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Delivering agility through IT

Chief Information Officers and their teams are in a prime position to help their enterprises anticipate changing market dynamics, adapt ...

By Ajit Melarkode , Mark From-Poulsen and Sugath Warnakulasuriya 01 September 2004)

Chief Information Officers and their teams are in a prime position to help their enterprises anticipate changing market dynamics, adapt rapidly to them, and accelerate the changes required, say Ajit Melarkode, Mark From-Poulsen and Sugath Warnakulasuriya. The key to clearly linking technology to the business is agility.
Delivering agility through ITThe rate of change in markets, technologies and value chains is accelerating. The average life time of an S&P 500 company fell from around 65 years in the 1930s to around 20 years in the 1990s. Similarly, the average lifetime of products has been dramatically reduced. Increased product commoditisation, reduced customer loyalty and increased switching, growing competition, intensifying price and cost pressures, and the increased need for scale economies are the business realities. An organisation’s foresight and responsiveness in dealing with such external factors determines whether it thrives, perishes or simply survives.

Against this backdrop, agility is increasingly crucial. Agility is the capacity to anticipate changing market dynamics, adapt to those dynamics, and accelerate enterprise change faster than the rate of change in the market, to create economic value. We believe there are five levers of agility, which need to be used together. Quality and efficiency are the prices to play, while visibility, velocity, and flexibility are the factors which differentiate enterprises. By this, we mean that any enterprise needs to have a comprehensive view of its operations, be able to take the right decisions based on this and be able to adapt quickly to changing circumstances. It must strive to do this better than the competition and at optimal cost.

Increasingly, technology plays a strategic role in creating this agility. Evolving technology, such as Business Process Management (BPM) and utility computing, as well as improved application of existing technology, are enabling end-to-end process management, rapid application development, the seamless sharing of business resources and the ability to expend budgets primarily based on demand (Figure 1).

Chief Information Officers (CIOs) are uniquely positioned to drive value creation by using IT to increase agility. They increasingly have the opportunity to participate in corporate and business strategy planning and work across business units in identifying opportunities to improve value via IT (Figure 2).

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