TOGAF 10 Value Streams: Identification & Real-World Examples from Huawei & SAP

What Is a Value Stream?

A value stream describes how an enterprise delivers expected value to stakeholders through a series of end-to-end activities. For example, when a customer purchases equipment from a manufacturer, the process spans sales negotiation, quoting, contracting, production, delivery, acceptance, and payment — involving sales, R&D, procurement, manufacturing, logistics, and finance. From a departmental view these are separate tasks; from the customer view they form a complete value realization process.

TOGAF's Series Guide: Value Streams (G178) defines a value stream as a sequence of value stages , each with its own goal and interim outcome. An order fulfillment value stream might be: Customer Demand → Commercial Quotation → Order Confirmation → Order Fulfillment → Product Delivery → Settlement & Collection.

Four Core Elements of a Value Stream (TOGAF G178)

Name – What goal does this value stream achieve?

Description – What activities and business scope are involved?

Stakeholder – Who triggers the value stream by expressing a need?

Value – What final outcome is desired?

Each value stage can be further described by six attributes: name, description, participants, entry criteria, exit criteria, and stage value. Entry criteria define when a stage starts; exit criteria define the state that marks completion; stage value states what that stage creates.

Important: A value stage is not a single operational step in a business process. It represents a milestone in value creation; the detailed activities, role assignments, and execution rules are expressed through business processes.

Relationship Among Value Streams, Business Capabilities, and Business Processes

The article presents a comparison to clarify the distinct questions each concept answers:

Value Stream – Question: What value is ultimately created for the customer? Example: Complete order delivery.

Value Stage – Question: Through which stages does value form progressively? Example: Quotation, Order Confirmation, Delivery.

Business Capability – Question: What capabilities must the enterprise possess? Example: Customer Management, Order Management, Supply Chain Management.

Business Process – Question: How is the concrete work carried out? Example: Order Processing, Inventory Allocation, Production Scheduling.

Organization – Question: Who bears the responsibilities? Example: Sales Dept, Production Dept, Finance Dept.

The relationship is direct: Value streams describe the value creation process, business capabilities provide necessary support, and business processes handle concrete execution. For instance, the "Order Fulfillment" value stage may require Order Management, Inventory Management, and Supply Chain Management capabilities, while involving Production Planning, Inventory Allocation, and Warehouse Outbound processes. A value stage can be supported by multiple capabilities, and a capability can serve multiple stages — a many-to-many relationship that also applies between value stages and business processes.

How to Identify Value Streams: Four Steps from TOGAF G178

Step 1: Identify Stakeholders and Their Needs

List key stakeholders — external (customers, suppliers, partners) and internal (employees, managers, other roles). Different stakeholders have different needs and thus different values:

Customers want compliant products/services.

Suppliers want completed transactions and timely payment.

Hiring managers want qualified candidates.

Executives want accurate, timely business information.

Answer: Who raises the need? What problem do they want solved? What result do they expect?

Step 2: Derive Candidate Value Streams from Value Demands

From each stakeholder need, trace the complete set of activities required to fulfill it. For a customer buying equipment, the activities are: demand identification, commercial quotation, order confirmation, order fulfillment, product delivery, settlement & collection. These collectively realize the customer's purchase-and-delivery value, yielding a candidate value stream named with a verb-noun pattern (e.g., "Acquire Retail Product", "Recruit Employee").

Step 3: Prioritize External Value Streams, Then Internal

TOGAF G178 recommends starting with external value streams, especially customer-facing ones. Once customer value is clear, the internal activities and capabilities needed to support it can be identified — e.g., R&D, procurement, manufacturing, logistics for product delivery; HR, finance, IT for internal support. This prevents internal value streams from becoming isolated departmental function lists.

Step 4: Decompose into Value Stages and Validate

For each candidate value stream, break it into value stages and check three questions:

Does each stage have a clear goal and interim outcome?

Are there logical entry and exit criteria between stages?

Do all stages jointly serve the final value realization?

Also verify the abstraction level: "Customer Order Delivery" is a value stream; "Quotation, Order Confirmation, Fulfillment, Delivery" are value stages; "Order Entry, Inventory Allocation, Outbound Operation" are business processes or finer activities. If a diagram shows departments, roles, and operational steps, it is likely an org chart or process map — not a value stream model. A true value stream model shows how stakeholders obtain complete value with each stage delivering explicit value outcomes.

After identification, map value stages to business capabilities to analyze which capabilities support key stages and where gaps exist.

Enterprise Practice: Huawei and SAP

Huawei: IPD and LTC as Cross-Departmental Process Domains

Huawei's corporate-level process architecture features two representative domains:

IPD (Integrated Product Development)

Goal: Deliver competitive products and solutions to customers. Product development spans marketing, R&D, procurement, manufacturing, sales, and service. Marketing gathers customer needs, R&D designs products, procurement secures materials, manufacturing organizes production, sales expands markets, service provides support. Without cross-department coordination, products may be designed but not manufacturable, or may not match customer needs. IPD uses company-level processes to orchestrate these cross-functional activities around final market value.

LTC (Lead to Cash)

Focus: The full journey from customer lead to final delivery and cash collection. Sales signing a contract is only one step; afterward, production must be organized, delivery arranged, acceptance completed, invoicing and collection executed. If delivery is late or settlement fails, the business process is incomplete. LTC manages the overall business result from lead to cash, not just sales booking.

SAP: Five End-to-End Business Processes

SAP organizes enterprise operations around five major end-to-end processes:

Lead to Cash (线索到回款) – From customer lead, through sales, to delivery and collection.

Source to Pay (采购到付款) – From procurement demand, supplier sourcing, to goods receipt and payment.

Design to Operate (设计到运营) – From product design, through production, to delivery and operations.

Recruit to Retire (招聘到退休) – Employee lifecycle from hiring, onboarding, to departure or retirement.

Record to Report (记录到报告) – From business transaction recording to financial close and reporting.

These five lines cover critical business activities:

Lead to Cash: Sales obtains order → Supply chain delivers → Finance invoices and collects.

Source to Pay: Procurement raises demand → Supplier selection, purchasing, receipt, invoice verification, payment.

Design to Operate: R&D completes design → Production, delivery, ongoing operations.

Recruit to Retire: Hiring, onboarding, training, role management, eventual exit.

Record to Report: Business transactions recorded, accounted, closed, forming management reports.

SAP's Signavio Process Navigator provides pre-defined process content to help enterprises with process discovery and implementation.

What the Two Practices Reveal

Huawei emphasizes corporate-level process architecture, process accountability, and governance; SAP emphasizes organizing end-to-end business processes and aligning them with software solutions. Commonality: Enterprise business activities must be organized around complete business outcomes, not managed separately by departmental responsibilities or system boundaries.

This is the core significance of value streams for enterprise architecture: start from customer and stakeholder needs to identify value streams; then define the business capabilities each value stage requires; finally implement through business processes, organization, and information systems. Value streams provide the value perspective of business architecture; business capabilities and processes answer what the enterprise must be able to do and how to execute. Distinguishing these objects clearly enables true understanding of business architecture.

References

The Open Group: TOGAF Series Guide: Value Streams (G178).

The Open Group: The TOGAF Standard, 10th Edition Reference Cards .

Huawei: Corporate Governance .

SAP: Describing the Major Business Processes within SAP Business Suite .