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Agile transformation – A paradigm shift for the digital economy

Today, most organizations across industries are on the path to achieving enterprise agility to survive in a changing market. Agile practices are being looked at from a far deeper perspective than just being a software development methodology; agile is now the operating model for today’s digital economy. Traditional organizations rooted in the industrial economy have focused on the ‘organization as a machine’ ideology for decades. With the inception of the internet and digital era, we witness the transformational shift where organizations are becoming more innovative, collaborative, and value-oriented.

The agile impact: Agile organizations are stable as well as dynamic at the same time. With iterative modifications and continuous improvement cycles, these organizations can embrace uncertainty and ambiguity with greater confidence. They are open, inclusive, and can inculcate customer feedback at every stage of the development process. Faster product delivery is achieved as a result of agile software development, addressing the traditional ‘application delivery lag’ that most organizations face. One of the critical drivers for organizations to move to agile development is to break free of internal silos, enabling business and IT teams to work cohesively in a cross-functional and empowered network. Although it might seem unlikely, the growth achieved by agile software methodology is quantifiable. A McKinsey research report on ‘agile impact engine’ shows that agile solutions allow an improvement of 30 to 50 percent in operational performance metrics such as time-to-market, issue resolution speed, target achievement rate, and many other industry specific metrics. The research also shows a 20 to 30 percent improvement in financial performance, affecting businesses’ bottom line. Above all, it is proven that when pressure is exerted on agile organizations, their performance improves because of external conditions. The agile operating model’s relevance is more than ever in the current scenario, where the pandemic has affected everyone, and organizations are being tested on the ability to deal with unpredictable situations.

The journey to enterprise agility: Most organizations today are on a journey to enterprise agility. A comprehensive agile transformation involves every aspect of the organization i.e., people, structure, processes, strategy, and most importantly, technology. Leadership, and how the leadership shapes an organization’s culture from a reactive to creative one are the two most crucial enablers of effective agile solutions. An organization’s structure in terms of linkage mechanisms, reporting, and governance structures are essential in creating an environment that fosters innovation. From the process standpoint, agile software development methodology encourages collaboration through a network of autonomous self-empowered teams. Finally, and probably the most essential aspect for enterprise agility is the organization’s technological landscape. Digitization plays a vital role in every industry, from digitizing legacy platforms to implementing automation in cognitive processes. Businesses are leveraging technology in their agile journey by becoming early adopters of such new-age technologies.

Leveraging technology: Having the right technical infrastructure is essentially the backbone of any agile organization. Implementing testing automation to reduce time-to-market, cognitive automation for faster decision-making, and eliminating dependencies on third-party application vendors; are some of the prominent use cases where businesses are leveraging technology. Agile approach to software development implements enterprise-level standardization of technologies that follow the cloud platform’s implementation, DevOps, and authentication algorithms. It minimizes the interdependence and handovers that are common to traditional organizational models. With advanced analytics, digitization, and process automation, we can make strategic use of technology to lower customer acquisition costs, and improve operational efficiency, automating the core business processes.

We at ValueLabs have over two decades of experience with helping organizations progress through their agile transformation journeys. We recently helped a US-based leading provider of financial services technology with process automation solutions using agile product development approach. We used our Cognitive Extractor accelerator to automate the customer onboarding process on their product platform, resulting in 30% reduction in manual efforts. For our clients, we act as a technology partner who has the right skillset and expertise, and can help them through consultative business solutions to achieve their set agile goals.

References:

  • https://www.mckinsey.com/business-functions/organization/our-insights/enterprise-agility-buzz-or-business-impact
  • https://assets.kpmg/content/dam/kpmg/nl/pdf/2019/advisory/agile-transformation.pdf
  • https://www.mckinsey.com/business-functions/organization/our-insights/the-journey-to-an-agile-organization

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