By Dr. K. K. Raman, Partner and Head - Business Excellence, KPMG in India and Dr. Srijith Sreenivasan, Director – Business Excellence, KPMG in India
In today’s digital era, organisations are striving to be responsive to customer needs in a more flexible manner than ever. Rigidity in organisational design structures and operations can hinder businesses from being in the forefront of efficiently serving the customer and gaining competitive advantage in time to market. Even large corporations aim at developing the nimbleness of a start-up combined with the predictability of a stable organisation to quickly understand the market dynamics and re-position their products and services accordingly. It stems from the realisation that competition in today’s world is more frequent, difficult to foresee and seldom from the same industry. The post-pandemic realities of virtual/hybrid ways of working, uncertainty in demand, changing consumer behaviour and cost pressures imply that traditional delivery models may not be suited to meet the flexibility and speed required in the digital world.
Agile as a framework for defining operating models
Agile principles, which originally were designed for product development, are now customised and used at an enterprise level to bring in the needed agility in business operations. Business agility can be defined as the inherent adeptness of organisations to respond to changing market dynamics and customer needs by using innovative and bespoke solutions to business problems. Business agility requires organisations to focus on the critical elements of customer centricity, leadership and people, product/service quality, technology, and the operating model. Organisations using business agility are attuned to customer centricity through adaptive processes, digitally trained workforce, application of emerging technologies and business-oriented support functions.
Business agility can help organisations achieve a state of responsiveness and flexibility. Furthermore, it can enable organisations to be versatile in appreciating evolving customer needs and delivering solutions to the market in the shortest possible time with acceptable levels of quality. Agility requires all functions and departments in an organisation to work seamlessly, with a defined cadence and a sole intent of delivering value to the customer, while remaining profitable.
Trends in business agility
Early adopters of business agility have reported promising results in execution. Some of these results include improvements in productivity, reduction of defects and rise in customer satisfaction. It is also worthwhile to note that the results of agile maturity in organisations have increased in the post-pandemic period, compared to the previous years. This is a result of the importance that organisations have placed on redesigning their operations as per the changing needs of the industry using emerging digital technologies and innovative workforce practices. Organisations are using agile principles such as customer-first approach, embracing change, technical excellence, simplicity in design and self-organising teams to re-orient their operations as per market needs. The emphasis is on maintaining a highly flexible structure which can be adapted as needed, while firmly anchoring on organisational values and ethos.
Common challenges in agility adoption
Transitioning to a customer-focused agile approach comes with its own share of challenges. Some of these challenges are as follows:
- Resistance to change due to organisational culture and work habits
- Non-aligning stakeholders, business, and delivery to a common need
- Operational silos and lack of transparency
- Complex governance systems with multiple reporting and decision-making layers
- Lack of consistency and standardisation across various business units.
These challenges can be overcome through application of time-tested change management approaches. The four stages include ‘making it known, real, happen and stick’. Moreover, communication, leadership commitment, empowerment of staff and cross-functional teamwork are key to achieving agility.
A well-laid-out approach may be your best bet
If implemented with the right intent and approach, business agility can help organisations gain a competitive advantage in responding to customer needs and thereby achieve the desired business results. Leadership vision has proven to be vital in making this transformation a reality. Without the right theme and tone at the top, making a change at this scale to impact the existing design and culture may be difficult. Alignment of technology to the process re-design is also important to make this transformation efficient and effective. Lastly, the significance of principles and methods to bring in transformation cannot be overlooked. A well-defined roadmap with a focus on end goals to manage the transformation process will go a long way in guaranteeing effective implementation.