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Cutting through complexity with business agility

New study explores characteristics, technology approaches of successful organizations

A new IBM study examined businesses that have increased their agility and improved business outcomes. The researchers wanted to find out what actions IT and business leaders took to achieve their business transformation. Companies surveyed represented the financial, insurance and healthcare industries and were located in the U.S., U.K. or India.

The results achieved by these companies were significant, for example:

Understanding the need for agility

Embody creative leadership. Build Operating dextery. Reinvent customer relationships.To understand the need for agility, it helps to review the major findings of the 2010 IBM Global CEO Study. CEOs are most concerned with determining how to navigate the highly volatile and increasingly complex business environment. As a result, they are focusing attention on increasing the agility of their businesses.

Three needs identified by CEOs shaped the approach to business agility taken by the companies interviewed in the Business Agility Study.

Top Needs of CEOs Related Results from Business Agility Study
Embody creative leadership. Creativity is the top leadership quality CEOs feel their business needs. CEOs want to innovate to drive change in their companies and stay ahead of the market. Companies created close-knit business and IT partnerships responsible for all aspects of a project, from understanding the strategic imperative to implementing the solution. New strategic imperatives replaced prioritized lists of functional requirements.
Reinvent customer relationships. The most important theme discovered in feedback from CEOs was a realization of the need to get close to customers. Companies set strategic imperatives that made significant improvements in customer service or partner interactions.
Build operating dexterity. Coping with change requires operating dexterity, which entails simplifying operations and products, executing with speed, and exploiting partnering. Companies achieved very high returns from business solutions that improved the processes spanning the boundaries of the enterprise, serving to integrate the business network of customers, suppliers and partners.

A preview of major findings from the Business Agility Study

Companies interviewed in the new study see themselves as agile because they target strategic imperatives that deliver significant business improvements in a timely fashion. Agility is measured by each company’s own expectations rather than by external benchmarks. Agility is not simply about making rapid improvements, but also about finding new ways of doing business.

One company, for example, tried to capture a new business opportunity and made improvements that helped them scale up to meet the demand. Another company wanted to attain growth and beat the competition by improving relationships with customers rather than adding resources. They improved a process that drastically cut the amount of time required to complete a service provided to the customer.

The Business Agility Study also shows that companies go after opportunities that can save cost or help them grow, with a broad focus on innovating processes, rather than expending too much energy on simply gathering requirements or modeling existing processes. Respondents favored comprehensive and enduring change, rather than incremental improvements to processes or systems. They re-engineered the business to achieve gains by exploiting emerging technology. Business process management (BPM) tools enabled gains in agility, while encouraging collaboration between business and IT areas.

The shift from software to business engineering

A partnership between business and IT was a key factor for achieving business results in the companies surveyed. The shared understanding and sense of ownership between business and IT fostered a highly collaborative environment. Through this partnership, companies are experiencing a shift from software engineering to business engineering, and the emergence of a new role, that of Business Engineer. With the rise in process automation, the details of business rules, processes flows and metrics are becoming increasingly complex. In the Business Engineer role, IT skills are combined with traditional business skills to design and manage these artifacts.

The respondents decided to grow skills in business engineering in-house rather than contract them, because of the time required to learn the details of internal business processes and rules, and the value of retaining that knowledge within the company. On the other hand, the companies in this study consciously chose to buy technology-specific skills rather than use their own staff.

To learn more about the results of the IBM Business Agility Study and read about specific companies surveyed, visit the IBM Business Agility site to download the study when it becomes available in November.