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What is Business Agility? Best 5 Scenarios and Benefits

This article will discuss business agility and its role in organizations. At first, let’s look at what we understand by Business Agility:

What is Business Agility?

Business agility is a term that describes organizations’ ability to quickly adapt and change their strategies to keep up with ever-changing market conditions. To be successful, businesses need to be able to reconfigure their operations to meet customer needs quickly.

In this blog, let me take a few examples to explain Business Agility and its necessity.

Scenario 1: Agile for Software Product Development, however, every product has software in it. Is Agile enough?

If you look back in 2001, Agile was brought primarily for software development teams. Software teams focused on building software incrementally and iteratively using frameworks like Scrum.

Gone are those days when the software was only software – for example, reservation system, HR system, Reservation system, etc. Now, every product is a software product. In other words, every product has a software part in it. A few examples to take are Banks, Insurances, Automotive, Healthcare, ERP, etc.

BMW expects 50% of the future R&D staff will be software engineers due to the way software is going to drive the entire product. This means the entire business and not just only software part of it.

We need Scrum for the team; however, it’s not enough. Software is just a part of the entire product. We need a framework like Scaled Agile Framework (SAFe) for the overall product development and delivery because SAFe brings value stream thinking and brings everyone in the value stream / Agile Release Train together.

Scenario 2: Learn from past technological revolutions in other industries

If you look at the picture below, it’s clear that every industry has gone through its own learning curve, and at some point, there was a turning point. Post the turning point, every industry had a Deployment period during which the business flourished. If you notice, we are in the deployment period for the software & digital age now. Hence, we need to be ready to take off and be ready to grow much faster than in the past.

technology revolutions chart
Ref: Scaled Agile

Scenario 3: Agility at Scale

As I mentioned earlier, every business is a software business now. Hence, Agility has to be for the entire organization that includes Marketing, Sales, Support, Legal, Product Management, Engineering, etc, as against team agility, which is just focused on 1 software development team.

This means we need to scale the agility journey across all parts of the organization that help sustain and grow business. We need Scaling Agility. Scaling Agility is not an option. It is very essential to scale the agility. If you look at the below picture, it clearly depicts all those skills/people required to release solutions to the customer. All should be part of the value stream.

Agile Release Train ART
Ref: Scaled Agile

Scenario 4: Dual Operating System to manage both hierarchy and value stream network

Products that started with a 3–5-member team to build the first version of the product. When the MVP of the product is successful, the product organization also grows, in fact, in no time, grows to hundreds of people. The complexity of the problem increases over a period. It is not enough to have 1 team to build a product and sustain and maintain it.

When the product team is small, the focus is on customer centricity and innovation. A few examples of customer centricity and innovation are – understanding the pains of the customer and addressing them, building what the customer needs, understanding the user persona, and building products to meet the need of each specific user persona, etc.

However, when they grow to the 100’s, efficiency & stability becomes the focus. For ex., focusing on legal, compliance, ability to repeat the business, cost-efficiency, etc gets high focused. Customer centricity and innovation take a back seat. Sustaining product development becomes a challenge.

image1image2
Ref: Scaled Agile

What is the solution for this? Organizational hierarchies, structures, and policies are built over a period of time for a reason; hence they are still required to run the organization. So we need a dual operating system like the one shown in the below picture.

business agility
Ref: Scaled Agile

Hierarchical / Traditional Operating System:

Since the hierarchy exists for years, a few structures like people, management, designations, etc will remain largely the same. We need not collapse it to bring scaling agility.

Value Stream / Network Operation system:

What is equally important is bringing value stream thinking into the existing organization to bring customer centricity and innovation into the system. For that, bringing elements like design thinking, continuous delivery pipeline, value stream alignment, Agile Release Train structure to bring all necessary roles together to deliver value, etc are key to 

Scenario 5: Address dynamic market changes and emerging opportunities

In today’s world, business opportunities are emerging so fast and market changes are so quick that many businesses struggle to survive with such market changes and expectations. 100-year-old large enterprises are struggling to fight against small start-ups due to start-ups’ ability to compete and prosper in the digital age by responding to market changes and responding to emerging opportunities. This is in short called “Business Agility”. Few examples are

  • Apple is the highest watch-selling company in the world
  • Tesla can respond to customer/market demands much faster than 100-year-old companies like Ford

Key Benefits of Business Agility:

  1. It enables everyone to think about the product/solution irrespective of which part of the solution they contribute to.
  2. It helps connect as a value stream and removes siloed thinking.
  3. Connect between Engineering teams and the market is quite high due to customer centricity. Adapting to market changes becomes easy as the organization is connected.
  4. No need to change the organizational structure, hierarchy, etc. Hence the impact on the existing organization is minimal.
  5. Agile businesses also tend to be more efficient, leading to cost savings. In addition, rapidly developing new products and services can also lead to increased revenue. 
  6. Finally, being able to respond rapidly to customer feedback can help companies create products and services that are both desirable and useful. 

To learn more about the benefits of business agility, you can always opt for the SAFe course that teaches you all the aspects of business agility.