Most tech execs and organizations still function as cost centers: utilities and suppliers driven by cost efficiency. But this is changing as your firm’s business and technology strategy becomes more fast-moving, customer led, insights driven, and connected. Value effectiveness is becoming paramount, and your tech organization must become future fit to support the effective flow of value creation across multiple functions and tech stacks. You probably already use these flows of value creation — called value streams — in your modern application delivery practices to identify and eliminate waste. But future fit technology organizations are broadening their focus on value effectiveness and prioritizing their technology investments based on the business value created.
This change to a future fit technology strategy requires transforming the tech organization’s operating model — addressing funding, resourcing, performance measurement, and value tracking to:
- Provide all stakeholders with end-to-end value visibility from planning to production. Traditional firms are structured based on the activity-centric needs of individual, functional organizations, optimized for that organization’s cost efficiency. Future fit firms break down these silos by focusing on how end-to-end activities, or value streams, interact to collectively deliver value to customers.
- Create value across the enterprise’s, partners’, and customers’ ecosystems. As linear value chains shift to ecosystem-based value creation, flows of value are becoming more complex. Value streams enable the planning, the mapping, and the management of value delivery across these dynamic and networked ecosystems end-to-end. This provides transparency of costs and resource availability enabling problem resolution and performance optimization.
- Realize value from activity flows engaging services from multiple business capabilities. Value streams power effectiveness by shifting the conversation from the activity (what needs to be done) to the outcome (why it needs to be done). Each value stream enables the alignment of business capabilities and the services they provide and consume — both internal and external — on clear and transparent business and customer outcomes.
- Shift measurement from internally focused performance to strategic OKRs. Value streams provide the language and insights for individual contributors, product owners, and tech and business executives to prioritize activities and investments that maximize value delivery. Strategic objectives and their key results (OKRs) link the enterprise’s strategic themes and business outcomes to the priority activities identified in value streams.
Boost Tech’s Effectiveness: Plan, Govern, And Communicate Tech’s Business Value
Our ongoing research at Forrester is addressing this shift to a future fit technology strategy through effective value streams as the role of value changes with the maturing tech organization. Effectiveness:
- Provides a model for planning. Focusing on effectiveness through value streams enables firms to bring the functionality of A/B testing to the strategic planning process, identifying the highest value scenario and using those insights to guide execution. The end-to-end performance transparency enables modern and future fit firms to modify the roadmap and optimize performance in support of ongoing strategic changes.
- Addresses both delivery and operations. Future fit firms use continuous delivery, dynamically rewriting the backlog of work to test the workstream’s progress toward the desired value. The same is true for operations and shared services. At the heart of modern operations is an expansion in purpose: to support today’s customer value and tomorrow’s innovation (future value).
- Forms the basis for communicating future fit performance. Value is in the eye of the beholder. Tech leaders must communicate tech’s business value to drive awareness and engagement across a diverse ecosystem of stakeholders. For instance, they leverage storytelling to communicate technology’s business value across technology, people, and leadership aspects.
- Brings value focus to future fit governance. Governance doesn’t do the work, but it provides the policies, frameworks, authority, and processes that facilitate and guide the funding and resource allocation, risk management, and measurement that make tech strategies effective and future fit.
In 2022, our ongoing research will help you define and apply value streams to boost your tech effectiveness. Let us know what else would be helpful to you and your team to drive your technology investments with business value.