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How agile companies create and sustain high ROI

Executive viewpoint

Nancy Pearson, Vice President of BPM, SOA and WebSphere Marketing, talks about our new name, what you most want to read about, the relationship of business agility to high ROI and finding your company’s agility level, plus a new guide to building an SOA governance transition plan. Read her commentary.

Learn from research findings and pinpoint your level of agility

The current economy is in a state of accelerating change, driven by demanding customer expectations and increasing competition. Potential competitors can enter the market more easily than ever due to advances in technology, global infrastructures and decreasing cost of labor. How can companies manage to this constantly accelerating environment? Responding to these pressures requires enterprises to create a business culture that is agile and flexible.

Creating a culture of agility gives companies a sustainable advantage when they can sense changes in the current business climate and proactively respond. Recent studies show that agile organizations possess the processes and architecture that enable them to respond quickly to change from inside or outside the organization. Results of these studies also indicate a specific set of actions, outlined in this article, that you can take to improve your company’s business agility for better financial performance.

Leaders in business agility obtain measurable financial performance increases

BTM Corporation has conducted a number of studies on the value of placing an emphasis on business agility. Their researchers have queried companies that are considered agile and reported the results. Overall, the findings show that companies with highly mature business agility characteristics – the Business Agility Leaders – exhibited superior financial performance:

And this advantage has been shown to be sustainable over time based on monitoring of these companies during both 1-year and 5-year timeframes.

Business Agility Leaders share three key practices

Business Agility Leaders focus on three core practices:

Based on the results from these studies, BTM Corporation, in cooperation with IBM, has created a Business Agility Index.

The Business Agility Index

The Business Agility Index was developed based on client surveys conducted during the first quarter of 2010 that examined publicly traded U.S. companies across multiple industry groups. The surveys used a range of financial measures, including value, performance, growth, margin, capital efficiency and stock price volatility to measure the financial effect of business agility. This index is built on a framework that describes the processes, structures and behaviors that together comprise business agility:

The two key technical components of business agility that support the framework are:

BPM and SOA provide the underlying support for the processes, structures and behaviors that companies need to adopt and implement to improve their business agility.

Figure 1: A summary of business agility maturity levels from the Business Agility Index report.
A summary of business agility maturity levels from the Business Agility Index report.

 

The Business Agility Index reveals the key role business agility holds in a company’s overall economic performance. Achieving agility is not exclusive to companies of a certain size by revenue or industry sector. The index specifies the behaviors and constructs that drive agility. These behaviors and constructs are defined as a repeatable management practice that can be implemented in your company.

Find your company’s business agility level

You can assess your company’s agility, and compare your maturity level to that of other companies as described in the Business Agility Index.

By Fillmore Bowen (Raleigh, North Carolina). Fill is the Program Manager responsible for Smart SOA in IBM Software Group.

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