Change as a Growth Enabler

Despite the inevitability of change, the resistance to change is so pervasive that it has inspired numerous publications and an entire industry of change management experts dedicated to overcoming it (e.g., Lientz and Rea, 2004). The inability to change is certainly seen as a major flaw in business, resulting in the call for agile management, agile IT, and agile thinking. Yet, despite the dread with which many organizations face change, change can itself be used for strategic advantage—such as the changes resulting from the adoption of a disruptive technology, like the internet. Many changes actually drive business growth, such as:

• Mergers & Acquisitions
• The addition of a major new customer
• Disasters and other events that bring new market demands and opportunities
• Expanding / global markets
• Changing enterprise boundaries

Thriving through growth and change does take agility – which Gartner Research defines as “the ability to sense environmental change and respond efficiently and effectively to that change” (Newman and Logan, 2006). Agility can be seen at the root of other qualities demonstrated by successful businesses:

• Innovation – the ability to think flexibly enough to perceive and respond to emerging opportunities
• Sustainability – the ability to not only explore emerging opportunities but to reconfigure the business as needed to exploit them
• Resilience – the ability to rebound quickly from a setback

Given the importance of agility in not only surviving but profiting from change, there are few good definitions of what makes an organization agile and fewer coherent plans for becoming agile. Gartner Research outlined such a plan in the 2006 Achieving Agility series, addressing issues within the corporation and across the value chain. In all cases, they recommended a formal information management program and sustainable data quality practices to achieve agility.

IT as an Agility Enabler

Business agility largely depends on agile, integrated information systems. “The information exchange required by agility is substantial. Because the first step in being agile is ‘sensing environmental change,’ information access and information quality are key enablers or inhibitors to agility” (McCoy and Plummer, 2006). The ability to exploit business-to-business (B2B) developments depends on the ability to extend trusted data to suppliers and customers, which in turn requires clean, consistent, semantic interpretation of master data (White and Koslowski, 2006). Quality information provides the foundation for growth. It is very difficult to grow and change if there isn’t a good, solid basis including a well designed IT infrastructure and good data practices.

For IT to enable growth and agility, it must be:

• Accountable – with clear visibility into transaction histories everywhere in the organization it is needed – and compliant with Sarbanes-Oxley and other regulatory requirements
• Flexible – easy to change in response to new processes, markets, and channels
• Reliable – based on good data quality, trusted sources, and managed complexity

IT as an Agility Inhibitor

The hasty implementation of new technologies in the 1990s, without fully integrating systems or changing the business as needed to exploit the technology, often resulted in costly IT complexity and disappointment with the ability of IT to deliver promised benefits. As a result, few companies used the downturn as an opportunity to prepare for the return of growth by correcting the root causes of IT complexity (Mattern, Schönwälder and Stein, 2003). In The Adaptable Corporation, Eric Beinhocker (2005) cites “path dependence” on existing resources as one of the key obstacles to agility, because “A company...might be stuck with the wrong resources to go in a given direction because reconfiguring them would take too much time and money.” The conflicting constraints in large software systems such as Enterprise Resource Planning (ERP) packages can result in a level of complexity that makes change nearly impossible. Redundant applications, spaghetti networks, and information “silos” further increase the complexity and rigidity.

Designing IT for agility and growth remains a significant challenge, because information is growing exponentially, and even with the introduction of ERP and Service Oriented Architectures (SOAs), many of the problems that plagued disparate, legacy systems remain. For example, SOAs that create “modular” business processes by building a wrapper around existing systems have been touted as a silver bullet to the problem of IT complexity. But the old adage, “garbage in, garbage out,” applies here as well. The SOA itself will not deliver any more benefits than the legacy systems it supposedly replaces if it delivers the same poor quality data (Rettig, 2007).

 

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