduce costs. Value
stream mapping has since been adopted by various industries, including
healthcare and software development.
While value stream and workflow can be used interchangeably in some
contexts, value stream typically encompasses a broader perspective that
includes all aspects of the process, such as customer demand, supplier
relationships, and feedback loops. On the other hand, workflow often refers to
the specific steps and tasks involved in executing a process.
In recent years, the concept of value stream has also been applied to non-
manufacturing areas such as marketing, where the focus is on identifying and
optimizing the flow of value to the customer. Overall, the term value stream
represents a holistic approach to process improvement that prioritizes
delivering value to the customer while minimizing waste.”

1.6 So, what is it?

By now, it may be clear that the concept of a value stream has been around for
many many decades. It relates to the workflows that deliver value to
customers. Positioned in the Value Maturity Model, this means it finds its place
at level 4: the customer-driven level, emphasizing that we’ve wanted to
achieve that level for ages.

Figure 1. The USM Value Maturity Model

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It’s also clear that it relates to an end-to-end approach of those workflows.

This means that all workflows that have an internal focus (levels 1-2-3 of the
Value Maturity Model) fall off the scale: they relate to the internal affairs of the
provider, not to the business effects of the customer. Therefore, best-practice
frameworks like ITIL are inherently unsuited for the concept of value stream.
Most of that best practice guidance is internally focused: it specifies the
practices that deliver internal results for the provider. At best, these internal
results relate to intermediate and indirect results for the customer. This means
that these best practices are mostly not (directly) relevant for the customer.
Specifying workflows for such intermediate results has been the core of what
we’ve done with workflows in the past. The value stream approach actually
only differs from this traditional work because it focuses only at the end-to-end
workflows. For the rest, it’s exactly the same as what we’ve been doing for
ages.
Based on a Systems Thinking analysis, the value streams equal the daily
routines that a provider applies for the handling of user-triggered interactions
with the combination of the three essential components of the provider’s
management system (Figure 2).

Figure 2. The provider's management system covers all customer interactions

If we find the ideal structure for these routines, we automatically find the
structure of the value steams. Section 2 will explain how that is done.

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2 HOW CAN I USE THE CONCEPT OF VALUE STREAMS?

Now that we know that value streams are just workflows that are limited to
end-to-end and customer-facing interactions, we can ask ourselves: “How can
we set up the most efficient and effective value streams?”. Basically, this
requires architecture: the architecture of the value streams in terms of the
management system that organizes these value streams.
Applying a methodical, principle-based approach as specified in USM will solve
this. USM defines service delivery at the end-to-end customer-driven level (4),
and it tackles the complexity of the management system and your daily
routines, by reducing its redundancy with an Enterprise Service Management
Architecture.
Redundancy is the archenemy of efficiency.

2.1 The structure of a value stream

In their explanation of value streams, authors regularly refer to terms like
processes, procedures, and work instructions. USM explains these terms in a
consistent way, based on an architecture with pure definitions, based on
Systems Thinking. This provides three value stream types (i.e. routine types).

Figure 3. A process only describes the what. As soon as the who is added, we have a
procedure. If we then add the how, we’ll find the work instruction: the practice.

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Value streams can now be specified in terms of only the generic process logic
(the ‘what’), but they can also include the answer to the question “Who is
responsible for the execution of each activity in the process logic?” (the ‘what’
and the ‘who’). This provides value streams at the level of procedures.
And when the specification of the value stream also covers the ‘how’, with the
practical instruction for the responsible operator, the value stream is specified
in the format of a work instruction. This is the level that is applied in practice,
and that’s why best practice guidance always specifies something at the generic
work instruction level: applied value streams in the format of customer
journeys.

2.2 All value streams follow the process logic

Each and every procedure and work instruction is clearly derived from the
process level. Therefor, each value stream type is derived from the process
logic. So, if we find the most effective and efficient process logic, we can derive
the most effective and efficient value streams.
To create the most efficient service management system for delivering your
customer-driven services, you’ll have to remove all redundancy from the
elementary level of the (pure) process – as USM demonstrates. If you learn
how to do that in a methodical way, you’ll find the maximum efficient process
model of no more than 5 pure processes (Figure 4).

Figure 4. The USM Process Model

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The USM process model is completely non-redundant, for maximum efficiency:

no activity is used twice in the fully integrated model. As a consequence, the
handling of interactions with the system requires workflows that run trough
the various components of the system, according to its logic. This results in only
8 possible patterns (tracks): the 8 workflows of the non-redundant process
model.
The concept of value stream can now be used interchangeably with the USM
concept of end-to-end customer-driven routine (see Figure 2) at level 4 of the
Value Maturity Model (Figure 1), based on 8 universal templates (Figure 5).

Figure 5. The 8 standard USM workflows

This means that you’ll be able to create any and all value streams with a set of
no more than 8 universal workflow templates for all your end-to-end
customer-facing routines.

When these 8 templates are applied to only the process dimension, they will
tell you all about the logic of your service delivery in terms of the universal
process architecture for service providers.
When the 8 templates are applied to the process and the people dimensions,
they will tell you all about your local procedures: who is assigned and allowed
to do what (in your local organization or team).
And when these procedures are then also applied to the technology level, they
will tell you all about your work instructions: the practices you use to deploy
your procedures to any practical situation (with your local tools).
All of this is described in the analysis of the daily routine, as demonstrated in
USM.

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2.3 Start at the beginning, not at the end

Designing, deploying, and improving your value streams should be done in an
effective and efficient approach. The traditional and most popular approach is
exactly the wrong approach: it does not deliver sustainable results.
If ineffective and inefficient value streams are the problem, the traditional
approach starts at the outside of that problem because it focuses on the
symptoms. It doesn’t start at the inside, focusing on the cause of these
symptoms. An approach that focuses on the symptoms is not a sustainable
approach: it will keep you busy forever, as the ever-changing conditions will
lead to ever-changing symptoms. The only sustainable approach is an approach
that focuses on the cause of these symptoms. And that requires a methodical
approach, based on principles, not on ever-changing practices. The practices
should be the result of these principles.
This is how the USM Method works: it specifies the inside, the heart of the
system that produces the symptoms, in a methodical way that underpins
effectiveness and efficiency. Designing that system in an effective and efficient
way can then lead to effective and efficient practices: the practical value
streams you are looking for (Figure 6).

Figure 6. USM positions at the left side of the triangle, as a method that is based on
principles. The method specifies the service management system that can reproduce any set
of practices at the right-hand side of the triangle.

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The techniques that are used in value stream management simply illustrate
this. These techniques include:
● Lean
● SixSigma
● customer journeys
● business process modeling (BPM)
● swimlanes
● service blueprinting
● Kaizen events
● Just-in-Time
● Kanban
● Total Productive Maintenance (TPM)
● Gemba walks
● Theory of Constraints (TOC)
All of these techniques start at the outside, with the actual practice as the
starting point for the improvement. They all strive for the reduction of waste,
the improvement of efficiency and effectiveness, but they all start at the end
and not at the beginning. A common denominator in these techniques is that
they use the term ‘process’ for the third level of the value stream types (work
instructions, practices, see Figure 3), which is a direct violation of the original
meaning of that term.
Starting at the beginning requires that we first define the process architecture
and then derive all practical value streams from that process architecture.
When we use the enterprise service management architecture of the USM
method to specify the enterprise service management system of the service
provider, we can reproduce any set of best practices from any framework,
standard, or reference architecture.
We can do this for any team or supply chain partner of that service provider, in
the exact same structure, so all actors in the ecosystem cooperate in a
compatible way for the optimal interoperability between these actors.
Once the design of those practices has been set in a sustainable way, we can
benefit from all the above mentioned techniques:
● Lean techniques can be used to eliminate waste in the practical value
stream. The process logic of the value stream is defined In the 8 USM
workflows.
● SixSigma can be used to analyze the statistics of large volumes of (parts of
the) value streams for improvement goals. The process logic of the value
stream is defined In the 8 USM workflows.
● A customer journey is then the same as the work instruction level of the

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value stream, from the perspective of the user. The process logic of the
value stream is defined In the 8 USM workflows.
● A technique like BPM can use swimlanes to define and optimize the work
instruction level of the value stream with swimlanes. The process logic of
the value stream is defined In the 8 USM workflows.
● Kanban boards can be used to analyze and improve the practical logistics of
any value stream. The process logic of the value stream is defined In the 8
USM workflows.

Claiming that value streams are something new is a hoax, fake news. They are
just another term for the end-to-end customer-provider interactions that have
been subject to our management systems for many many decades. Don’t fall
for it. You’ve already been working on value streams for as long as your
organization exists.
And if you really want to improve your customer-facing routines (i.e. your value
streams), you’ll only need USM’s 8 templates to manage all of them in a
consistent way for maximum efficiency.
USM also supports the structuring of the People and the Technology
component of your management system in an integrated way, with guidance
that helps you to get in control of your value streams at the practice level, to
improve your service delivery performance.

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3 CLOSING REMARKS
By now, this analysis should have demystified the term value stream.
Hopefully, this has demonstrated the power of the methodical approach
specified in USM, the Unified Service Management method. If you spend some
effort on this, you’ll soon find out how USM enables you in a more effective
and - most of all - more efficient way of applying the popular guidance from
best practice frameworks such as ITIL, FitSM, IT4IT or COBIT, and to find a much
simpler, cheaper, and more sustainable route to getting in control, or towards
any certification against popular standards like ISO27001 or ISO9001.
Tons of free information are available at the USM Portal. Compliments of the
SURVUZ Foundation.

The new thinking of USM - the Unified Service Management method - can help
you unlearn and re-think. Read the USM book or any of the free downloadable
e-books, or take a USM Foundation course or a free online USM workshop -
whatever you prefer, and learn what you haven't learned at school.

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MORE INFORMATION?
The SURVUZ Foundation develops and manages methods and instruments that
can be used by service providers in improving their performance.

In doing so, SURVUZ applies the following principles:

● Organizational improvement is based on the promotion of self-
management, with learning at its core.
● Organizational improvement is only permanently effective if it is driven and
implemented by internal employees.
● External efforts should be limited to coaching internal employees.

The SURVUZ Foundation:

● manages the USM method and associated tools
● promotes the application of the USM method and the dissemination of
USM knowledge
● certifies professionals who support the practical application of USM and
provides them with free tools
● provides free tools to user organizations wishing to apply USM on their own
● provides free online learning environments to educational institutions that
incorporate USM into their curricula

All standardized USM knowledge products act as service management building

blocks in a unified architecture for managing services.

SURVUZ lists certified professionals and products at the USM portal so that
USM users can always verify that they have qualified resources.

For all information about USM: go to [Link]

All rights reserved. Copyright ©SURVUZ 2023.

This free e-book is a publication of the SURVUZ Foundation

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