Value Chain vs Value Streams

Value Chain or Value Stream or Value Stream Mapping?

There is a common misconception between the concepts of Value Chain and Value Stream, where the two terms are used interchangeably and causing confusing among the stakeholders, including senior management sponsoring key transformation programs and projects. Like many other concepts, it is vital to get everyone in the organization to have the same understanding, so that the programs and projects are built on the same page. 

Value Chain

Value chain represents a decomposition of an organization based on its business capabilities – a description of “what specialization” are required for the organization to function. 

In most cases it aligns closely to an organization chart that is based on functional groups built on specialized skill sets to perform specific functions. Most importantly an organization is represented in ONE and only one value chain. 

The diagram below is an example of a generic value chain, consisting of two stacks of activities - primary and secondary activities. The horizontal stack consisting of the core activities of the organization that are critical in delivery of products and/or services to the end customers. Hence also known as the primary activities. The vertical stack representing the supporting or secondary activities in an organization, They only play supporting roles, and are not directly involved in delivery of products and/or services to the end customers.

Figure 1: Value Chain

In business architecture practice, the value chain diagram is a commonly used approach, but not the only approach, for identifying high-level "business capabilities". In short, a value stream helps in showing the "what" capabilities an organization to function smoothly. 

The term has also evolved to cover a wider meaning, including cross-industry value chains, cross-border value chains and global value chains. 

Business Process Control and Compliance Assurance

The Banking Royal Commission’s final report was released recently with 76 recommendations. Among them, the report has set out in detail how and when so-called processing or administrative ‘errors’ veer into misleading or deceptive conduct and the need for corporations to have in place processes that avoid these systemic errors. The report also recommends that there should be one person in every bank that is responsible for the design and implementation of each product, keeping it fit for purpose, and if something goes wrong, remediating it. This implies having specific senior executive owning each of the enterprise processes, designing controls for these processes, and overseeing these checks and controls ensuring they are working without failure.

Predictive Data Analytics, Machine Learning, Decision Management & Business Process Management

This is a simple info-graphic illustrating several emerging concepts and practices, including big data, predictive analytics and machine learning, with relation to decision management, business process management and business operations.

New Business Models using OMG's Standards - OMM, BPMN, DMN & CMMN

A presentation by Trisotect on its new tools based on the OMG's standards - OMM, BPMN, DMN, CMMN - that facilitates in building of new holistic business models to support an enterprise digital transformation.

Multi-Vendor BPMN Interchange Demonstration

Another reason for adopting of BPMN. The BPMN Model Interchange Working Group (BPMN MIWG) held its 4th BPMN interchange capability demonstration. This demonstration involved several BPMN software vendors collaborating to create a BPMN model and then have it execute on various BPMN based business process engines. BTW unless the BPMN process model is developed in accordance to the standard, it defeats many key purposes of BPMN, including interchangeability and executability. Enjoy the demo.