1、The importance of value streams in the age of AIKPMG International|KPMG.Make the Difference.ContentsWhat are value streams?04The role of businesssupport services08Creating value-driven,customer-centric experiences09Designing for value-driven customer-centricity 12How KPMG can help14 2024 Copyright o

2、wned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.The importance of value streams in the age of AI|2In a rapidly evolving business environment,organizations should continually seek ways to enhance value creation,impr

3、ove competitiveness,and drive cost efficiency.Theadvance in artificial intelligence(AI)has the potential to rapidly accelerate value creation through AI-powered value stream analysis and AI-enabled continuous improvement.By focusing on value streams and the services that support them,organizations c

4、an achieve operational excellence,deliver superior customer experiences,and drive sustainable growth.Value streams provide a structured framework for delivering core products and services efficiently.The concept of value steams is rooted in Lean,Six Sigma andAgile methodologies and is the series of

5、steps involved in delivering products or services to customers.AI can significantly accelerate the cost,time and quality benefits derived from value streams by enhancing data integration and analysis,enabling real-time monitoring and insights,and automating and optimizing processes.AI is also provin

6、g to be a catalyst for customer-centric transformation,revolutionizing the way organizations create value for customers.AI can also be the stimulus for transforming business models and creating new industrial ecosystems.From predictive analytics to personalized recommendations,AI-powered tech soluti

7、ons have the potential toreshape every aspect ofthe value creation process.Organizations need to answer some fundamental questions.What do your customers want?What does your brand stand for?And how do you deliver value for your customers?The execution of AI-enabled transformation cant just happen.It

8、 must be focused,considered,understood,and then streamlined right through the business.Jenny RochePartner,Digital Transformation Lead KPMG Australia 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.T

9、he importance of value streams in the age of AI|3What are value streams?Value streams represent the end-to-end processes that deliver value to customers and the organization.They encompass the activities required to transform inputs into valuable outputs.Whether its developing a product,providing a

10、service,or delivering a tech solution operational value streams map out the flow ofwork from trigger to delivery.How an organization creates value for itself and its customers has become a preoccupation for C-suite members.In a survey of 160 companies in six countries that are focusing on value stre

11、ams 80%of C-suite executives said they had identified value streams for key products and services.Yet only 35 percent have developed strategies for incorporating AI into value streams.11 KPMG International survey on April 2024 of 160 C-level executives from Australia,Canada,Germany,India,US,and the

12、UK across the banking,insurance andhealthcare sectors involved with key decisions regarding their companys value streams.2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.The importance of value strea

13、ms in the age of AI|4of C-suite executives state that value stream mapping has positively impacted organizational effectiveness.2Value streams are present in every business.For example,in financial services the value streams for a loan may look like this:Value streams cut across departments and func

14、tions,and each contains the steps necessary to convert the trigger to the delivery of value.For the loan example they would include:The people who perform these steps,for example the marketing teams that promote the product or the finance team that evaluates the suitability of the customer for a loa

15、n.The AI-enabled technology solutions they use,for example the systems that show what type of loan can be provided or what interest can be returned.The flow of information and materials that are necessary,for example the loan type and how it will be paid back.Streamlining these processes with AI can

16、 help to eliminate waste,reduces lead times,and enhances overall efficiency.Its like fine-tuning the engine of a well-oiled machine,ensuring that every cog and gear works seamlessly together to drive success.When AI is added to the mix it has the potential to supercharge the loan“engine”.AI can auto

17、mate repetitive tasks within value streams,allowing for faster processing and reduced human intervention.By quickly identifying patterns and insights within the data,AI enables organizations to make data-driven underwriting decisions more rapidly,leading to improved customer outcomes.By leveraging p

18、redictive analytics,organizations can detect potential fraud or anticipate potential issues or opportunities and take proactive action.AI algorithms can continuously monitor and analyze performance metrics within value streams to identify areas for improvement.By providing real-time feedback and ins

19、ights,AI enables organizations to iterate and optimize their loan processes more effectively,leading to ongoing enhancements in process efficiency and customer experience quality.LoanneededAttractcustomerCompleteapplicationUnderwriteAwardloanRepayloanLoanrepaymentwith interest70%2 KPMG International

20、 survey on April 2024 of 160 C-level executives from Australia,Canada,Germany,India,US,and the UK across the banking,insurance and healthcare sectors involved with key decisions regarding their companys value streams.2024 Copyright owned by one or more of the KPMG International entities.KPMG Interna

21、tional entities provide no services to clients.All rights reserved.The importance of value streams in the age of AI|5 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.The importance of value streams

22、in the age of AI|6AI-powered value streamsOne of the worlds largest payment providers is utilizing AI-powered value streams,tapping into a host of data from across its customer ecosystem,encompassing end users of credit cards through to merchants and banking partners.Every single time a card is used

23、 around the world,it uses a machine-learning-powered fraud detection model to monitor transactions in real time,generating a fraud decision in milliseconds.3Users also benefited from AI-driven offers,personalized opportunities to save money on purchases,and data scientists used AI to develop algorit

24、hms that determined in microseconds the most relevant offers to put in front of a customer.The provider estimates that customers saved over US$7 million in its first year of operation.3 https:/ study 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities p

25、rovide no services to clients.All rights reserved.The importance of value streams in the age of AI|6What are the sources of organizational value with AI?Value is created through innovation,technology,operational excellence and an engaged workforce,for example:Delivering high-quality AI-enabled produ

26、cts or services that are reliable,consistent,and meet or exceed industry standards.Innovating and developing new products,services or processes that address unmet needs or improve existing solutions.Reducing cycle time with AI,getting products to market quickly and efficiently.Providing exceptional

27、customer experiences with AI,that meet or exceed customer expectations.Reshaping the workforce of the future.Augmenting roles through a combination of automation,skill evolution,and the need to collaborate effectivelywith AI tools.Improving operational efficiency with AI reducing costs,improving pro

28、ductivity,and optimizing supply chain management to enhance profitability.Managing compliance and risk using AI,ensuring the organization acts responsibly and ethically.For many organizations identifying and defining their operational underlying value streams can be problematic.AI can help here too.

29、AI can identify patterns and relationships within the organizations data that indicate value streams.AI models can build on techniques such as clustering,classification,regression,or process mining to surface and reveal critical value streams.It is important to focus on value and to be value-driven.

30、This starts with defining what value is and where and how value is created in the business.Organizations need to grapple with data,analytics,automation,workflows,aligning the workforce and ensuring they have the right skills to collaborate effectively.Focusing first on operational value streams and

31、their supporting capabilities provides a structured approach to creating and delivering value across all of these areas.Adrian ClampGlobal Head of Connected Enterprise KPMG International 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no ser

32、vices to clients.All rights reserved.The importance of value streams in the age of AI|7The role of business support servicesWhile operational value streams focus on delivering core products or services,business support services,enhanced with AI,can provide the necessary support and infrastructure to

33、 facilitate value creation.These services include examples like order to cash,procure to pay,target to lead and invoice generation and payment collection.When services are optimized and aligned with operational value streams,they can become catalysts for value creation.By investing in automation,sta

34、ndardization,and continuous improvement within support services,organizations can minimize bottlenecks,reduce overhead costs,and enhance overall agility.Using value streams to optimize costsValue stream mapping allows organizations to identify and categorize various types of waste within their proce

35、sses.It can also prioritize AI investments that reduce costs associated with idle capacity,underutilized resources,and unnecessary expenditures.It helps organizations identify bottlenecks,delays,and non-value-added activities.Byremoving unnecessary steps,organizations can reduce cycle times and incr

36、ease productivity.By examining the value stream maps organizations can create“Benefits Hypotheses”.These are potential areas where cost can be removed.By launching a minimum viable product(MVP),organizations can dual run processes and validate whether in fact the new way of working is delivering the

37、 cost benefit envisaged.However,value stream mapping is not a one-time exercise;its an ongoing process of continuous improvement.By regularly reviewing and refining value streams,organizations can identify new opportunities for cost optimization and drive sustainable cost savings over time.4 KPMG In

38、ternational survey on April 2024 of 160 C-level executives from Australia,Canada,Germany,India,US,and the UK across the banking,insurance and healthcare sectors involved with key decisions regarding their companys value streams.84%of C-suite executives believe that managing value streams has driven

39、cost efficiencies across the organization.4 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.The importance of value streams in the age of AI|8Creating value-driven,customer-centric experiencesCustom

40、er journeys within the value stream record the sentiment of the customer as they experience touchpoints at different stages enabling the identification of pain points and blockages.Value streams and customer journeys are therefore closely linked,and value streams define the steps required to deliver

41、 value to customers,while customer journeys provide insight into how customers experience those steps.Employee journeys also have a role to play in aligning the right skills and competences to each touchpoint.Employees execute tasks and activities that directly contribute to creating the value promi

42、sed tocustomers.By mapping employee journeys into both value streams and customer journeys organizations can understand how AI can help improve employee experiences,and AI-driven insights and AI-orchestrated actions can contribute to delivering value and enhancing the overall customer experience.Col

43、lectively value streams,employee journeys and customer journeys when aligned together,ensure that the organization is meeting the needs and expectations of their employees and their customers,improving productivity,efficiency,effectiveness,and ultimately,customer satisfaction.5 KPMG International su

44、rvey on April 2024 of 160 C-level executives from Australia,Canada,Germany,India,US,and the UK across the banking,insurance and healthcare sectors involved with key decisions regarding their companys value streams.81%of executives state that focusing on value streams has positively impacted customer

45、 satisfaction.5 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.The importance of value streams in the age of AI|9Organizational alignment along value streamsA global automotive business had devolve

46、d over time into a series of functional mini businesses,and each had become a silo leading to a fragmented view of the customer and their needs.The organization started its transformation by implementing a lean four-step problem-solving process to understand how a lean supply chain affects the produ

47、ct quality and cost.Value stream mapping was then used to identify the value-added(VA)and non-value-added(NVA)activities as well as their impact on lead time in the supply chain from the unloading of the raw materials to the shipment of the final vehicle.The result was shorter lead times,higher qual

48、ity,and lower cost.Data was central to their value stream transformation;supply chain data,vehicle data,lifestyle data and usage data were all needed to deliver value for the customer and the organization.This meant this business needed to connect across silos and have a 360-customer view.Achieving

49、this required a clear definition of the value streams that spanned the life cycle and the creation of enterprise-wide capabilities independent of functions and supporting technology that provided a single version of the truth.66 AI and the orchestrated customer experience KPMG GlobalCase studyThe im

50、portance of value streams in the age of AI|10 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Modular technologies are improving value streams and accelerating speed to valueNew technologies like AI

51、 are increasing the flexibility of organizations by providing the tools and platforms necessary for modularization,automation,and rapid integration.In fact,leading analysts contend that the organization of the very near future will be“composable”comprised of a set of interchangeable components that

52、can be reconfigured to meet evolving business needs and market dynamics.The move to the cloud and widespread adoption of microservices is breaking down monolithic IT applications into small,independently deployable services that can be rapidly developed and scaled.This architecture promotes modulari

53、ty and allows businesses to quickly assemble and reassemble applications to meet changing requirements.These organizations have learned that as they modularize their technology infrastructure,they can also modularize their value streams,breaking down value streams into smaller,more manageable compon

54、ents or stages,each with clear inputs,outputs,and responsibilities.These can then be reconfigured quickly when new opportunities arise,or customer needs change.Content streaming organizations exemplify a new type of business,one where the front,middle and back-office operations are connected through

55、 value streams that in turn are built on a modular IT architecture,which when coupled with AI allows them to deliver highly personalized experiences to users.Such organizations have been early adopters of this revolutionary microservices architecture.Each of these services operates independently and

56、 communicates with each other through interface APIs creating a symphony of small,independent services all working together.Updates and changes are easier to implement,and new applications can be developed in record time through reusing existing microservices,leading to much more adaptive and respon

57、sive organizations.7 KPMG International survey on April 2024 of 160 C-level executives from Australia,Canada,Germany,India,US,and the UK across the banking,insuranceand healthcare sectors involved with key decisions regarding their companys value streams.of executives state that silos get in the way

58、 of delivering value to customers and 77percent are actively breaking down silos to deliver greater value to customers.779%2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.The importance of value str

59、eams in the age of AI|11 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Designing for value-driven customer-centricityWhen looking at value creation and customer-centricity it is helpful to do so a

60、t three levels:Enterprise levelAt this level value streams are the key enabler.There will be multiple value streams supporting the portfolio of products and services that when defined and optimized,will enable the rapid flow of value through the organization.Operational levelAt this level it is abou

61、t building and connecting capabilities in a way that enables the smooth functioning of the operational value streams and the customer journeys.The focus is on removing pain points by optimizing and enhancing capabilities.Technology levelIt is vital to identify and then implement the right technology

62、 solutions for digitizing the organization;this should span data and analytics,operational systems,customer engagement systems and back-end enterprise support systems.A focus will be required on cybercrime,risk management and controls.Organizations have limited time,resources and capital;not everyth

63、ing can be changed at once,so prioritization decisions need to be made.It makes sense to focus on those areas that lead to greatest value for the organization and the customer.2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to cl

64、ients.All rights reserved.The importance of value streams in the age of AI|12Improving the flow of value across the end-to-end value streamTo fully harness the advantages of operational value streams and business support services,organizations should prioritize integration and collaboration across a

65、ll functions.Siloed functions,disjointed processes and isolated capabilities can significantly impede value delivery and hinder organizational agility.Establishing these crucial connections entails linking value streams and business support services to core business capabilities.Previous research co

66、nducted jointly by KPMG and Forrester has outlined eight capabilities that delineate the operational framework for modern organizations.8 These capabilities encapsulate the requisite skills,knowledge,processes,architecture and resources necessary for executing strategic objectives and delivering val

67、ue to customers.of executives state that they know where value is created and lost in their customer journeys.973%Organizations that diligently cultivate all eight capabilities typically yield twice the value compared to those that neglect them.9 KPMG International survey on April 2024 of 160 C-leve

68、l executives from Australia,Canada,Germany,India,US,and the UK across the banking,insurance and healthcare sectors involved with key decisions regarding their companys value streams.Insight-driven strategies and actions:Harness data,advanced analytics and actionable AI-driven insights with real-time

69、 understanding of the customer and the business to shape integrated business decisions.Innovative products and services:Develop compelling customer value propositions on price,products and services using AI to engage the most attractive customers and drive profitable growth.Experience centricity by

70、design:Design seamless,intentional AI-orchestrated experiences for customers,colleagues and partners,supporting the customer value propositions and delivering business objectives.Seamless interactions and commerce:Interact and transact with customers and prospects across marketing,sales and services

71、 using AI in a way that achieves measurable results.Responsive operations and supply chains:Operate the business with efficiency and agility,using AI to fulfil the customer promise in a consistent and profitable way.Integrated partner and alliance ecosystem:Engage,integrate and manage third parties

72、through AI orchestration to increase speed to market,reduce costs,mitigate risk and close capability gaps to deliver the customer promise.Aligned and empowered workforce:Build a customer-centric organization and culture that inspires people to deliver on the customer promise and drive up business pe

73、rformance using AI.Digitally enabled technology architecture:Create intelligent and agile services,technologies and AI platforms,enabling the customer agenda with solutions that are secure,scalable and cost effective.This concerted effort leads to enhanced automation,advanced utilization of data and

74、 analytics,and the identification of key areas where AI and digitization can generate the most significant value.8 A commissioned study conducted by Forrester Consulting on behalf of KPMG,September 2018.Base:1,299 professionals involved with customer-centric strategy decisions.The importance of valu

75、e streams in the age of AI|13 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.How KPMG can helpAI is key to unlocking exciting new opportunities and new revenue streams to drive sustainable growth.A

76、t KPMG we believe that AI will be transformative,generating new business models,transforming industries and reshaping the workplace of the future.We are committed to helping organizations navigate the opportunities,challenges and long-term impact of AI and realize its value.By combining our deep ind

77、ustry and functional expertise with the right technology,we can help you prioritize where to unlock business value and harness the power and potential of AI with speed,agility,and confidence.Identifying sources of value,mapping value streams,customer journeys,and employee experiences requires an int

78、egrated approach one that enables line of sight between the aspirational direction set by the business strategy and how value is created,and enabled by AI,day to day,interaction by interaction.Managed services can also play a crucial role in helping value creation acceleration and enabling organizat

79、ions to harness the full potential of AI.By providing domain experience and a focus on continuous improvement,managed services can help AI models to remain effective and deliver ongoing value,empowering organizations to optimize value streams through data-driven insights,automation of repetitive tas

80、ks,and predictive maintenance.Continual innovation and customer-focused value creation are essential in todays competitive business environment KPMG professionals strive to leave our clients with the tools to always stay market relevant with a mature capability around organizational agility.Rick Ros

81、e Americas Region Connected Enterprise Lead and Commercial,Principal,Advisory KPMG in the US 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.The importance of value streams in the age of AI|14“Futur

82、e of”:At the strategic level KPMG publishes“Future of”reports for individual sectors.These highlight key trends,value-creation opportunities and potential winning business models.PoweredDrive outcome-driven functionaltransformation.TrustedBuild and sustainthe trust of yourstakeholders.ConnectedRebui

83、ld your business,end to end,aroundyour customers.Scalable Managed ServicesTransformation Journeyquickly and confidently.Unlock financial valueElevateKPMG digital transformation suiteElevateThe KPMG Elevate toolset provides a structured approach to value identification.Thishelps unlock value quickly.

84、ConnectedConnected Enterprise is KPMGs customer-centric,agile approach to digital transformation.Preconfigured sector-specific enablers include:Value streams:Identifying and mapping Connected Value Streams.Customer journeys:A visual tool that depicts the sentiment of customers atevery stage and ever

85、y touchpoint as they experience the end-to-end valuestream.Capabilities:The eight key capabilities that define successful transformations.Investing in these eight capabilities can result in a connected,customer-centric organization.Blueprints:These depict a logical architectural model of all the fut

86、ure capabilities,sub-capabilities and technology architecture of the enterprise.Products:The AI-driven technology products that enable the journeys and Value Streams.PoweredPowered Enterprise includes KPMGs Target Operating Model,Powered Technology and Powered Evolution.Operating Model assets within

87、 the KPMG Target Operating Model(TOM)enable accelerated delivery of a business capability.TrustedKPMGs Trusted Imperative embeds a balanced approach to risk and regulation into every part of your organization,while securing stakeholder confidence.Whatever stage you are at on your transformation jour

88、ney,KPMG professionals can help you find the right model,and build the practical steps to get you there.Transforming for a future of valueKPMGs digital transformation suite is designed to help clients get to a more productive and sustainable future.The solutions are designed to address different cli

89、ent challenges and different parts of a business or an operating model.Each one contains rich insights and is underpinned by our leading transformation methodology.These solutions include:2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no se

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95、rtance of value streams in the age of AI Publication number:139322-G Publication date:May 2024ContactsAdrian Clamp Global Head of Connected Enterprise KPMG International adrian.clampkpmg.co.ukRick Rose Americas Region Connected Enterprise Lead and Commercial,Principal,Advisory KPMG in the US Silvester Liu ASPAC Region Connected Enterprise Lead and Partner KPMG China Urvashi Roe Global Head of Sales Enablement Connected Enterprise KPMG International urvashi.roekpmg.co.uk