The purpose of a business is to create and deliver value to customers.

—Michael Porter, Competitive Advantage: Creating and Sustaining Superior Performance [1]

Value Management Office (VMO)

Note: This article is part of Extended SAFe Guidance and represents official SAFe content that cannot be accessed directly from the Big Picture.

The Value Management Office (VMO) is an organizational function responsible for facilitating the Lean Portfolio Management process and for fostering operational excellence and lean governance as part of a Lean-Agile transformation.

In a historically project-based organization, a Project/Program Management Office (PMO) is often chartered to track and coordinate the delivery of projects, initiatives, and programs an organization may have in flight at any time. A different set of values, mindset, and practices are required when implementing SAFe, which requires the move from temporal projects to long-lived products and from a start-stop approach to flow-based value delivery. The label of Value Management Office (VMO) has been applied to create focus on this change in approach, and the VMO enables this new way of working.

The VMO typically operates as an Agile team in partnership with the LACE, Portfolio leadership, and other enterprise stakeholders to optimize the flow of strategic value delivered within a SAFe portfolio. VMOs can also be dedicated to large value streams that require thousands of practitioners to collaborate on a single large solution.

Details

Many SAFe transformations will find the need for a VMO after they have launched several value streams in the new ways of working, often once initial steps have been taken toward Lean Portfolio Management (LPM). VMOs often emerge from the existing PMO, ready to embrace the mindset, values, and principles that a Lean-Agile approach requires. The VMO, like the LACE, must coordinate many activities across the organization. However, while the LACE is focused on launching, coaching, and accelerating the transformation as a whole, the VMO focuses on enabling the LPM activities that successfully translate the enterprise strategy into the solution delivered by the value streams in a SAFe portfolio.

They also have accountability for establishing and improving practices for measuring and improving the flow of value across a portfolio’s value streams. Overall, the LACE and VMO are complementary in driving successful SAFe transformations. By working together, they can help the organization adopt and implement SAFe practices, align the portfolio with enterprise strategy, deliver value to customers more quickly and efficiently, and manage the change associated with transformation.

Characteristics

The VMO typically consists of a small team of Lean-Agile professionals passionate about helping optimize the flow of strategic value across a set of value streams inside a SAFe portfolio. These individuals often come from existing PMO roles and business operations backgrounds, as well as change agents, including SPCs. Together, they use their varied experiences to create a cross-functional team committed to improving business outcomes.

They use skills in facilitation, conflict management, fact-based influence, and change leadership to promote growth within the portfolio and support the adoption of LPM practices. They have the business and technical context competence to provide guidance and support related to the portfolio’s solutions. Additionally, they generate the communication and excitement needed to get others in the organization to accelerate achieving this strategy.

Key Collaborations

The VMO primarily collaborates with the other roles that drive the three dimensions of LPM (Figure 1). This includes enterprise executives, Business Owners, and Enterprise Architects. The VMO takes a holistic view across all LPM activities and represents the views of each value stream during LPM interactions through partnering and listening deeply to the LACE, Communities of Practice (CoPs), and the Solution and Agile Release Trains (ARTs) that do the work.  They have a strong role in facilitating data-driven decisions. These collaborations ensure informed investment decisions, a focus on improving the flow of the value streams within the portfolio, and a shared point of view on how to move forward together.

Figure 1. The VMO supports Lean Portfolio Management through key collaborations

Responsibilities

The responsibilities of the VMO can be categorized into the areas shown in Figure 2.

Figure 2. VMO’s areas of responsibility

Enabling Strategy and Investment Funding

Strategy and investment funding ensures the entire portfolio is aligned and funded to create and maintain the solutions to meet business targets. The VMO has a large part to play here, ensuring the coordination of multiple viewpoints through effective LPM practices and processes.

  • Coordinate the LPM Kickoff event – An LPM kickoff event is a common successful pattern that generates alignment and engagement among the various stakeholders at the start of the LPM journey. The VMO typically prepares and facilitates this event.  It ensures the entire portfolio, including those working within the ARTs and solutions trains, is ready for the upcoming changes. Topics often include:
    • Refining the LPM adoption roadmap and aligning on expected outcomes
    • Scheduling of the agreed-upon LPM events
    • Establishing a common PI cadence across the portfolio
    • Refining the portfolio backlog and reviewing current in-flight work
    • Establishing the portfolio kanban system
    • Agreeing to remove legacy policies and practices
  • Gathering critical inputs – Enabling the LPM adoption, the VMO works with the LACE and portfolio leaders to collect critical portfolio inputs, such as the current Strategic Themes, Portfolio Vision, and Lean Budget allocations. Communicating this information creates transparency and alignment across all the value streams in the portfolio.
  • Coordinate Lean Budget Guardrails – Lean Budget Guardrails describe the policies and practices for budgeting, spending, and governance for a specific portfolio. The VMO partners with enterprise executives and business owners to craft and enforce these guardrails, considering the current context of the portfolio. The VMO also coaches others, such as Solution and Product Management, to ensure these guardrails are understood and applied well.
  • Facilitate effective LPM events – The strategic portfolio review and portfolio sync ensure alignment between strategy, implementation, and investments. They are typically facilitated by the VMO and held on a cadence. Figure 3 compares these two events.
Figure 3. The VMO facilitates strategic portfolio review and portfolio sync events

The VMO ensures the purpose of these events is met by enabling the participants to effectively:

  • Share business context changes
  • Update the portfolio kanban, vision, and context
  • Gather and visualize progress
  • Communicate capacity and financial changes
  • Update financial tools and reporting
  • Ensure actions are updated
  • Ensure key attendees are committed

Coordinating Agile Portfolio Operations

Agile portfolio operations coordinate and support decentralized ART execution and enable operational excellence. Measuring and improving the portfolio operations across value streams is essential for any organization that wants to improve its performance. The VMO helps identify bottlenecks, optimize workflows, and make data-driven decisions about where to invest a portfolio’s resources.

  • Develop, harvest, and apply successful Team and ART execution patterns – With information gleaned from Scrum Masters/Team Coaches, Release Train Engineers(RTEs), Solution Train Engineers (STEs), the LACE, and CoPs, the VMO can optimize, address, and debug issues from Agile Teams and ARTs. The VMO can take a systems view and identify the bottlenecks and inefficiencies across all of the Portfolio’s value streams. Can any handoffs be eliminated? Can any tasks be automated? Can any approvals be streamlined?
  • Foster operational excellence – The VMO’s focus on operational excellence applies to continually improving efficiency, practices, and results of LPM. They provide visibility into the progress of portfolio epics, strategic themes, and value stream KPIs, creating transparency across the portfolio and enterprise. This helps ensure that everyone is aligned on priorities and that any scarce or expensive resources are used efficiently.
  • Cross-value stream coordination – As the Value Stream Coordination article describes, the VMO, alongside RTEs and STEs, is typically responsible for helping to manage dependencies that exist between value streams as well as exploiting the opportunities that exist in the interconnections. The VMO coordinates the shared schedule for the PI Planning, System Demo, and Inspect & Adapt events required to deliver Epics that span value streams.

Applying Lean Governance

Lean governance provides oversight of spending, audit, security, compliance, expenditure, measurement, and reporting. Lean governance collaboration and responsibilities require the active engagement of the VMO, the LACE, Business Owners, and Enterprise Architects. Done well, it allows enterprises to eliminate or reduce the need for traditional project-based funding and cost accounting, thereby reducing the associated friction, delays, and overhead.

  • Gather and analyze value stream measurements – The VMO measures and reports on the performance of the value streams in the portfolio. This data can be used to identify systemic improvement areas and consider progress over time. The VMO will use its expertise to bring information to portfolio syncs and other alignment sessions like Participatory Budgeting around the parts of the value streams that are delivering the most value to customers and the enterprise. This research helps the LPM invest in resources that will help to address bottlenecks and inefficiencies. The VMO, as an example, may suggest hiring new team members, purchasing new tools, or training to acquire new skills.
  • Align with other portfolios – The VMO, alongside other portfolio VMOs, provides the combined input needed for Enterprise Portfolio Management to keep multiple portfolios aligned.
  • Evolve supplier relationships with agile contracts – The VMO assists value streams that require supplier relationships to develop clear processes for navigating this change. The VMO helps coordinate Agile contracts that maximize economic value for all parties in the short and long term. With suppliers and contracting, they strive to create flexible and transparent approaches to investment that motivate all parties to build the best solution possible. The group also spreads learnings from successful relationships into other value streams.
  • Document and communicate the LPM governance model – Portfolio leaders and other enterprise leaders are responsible for crafting how LPM will be operationalized. VMO ensures the processes are communicated, aligned, and updated as they mature.

Supporting the Transformation

Communicating across organizational boundaries, pulling together data, and aligning the transformation roadmap to the next steps requires the right input from multiple stakeholders. The VMO supports the communication and collaboration between different leadership teams and departments as they transition to the new way of working.

  • Coordinate transformation with LACE – Together, the LACE and VMO ensure the SAFe Implementation Roadmap is applied across each portfolio. The LACE provides training and supports value execution on Agile practices, while the VMO helps ARTs and value stream to continuously measure and improve their value delivery performance via activities like value stream mapping.
  • Help identify and launch value streams – The VMO assists the LACE in launching and integrating new value streams within a SAFe portfolio and an LPM context. They also partner with portfolio leaders to inform conversations around emerging value streams with relevant data and collated market research.
  • Measure and grow the LPM core competency – The VMO supports those struggling with LPM practices by providing training on the skills and practices needed for organizational maturity. They focus on improving the effectiveness of LPM events and develop plans to improve transparency and flow. They also facilitate the LPM core competency assessments and use the resultant data to inform future improvements.
  • Onboarding new Epic Owners – VMO members coach and guide new Epic Owners through defining and communicating their vision and developing a Lean Business Case. The VMO supports the epic owners in coordinating with key stakeholders and monitoring and communicating the progress of their epics. Since new epic owners will often emerge as the work progresses through the portfolio kanban system, sometimes with no previous SAFe or LPM background, this support is critical to maintaining flow and a positive culture across the portfolio.

Organizational Model

In practice, VMOs can be organized for success in a few different ways. The right way for an individual organization will depend on what order they have implemented their transformation and where they are in their journey towards LPM. Most often, a VMO is created after multiple ARTs have been launched as an offshoot from the existing LACE. This is done to begin focusing on applying LPM practices and value stream management. Some existing LACE members, alongside a few existing senior program managers, are often a starting point for the VMO team.

Another pattern is that the VMO was created as part of the guiding coalition for the transformation itself, often out of an existing PMO. This often occurs when LPM practices are the initial focus before launching ARTs. Transitioning the PMO to a VMO, as well as forming a LACE early on, can enable a breadth of change to happen more quickly while maintaining focus on the connected vision for change. This pattern is also effective at immediately helping individuals across the organization practice the new working methods required to move to value-focused delivery.

When multiple portfolios are in place in the enterprise, a hub-and-spoke model for VMOs may be utilized. In this situation, a central enterprise portfolio management VMO works alongside multiple VMOs for each portfolio.

Last Update: 30 October 2023