Many businesses are investing heavily in digital transformation, gearing up their cultures to deliver more capabilities aligned to customer needs. But understanding business value and aligning efforts to customer benefits is a challenging discipline. 

It’s relatively easy to understand the value delivered from agile development teams in small IT organizations or teams working on new applications. These teams can report on their feature completion velocity, their track record of deploying releases on time, and quality metrics such as the number of defects found in production.

Smaller organizations can also stitch together metrics using out-of-the-box reports directly from their tools. For example, the agile team might use epic burndown reports or incident management metrics from IT service management tools and then speak to the business impacts.

Defining and leveraging metrics in larger IT organizations supporting hundreds of production applications becomes a bit more complex. Telling leaders that the organization completed 10 releases and 100 features and saw a 10 percent reduction in the number of defects found in production tells a story but lacks meaningful business context. Sharing metrics and presenting detailed business impacts across a large number of teams is inefficient. Lastly, large IT organizations must also represent work efforts beyond features, such as addressing risk, reducing technical debt, or fixing defects.

Value streams help digital and IT leaders in larger organizations present top-down key performance indicators around business value, strategic drivers, or long-term objectives. The methodology and metrics abstract where and how work gets done, and the leader’s presentation focuses on business-impacting progress. IT leaders also use value streams to present the benefits from “under the hood” investments in technical areas such as architecture, security, or devops.

Defining and mapping value streams to demonstrate business impact

Leaders first must define meaningful value streams. A value stream can represent products, services, or portfolios of them. Some organizations create value streams tied to strategic objectives, such as improving customer experiences, becoming more data-driven, or addressing compliance objectives.

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