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HP Software's community for IT leaders // July 2013
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Are value streams the “new thing”?

By Joshua Brusse, Chief Architect, Asia Pacific and Japan, HP Software Professional Services

It was some years ago that a few “pioneers” came together in an HP office to talk about something that was already common in the business, but not in IT: value streams. First launched (as “value chains”) through Michael Porter’s book Competitive Advantage: Creating and Sustaining Superior Performance, a value stream is an integrated, end-to-end set of activities that an organization performs to deliver value to their customers. It has been adopted by many organizations since then, but only in the “business,” not so much in IT. The experience that those “pioneers” had while working with many enterprise customers, however, was that to make Service Lifecycle Management sustainable, IT needed something more holistic than just the “stand-alone” processes that were adopted in many IT organizations through the increasing popularity of ITIL, ISO/IEC20000, and COBIT. It seemed that IT was ready to adopt value streams, too.


 

Today I see the interest in value streams growing. Myles Suer has written a series of blogs that are interesting to read, and HP has recently released a free ebook that discusses the four core value streams shown above. Every time I present IT value streams to board members, they listen and engage with the idea, and many HP customers are now working with HP to agree which value streams are relevant for an IT organization. Value streams are not yet mainstream in IT, but in my opinion they should be: as in any other business, IT should have an integrated chain of activities that they perform to deliver value to their customers. And in the future this is going to be even more important.

IT organizations have historically been the sole source of technology enablement to the enterprise—the gatekeeper of all things related to the mysterious world of technology. However, as a result of consumerization and cloud, the mystique of technology is no more. The digital natives have entered the workforce, and they aren’t intimidated by technology—they are exploiting it! So what we are starting to see is that IT is no longer telling the users what they will get. Instead, users are deciding what they will consume and use, and where they will source it from, often driven by the overall experience rather than just functionality. This is forcing companies to rethink their approach to IT: how it works, what it delivers to the enterprise, and how it is sourced. 

Most of HP’s customers are still using the traditional IT model, but the general consensus from their user communities is that it is too slow and inflexible to deliver innovation at the pace they need. Commoditization and consumerization of IT brought with it new business models, opened up new markets globally, and spawned new systems of engagement. This is forcing IT to become a service provider to the business and deliver services through a self-sourcing experience (like a catalog). Until now, most of the efforts we see here have been oriented toward delivering “IT technologies as services”: compute, storage, network, apps on demand. But the business doesn’t want technology services and monolithic applications on demand—they want ready-to-use business services that they can source, control, and configure to generate their own breakthroughs. And to add to this, there are more disruptions in front of us: the information explosion and big data.

It is not only my opinion that, without fundamental change, IT will end up as the maintenance department for the current (legacy) environment, while the business sources its own innovation from somewhere else—in fact, this is already happening for many of HP’s customers. So what’s needed is a hybrid IT model that not only enables the organization to maintain the traditional systems, but also enables the multi-sourcing of business services and the ability to harness the power of the information explosion and big data. This is a new structure, with service provider and broker characteristics aimed at connecting the various sets of economic buyers with the services they need at the right time, in the right context, from anywhere on the planet. The goal here is to create an engagement experience that helps move from project-sourced to self-sourced deliverables, which in itself increases the speed of innovation. And if IT can become the central service broker, then the enterprise can operate with the appropriate level of control, security, and risk mitigation that the board demands.

I believe that the value stream–based operating model should be the foundation for the new (hybrid) structure of next-generation IT, because IT needs to move from a siloed, technology-centric structure to an integrated value stream model focused on the consumption and delivery of services. But wait: Did we not say this when we introduced Service Management? Yes, we did. However—back to the beginning of this article—the focus on processes has not delivered what was promised so far—and maybe never will—because it didn’t address the integration of activities into a stream to deliver value.

Download the free ebook, “Value Streams: A User-Centric Model for the Enterprise CIO” (reg. req’d). For more on transforming how your IT organization delivers value, check out the HP Professional Services page.


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