Why two types of value streams?

Apr 11, 2023
Water flowing over rocks in a woodland creek

I find that people struggle to intuitively understand the difference between an operational value stream and a development value stream in SAFe. This blog post provides simple, clear distinctions to help people reason about their organization and the difference between the two. The concepts exist regardless of the use of SAFe as an organizational operating system and need to be considered regardless of your process or delivery framework. Join the discussion on LinkedIn! 

The Scaled Agile Framework (SAFe) defines two primary types of value streams. Let’s start with the definitions provided by SAFe:

  • “An Operational Value Stream (OVS) is the sequence of activities needed to deliver a product or service to a customer.”
  • “A Development Value Stream (DVS) is the sequence of activities needed to convert a business hypothesis into a digitally-enabled solution that delivers customer value.”

I find comparisons often help people understand the difference: 

  • OVS delivers products to customers; DVS creates better products
  • OVS converts products to money; DVS converts money into (digital*) products.
  • OVS operates the business; DVS changes the business
  • OVS serves the customer; DVS serves the OVS
  • OVS flows customer needs; DVS flows system changes to serve needs better

* Digital products, because a manufacturing process or other products with material COGS components would include that manufacturing process in the operational value stream… at which point it becomes very close to the traditional lean manufacturing version of a value stream. 

It is important to recognize the two different types of value streams because the goals and behaviors of teams operating in each space will be different. In practice, the OVS focuses on repeatably delivering to customers in a highly predictable manner while continuously reducing the lead time and friction involved for the customer. Customer experience and satisfaction are paramount in this space. 

On the other hand, the DVS focuses on providing new capabilities that serve the customer, and this requires an inherent element of innovation, discovery, and unpredictability while pursuing these outcomes. To attempt to hold the two groups to similar metrics and management approaches is a recipe for damaging one of those two goals. Leaders must respect and support the difference in the operating behaviors for the two types of value streams and create the space necessary for each to flourish while still working closely in harmony.

There are two additional elements that were introduced in SAFe 6.0 that cause additional confusion around value streams. I’ve elaborated these below.

Where does the new Business Agility Value Stream come into this? 

Taking advantage of significant new market opportunities often requires significant investment in a short time horizon. These opportunities would typically be represented as Portfolio Epics. However, the need for both high speed of discovery and new combinations of business and technology capabilities means that trying to create them in the existing portfolio structure would incur a huge number of delay-inducing dependencies. The BAVS provides a repeatable series of steps to take advantage of these opportunities, which will often result in having new OVS and/or DVS operating long-term if they are successful. 

As such, the BAVS isn’t a new type of value stream, it is instead a pattern for using the other two types of value streams in specific situations. Conceptually, the BAVS be seen as an element of a flow-based solution to having new business programs using traditional time-bound program management approaches.

What does an Agile Business Train mean in value stream terms?

When organizations become highly capable in both agile business operations (OVS-focused) and agile delivery (DVS-focused), they often discover significant benefits in pulling together the two elements into a single organization structure that essentially operates the entire Solution for a given line of business. When these two elements operate in harmony using the aspects and patterns of an Agile Release Train, the resulting organization can be called an Agile Business Train and contains all of the people, processes, responsibilities, and funding necessary to operate and evolve a significant portion of the business.

All quoted text is from https://scaledagileframework.com/ and is © Scaled Agile, Inc. unless otherwise noted.