This article introduces the concept of business agility, its importance, and how organizations are building capabilities to become more agile to stay competitive.
The Need for Business Agility
For the past few years, the industry has been witnessing an ongoing disruption of businesses triggered by the digital revolution and related phenomena. This disruption where enterprises either have to adapt or risk being driven out of the market has become the new constant and the norm. Business agility refers to an enterprise’s ability to respond to this ongoing disruption by meeting market and customer demands. It’s about adapting to the constant changes and pressures that an organization faces to bring incremental but rapid changes both internally and externally. The greater the agility, the faster an organization can meet its customers’ needs thus increasing customer satisfaction. Business agility also provides organizations the opportunity to experiment with new innovations as this enables them to roll out new products and services to the market quickly, gauge market’s reaction accordingly and then can incorporate that feedback rapidly before releasing the next version or iteration of their offering. In the face of fierce competition and constant market pressures, every organization therefore should incorporate agile practices in all its business operations.
Characteristics of an Agile Organization
The aforementioned qualities of an organization refer to an organization’s agility. So, we can state that an agile organization has the following characteristics:
- The organization’s delivery processes are appropriately aligned to its users, customers, and the market in general to ensure that the right products and services are delivered on time.
- Its delivery processes are nimble and flexible, yet stable to enable rapid and defect free delivery.
- The organization appropriately listens to market and customer feedback and responds to internal and external change effectively.
In building such agile capabilities, an organization may need to tailor its overall delivery mechanisms to become nimble and flexible to respond to change. This delivery capability that in turn is made up of internal systems, methods, and processes must be lean, stable, yet flexible, and fast to deliver at market speed.
Principles of Agile
With regard to methods, various agile methods have surfaced in the market during the past few years. Most of these methods have their roots in software engineering. The success of agile techniques in the technical communities have since put pressure on other parts of the enterprise to adopt agile techniques as well. That’s because from an enterprise standpoint, there is no use of delivering software in an agile manner if the overall delivery life cycle comprising of all legs (from ideation to delivery and deployment to production) of the overall delivery life cycle is not effective and efficient.
The agile methods that have surfaced in the past few years are based on a set of 12 principles that were developed as part of an initiative called the Agile Manifesto. Due to the simplicity and commonsensical approach of these principles, they have become the foundation for agile practices that are now applied enterprise wide in areas even outside the discipline of software engineering. The twelve principles behind agile can be found at http://agilemanifesto.org. Those principles are as follows:
- Satisfy the customer constantly by continuous delivery of the product
- Change is welcome in all phases of the delivery lifecycle
- Focus on continuous delivery of the product by breaking it down in smaller releases.
- Business users and product development teams must collaborate constantly on delivering the products
- Empower teams to self-organize and to make decisions
- Encourage face to face (and one on one) conversations and collaborations and bypass bureaucracy
- Establish working products delivered to production as the primary means of success
- All organization stakeholders should strive to maintain the pace of delivery and performance
- Always strive for excellence in the delivery of products and services
- Encourage simplicity in all matters
- The best results usually come from self-organizing teams
- Constant reflection
Business Scenarios in the Adoption of Agile
Within the context of delivering new solutions to the marketplace, the following are some examples in how organizations are adopting agile practices within the areas of Information Technology and other areas:
- In all areas of the enterprise, where processes progress in a waterfall approach from one phase to another and are getting tied up in a bureaucracy where there are hand-offs from one department to another, organizations are instead looking to break down those barriers between departments by setting up cross functional teams to collaborate on projects and to deliver them rapidly.
- As we have covered earlier, the most common application of agile has been in the area of software development and engineering. Rather than following waterfall types of methods, organizations are building software in multiple iterations where each iteration releases a working product with cross functional teams involved in the planning, development, and testing of each work product. The agile methods that are used to perform this type of work are called Scrum, XP (Xtreme Programming), FDD (Feature Driven Development) and many others.
- Many organizations are now adopting software that has minimal deployment and upgrade times. For example, traditional ERP software packages (e.g. earlier versions of SAP and Oracle that used to be installed in house) take longer to install and upgrade relative to the newer cloud based offerings (e.g. Workday and other ERP versions on the cloud)
- To streamline the process from idea inception to project execution, organizations are now adopting portfolio management systems and software. This is because in many organizations, the process starting from idea inception to project formulation, definition, approval, and then execution is not very structured and thus it takes a long time to deliver on projects. As we have covered earlier, in the hypercompetitive environments of today, organizations can’t afford to take long to deliver on ideas. One way some organizations are becoming agile in this regard is that they are instituting portfolio management techniques and systems across the enterprise to streamline the entire process from idea capture to execution and product delivery. This is allowing organizations to evaluate and test ideas and execute projects and bring products to market rapidly.
These are some of the scenarios in which organizations are adopting agile practices. As we talked about this earlier, agility is no longer an option and organizations therefore will constantly be looking to bring agile methods in all parts of their business from strategy to operations.
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