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FORRESTER PERSPECTIVE:

Measure And Improve Your Business AgilityIn a world of constant change, does your company have the agility required to survive?

By Craig Le Clair

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The pace of change is accelerating. The past 10 years have seen the rise of pervasive Internet connectivity, cloud-based applications, mobile devices that connect anytime and anywhere, information workers who use their own tools, and disruptive innovations that create newly empowered customers.

Every industry is subject to disruption. Only a truly agile business is equipped to respond. This Forrester Perspective defines business agility, describes its measurement, and shows how to evaluate your preparedness to deal with different types of threats.

WHAT IS BUSINESS AGILITY?

Forrester defines business agility as:

The quality that allows an enterprise to embrace market and operational

changes as a matter of routine.

This is the attribute that enables companies to thrive amidst uncertainty. Agile thinking starts with the methods used by corporate information technology and extends into all elements of the enterprise. But most companies have not yet accepted this broad view. When we reviewed the elements of agility with CIOs and CMOs, we found that while the issue of agile performance was critical to them, they were confused about what agility actually meant — or what to do about it at a corporate level.

Craig Le Clair is a vice president and principal analyst. As an internationally recognized expert in business process management, he helps companies transform from manual processes to the mobile and digital world. He is the author of How To Succeed In The Enterprise Software Market. blogs.forrester.com/craig_le_clair@csleclair

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THE 10 DIMENSIONS OF BUSINESS AGILITY

These dimensions span the qualities that make agile companies faster and more responsive to change.

MARKET

Channel integration Information sharing and cross-channel experiences

Market responsiveness Customer knowledge and rapid access to resources

ORGANIZATION

Knowledge dissemination Broader sharing, flatter organizations

Digital psychology Trend awareness and digital skill sets

Change management Embracing change and embedded change management

PROCESS

Business intelligence Information management and distributed analytics

Infrastructure elasticity Cloud awareness and embrace of cloud options

Process architecture Process skills and core system independence

Software innovation Real-time experience and incremental development

Sourcing and supply chain Agile sourcing processes and supply chain flexing skills

“We were able to respond to a competitor’s product by moving [our own] from concept to shelf in six weeks. We allow decentralized and rapid decision-making.”

Chief architect, consumer packaged goods

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AGILITY REQUIRES BOTH AWARENESS AND EXECUTION

In each dimension, an agile company must be aware of a changing environment and then execute on decisions to respond.

Agility in both awareness and execution can power rapid product launches, new business models and markets, revamped processes, and sustained performance.

Conversely, companies with strong awareness and weak execution become paralyzed, while poor awareness and speedy execution make for dangerously shortsighted decisions.

We measure progress through indicators along each dimension.

Awareness indicators measure the understanding of external market forces, like price wars or digital disruption, and internal process changes, like new channel or security requirements.

Execution indicators measure the qualities that allow a company to move quickly on decisions to respond to change.

Clueless

Paralyzed

Dangerous

Formidable

EXECUTION

AW

AR

EN

ES

S

“Embedding business intelligence in our price management function has saved tens of millions of dollars by redirecting tankers to the port that pays the highest crude prices.”

Senior business architect, oil and gas

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DIFFERENT TYPES OF CHANGE REQUIRE DIFFERENT AGILITY STRENGTHS

Unexpected events — in the form of market shifts like digital disruption or operational changes like new regulations — can challenge or destroy a company, even over a few months. Our methodology can quantify the dimensions of the threat and provide insights on how to fight back. For any type of event, we can assess which agility dimensions are crucial and how far companies fall short of the agility needed to respond.

For example, this chart shows which dimensions are important for digital disruption and how a company might fall short.

MARKET Actual preparedness Goal Dimension importance

Channel integration

Market responsiveness

ORGANIZATION

Knowledge dissemination

Digital psychology

Change management

PROCESS

Business intelligence

Infrastructure elasticity

Process architecture

Software innovation

Sourcing and supply chain

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GET STARTED

Forrester can help you understand what business agility entails, measure the state of your agility, identify gaps, and create a plan for improvement:

Assess your business agility. We measure your firm’s responsiveness to change along 10 dimensions that define business agility. Using industry benchmarks for comparison, we identify where you are below average in awareness, execution, or both.

Analyze your agility gaps. We identify the events and sources of disruption that your business may face and determine which ones carry the most risk. We assess and analyze gaps between those risks and your readiness to respond with agility.

Create an agility road map. Forrester consultants and analysts work with you to detail your organization’s agility gaps. We then make specific recommendations for improvement.

Connect with Forrester

Talk to one of our experts about business agility.

+1 617.613.6000 or forr.com/contact_bizagility

Visit the business agility site to:

• See Craig Le Clair explain what business agility requires.

• Complete a brief assessment to determine your organization’s preparedness for change.

• Watch the recent webinar to learn about the measurement framework.

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