In this video, learn the Lean IT concept of value, including what value is and the stakeholders' role in value.
- [Instructor] Let's look at how to define the lean concept of value, including what value is and the stakeholder's role in value. Here we see a definition of value. Take a moment to review it. There are a couple keys here, namely, who judges value? That's stakeholders. And what is a value? A product or a service. So, value is judged by stakeholders. That means that value is subjective, that it's assigned by stakeholders and resides in the mind of the consumer. It follows that for something to be of value, that it must have both good reality, but also good perception by stakeholders. Just having good reality isn't enough. Also note here that value has an intrinsic, or inherent aspect, as assigned by stakeholders, but it also has an extrinsic aspect, one assigned externally. As seen here, the value of something is also a function of its price and of the demand in the market for it. Someone must provide value. We call that role the provider. Value is in what the provider provides, products and services. Products may include tangible goods, like a car, phone, or coffee, and intangibles, like advice from your doctor. Services are a special form of products. Intangible activities which may include provision of goods, but with no transfer of ownership inherent in the service. People and organizations with a stake in the value of a provider's product or services are called stakeholders. Here we see the definition of a stakeholder on the left and a list of some of the usual suspects with a stake in a provider's products or services on the right. A consumer can be a person or an organization, and it's an aggregation. It includes the person who pays the bills, often called a sponsor, the person specifying requirements and ensuring effective use, often called the customer, and a user. Note that roles can be performed by one person or spread across people or organizations. The consumer can also be the person next in line in a value stream, or an internal customer, so it's important to understand what a value stream is. We define it right here on the right. Internal consumers are within the provider, a person or organization, and external consumers are people or organizations outside the provider. As you can see here, the value of IT products and services is lean IT's central focus. Value is created through a combination of actions, some of which produce value as perceived by stakeholders and others which do not. Lean IT's aim is to optimize value by eliminating the latter class of activities while preserving and enhancing the first.
Learn more about Lean IT Foundation certification at https://www.leanitassociation.com/certifications/lean-it-foundation/.
- Value stream terminology
- Value stream techniques
- Flow terminology and techniques
- Pull terminology and techniques
- Perfection terminology and techniques
- Lean improvement terminology and techniques
- Lean management terminology and techniques
- Preparing for lean certification