Why improving strategic agility is good for business

By , Janice Salchert, and Gene Byrne | 3 minute read | July 22, 2019

Modern enterprises must transform faster to keep up with changing market conditions. They must improve their strategic agility by marrying enterprise data and human talent to find opportunities to improve their processes. Companies need help innovating to find new efficiency in their operations — at speed and at scale.

Agile innovation is the key to this optimization. It sits at the top of IBM’s Cognitive Enterprise model, which outlines how companies can adapt to market challenges using new technologies. IBM is going through an agile transformation itself; our client-facing agile delivery capability program, Agile Accelerate, brings new process improvements to client operations by engaging and empowering employees. We provide some tangible evidence below on how agile innovation delivers increased value for our clients.

How agile works

Agile innovation inverts the organizational pyramid, giving control to the workers closest to the operations. For example, in its agile delivery practice, IBM forms 10-person squads and gives them end-to-end responsibility for refining client processes.

This approach eliminates one of the biggest barriers to innovation: siloed thinking. Agile squad members see how their activities contribute to business outcomes, which gets the team marching in lockstep as it pursues a common goal.

Squads use this structure to work on two consecutive work streams: client operations and process improvement. They perform the client work in one stream and use the other to analyze how they can do that work better.

Squad members explore potential avenues to improving client operations, then create an execution strategy and deliver it in a two-week sprint. Under this method, process improvement isn’t merely iterative; it’s continuous.

The benefits of agility

A concentrated effort to improve operational agility provides three connected benefits.

A supercharged client experience. To use IBM’s agile transformation as an example, the program has already delivered significant and quantifiable client benefits. One client saw a 31 percent efficiency increase in its contact center processes that included a reduction in case handling times from five to three business days.

Clients have also quantified the improvement in their experience with IBM. One client wanted to shut down its program by the end of 2020, arguing that they wanted more innovation from their partner. After demonstrating its operational agility by exposing the client to the Agile Accelerate program, IBM increased its net promoter score with that client by a factor of 10.

Engaged, empowered employees. Agile innovation engages employees by empowering them to take risks and adapt. Employees better understand how their work contributes to larger processes. They get more say in how those processes work. Understanding the whole workflow helps them develop their skills, making them more capable employees.

Employee engagement benefits are concrete. To quantify the effects at IBM, we now have a net promoter score of 91 with employees working under agile innovation programs. The cultural shift targets the hearts and minds of the workforce, ultimately leading to reduced attrition — happier employees tend to stay where they’re valued.

Tangible shareholder value. By applying rapid-iteration innovation techniques, agile squads pass financial benefits on to the clients. For example, lower attrition rates reduce expensive and time-consuming training sessions for new employees, which lowers retraining costs. More efficient operations reduce the need for overtime.

The process efficiencies delivered through an agile program can also reduce client costs. By uncovering accounting efficiencies, for example, agile squads enable greater throughput when processing invoices. Faster invoice payment means clients can ask suppliers for early payment discounts, which unlocks significant savings.

These three beneficial areas provide a synergy greater than the sum of its parts. Enhanced employee engagement and client experience correlate with shareholder value as companies reap the financial rewards of lower labor costs and more efficient processes.

Agile at speed and scale

It has been proven that operating with strategic agility benefits your clients, and your bottom line, immensely. To prove its worth, we at IBM are continuing to roll out agile practices across all of our client-facing businesses.

Furthermore, we would be pleased to partner with your organization to explore how building and implementing internal agile operations will bring the same benefits to your company as you embrace the era of the cognitive enterprise.

 

Learn more about IBM’s agile business consulting and transformation services.

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