Thursday, August 22, 2013

A Roadmap to Business Agility

I hope my avid readers noticed that as I discussed Business Enablement and IT simplification in my last two posts (Business Enablement through Release Management and Achieving True Business and IT Partnership), there was a common thread that ran through both of these articles.  It was maximization of business agility.  But what is business agility and why is it so important?  In my simple definition, it is company’s ability to react quickly to changing market conditions.  Every organization strives to introduce new products or services before its competitors, change prices at a drop of a hat, offer innovative solutions, be flexible, and so on.  Those companies that are more agile become leaders, those that are not become extinct.

I’ve argued that enabling business users to make changes to IT systems themselves and providing a streamlined deployment process goes a long way towards achieving business agility.  However, the more astute readers will note that there has to be a more holistic approach to achieving business agility.  And they would be right!  In fact, there are many approaches and models to maximize an organization’s business agility.  Doing a Google search on “business agility” brings up hundreds of relevant articles.  All of them approach this topic from different perspectives, and all of them have merit.  In this discussion, I will present an alternative to maximizing business agility – simple, yet powerful roadmap to move the organization forward.

My model consists of two variables – Business Enablement and IT Complexity.  The hypothesis that is being proposed by it is very simple – by increasing Business Enablement and reducing IT Complexity, you will maximize your organization’s business agility.  The visual representation of this model is shown below.

As you can see, on the way towards maximum agility, each organization will pass through a variety of states.

  • Highly IT Dependent 
    • Business depends on IT to perform even the simplest tasks 
  • Process Dependent 
    • All processes are defined and understood
    • Business and IT both follow consistent and repeatable processes 
  • Enabled & Largely Independent
    • Business is self sufficient in most operations
    • Needs to rely on IT in some situations 
  • Self Sufficient & Automated
    • Business can perform all the critical functions with little or no IT involvement
    • IT plays a supporting role

These maturity phases are all very high level, but you can see how and where the progress should be made to achieve the next level of maturity.  The maturation process makes business increasingly more and more self sufficient while at the same time mandating simplification of IT.  Without Business Enablement and IT Complexity variables moving in the right direction, the subsequent phases on the maturity curve cannot be reached.  The proof of this hypothesis is provided below.

The IT Complexity component of the equation has to be explained a bit further, as it carries a very specific meaning in this model.  There are many elements contributing to IT Complexity.  They may include number of systems, number of interfaces, diversity of platforms, supported technologies, etc.  My simple definition of IT Complexity is the amount of effort required to introduce a unit of change to IT systems.  A unit of change is a measure of a basic change that can be made to a system’s functionality.  Each organization may have a different notion of a unit of change, which is why using this measure helps generalize this approach across a variety of IT organizations.

Some IT environments can be so complex and tightly interconnected that even the simplest change can take a lot of effort.  On the other hand, there may be organizations with such well defined systems and clear boundaries around them that changes can be made quickly with little or no impact on the outside world.  Most organizations, however, will find themselves somewhere in the middle of the two extremes.

The reason IT Complexity plays a prominent role in the business agility model presented here is simple.  The faster and easier that changes can be made to IT systems, the more agile the entire organization can become.  In fact, by simplifying the IT environment and introducing next generation technologies such as Business Rules, BPM, Cloud Computing, etc. you will decrease the time required to make changes to IT systems.  I’ve argued this exact point in the Death of Custom Software Development post.

The bottom line is that by striving to increase Business Enablement and reduce IT Complexity you will ultimately maximize your organization’s business agility.  Why?  Simply because by increasing Business Enablement, you enable business to react faster to any situation, and by decreasing IT Complexity, you make IT more efficient.  Putting these two variables together leads to maximum business agility.

The path towards business agility is neither straight nor simple.  The distance between each maturity level on the model is measured in years, not months.  The journey requires significant investment of time and resources, strong backing of IT and business leaders, deep commitment from everyone involved, and a lot of hard work.  But the results are worth the effort.  If you had to choose between the market leadership, mere survival, or extinction, where would you want your company to be?  My guess is that market leader is where everyone wants to be.  To achieve this, you will need to follow the simple roadmap outlined above.


Unknown said...

A great review of the need today for Business agility. I would venture to suggest that in addition to the reduction of IT complexity the enablement of organization . We need to place more emphasis to the change in thinking and innovative explorations of enabled models of business to meet fast moving challenges in the near and medium future.

Leo Shuster said...

If companies are able to maximize their business agility, they will have more freedom to innovate. The less time companies have to spend on introducing IT changes, the more time they will have on differentiating capabilities.

Unknown said...

As a start-up business, I found it difficult to choose the appropriate software or find assistance with IT issues. Once we adopted new shipping software solutions, however, I noticed a huge growth in our customer base. We've been largely IT independent, but I think this move is the first of many that will plot us somewhere differently in your data by next year. Thanks for the perspective!

Unknown said...

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Unknown said...

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asor said...

You actually make it seem so easy with your presentation but I find this matter to be really something that I think I would never understand. It seems too complicated and very broad for me.
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Unknown said...

many of us now are Highly IT Dependent, competitive is a must.
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Unknown said...
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Unknown said...

Its like the first need when its about establishing the business in the needed way and i feel that for taking to the next level agile business solutions is more like a finest way that is appropriate and i have seen people bothering it.

Unknown said...

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Unknown said...

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