August 1, 2024
Author: Heather Spring
The 2024 Value Stream Management Trends: A Global Survey of Executives and IT Leaders, conducted by Dimensional Research and sponsored by Broadcom, offers insights into the future of value stream management (VSM).
The survey identified 3 key VSM trends for 2024:
- Delivering improved customer value directly aligned with top business objectives
- Top VSM challenges are measuring customer value and including all teams
- Ad hoc solution deficiencies inhibit VSM effectiveness and limit business benefits
Aligning the Value Stream With Business Objectives
The survey found that increasing customer value aligns with new business objectives in 2024.
The New Business Trifecta
Now that business changes imposed by the pandemic have been normalized, many companies are focusing on optimizing for global business. This transition is changing the traditional business trifecta, which has long been to reduce costs, increase sales, and grow profits, to include improving customer value.
- 58% Reducing Expenses
- 56% Improving Customer Value
- 50% Growing Profit Margins
Those interviewed stated that internal focus is returning to the customer and that a happy customer delivers more revenue to the company. Over the last few years, customers have shown they are willing to change brands to receive better products and customer service.
Benefits From VSM Initiatives
While many companies are in the early stages of VSM adoption, the research explored where companies were already receiving business benefits. Of the respondents, 96% confirmed they have already received benefits from VSM.
The top benefits of VSM initiatives in 2024 were:
- 38% Accelerating digital transformation initiative
- 33% Increased customer value
- 33% Improved organizational alignment
- 32% Increased transparency
Those interviewed report one of the cornerstones of VSM is driving efficiency with improvement process, communication, data, and more, and improved efficiency is a primary objective of digital transformation.
Multiple Products Leveraging VSM
Most companies expect to have multiple products using VSM in 2024. This makes sense since the one initiative synonymous with customer value is VSM.
When asked where their company would be with VSM adoption at the end of 2024, the top answer was multiple product teams using VSM, chosen by 28% of respondents.
The year-over-year data shows a steady improvement in VSM maturity from 2023 to 2024. However, many organizations may be running into challenges in broadening their VSM initiatives.
Top 3 Business Challenges for 2024
The survey asked what business challenges companies are anticipating in 2024. Results showed that the top business challenges in 2024 correlated with VSM strengths.
The top challenges were:
- 49% Inefficient processes
- 40% Collecting data and measuring customer value
- 40% Siloed teams
Inefficient Processes
When processes are made more efficient through VSM, companies increase their profits, reduce losses, and increase speed to market.
Measuring Customer Value
Interviews reveal that companies need information for data-driven decision-making. Using data to make decisions and optimize business processes would drive efficiency and organizational alignment.
In 2024, measuring customer value rose to the top 3 of business challenges. While 99% of companies measure customer value, only 5% measure all 6 key metrics recommended by the Broadcom VSM maturity model.
- 86% likely make decisions on too little data and biased perceptions
- 14% have a comprehensive idea of customer value
- 9% track 5 of the metrics
Including all Teams
The company leaders surveyed indicated that too few teams are involved in value streams, limiting efficiency and allowing silos to persist. The good news for VSM is that the most crucial teams are involved:
- 48% Product Management
- 48% Software Development
- 44% DevOps
However, these top 3 teams are involved less than 50% of the time and their involvement should be closer to 90% for most companies.
Factors that Limit VSM Efficiency and Business Benefits
This lack of team involvement is likely impeding efficiency and sustaining a siloed team environment, both of which were top business challenges for 2024. The survey looked at other factors that limit the benefits of VSM.
Ad Hoc Approach to VSM Solutions
Most companies are using a variety of non-integrated tools and solutions to try to manage their value streams, which is likely inhibiting information flow.
The most used tools were:
- 45% Homegrown and opensource
- 41% Excel spreadsheets
- 32% Numerous non-integrated tools
Only 20% use integrated solutions and a mere 7% use a single integrated platform for VSM.
Homegrown and opensource tools are at the top of the list. While these tools can be good if they are customized to the company’s business processes, they can be detrimental if they are unsupported or are only used by one team, limiting data sharing.
One of the most alarming findings was that Excel spreadsheets ranked second. Often spreadsheets are a static point solution that needs to be updated manually. The third most-used tools for VSM are numerous non-integrated tools, which limit data sharing and promote siloed operations.
Lack of Visibility Across Value Streams
To determine if companies’ tools were really inhibiting VSM, we directly asked about their visibility across value streams. Most companies indicated that they lack visibility across their value streams.
- 80% don’t have good visibility across value streams
- 20% have good or excellent visibility across value streams
A couple of business leaders commented that visibility is critical to ensure products and services are secure and compliant. This means that by not providing the visibility needed, the ad hoc solution approach is creating risk.
Failure to Leverage VSM Data
Companies fail to leverage VSM data, limiting business benefits. Data collected throughout a value stream can indicate how well the company is operating and how happy customers are with the products and services received. However, half of companies surveyed lack a solution to centralize product lifecycle data.
When participants were asked why they thought VSM data wasn’t being used effectively, they pointed to 2 factors:
- Lack of quality VSM solutions
- VSM immaturity
The first response reinforces the concern about an ad hoc approach to VSM tools in which data is not being collected or isn’t flowing between teams. When data isn’t accessible, teams either don’t know the information exists or it takes too much work to get it, revealing the immaturity of most companies’ VSM initiatives.
Uses for VSM Data
The power of VSM data to drive direct business benefits cannot be underestimated. When companies were asked what they used VSM data for, the top 5 responses were:
- 47% Continuous improvement
- 44% Improving efficiencies
- 37% Improving product quality
- 37% Increasing customer value
- 35% Increasing workflow visibility
When VSM data isn’t being leveraged for these purposes, companies lose key opportunities for strategic advancement and digital transformation.
Survey Methodology
Executives as well as IT and business leaders at enterprise companies representing all industries were invited to participate in a survey on their company’s digital transformation initiative covering objectives, challenges, and solutions. Selected questions were compared to questions asked in the previous year to create year-over-year trends. Eight executives from the survey were invited to participate in in-depth interviews to discuss their survey answers and provide deeper insights into the findings. A total of 511 qualified participants completed the survey.
Overcoming Challenges to VSM Adoption and Maturity
In 2024, VSM continues to gain momentum, delivering numerous business benefits, such as increased efficiency, increased customer value, and cost reduction. The increased focus on VSM and the customer is removing some of the key challenges that have inhibited companies’ digital transformation initiatives.
To address critical business challenges in 2024, move their VSM initiatives to the next phase, and push digital transformation across the finish line, companies should have the right philosophies and initiatives already underway.
Companies that need a better understanding of their customer and the value their products deliver must get more teams involved in the VSM initiative and acquire the proper VSM solutions that flow data across teams along the value stream and up to the executive team.
About ValueOps by Broadcom
ValueOps® by Broadcom is the industry’s most complete Value Stream Management (VSM) solution. Combining robust business planning, agile delivery management, and value stream integration in one solution, ValueOps uniquely accelerates digital transformation by improving visibility, alignment, and efficiency at every stage of value creation.
With ValueOps, the seamless convergence of Clarity™, Rally®, ValueOps ConnectALL®, and ValueOps Insights in one solution empowers leaders at every level to plan, fund, manage, track, and optimize their work efforts using a common data model and value orientation. With the widest range of VSM features in the category, ValueOps has capabilities and insights to meet the needs of everyone in a value stream – effortlessly synchronizing them to align strategy, investments, people, and work across the enterprise.
About Broadcom
Broadcom Inc. (NASDAQ: AVGO) is a global technology leader that designs, develops, and supplies a broad range of semiconductor and infrastructure software solutions. Broadcom’s category-leading product portfolio serves critical markets, including data center, networking, enterprise software, broadband, wireless, storage, and industrial. Our solutions include data center networking and storage, enterprise, mainframe, and cybersecurity software focused on automation, monitoring and security, smartphone components, telecoms, and factory automation. For more information, go to www.broadcom.com
Explore all the findings of our 2024 VSM Trends Report. Get your copy here.