Agility over Process Orientation in Digital World

Agility can be a great virtue for organisations to engage with their customers effectively and anticipate and respond to unforeseen business situations

That the business environment we witness is dynamic and volatile is given.  Organizations across industries face multitude of challenges in the market place; consumers, empowered by pervasive technologies look for immediate indulgence in products and services they wish to acquire and swiftly complain about a poor performance in the social media exerting pressure on the operations; competitors, getting better at market insights move quickly with new products or promotions gaining market share; start-ups, willing to take risks come with a disruptive business models changing market equations. Organizations differ in the way they tackle these challenges and that is reflected in their preparedness and responses. If we examine what qualities distinguish leaders from others, agility takes a prominent position.  For those who master the skill, it can indeed become a competitive advantage.

SONY DSC

However, agility is not something organizations have consciously invested in the last two decades. Instead there has been a high emphasis on process excellence to achieve business excellence. The question arises as to whether the process focused organizations are also agile or are these two conflicting approaches?

Process focussed organisations have well defined qualities about them.  They are characterized by two key qualities; standardization and efficiency. There is clarity on structure, roles and tasks to be executed. Their practices are steeped in transparency as all those involved clearly know where each one stands in the execution of the processes.  They tend to avoid any deviation from the established standards.  Any changes to the processes, triggered by business changes or as part of continuous improvement are normally taken up as projects that are subjected to well defined scope, timelines and budgets. Process groups staffed by experts would define standards enabled by world-class techniques such as Lean and Six Sigma. Information Technology would be seen as an enabler and be taken up as projects adhering to the established standards of the organization.

The process orientation has helped these organizations achieve standards of operations across functions and locations, measure performance against set goals, improved efficiency on a continuous basis and set benchmarks.

Agile clipartAgility, on the other hand, determines organizations response to market situations.  Agility can be characterized by two critical qualities; speed of response and flexibility. Speed of response helps them to spot and convert business opportunities, continuously develop or evolve products and services to meet changing market demands and anticipate and counter moves of the competition. Flexibility empowers their employees to make decisions on-the-go that may related to structure, roles or process changes that are customer oriented.

Thus, in an agile organization, a sales person may be empowered to structure differential pricing to customer segments or customize an offering to specific requirements though not defined as part of his job; a service engineer can be trained to not stop by merely servicing the product but can make a sale of a related product during a service call; a delivery executive may deviate and airlift a consignment for an emergency demand.

There are many differences between a typical process oriented and an agile organization.

Typical Process Oriented Organization

Typical Agile Organization

Clearly defined process standards, roles and responsibilities  generally with no deviations Broadly defined structure and roles – especially in the customer facing organization –  that changes as per business needs
Changes to procedures are time consuming due to design and validation Changes to procedures happen on the fly
Decisions typically more centralised Decision making decentralised
Typically rely on lagging and periodic indicators like Financials, process quality etc. Driven by real-time measures like social listening, customer experience  etc
Continuous improvement helps in reducing errors and improving quality of service Mistakes are looked at as means of learning to improve speed
Focus is on reducing costs Focus is on increasing revenues
IT seen as an enabler and lags process definitions IT is integral to business direction and determines the business process

Clearly, to meet the increasing expectations of the consumers and deal with heightened competition, organizations can no longer ignore agility but instead should look at it as a key driver for running their businesses.  However, the argument here is not for agility at the cost of process efficiency. It is instead for building the skill on a foundation of just adequately defined processes and not ignoring it in the attempt to improve process efficiency.

Organizations can balance the seemingly dichotomous objectives by going Digital.  Programs that can automate the predominantly manual processes or integrate all communication (emails, workflows) under a common platform or manage structured and unstructured data to assess performance or building a knowledge repository that is live and easily accessible can enable organizations to be agile and process oriented.  Thus, for a bank or a retailer, technology can help to design and deploy digital services rapidly still following all the regulatory requirements, for a logistic company or a manufacturer, it can help track consignments / inventory end-to-end while complying to Health, Safety and Environment norms and for a government department, it can facilitate faster procurement while being transparent.

Agility can be the need of the hour to survive and be successful in a rapidly changing business environment. By being responsive and flexible, two critical qualities of agility, and not obsessed with process efficiency, organizations can better handle market uncertainties, customer demands and environmental changes. Information Technology and digital programs can be leveraged to becoming agile.

Advertisements

About Raghuram S

I am a Management Consultant with over 25 years experience in the industry and run my own firm called Cohere Consulting since 2008 focusing on business strategy, IT advisory and program management. Prior to this I was with some of the top consulting firms in India including S.B. Billimoria, PricewaterhouseCoopers and IBM. I have participated in a number of strategy and IT delivery engagements across a wide range of industries including manufacturing, consumer products and IT Services. In addition to my consulting assignments, I also spend considerable time in industry research and teaching at premier management institutes. I am based out of Bangalore. I have an MCA from Birla Institute of Technology, Mesra, Ranchi and an MBA from XLRI, Jamshedpur. I can be contacted at raghurams@cohereconsulting.com
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s