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What is Value Stream Mapping and How Does it Help?

Todays’ corporate biosphere isn’t static, it is continuously evolving. In the race for being the best vendors to their clients, organizations are trying new ways (though old) to stay ahead. With Agile and Lean paving the way, the Value Stream is a powerful tool that can help teams in numerous ways. In this article we attempt to help you understand about value stream, its definition, benefits and how you can apply it in your work area.What is a value stream?A value stream is a set of events/actions needed to create a flow of value that can be realized by the customer and contains both value-added and non-value added activities. It contains all the steps from the start (of value creation) to the end (delivery to the client), where ‘Value’ is defined as the tangible or non-tangible benefit that the customer receives for return on investment.As per Scaled Agile Framework, “Value Streams represent the series of steps that an organization uses to implement Solutions that provide a continuous flow of value to a customer.”History of value stream mappingIt is difficult to trace down the history of value stream mapping and to know when it was invented but there's a reference of value stream mapping in several processes of Toyota. The book ‘Learning To See’, co-authored by John Shook and Mike Rother and published by the Lean Enterprise Institute, too talked about the material and information flow extensively reachable and relevant outside of Toyota. Though Toyota never used the term ‘Value Stream’, they did invest a lot in creating flow across processes.Over the last two decades, value stream mapping has evolved and refined its ways through the IT industry. The first introduction to the term “value stream” was done by the authors - James Womack, Daniel Jones, and Daniel Roos, in the book “The Machine That Changed the World”. In the present world, value stream mapping is linked with both Lean and Six Sigma methodologies as they highlight the removal of waste.What is the purpose of value streams?Value Stream helps in identifying each component in the flow by defining a visual that can represent the ‘Start – To – End’ pipeline delivering value to the customer. It helps to define the flow and its counterflow ensuring a complete safety net in deliverables. Value Streams are composed of stages where each stage has a set defined ‘value’ as a deliverable that gets accrued at the end. It is a great method to focus on the benefits that can be attained through efficient effort consumption. Value stream provides a great way of defining the ‘what’ and ‘how’ in delivering solutions to the end customers.Types of Value StreamsWhile defining a value stream, it is important to understand the ‘value’ that is to be delivered. With a clear understanding of the deliverable, it gets easy to define a value stream around it. There is no set standard to create a value stream and it is unique to each organization.There are two types of Value streams:Operational Value Stream - It consists of a series of steps used to deliver products and services to a client. It delivers end-client value or solutions created by the development value streams.Development Value Streams – It consists of steps or phases to build and deliver a solution to the Operational Value Stream and ensure its smooth execution.Value Stream KPIsValue Stream KPIs(Key Performance Indicators) are the measurable actions to assess the performance of a value stream. It helps to check if the Value stream is working in the way it was projected. The KPIs differ for each value stream and serve the individual purpose for every stream. The KPIs form different parameters depending upon the type of value being delivered. Each Value stream defines its own set of KPIs to evaluate the constant venture.How to identify a value streamWith smaller organizations, it is easy to define the value streams as the complexity is quite low as compared to large setups. While defining value streams for larger organizations, everyone involved must understand the ‘why’ or ‘the customer’s need’. Identifying a Value Stream requires an understanding of the flow and how to optimize it for consistent better delivery. As per the scaled agile framework, there are certain steps to identify a value stream:Identify the Operational Value Streams – In a large setup, identifying the Operational Value Stream is not an easy task. It involves an understanding of the business goals and an ability to visualize the value flow to the customer.Identify the Solutions the operational value streams use to provide to customers – With the identification of Operational Value Stream steps, the next action is to identify the solution that can be developed to support the stream and the customer.Identify the people who develop and support the solutions – At this step, the people needed in the stream are identified who will build the solution. The estimate is provided in terms of numbers and the location depending on the value stream type.Identify the Development Value Streams that build the solutions – This step is about identifying the development stream activities and the people involved in creating the solution.Add the people needed to build the full business solutionRealize development value streams into ARTs – The last step is to define the ARTs. There can be multiple smaller value streams running in a single Agile Release Train(ART).What is value stream mapping?A Value Stream Map is an easy yet powerful visual tool that assists in visualizing the flow. It allows generating a comprehensive visualization of all end-to-end steps in the process. A value stream map shows all the significant phases required to deliver value from raw to finished goods. It is a Lean tool that uses flowcharts with boxes, arrows, and process flows to represent the system. It not only provides a real-time update on the flow but also helps in removing the waste and optimizing the flow.How does value stream mapping help?For decades, Value Stream Mapping has been supporting industries to realize ‘value’ both ways. Let’s look at some of the points that make it a ‘go-getter’:Detect waste - Value-stream mapping intends to identify and eliminate "waste" which in turn grows the efficacy. There can be multiple types of wastes in the system such as Overproduction, Waiting, Transportation, excess stock, etc.Identify bottlenecks – One of the very obvious benefits of Value Stream Mapping is the identification of bottlenecks. With Visual flow, one can easily check for the blockages in the system. It helps the whole organization to realize where the bottlenecks are and their impact on the value being delivered to customers.Make processes efficient – Yet again, with visual help, one can know the current state just by looking at it. With reduced waste and bottlenecks, the organizations can perform better.Improve cross-functional collaboration – With both Operational and Development teams working closely, it enhances the overall high-level collaboration. But at the team level, value streams help in building a cross–functional collaborative environment which sets the tone for enterprise agility.Improve end- Product qualityHow to map your first value stream of software development?Creating your very own first value stream can be an exciting task that requires understanding on the value, the need, and the result. Every organization or individual has their way of doing it. Here, I will just lay out a basic format that can help with initial value stream creation: Creating a Value Stream can be a simple task that includes:Identification of all the end-to-end steps in the entire process. Make sure that you cover all the activities and keep it simple. You can begin with scribbling whatever comes to your mind in regard to the process and can rearrange and refine. Data is the Key – Try to Gather data around each step, note the usual time it takes to complete a piece and the typical wait time between each step. Follow by a minimal flow chart that represents the “value add” times for each step and the “wait times” between each step.  Lastly, and most importantly, look for the major holdups in the flow and establish the reason for the delay. Once you have an understanding of the data, delays, and bottlenecks, etc. start creating a plan to decrease the wait.    Act on the plan you just created!Measuring the ResultsWith all the processes and mapping in place, it is all the more important to measure the ROI. Metrics help in continuous improvement. Like for others, Value Stream Mapping(VSM) also has a set of metrics that can be used to identify bottlenecks and waste in the system. Let us look at some of them:Process Time – Total time required by a single step within a process. In simple words, the time it takes to finish a single unit of work.Lead Time  – The elapsed time between the task creation and work completionCycle Time – The elapsed time between the moment the team starts its work till the completion. Work-in-Process  – Limiting the maximum amount of work that can be done in each status of a workflow. Flow Load – Total Number of work items with the state as active or waitingConclusionIn this article, we talked about value streams being the set of activities one needs to perform to deliver value to a customer. To sum up, value stream maps are an easy and efficient way to identify bottlenecks in any process flow. Being visual, they make it easy for everyone to understand and agree on the remediations. It is a significant tool for achieving continuous improvement with collaboration. 

What is Value Stream Mapping and How Does it Help?

4K
  • by Deepti Sinha
  • 05th Mar, 2021
  • Last updated on 25th Mar, 2021
  • 4 mins read
What is Value Stream Mapping and How Does it Help?

Todays’ corporate biosphere isn’t static, it is continuously evolving. In the race for being the best vendors to their clients, organizations are trying new ways (though old) to stay ahead. With Agile and Lean paving the way, the Value Stream is a powerful tool that can help teams in numerous ways. In this article we attempt to help you understand about value stream, its definition, benefits and how you can apply it in your work area.

What is a value stream?

A value stream is a set of events/actions needed to create a flow of value that can be realized by the customer and contains both value-added and non-value added activities. It contains all the steps from the start (of value creation) to the end (delivery to the client), where ‘Value’ is defined as the tangible or non-tangible benefit that the customer receives for return on investment.

As per Scaled Agile Framework, “Value Streams represent the series of steps that an organization uses to implement Solutions that provide a continuous flow of value to a customer.”

What is a value stream?

History of value stream mapping

It is difficult to trace down the history of value stream mapping and to know when it was invented but there's a reference of value stream mapping in several processes of Toyota. The book ‘Learning To See’, co-authored by John Shook and Mike Rother and published by the Lean Enterprise Institute, too talked about the material and information flow extensively reachable and relevant outside of Toyota. Though Toyota never used the term ‘Value Stream’, they did invest a lot in creating flow across processes.

Over the last two decades, value stream mapping has evolved and refined its ways through the IT industry. The first introduction to the term “value stream” was done by the authors - James Womack, Daniel Jones, and Daniel Roos, in the book “The Machine That Changed the World”. In the present world, value stream mapping is linked with both Lean and Six Sigma methodologies as they highlight the removal of waste.

What is the purpose of value streams?

Value Stream helps in identifying each component in the flow by defining a visual that can represent the ‘Start – To – End’ pipeline delivering value to the customer. It helps to define the flow and its counterflow ensuring a complete safety net in deliverables. Value Streams are composed of stages where each stage has a set defined ‘value’ as a deliverable that gets accrued at the end. It is a great method to focus on the benefits that can be attained through efficient effort consumption. Value stream provides a great way of defining the ‘what’ and ‘how’ in delivering solutions to the end customers.

Types of Value Streams

While defining a value stream, it is important to understand the ‘value’ that is to be delivered. With a clear understanding of the deliverable, it gets easy to define a value stream around it. There is no set standard to create a value stream and it is unique to each organization.

There are two types of Value streams:

  1. Operational Value Stream - It consists of a series of steps used to deliver products and services to a client. It delivers end-client value or solutions created by the development value streams.
  2. Development Value Streams – It consists of steps or phases to build and deliver a solution to the Operational Value Stream and ensure its smooth execution.

Value Stream KPIs

Value Stream KPIs(Key Performance Indicators) are the measurable actions to assess the performance of a value stream. It helps to check if the Value stream is working in the way it was projected. The KPIs differ for each value stream and serve the individual purpose for every stream. The KPIs form different parameters depending upon the type of value being delivered. Each Value stream defines its own set of KPIs to evaluate the constant venture.

How to identify a value stream

With smaller organizations, it is easy to define the value streams as the complexity is quite low as compared to large setups. While defining value streams for larger organizations, everyone involved must understand the ‘why’ or ‘the customer’s need’. Identifying a Value Stream requires an understanding of the flow and how to optimize it for consistent better delivery. As per the scaled agile framework, there are certain steps to identify a value stream:

  • Identify the Operational Value Streams – In a large setup, identifying the Operational Value Stream is not an easy task. It involves an understanding of the business goals and an ability to visualize the value flow to the customer.
  • Identify the Solutions the operational value streams use to provide to customers – With the identification of Operational Value Stream steps, the next action is to identify the solution that can be developed to support the stream and the customer.
  • Identify the people who develop and support the solutions – At this step, the people needed in the stream are identified who will build the solution. The estimate is provided in terms of numbers and the location depending on the value stream type.
  • Identify the Development Value Streams that build the solutions – This step is about identifying the development stream activities and the people involved in creating the solution.
  • Add the people needed to build the full business solution
  • Realize development value streams into ARTs – The last step is to define the ARTs. There can be multiple smaller value streams running in a single Agile Release Train(ART).

What is value stream mapping?

A Value Stream Map is an easy yet powerful visual tool that assists in visualizing the flow. It allows generating a comprehensive visualization of all end-to-end steps in the process. A value stream map shows all the significant phases required to deliver value from raw to finished goods. It is a Lean tool that uses flowcharts with boxes, arrows, and process flows to represent the system. It not only provides a real-time update on the flow but also helps in removing the waste and optimizing the flow.

How does value stream mapping help?

For decades, Value Stream Mapping has been supporting industries to realize ‘value’ both ways. Let’s look at some of the points that make it a ‘go-getter’:

  • Detect waste - Value-stream mapping intends to identify and eliminate "waste" which in turn grows the efficacy. There can be multiple types of wastes in the system such as Overproduction, Waiting, Transportation, excess stock, etc.
  • Identify bottlenecks – One of the very obvious benefits of Value Stream Mapping is the identification of bottlenecks. With Visual flow, one can easily check for the blockages in the system. It helps the whole organization to realize where the bottlenecks are and their impact on the value being delivered to customers.
  • Make processes efficient – Yet again, with visual help, one can know the current state just by looking at it. With reduced waste and bottlenecks, the organizations can perform better.
  • Improve cross-functional collaboration – With both Operational and Development teams working closely, it enhances the overall high-level collaboration. But at the team level, value streams help in building a cross–functional collaborative environment which sets the tone for enterprise agility.
  • Improve end- Product quality

How to map your first value stream of software development?

Creating your very own first value stream can be an exciting task that requires understanding on the value, the need, and the result. Every organization or individual has their way of doing it. Here, I will just lay out a basic format that can help with initial value stream creation: 

Creating a Value Stream can be a simple task that includes:

  1. Identification of all the end-to-end steps in the entire process. Make sure that you cover all the activities and keep it simple. You can begin with scribbling whatever comes to your mind in regard to the process and can rearrange and refine. 
  2. Data is the Key – Try to Gather data around each step, note the usual time it takes to complete a piece and the typical wait time between each step. 
  3. Follow by a minimal flow chart that represents the “value add” times for each step and the “wait times” between each step.  
  4. Lastly, and most importantly, look for the major holdups in the flow and establish the reason for the delay. Once you have an understanding of the data, delays, and bottlenecks, etc. start creating a plan to decrease the wait.    

Act on the plan you just created!

Measuring the Results

With all the processes and mapping in place, it is all the more important to measure the ROI. Metrics help in continuous improvement. Like for others, Value Stream Mapping(VSM) also has a set of metrics that can be used to identify bottlenecks and waste in the system. 

Let us look at some of them:

  • Process Time – Total time required by a single step within a process. In simple words, the time it takes to finish a single unit of work.
  • Lead Time  – The elapsed time between the task creation and work completion
  • Cycle Time – The elapsed time between the moment the team starts its work till the completion. 
  • Work-in-Process  – Limiting the maximum amount of work that can be done in each status of a workflow. 
  • Flow Load – Total Number of work items with the state as active or waiting

Conclusion

In this article, we talked about value streams being the set of activities one needs to perform to deliver value to a customer. To sum up, value stream maps are an easy and efficient way to identify bottlenecks in any process flow. Being visual, they make it easy for everyone to understand and agree on the remediations. It is a significant tool for achieving continuous improvement with collaboration. 

Deepti

Deepti Sinha

Blog Author

Deepti is an Agile Coach by profession and Freelance Trainer with over 11 years of industry experience working primarily with healthcare & finance clients in delivering business. She has played a wide variety of roles in the graph of her career, whether it be, management, operations or quality. She likes reading fiction, management and loves to write her experiences. Her colleagues mostly describe her as very detail oriented person with a knack of creativity and imagination. And yes, she loves feedback more than her coffee!!

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Hence, this role is similar to a bridge between the two ends that effectively paves the way for smooth communication.Deep dive into the Product Owner’s role:According to Roman Pichler, a leading Agile expert and the author of “How to Lead in Product Management”, the ultimate responsibility of a product owner is to ensure that the product creates value for its customers and users, as well as for the company. Think of the product owner as the person who champions the product, who facilitates the product decisions, and who has the final say about the product.” Pichler also says. “This includes if and how feedback is actioned, and which features are released.”The roles and responsibilities of a Product Owner include making sure that they understand the core of the product as well as how to facilitate collaboration at a 360-degree level, being both a liaison and the face of the user.At the most rudimentary level, as defined by the Scrum Guide, the Product Owner is responsible for maximising the value of work done by the development team. Let’s chalk out a few of the Product Owner’s responsibilities.1. Defining the vision: The purpose of the product is defined in the product vision. It is the Product Owner who creates this vision, manages it for the entire life of the product and owns the same. The Product Owner has the responsibility of creating a vision so that the development team clearly visualizes the expected outcome by the user. It is the Product Owner who interacts and collaborates with the users to understand their requirements, so that it can be effectively communicated with the team. Also, it is equally significant to communicate to the stakeholders the vision and goals so that they have a clear-cut understanding of the outcome.  The Product Owner has to be very passionate about this product vision. The product vision is not developed at one go but rather over many iterations, and improves over a period of time. The Product Owner makes sure that this product vision is in line with the vision of the company. He / she also creates a product roadmap for this product vision. Roadmap is a visual summary of the vision spread across a period of time. The vision will define the future state of the product and the motivations that the product tries to fulfil.2.  Managing the product backlogThe primary responsibility of the role of a Product Owner is managing the product backlog. Today’s market is really dynamic and every customer wants to stay on the top of the latest trends in the industry. This product backlog is derived from the roadmap created by the Product Owner. Even the items in the product backlog might require some movement due to changing priorities. It is the Product Owner’s responsibility to build up a stack of items in the backlog and prioritize them as per the business goals and the global approach. The product backlog is a dynamic list of items and as we call it in agile, it is a ‘live document’ that should be frequently updated, based on changing project requirements, all the way through to development. The Product Backlog exists as long as there is a Scrum team that works on the product.3. Prioritizing and Ordering Items in the Product Backlog: Another area where the product owner focusses on is to prioritize the needs of the stakeholders. A product owner should be able to determine the priority of product backlog items in order to deliver the maximum outcome. The Product Owners are constantly in touch with the stakeholders and understand the environment in which the product operates. When the needs and market conditions for the product change, the Product Owner will change the priorities in the Product backlog. He / she may add new items in the Product Backlog and remove the ones which are now obsolete due to new stakeholder needs. This means that the Product Owner must order the items in the Product Backlog to best achieve goals and missions. There are many tools to help Product Owners do this. The Product Owner is required to have the Backlog sequenced prior to the Sprint Planning Meeting. This means that each user story must be ordered by relative importance. The Product Owner will determine what needs to be developed in each iteration and how the product element will be developed over the life of the product.4. Overseeing development stagesOnce we have the basic entities in place – vision, product backlog, and the prioritization, the product owner has to make sure that he/she is participating in the overall development stages of the product. The team might need their Product Owner to get the clarity on a few queries or they might need to demo the committed item. The Product Owner will participate in the ceremonies with the team. In some ceremonies, this role can be active such as planning or backlog grooming but can also be passive or inactive such as in the daily Scrum.5. Anticipating client needs  In today's competitive environment, it is really important for someone in the role of a Product Owner, to understand the client/customer’s needs. The product owner should understand the market, the competition, and the users’ pain points. With those valuable pieces of information, the product owner can determine what features should be implemented, and in what order, with respect to time and importance. Sometimes the Product Owner can help the customers in configuring and penning down the items which they want but are not able to comprehend. And here communication plays a big role.6. Acting as primary liaison  As we have talked about at the start of our discussion, a product owner role involves acting as a primary liaison between the teams and the customers. The person in this role has to make sure the information flow is quick and clear so that there is no misinterpretation. The Product Owner has to make sure that the goal and the vision are correctly aligned with the work items on the product backlog. The Product Owner also acts as a liaison for business stakeholders and end-users, determining whether each story meets their shared expectations. When we say stakeholders, we mean the end users, or their representatives; they could be sponsors (who are paying for the product) or stakeholders who are also a part of the company's management. A stakeholder could be anyone with an interest in or an influence on the product. A Product Owner understands these stakeholders' needs and builds a vision that will drive the development team to develop the vision. Good product owners ensure that development teams can communicate directly with stakeholders, as long as they work on the priorities as chosen by the product owner.7. Evaluating product progress at each iteration   In every iteration, a product increment is created by the development team. The product owner inspects this product increment and decides if this is developed as per the vision created for the product. If it not as per the vision he / she may direct the development team to revise it in later sprints. Work that is either not complete or un-done needs to be re-prioritized or sequenced. The Product Owner makes sure that the development delivers the expected outcomes from the stories they worked upon and accepts it.  Thus, a Product Owner wears multiple hats throughout the product development effort.8. Participating in daily Scrum, Sprint Planning Meetings, and Sprint Reviews and RetrospectivesScrum ceremonies give a chance for the Product Owner to inspect and adapt. And as a result, being present at these ceremonies is identical to success. It is important for the product owner to join the Scrum meetings as it not only keeps the development team up to date with the priorities, but also helps the product owner understand the perspective of the team if there are any impediments.9. Terminating a Sprint if it is determined that a drastic change in direction is requiredIf the Sprint goal has no meaning (will not deliver business value) because of the extreme change, the product owner can terminate the sprint. The termination is most frequently the outcome of an intense change in business priorities; something previously considered important is no longer needed, or something even more significant is learned.How to become a Product Owner?Becoming a product owner requires a thorough understanding of the product as well as analytical and strategic skills. The person who wants to deep dive and become a good product owner needs to understand the market and the stakeholders. He/she should be able to create a vision and know when to juggle with the items in the product backlog so that the bucket is always prioritized.You can opt for some good certification programs provided by different authorities and gain a confidence in this area. As per my experience, I would recommend you to select a domain and master it!How to be a Good Product Owner | Product Owner Best PracticesWhat is A Certified Product Owner?As defined by the Scrum Alliance, a Certified Scrum Product Owner® (CSPO®) is someone who has been trained by a Certified Scrum Trainer in Scrum terminology, practices, and principles that will enable them to fulfill the role of Scrum Product Owner.Is the Product Owner the Project Manager?Both a project manager and a product owner watch over teams who work to carry developments across the finish line together. But the path to that finish line deviates entirely from the start. The Product Owners are product driven and customer focused. They need to be actively engaged with the team because they are the ones responsible for deciding what features will go into the final product.Also, there is a confusion between a Product Owner and Product Manager. Let us understand the difference between the two.A Product Manager is a high-level role that has responsibilities for the entire product lifecycle. The role starts by focusing on customer discovery to product delivery. The product manager will drive the overall product strategy. This is a multidisciplinary role and is very strategic in nature.  The product owner works primarily with the production team to ensure that the development team develops a product that is aligned with the product roadmap.To summarize, the product manager decides on what products to build next, and the product owner coordinates with the development team to build these products.What are the challenges a Product Owner comes across?Below are the major challenges a Product Owner is more likely to come across:1. Missing product road map2. High-level acceptance criteria3. Spending too much time dealing with product support instead of grooming the backlog4. Changing priority while sprint is in progressProduct Owners can escape these usual snares by working around the product road map, centering on high-value backlog items, defining crisp acceptance criteria, concentrating on grooming quality backlog item, and avoiding disturbing sprints.What is the learning path for a Product Owner role?Are you a business analyst who is now unable to figure out his / her new duties as Product Owner? Are you looking to venture into a Product Owner role? Or are you looking to clear your understanding of Scrum Framework and understand the Product Owner role? Then embark on this journey with us in becoming a great Product Owner.Why should you go for a CSPO certification?  Every high-functioning Agile team has a well-trained Product Owner making critical product decisions. A Certified Scrum Product Owner® (CSPO®) is one such certification that helps holders become successful product owners by training them on aspects of on-time delivery of high-value releases and maximizing the ROI. The globally recognized CSPO certification, therefore, is a career-defining credential for anybody willing to take up the challenging role of a Product Owner on a Scrum team in an organization.Increasing Demand for CSPO® Certified Professionals The industry today is ripe with endless opportunities for Product Owners. With 90% of modern teams using Scrum, the demand for Certified Scrum Product Owners has seen a steep rise. Their presence on an Agile team is guaranteed to ensure early ROI while maximizing business value.Scrum Alliance  underlines the importance of Product Owners as follows:38% of the Product Owners act as an intermediary and are responsible for maintaining relationships with the Stakeholders.24% of the Product Owners set project business priorities and work directly with the customers.15% of the Product Owner work directly with the Scrum team.The Future of a Product OwnerA Product Owner is indispensable for the Scrum teams. This role can be compared to that of a deeply rooted tree which has a firm foundation on the product side and provides vision, approach, and planned execution on the outer side. The product owners carry the ownership of the product in terms of quality and delivery as per the expectations set with the stakeholder.A Product Owner needs to have an all-inclusive view of the product along with all the other factors like business understanding, go to Market, organizational readiness, and product capabilities. All of these should be collectively managed, coordinated and aligned to drive product success.Product Owner Training:  Be an efficient Product Owner to raise product value & manage product backlog effectively!  Get trained by Scrum Alliance approved Certified Scrum Trainers® (CSTs)  Get certified from the globally acclaimed accreditation body, Scrum Alliance  Earn 16 PDUs and SEUs in just 2 days  Excel in addressing challenges through Scrum as an effective Product Owner  Advance your knowledge with an experiential learning format  Get Free E-learning Access to 100+ courses  The Scrum Product Owner Certification from the globally renowned Scrum Alliance endorses and validates your Scrum expertise while enabling you to take on the Product Owner role and responsibilities with dexterity, as you lead successful projects and ensure high-velocity releases of marketable products. 
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