Business-agile enterprise (B-AE) is a field of study of different business & IT methods that work together to create an agile and competitive business model.
Contents
- Overview
- Business Technology Management Institute Agility research
- MIT Center for Information Systems Research Agility research
- Agile companies show higher profit growth
- Agile Companies exhibit superior Business Value relative to their industry groups
- Agility focused businesses have reduced IT costs
- The business agile enterprise approach
- Technique
- Business Agile Proficiencies
- Business agile enterprise framework
- References
Overview
Business-agile enterprise (B-AE) is an amalgam of different business & IT methods that work synergistically to create an agile and competitive business model. These disciplines include business technology management, service-oriented architecture, IT governance, SOA governance, IT portfolio management, business process management, Control objectives for information and related technology (CobiT), enterprise architecture, business architecture, project management, Information Technology Infrastructure Library, ITIL V3 (Alignment of IT to business), IT service management, information management, matrix management, and business process modeling.
Business-agile enterprise improves financial measurements such as margins, profitability, time to market, revenue growth, earnings per share, ebitda (earnings before interest, taxes, depreciation & amortization, return on equity), return on assets, and return on investments.
Agile companies make more money with less resources and lower costs.
Business Technology Management Institute, Agility research
Business Technology Management Institute (BTM) conducted 5 years of business agility research across 50 industries worldwide. Their document, "Business Technology Convergence Index," summarizes the financial benefits a firm can accrue in converging their business & IT groups.
Agile companies have converged their business & IT worlds and higher revenue growth and net margins relative to their industry groups.
Agile Companies not only grow at a faster pace than their peers, but they also exhibit consistently greater returns than those of their direct competitors.
These figures are not limited to any one area within the enterprise and are not "IT-specific." They also do not measure returns on any single project, rather, they measure enterprise-wide returns, and reflect the EBITDA of the entire enterprise. The financial effects are enterprise-wide, since the key management capabilities are interconnected, and because both the business and technology professionals in a B-AE actively share ownership of decision-making and execution.
MIT Center for Information Systems Research Agility research
In the book, "Leveraging the New Infrastructure", the idea of treating IT as a portfolio of investments, just as corporate finance handles their investment portfolios, is documented as a way to assess IT business value. Agility is a major contributor to these financial benefits.
Agile companies show higher profit growth.
Between agile and staid companies there is a 50% profit difference.
Agile Companies exhibit superior Business Value relative to their industry groups.
Agile companies are IT Savvy. An IT Savvy firm uses a digital platform to integrate a set of electronic business processes and the technologies, applications, and data supporting these processes. Managers in these companies elevate their firm's performance by a consistent use of IT. They use disciplined core processes and then apply the resulting data to both operational and strategic decision-making tasks.
Agility-focused businesses have reduced IT costs
Weill and Broadbent's results show;
MIT has proven that IT departments that have a cost focus spend more and get less than those of an agility focus.
The business-agile enterprise approach
A business-agile enterprise is an ongoing journey to a state of greater industry competitiveness. A B-AE strives to achieve larger degrees of agility to match their industry's competitive requirements rather than using a reorganization to improve competitiveness.
Technique
The B-AE is a top–down, business approach that summarizes in one place the joint business & IT elements necessary to compete.
- IT investments – e.g., service-oriented architecture infrastructure so stable and ubiquitous as to become a utility
- Business technology investments – e.g., reuse policies and new roles such as the business service champion and the business service analyst
- Identifies software, hardware, products & services that execute the particular capability
- Identifies business & technology gaps
- Shows business & technology redundancies
- Highlights where acquisitions fit
Business-Agile Proficiencies
The B-APs are a set of ten (10) practices and competencies that define agility from a practical standpoint.
- Business & IT Convergence (Asset Sharing & Mega-Alignment)
- Competencies that drive Superior Value from IT (IT Savvy)
- IT portfolio asset class management (enterprise architecture)
- Governance (direction, control & distributed authority for decision making)
- Senior management leadership (management involvement)
- Business control of information (intellectual capital & information visibility)
- Business process understanding (component business modeling)
- Business case (business value documentation throughout lifecycle)
- Key business performance indicators (consistent & continuous benefits valuation)
- External relationships (external assets, skills & competencies to act on opportunities)
Business-agile enterprise framework
The business-agile enterprise framework describes how a B-AF functions in real-world operations. It highlights the big picture and shows how business and IT can work together. The B-AEF is a unifying management system that connects the business & technology sides of the company and facilitates their coordination as a whole. It addresses business & technology as one holistic, structured management system achieving consistent vertical and horizontal integration.