The new industrial era has dawned, but the shift that companies are going through is not just about adopting new generation technologies. Customer expectations and market dynamics are changing as well, creating incredibly demanding, competitive and volatile business environment.
Loosely quoting the American management expert Gary Hamel, you can’t run your business with 21st century technology, 20th century practices and 19th century values. In the digital age, business agility is imperative for organizations and enterprises to stay afloat.
Having said that, we have to admit many executives still have a vague understanding of what business agility really is.
In this article we will give you an extensive business agility definition, outline its benefits, offer some implementation examples and focus on ways to boost business agility to achieve success. Read on to learn more.
When speaking of enterprise business agility, most people will dwell on the acceleration of core business processes and improved time-to-value. While business agility truly is about increased operational speed, such a definition misses some important points:
Adaptability – being ready to revise business strategies and change them on the go. Today, business strategies are no longer carved in stone. Within an agile mindset, they are even no longer self-sufficient. They have to correlate with fast-changing business requirements and are subject to numerous changes and reinventions.
In the digital era, when a new technology can emerge in a blink of an eye and render the existing strategy irrelevant, there is simply no time for meticulous planning. Adaptability and variability is the name of the game. It’s not just performing a particular set of actions; it’s refining them to adapt to ever-changing circumstances, and that is the keynote of the agile approach.
Customer centricity – companies adopting a business agility approach are also customer-centric to the point of becoming customer-obsessed. As stated in the Agile manifesto, they believe their success revolves around customer satisfaction. Most importantly, business agility implies responsiveness to constantly emerging challenges and ever-changing circumstances.
Cross-functional collaboration – understandably, agile goals demand forging closer collaborative ties within the organization and ditching the functional mentality to focus on value. While this is by no means easy, it’s totally worth the effort, since we can’t overestimate the impact of agility on business success.
So why is agility vital to digital-age business? To understand the importance of business agility, let’s now outline its benefits:
Focus on the customer – being customer-centric ensures your efforts are never hit-and-miss and are always applied in the right direction: towards greater customer satisfaction and business value.
Increased efficiency – adaptability means you can quickly refine your strategy based on the most recent data and do exactly what needs to be done precisely and on time.
Productivity and quality – removing barriers within organizations and creating cross-functional teams enables companies to achieve unprecedented productivity boosts. Because business agility erases functional barriers and ensures better visibility of all business processes, pinpointing bottlenecks and eliminating them to achieve better performance and quality is now easier than ever.
These are the primary reasons why business agility matters: focus on customer, increased efficiency, productivity and quality gives enterprises a distinct competitive edge and brings greater revenue.
Now that we have stressed the importance of business agility, let’s examine what companies adopting it have in common. There are several key traits that companies utilizing business agility unmistakably share.
Practical approach: agile companies are practitioners rather than strategists and value implementation over planning. That doesn’t mean they devalue a strategy altogether. What they try to do is keep it attuned to practical implementation and client feedback.
Client centricity: being customer focused, agile companies welcome client input and monitor customer feedback on every production and post-production stage.
Transparency: agile companies welcome visibility and transparency of all business processes and encourage the exchanging of ideas and cross-functional collaboration between teams. Such an approach enables the detection and elimination of mistakes just as fast as they occur, and continuously aids in the refining of skill sets.
Fast decision making: companies utilizing a business agility approach will follow a strategy that they know is not 100% correct, rather than spending time honing it to perfection. It’s not that they are not afraid to make mistakes – on the contrary – they do all it takes to achieve better performance and efficiency. It’s just that they are only too aware of how fast things are changing in the digital age, and how being late to launch may negate the success of their product or service.
Democratic leadership: agile leaders place great trust into their teams’ expertise. They avoid micromanagement and mostly guide their teams in the right direction and communicate a project vision. One important trait distinguishing an agile leader from the rest is no fear of failure. They are inherently capable of experimenting and starting over again.
Use of innovative technology: keeping your strategy in tune with the ever-changing business environment, ensuring efficiency and quality, making data-driven decisions and communicating them to teams implies businesses have to be tech-savvy and leverage the most advanced software, infrastructure and platforms. Moving as fast as data does, assisted by BI tools and data analytics, agile businesses are always on top of the curve.
So how does all the above mentioned translate into concrete examples? It’s no secret that IT startups are among the most frequent, and admittedly, successful business agility practitioners. While Agile methodologies are mostly applied in software development, below are examples of business agility bringing positive disruptions to manufacturing and retail.
Here’s how companies adopting business agility apply it to boost operational efficiency and maximize their performance.
1. Business agility application in manufacturing
Dell’s Computing journey towards business agility is a vivid example of leveraging advanced technologies to meet the standards of a digital era. The company has implemented a next-gen ERP system to connect its seven manufacturing facilities and integrate them into one centralized management platform.
The Microsoft Dynamic AX ERP system they applied has replaced 75 different applications and provided the company with a single management entry-point and end-to-end visibility of manufacturing processes across all its seven facilities.
Apart from achieving 150 million in cost reduction, Dell is now capable of instantly meeting market challenges and adapting to the changing requirements. For Dell, technology has become the main business agility driver.
2. How business agility impacts Ecommerce retail
In e-commerce, the agile approach is unlocking its potential by streamlining back-office operations such as warehouse management, product dispatch and delivery, etc. It also accounts for better customer service. The example of the UK-based e-commerce company Moonpig is a working proof of that. Having successfully harnessed business agility to streamline their software development processes, the company decided to extrapolate the agile approach to all its organizational facets.
The company started off by aligning teams and promoting cross-functionality, and ended up with steady incremental revenue growth, a radical reduction of production cycles (from months to days), and staff surveys are showing greater levels of job satisfaction and engagement.
According to the business expert and advisor Barry O`Reilly, as many as 50% of Fortune 500 companies have dropped off the list by 2015. Also, the average lifecycle of a company has reduced to 15 years – a dramatic reduction given that in the 60s it was 67 years. This implies that for many companies, business agility implementation is paramount to survival.
So how can you make your company more responsive to today’s challenges? Below are some actionable business agility tips you can apply in your organization.
Communicate why business agility matters
One of the most daunting experiences agile leaders come across is a lack of support from management and co-workers, which stems from a lack of understanding of why business agility spells success. People are, in general, resistant to change. That’s why, to gain their support, you have to provide them with a clear outline, detailing the advantages of the business agility approach.
Assemble cross-functional teams
Continuous learning and collaboration should be the core values of agile teams. Unlike siloed teams, they include members from all levels of an organization and provide a 380 degree vision of the production process and its diverse aspects. Foster communication and the sharing of ideas to infuse your team members with an agile mindset and increase engagement.
Ensure fast decision making and resource allocation
Fast decision making defines the agile approach. However, some policies and procedures across your organization may hamper this process and stand in the way of ensuring a fast time-to-value. Revise your workflow and eliminate such points as lengthy approvals where you can. Also, make sure you can assess costs needed to propel your decisions, when necessary.
Invest in technological advancement
It takes immense amounts of time and money to entirely replace your existing infrastructure, but you can start small. Firstly, pinpoint bottlenecks in your business operations, and think of how you can use new generation technologies to eliminate them. As of today, the best business practices revolve around data which is driving business agility. Leverage BI and data analytics to give you insights that will advance your business agility strategy forward.
Choose a reliable partner
You need someone from outside your company to give you an alternative perspective and facilitate your business agility adoption. Transitioning to new ways of doing business is a long, and often, painstaking process. Partner with reliable digital transformation experts to guide you through.
Need a trustworthy business agility guide to accompany your organization along the digital transformation journey? Contact our expert team now for a business agility plan tailored to suit your business specific requirements.