value

Value stream and customer journey: They’re not identical, but they’re the ultimate power duo of business success! Think of the value stream as the grand blueprint for delivering value – the behind-the-scenes orchestra playing the tune of your product or service. It maps out the entire flow of activities, from conception to customer delight.

The customer journey is the spotlight-stealing star of the show. It’s the user’s story, their emotional rollercoaster ride as they interact with your offering. It’s understanding their hopes, frustrations and everything in between.

The problem? We often confuse these two crucial concepts, especially in complex organizations. When you’ve gone through multiple transformations, restructurings, and new ways of working, things can get tangled. And if you’re making the switch from project to product, adopting frameworks like SAFe, or simply dealing with large-scale solutions, clarity becomes even more vital.

That’s where this blog comes in. We’ll dive deep into the basics of “value stream” and “customer journey,” ensuring you can tell them apart and leverage their unique strengths. We’ll show you how these concepts can be the secret weapons for optimizing your business and user experience, no matter how complex the landscape.

Let’s start with understanding the value stream and how it could be deciphered in a simple way.

“A value stream is the sequence of activities necessary to deliver a product, service, or experience to a customer, internal or external. Value streams cut across and connect siloed business capabilities. They provide end-to-end visibility of the activity flow, from customer request to delivery.”  – Gartner

Example:

As per this example, for a software development team, a value steam could consist of development, build, test and deployment to deliver working code to customers.

Example:

For a telecom company, that offers services around mobile phones, the value stream can consist of marketing and sales, network infrastructure and maintenance, billing and customer services, provisioning and activation and customer experience and support. These stages can also be appropriately mapped with the enhanced Telecommunications Operations Map (eTOM) framework and its associated workflow – P2O, O2A, U2C, T2R, CPQ and Q2C.

Example-3:

Similarly, for a finance company or bank that offers credit card services to its customers, the value stream can consist of awareness and acquisition, onboarding and activation, daily business management, growth and value enhancement and retention and advocacy.

Example-4:

Another example for a healthcare company that offers services around healthcare insurance, the value stream can consist of awareness and acquisition, onboarding and plan activation, policy management and healthcare access, value-added services and well-being support and retention and advocacy.

So, why call this sequence of activities a value stream? Because each step is vital for delivering valuable user experiences, whether it’s navigating health insurance, applying for a credit card or simply using your mobile phone. Every business thrives by launching competitive products and services, and this specific sequence unlocks the value within those offerings. That’s why we call it a value stream.

Exploring a Healthcare Company Portfolio, IT Product Family and Operating Structure

Let’s explore this concept further by examining a healthcare company and its business products like health insurance, healthcare services, aged care and its supporting IT functions powered by apps, services and platforms.

Portfolio and Products Family for a Healthcare Organization

Let’s understand the portfolio and product family layer by layer:

  • Top Layers (1 and 2): These showcase the business products and services directly offered to end customers. Think health insurance, healthcare services and aged care.
  • Experience Layer (3): This crucial layer focuses on how customers interact and engage with those offerings. It encompasses apps, websites, and any touchpoint influencing their experience.
  • IT Portfolio/Line of Business (4): Here, internal apps and services are logically grouped based on their specific roles and functionalities, like claims processing or policy administration.
  • Common Services & Platforms (5 and 6): These form the foundation, providing shared resources and capabilities like authentication, data storage or analytics. They’re the hidden heroes enabling everything to function smoothly.
  • IT4IT and Infrastructure (7): This layer houses the essential IT infrastructure, networks and tools that keep everything running behind the scenes, ensuring performance and security.

By understanding these layers and their relationship, we unlock the secrets of crafting value streams for our customers. You will find similar structures of your internal and external apps organized by business functions in your organization. Keep this front of mind—we are going to use this structure to understand more about the value stream and customer journey.

An Example of the Value Stream

Remember our earlier discussion about value streams for a healthcare company? Let’s deep dive into a specific example: A dental insurance service offered by a healthcare company. At the business level, its value stream unfolds like a well-orchestrated journey:

  1. Awareness and Acquisition: Attracting new patients and convincing them of the value of your dental insurance plan. Think informative campaigns, partnerships with dentists and clear communication of benefits.
  2. Onboarding and Plan Activation: Smoothing the path for new members, from enrolling seamlessly to understanding their coverage and finding a dentist within the network. It’s all about clear instructions, helpful support and making the process stress-free.
  3. Policy Management and Healthcare Access: Ensuring smooth sailing once the plan is activated. This involves efficient claim processing, easy appointment scheduling and providing access to a qualified network of dentists. Think streamlined systems and responsive customer service.
  4. Value-Added Services and Wellbeing Support: These services go beyond just coverage and offer additional perks like dental hygiene tips, discounts on related services or even access to wellness programs. They are about exceeding expectations and fostering a sense of well-being.
  5. Retention and Advocacy: Keeping your patients smiling and singing your praises! This involves personalized communication, loyalty programs and demonstrating the value of your service over time. Happy patients become loyal advocates, spreading the word and boosting your business.

This value stream, like a well-designed roller coaster, takes customers on a journey filled with ease, value and, ultimately, healthy smiles. By understanding and optimizing each stage, you can ensure a smooth, satisfying experience that keeps your patients coming back for more.

What is important here is that perspective is the business or company’s viewpoint. Until now, the focus has been on all the processes or sequences of activities involved in delivering value to end customers.

Also, if you overlay the value stream on the chart discussed in the previous section, you will appreciate that the value stream must have multiple touchpoints across the portfolio and the product family to deliver something meaningful.

Now, you might be wondering, can these value streams also exist within specific business functions or lines of business, like product development, sales and marketing or channel management? Absolutely—as long as it aligns with the core definition of a value stream: The sequence of activities needed to deliver a product, service or experience to a customer.

So, can a team supporting applications or services within these business functions or lines of business have its own value stream? You guessed it – yes! We’ve already touched upon the idea of team-level value streams, like a chain of activities such as development, build, test and deployment that seamlessly delivers working code to customers, fulfilling the business objective of providing products or services.

By now, you’ve probably grasped the concept of cascading value streams. These interconnected chains of activities work together to deliver business objectives and, ultimately, value to customers. But where do we measure the efficiency of this flow?

The answer is: At all levels. However, to truly understand any issues impacting business value delivery, we need to zoom in on the highest level – the business or company perspective. This provides a holistic view of the entire value stream and reveals any bottlenecks or inefficiencies.

Now, you might think, “What about new companies adopting this product-centric approach for the first time? It seems daunting to implement flow metrics at the highest level.” You’re right. In such cases, starting with a pilot project at the team level and gradually scaling up is the best approach. This allows you to test and refine the metrics before applying them to the entire organization.

Don’t worry; I won’t delve deeper into this topic here. I plan to share my further insights and recommendations in a future post or dedicated blog.

Exploring the Customer Journey

At first glance, you might think “value stream” and “customer journey” are similar concepts. But while both are crucial for delivering exceptional experiences and optimizing business operations, they play distinct roles.

Think of a value stream as the behind-the-scenes orchestra, flawlessly performing activities that bring your product or service to life. It’s the efficient flow of processes that ensures everything runs smoothly, from idea to development to delivery.

On the other hand, the customer journey showcases the user’s perspective. It’s all about understanding their every touchpoint–from initial awareness to post-purchase interactions. It’s about empathy, understanding their emotions and pain points and ensuring their experience is satisfying at every stage.

Why are both crucial? Because they’re two sides of the same value coin. A perfectly optimized value stream might be a marvel of efficiency, but if it ignores the customer’s experience, it’s just a well-oiled machine churning out disappointment. Conversely, a customer journey might be filled with delightful interactions, but if the value stream is riddled with inefficiencies, it’s unsustainable and ultimately unsatisfying.

By embracing both perspectives, you gain a holistic understanding of how value is created and delivered. You can identify areas to improve both the efficiency of your operations and the satisfaction of your customers. This powerful combination unlocks the true potential of your business, allowing you to deliver experiences that truly resonate and drive success.

Customer Journey Definition

A customer journey is the complete end-to-end experience customers have with a company from their perspective. That journey has a clearly defined beginning and end, spanning the progression of touchpoints. Customers don’t know or care who in a company owns the individual experience of billing, onboarding, service calls and so forth. From their perspective, these are all part of one and the same journey. – McKinsey

It is evident that the customer journey is about understanding every interaction they have with your product or service, from the initial spark of interest to the final sigh of satisfaction (or frustration!).

It’s all about seeing things from customers’ perspectives, not through the lens of your company’s processes or internal metrics. It’s about their emotions, their pain points, their successes and everything in between. It’s about understanding what makes them tick, what makes them smile and what makes them tear their hair out.

The customer journey is the bridge between your business and your customers’ hearts. It’s the map that guides you to create experiences that resonate, that build loyalty and that ultimately drive success. By stepping into their shoes, you unlock a treasure trove of insights that can transform your product, your service and your entire business.

To summarize the difference between the value stream and customer journey, please see the comparison table:

Value Stream vs. Customer Journey

So now, let’s say you have to get health insurance from a healthcare company. We are going to explore the customer journey for the same.

Customer Journey for Health Insurance

If we look carefully, the customer journey interacts with several touchpoints within the company—maybe talking to sales, using an app or getting help from customer service. These apps or systems might be spread across different teams, departments or lines of business within the enterprise. Those systems can also sit behind multiple value streams.

So, if you want to smooth your customer’s journey, you can’t just focus on one interaction or one touch point. You need to think about the whole stream, how each part connects, and how different pieces delivering value to the customer can work together.

We need a new set of metrics to measure effectiveness at the customer journey level. NPS, conversion rate, FCR, lead and cycle time, renewal rate, retention rate, cost per acquisition, claim cost, etc. can be tracked to understand the effectiveness of operations supporting customer journey.

You may have some additional questions like:

  1. How can we map the transition from project-centric to product-centric work?
  2. How do we identify key value streams and customer journeys, and how many should we focus on?
  3. What’s the urgency of adopting this product-centric, value-driven approach?
  4. How can we shift our mindset and culture to prioritize delivering business value over completing tasks?
  5. Can existing ALM tools like Jira support value stream mapping and improvement?
  6. What specific metrics should we track for different aspects like transformation success, value stream improvements, customer journey enhancements and overall productivity?
  7. How do we design an operating model that empowers teams and supports value delivery?
  8. In a multi-vendor environment, how can system integrators contribute to outcome-based delivery and business value realization?
  9. What skills and competencies do teams need to thrive in a value-driven environment?
  10. How can we upskill and reskill our workforce for this shift?
  11. Are there specific tools or platforms beyond ALM that can facilitate value stream mapping, data collection and continuous improvement?
  12. How can we effectively scale our value-driven approach as our business grows and expands into new markets or product lines?
  13. How can we address potential resistance to change from individual employees or teams who might be comfortable with traditional project-based work?
  14. How can we quantify the ROI of adopting a value-driven approach and demonstrate its benefits to stakeholders and decision-makers?
  15. What are effective strategies for breaking down silos and fostering collaboration between different departments and teams involved in the value delivery process?
  16. Can we measure and track the impact of value-driven practices on employee engagement, motivation, and overall organizational culture?

We’ve scratched the surface of a world where value reigns supreme, but the journey is far from over. As you embark on this transformative quest, remember that the path is paved with questions—questions that ignite curiosity, challenge assumptions and propel us forward. So, let’s keep the conversation going! Share your own experiences, voice your doubts, and unleash a flow of new questions.

Techstrong TV

Click full-screen to enable volume control
Watch latest episodes and shows

SHARE THIS STORY

RELATED STORIES