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The ability to respond faster to market changes has always been an imperative in a competitive marketplace. Today’s businesses have the advantage of technology to help deliver real-time information and automate processes, both keys to true business agility. However, IT systems themselves must also be smarter and faster, and the pressure is on IT to deliver.

“Business agility is the capability to adjust how the business works in response to change in the environment, such as customer needs, competitors’ actions and things that happen within the company itself,” says W. Roy Schulte, a vice president and distinguished analyst for Gartner Inc.

He defines two types of agility: process agility and instance agility. “Process agility is being able to change something in a business process because the process doesn’t work right,” Schulte explains.

Instance agility means that “you can change each instance of the business process, but the process doesn’t change”—for instance, in an automobile assembly line in which each car is different from the one before it. “You want both kinds of agility,” says Schulte.

Agility enables the business to gain a competitive advantage, which translates to profitability. Agile systems architect Michael Hugos defines agility as “the ability for a company to earn the agility dividend. That dividend is to consistently earn 2-4% higher gross profits than the industry averages in their line of work.” It other words, agility provides competitive advantage.

“My feeling about agility is that it’s not about doing complex things fast,” says Hugos, principal at the Center for Systems Innovation and the author of books on agility, supply chain management and other IT topics. “It’s about doing simple things well. And agility isn’t necessarily ramming around at supersonic speed all day, either. It just means you’re more responsive—and slightly more profitable—than your competitor.”

The role of systems in business agility
An organization’s ability to achieve the agility dividend depends, in large part, on the agility of its IT systems. “Since the level of automation in most enterprises is only increasing, almost every business change will lead to a change in the application landscape,” says Johan den Haan, CTO of Mendix, a provider of Platform as a Service (PaaS) software. “Hence, the role of IT is an important factor in enabling business agility. An enterprise needs apps that perfectly fit in the business.”

Often, the systems that companies view as most important for supporting agility are those that deliver real-time information. “‘Real-time,’ in a general sense, means something that happens pretty much now or immediately,” Schulte says. The real definition, in his view, hinges on the answer to this question: “When something changes in the environment, are you able to respond to it quickly?”

Of course, being able to access information immediately—or at least as quickly as possible—was crucial for businesses even before computers existed. The faster you can detect that something has changed—say, a competitor has lowered its prices or a delivery truck has broken down—the faster you can react and the more you can optimize your response.

In other words, Schulte says: Real-time access to information gives your business a better chance of limiting the risk of a negative change and exploiting the benefits of a positive one.

That need for the ability to react swiftly to business changes typically requires modifying, or transforming, the underlying systems. “To be agile, you have to adjust what people do, but also what the systems do as part of those processes,” says Schulte.

The availability of real-time data also drives further change in IT systems. “The fulfillment of the need for real-time data almost always results in more needs,” Haan says. “As people or systems learn from this data, new data is needed to further clarify things or to fulfill new requests. This process will happen at an ever-increasing speed. Software systems will need to adapt to be able to deliver all this data.”

Characteristics of an agile system
What does an agile system look like? In Schulte’s view, it’s inherently flexible. “It should be reusable and have adjustments built into it so that it doesn’t have to be reprogrammed for instance agility,” he says.

Haan agrees. “These apps need to have a short time-to-market and have to be flexible to evolve along with the business,” he says. “This means the full lifecycle of an application, from the initial idea to first deployment, and from that first deployment to long-term evolution, needs to be as agile as possible.” Among the critical components required for agility: “Short feedback cycles and close collaboration with all stakeholders within a software project,” Haan says.

Agile systems are actually quite simple, says Hugos: “Complexity is a trap. In a world that is constantly changing, [complex systems] become harder and harder to change. If you come up with these kludgy systems, you’re toast. You’ll never catch up. You might keep up for the first six months, but after that the system’s a boat anchor.

“Your goal is elegant simplicity. If the systems exhibit elegant simplicity—and to some degree that’s in the eye of the beholder—then you’re on the right track. It should look beautiful, almost literally, with good systems architecture and good algorithms,” Hugos says.

READER FEEDBACK: In discussing agility, analysts say it's important to know how quickly your organization can react to shifting business landscapes. What steps has your company taken to respond more rapidly to changing business conditions? What lessons have you learned? ebizQ's editors would be grateful for your insights. Contact Site Editor Anne Stuart at editor@ebizq.net.

About the Author

Crystal Bedell is an award-winning freelance writer who specializes in covering technology. Contact her at cbedell[at]bedellcommunications.com.

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