Business Agility: What Is It & Why Is It Important?

Everyone is buzzing about the power of business agility these days. But what does agility mean in business, and how can it contribute to your organization’s overall success and long-term growth?

We’ll provide a primer on business agility that examines the core concept, its benefits, and some challenges you may encounter as you strive to create a more agile organization.

What is business agility?

Business agility refers to a company’s ability to adapt to emerging changes in the business environment. An agile business can effectively respond to change, reduce operating and production costs, and accelerate time to market — all without sacrificing quality.

The concept is based on the agile method in software development, which prioritizes minimal overhead, short development cycles, and frequent process analysis and improvement. Business agility applies these fundamental development principles to the entire organization.

What is an agile organization? How to go agile in an enterprise

The agile methodology allows a company to quickly and effectively respond to emerging opportunities and unexpected threats to business continuity. These may exist externally or internally and fall into commercial, social, political, moral, legal, or technological categories.

For instance, ineffective resource management capabilities are an internal threat, but they also represent an opportunity to implement new technologies, such as a management information system (MIS).

With an agile business model, you can upgrade your technology integrations, improve your resource management capabilities, reduce waste, and remove barriers to growth. 

Responding to threats is only one attribute of an agile organization. Additionally, an agile business can:

• Adapt swiftly to market changes
• Demonstrate flexibility when responding to customer needs
• Maintain a competitive advantage
• Implement changes in an efficient and cost-effective way

To cultivate these attributes and capabilities, your organization must first implement processes and governance protocols that ensure well-vetted and consensus-based decisions. Additionally, you need the necessary infrastructure to empower staff to act swiftly. 

Business agility framework

There are three core elements of an agile business framework, which are as follows:

Culture

To create an agile business, you must focus on revamping your culture. This means empowering your team to make decisions and act with intention.

An empowered team requires robust yet user-friendly technologies, such as a cloud-based warehouse management system, automation tools, and customer relationship management software. By providing your staff with the right tools, you give them the information and abilities they need to make decisions at the speed of business.

Leadership

Ultimately, every major decision falls at the feet of you and your leadership team. By embracing agile principles at the executive level, you create a cascading effect that permeates your business. 

When you and your team act decisively, your line-level staff can do the same. That said, working quickly is only part of the equation. You must also support your decisions using timely, relevant data and ensure agreement among the leadership team.

Governance

Implementing a comprehensive governance framework will accelerate decision-making processes while ensuring everyone understands their role’s responsibilities and boundaries. It helps identify who has what authority and holds your staff accountable for their choices.

If you already have a comprehensive set of governance policies, revisit them to confirm they support your agile business journey. 

3 benefits of business agility

So, what is the benefit of business agility? There’s no single answer, as the advantages of an agile framework vary based on several factors, including your industry and the extent to which you implement these principles.

That said, most organizations will experience three key benefits:

1. Better cross-departmental collaboration

Embracing business agility principles tears down data silos between teams and departments. As a result, your staff can easily collaborate, communicate, and share information between departments. 

2. Improved supply chain visibility

An indirect benefit of business agility is improved supply chain visibility. To support agile decision-making, you must streamline internal and external data flow by adopting new, integrated technologies. As you implement new tools, you’ll find it easier to send and receive data, track inventory, and access real-time insights.

3. Enhanced challenge management

Achieving better business agility enables you to quickly adapt to emerging threats in your market while remaining focused on the customer experience. You aren’t restricted by months-long development cycles or overly complex long-term strategies. Instead, you can think outside the box and implement creative solutions to business hurdles.

Challenges of business agility

Making your business more agile seems like an easy call — after all, you can improve your responsiveness to challenges, drive innovation, and boost visibility. However, business agility initiatives can easily go off the rails and dull your company’s competitive edge. 

For instance, your business agility initiative could become detrimental if you overemphasize short-term solutions and neglect long-term planning altogether. Focusing on the here and now doesn’t mean forgoing a comprehensive strategy. You should balance your overarching game plan and daily operations as needed to address the challenges of the day.

Giving your teams too much leeway can also spark issues with business agility. When your staff isn’t working within a clear governance framework, departments may inadvertently hinder one another by implementing adversarial solutions to business challenges. 

Improve business agility with Orderful

Streamlining communication with your trading partners is vital to achieving an agile business. If you want to remove friction from your operations and become a more agile company, Orderful’s fast, modern EDI solution is a valuable addition to your organization.

With Orderful, you can achieve real-time data exchange, enhance collaboration with your trading partners, and support your supply chain operations. Speak with an expert today to learn more.