Organizations considering value stream management (VSM) must look at several deciding factors, not the least of which is the potential return on investment (ROI). In fact, VSM has been shown to deliver significant organizational benefits and quantifiable, financial ROI.
In November 2023, Forrester Consulting conducted a Total Economic Impact™ (TEI) study, commissioned by Broadcom, which found organizations using ValueOps, a dedicated VSM solution, can realize significant financial benefits. Based on the experience of a Broadcom customer, the study found the organization achieved a 471% return on investment (ROI) and a net present value (NPV) of $81.63M over three years, with payback of the initial investment in just nine months.
Now, we see this as a particularly successful deployment, and numerous factors came into play to achieve these benefits. That said, this customer example highlights four key benefits that have a considerable impact on ROI.
- Increased visibility to reduce waste. Driven by real-time data access, VSM increases visibility and situational awareness enabling teams to identify which initiatives support value streams. They can also more easily spot overlapping responsibilities and work, allowing teams to reallocate resources and move investments to more valuable products or projects, saving time and costs.
- Improved IT team efficiency. Using common data and software across teams makes communication faster and more intuitive. Different teams can pull their view of progress on demand. Additionally, access to real-time data reduces the need for so many meetings, saving everyone time.
- Organizational Alignment that reduces costs. When management has visibility into employees’ contribution to value streams, they can easily detect duplication and wasted effort empowering informed decisions about changes to team and/or organizational structure to improve results. In this study, the customer identified duplicative analysis work across various functions, resulting in the creation of a single analytics team. This enabled the redeployment of 65 employees by year 3 and reduced costs by over $10 million in three years.
- Streamlined financial processes. One of the biggest challenges in value stream delivery is connecting DevOps with business outcomes. This generally requires frequent reporting from various groups to communicate progress and ensure projects are within budget. With VSM, teams can easily access the data they need to manage value streams profitably eliminating the demand on finance teams to custom produce reports for each team. Comprehensive, real-time data also helps each team understand how their work impacts customer value.
There are many other benefits this customer realized, such as improved resource dedication to the highest value priorities of the organization, increased alignment on goals and progress, and exposure to new concepts and skills. Each of these benefits has a profound impact on the IT organization and customer value.
VSM has emerged as a business-critical solution for helping organizations pinpoint misalignment, eliminate waste, and improve operational visibility. The Total Economic Impact™ of ValueOps by Broadcom Study illuminates the journey of one organization and highlights some of the impactful benefits companies can achieve with VSM.
To better understand the potential ROI of a value stream management deployment with ValueOps, download the TEI study.
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