Agility is the new business currency
Agility is the ability to move quickly and easily. The rapid pace of change and competitive markets, for example, in retail, automotive, manufacturing, financial services require business agility. In the era of constant disruption and uncertainty; innovation, flexibility, adaptability, and continuous learning are critical components of business agility and growth. The speed to market new products and meet the evolving customer demand is essential. This will lead to customer satisfaction, retention and profitability. Amazon calculated that a website page load slowdown of just one second could cost it $1.6 billion in sales each year. Website load speed for example affect user experience, search rankings and sales for big retailers like Amazon or small businesses. However for most organizations to unlock the potential of business agility, they need to transform their traditional business models. Leverage digital technologies and strategy to create new business models and customer experience.
Digital technologies
Cloud computing is self-service, automated, highly scalable and enable organizations to focus on economies of scale, innovation and to market new products or services with agility. Cloud computing also has its challenges with regards to latency, bandwidth and strict regulations around personal and customer data between countries. Some of these challenges can be offset by leveraging edge computing technology.
Digital mature organizations leverage digital technologies such as Internet of Things (IoT) and more (Big data, AI, mobile etc.), to enhance operational efficiency and to deliver innovation. Edge computing is becoming an important part of IoT to enable agility in digital transformation. As the name suggest edge computing provides processing, storage and services for IoT and people close to the source of data.
According to Wikipedia, edge computing is pushing the frontier of computing applications, data and services away from centralized nodes to the logical extremes of a network. It enables analytics and data gathering to occur at the source of data. This approach requires leveraging resources that may not be continuously connected to a network such as laptops, smartphones, tablets and sensors.
Businesses should leverage digital technologies based on their visionary goals and anticipated outcomes to achieve business agility and superior customer experience.
Business agility
Business agility refers to distinct qualities that allow organizations to respond rapidly to changes in the internal and external environment without losing momentum or vision. Adaptability, flexibility and balance are three qualities essential to long-term business agility (HRZone). From a strategy perspective, agility or agile roadmap provides context around daily strategy execution and should enable the organization to respond quickly to changing market conditions and internal environment without losing focus on the business vision. This approach is often referred to as strategic agility. It is essential for organizations to adopt agile principles and new ways of working to enable business agility.
The diagram below depicts comparison between traditional and agile organization.
In the digital era agility is the new business currency. If an organization is still focusing on old ways of working, there's a good chance it will be disrupted by new digital players. These new digital players doesn't play by the same rules and they are lean and agile, not bound by legacy issues.
Agile organization
Strategic agility enables the organization to remain focused on the vision, with an open mind; to be flexible; and to be able to adapt its capabilities to reach short-term goals. In the instance of long-term goals, it allows the organization to deliver a minimum viable product (MVP). In essence, this enables the organization to learn and adapt its product strategy from user experience, feedback and evolving market conditions.
To address red tape and tedious processes, the organization must leverage agile processes and methodologies, such as MVP, DevOps and Scrum to enable continuous integration, development and faster delivery. This will enable the organization to focus on the customer value proposition, adopting a customer oriented approach. Slow delivery will inevitably impact business agility and in turn customer experience and the bottom line.
The organization should discourage silo mentality and create an environment for collaboration. Encourage risk taking, creativity, experimentation and innovative culture using hackathons and open innovation hubs. Innovation must be part of the company's DNA and embedded in the performance management system.
Based on the analysis, the critical components that enable business agility are listed below:
Innovation.
Adaptability.
Flexibility.
Agile processes and methodologies.
Process optimization and automation (digitization).
Collaboration internally and with industry players.
Talent management (digital skills development).
Digital technologies.
Customer experience.
Value oriented.
Leadership and strategy.
Culture.
These critical components will lead to a well integrated, efficient and flexible value chain.
Start-ups have an advantage to start on the clean slate. Established organizations need to embark on the digital transformation journey or get left behind. Strategy is the key driver for this change and transformation to materialize. Agility is the key differentiator in the digital economy hence the new business currency.
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