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Archived Boards => ArchiMate (Read only) => Topic started by: projetnumero9 on June 05, 2020, 16:08:23 PM

Title: Good use of the Value Stream concept ?
Post by: projetnumero9 on June 05, 2020, 16:08:23 PM


Coming from an enterprise where the domains where described functionally using 3 levels of Business Functions, I'm trying to wrap my head around the concepts 'Capability' and 'Value Stream'.
After a bit of reading (BCRM, http://essay.utwente.nl/65421/1/Papazoglou_MA_MB.pdf found through https://forum.archimatetool.com/index.php?topic=137.msg676#msg676) and testing, I came up with this (see attached view).


I'm still hesitating:

Am I on the right track?
Title: Re: Good use of the Value Stream concept ?
Post by: Jean-Baptiste Sarrodie on June 05, 2020, 19:37:14 PM
Hi,

Quote from: projetnumero9 on June 05, 2020, 16:08:23 PM
I'm trying to wrap my head around the concepts 'Capability' and 'Value Stream'.
Am I on the right track?

First of all, Capabilities and Value Stream are used to model what your company does in an organization agnostic way. Ie. Capabilities and Values Stream don't change when your company reorganizes itself by creating or merging Business Units or Departments. They both really represent what your company does, not how it does it or through which organization.

Capability and Value Stream differ in the way they are identified: Capabilities are usually generic and are big bunch of activities group logically, they are activities that your company is able to do (either by itself or through partnership), while Value Streams are defined based on the perceptible value and outcome for the end user. We also find a distinction which is similar to the one between function and process. Capabilities are thus used to model Enterprise at rest, while Value Stream model Enterprise in motion.

In strategy, they are used as the basis for your operating model: your first define the purpose of your business and its products and values through a Business Model Canvas, then your clarify which activities are needed for each product/value, then your check which capabilities must be there to support those values stream. At this point, you can start looking at how to organize your company and decide whether it seems best to have Business Units in charge of a whole Value Steam (usually best for client satisfaction), or in charge of a Capability, and thus supporting multiple Value Streams (usually best for efficiency and cost).

If not done, I would highly suggest you to read the books "Operating Model Canvas" (and maybe also  "Business Model Generation", the book which introduced Business Model Canvas).

Quote from: projetnumero9 on June 05, 2020, 16:08:23 PM
I'm still hesitating:

  • if I intend to speak about the product (Car Insurance for instance), the Value Stream as presented shows Capabilities and Business Functions (and Mapped Applications) required
  • if i intend to speak about the organization (Car Insurance being a part of my organization), i should use a Capability and the view will then show which capabilities are shared between domains

Am I on the right track?

That's mostly right, but in your example one might wonder if Health, Car and Construction Insurance are really different Value Streams. I would personally not name them only by the target product or outcome and would try to suggest the journey to deliver them. I would also provide more details (ie. decomposition to sub-level Value Streams) and might come to the conclusion that they exhibit the same "steps" (concept to product, ie. R&D, Marketing, Sales, Operation...). And then maybe you'll see that in fact your have mostly 1:1 relation between key Value Streams' steps and Capabilities (which is not unusual). Then , If your company has its organization based on its capabilities, you'll see that your Business Functions are very similar to your Capabilities which in turn are very similar to Value Streams' steps... That's simply the (usual) consequence of the choice of your company regarding its organization. So of course you won't model all this and will decide which concept to keep (based on future usage of your model).

Regards,

JB
Title: Re: Good use of the Value Stream concept ?
Post by: projetnumero9 on June 06, 2020, 19:25:35 PM
Quite obviously, crystal clear!
Thank you,