What Business Architecture Needs: Value Streams or Activity Streams?

2015

I think you have noticed that when you are seriously looking into many familiar things, especially in the business world, you find yourself, your line of thoughts and language occupied by stereotypes. They help to communicate, but they also obfuscate the core of things. The most illustrative examples of stereotypical thinking we can find when some concepts of mass production are moved into other types of businesses while, along the way, dropping the context and losing the sense.

Example 1: Lean Production (auto assembly manufacturing) was succeeded because: 1) required outcome was precisely defined; 2) the dominant majority of instruments and parts were known up-front; 3) it was possible to valuate every operation in the production to see if it has a value regarding the outcome. Now, look at other businesses where the reaction of the consumers on the business outcome (products and services) is not 100% known, but can be only estimated and assumed; when ingredients of the of the instruments, operations, processes, procedures are all based on “the best we can afford” or “the best we can do” or even on “we used to do so”.

How would we know from the enterprise and market perspective what is the waste in our production? In essence, we all produce services to our peers, partners, management/enterprise and customers. How would we be so sure that the ‘waste’ today won’t become a competitive advantage tomorrow? Simply, if a thing is not required today, in particular project, it does not mean this thing has to be eliminated as waste – who has done enterprise-wide analysis of its usefulness? Why a project may judge and classify things as a waste? Thus, before playing in Lean, you have to justify its applicability in each particular case considering its short- and long-term consequences.

Example 2: Value Stream exists everywhere. Yes, it is true, but are there anything that is not a Value Stream? A relatively common explanation of the term ‘value stream’ is given in the APICS Dictionary as “the processes of creating, producing, and delivering a good or service to the market”. The concept of Value Stream came to business from the manufacturing industry as well. A Value Stream is used now to identify the activities that occur in an enterprise to provide products, services and/or experience the customer desires. These activities and related business domains may be of quite different nature and even have different ownership. We use Value Streams to manage multiple different business capabilities and stream them to the benefits of our customers. At a glance, it is a good concept, but there is an issue embedded in corporate business itself that challenges an applicability of Value Streams.

In capitalism, the majority of businesses are for profit, for the well-being of the companies (the ends) while the customers are used to generate this profit (the means). The customer demand cannot be ignored, however, a business may have and do have other activities, and business capabilities are defined and designed for them. It is almost a trivial statement, but if we focus on the Value Stream related activities only, we risk omitting a significant part of the business and can easily miss the competitive advantage. The ‘means’ may be in the focus of the business, but they cannot substitute the ‘ends’ do we like it or not.

A quite legitimate question might be: if a Value Stream concept is only for “creating, producing, and delivering a good or service to the market” or only to satisfy a customer desire, may/should we use the Value Stream as the only methodology for defining, describing, documenting and, finally, managing the corporate business as a whole? Business Architects have a lot of tasks to address that do not relate to the customers. If you believe that this should not be possible and that everything must be done for the sake of customers, try to open your own enterprise (and then tell me how your opinion changed…)

The examples of such tasks are: financial targets, lobbing, advertisement and even planned speculative activities used by companies not to outperform the competitors, but simply push them from a particular location or even a market. Also, it may be about winning a bid for a government project, about creating a market or customer’s needs, about sustaining negative results in researches of new materials or models, and so on. All those are defined and designed via business capabilities while the customers are viewed in these business cases as resources and business execution context.

If Value Streams are the only what enterprise’s operational and delivery business teams see, the company is in danger. So, either Value Stream concept as a single instrument is inadequate for the Enterprise business as a whole, or this instrument has to be re-defined and include the value for the business in addition to the value for the customers.

From my practice, I believe that re-defining commonly used artefacts is a trouble-making work. So, I propose a more universal concept of Activity Streams, at least, for Business Architecture. This concept includes Value Streams as well as a lot of other activities aimed to the wellbeing of the corporate business. In contrast to Value Streams, Activity Stream may be expressed via Business Capabilities and their combinations, not necessary via business processes or cases. An Activity Stream depicts a sequence and logic of utilisation of Business Capabilities and practically represents an orchestration of activities (in business this is also known as a high-level business process).

Thus, I do not change the core, but extends the scope when replacing Value Streams by Activity Streams for Business Architecture. Though the proposed term may be not the best, it is free from confusion that business is for customers only (not very much politically correct, but politically better to reflect reality than ‘construct’ its own, IMO). To manage things properly, we have to know what we are going to manage.

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