Thursday, November 08, 2007

Defining and measuring Business Agility

In my previous post on defining Business Agility I had defined it as follows

Business Agility = Business Alignment + IT Flexibility

Business Alignment: Alignment between the various business units
IT Flexibility: Alignment between Business and IT + ability to rapidly deploy new business capability

Business Agility = Business Intuition + IT * (BPM + SOA)

Of course this definition is pretty generic and the next obvious question is how do we measure Business Agility? Typically most business have one primary measurement criteria - company
financial results such as revenue, operations cost, stock price and profits. There are alternate ways for measure business by adopting Six Sigma, Lean, etc. Again this approach is still business focused - and does not help in measuring IT Flexibility (especially as very rarely have I see IT organizations actually adopt Lean, Six Sigma or any such measuring criteria - maybe that will change :) ).

After giving this much thought I came up with this domain model for measuring Business Agility.

The Business Agility would be measured against each of the following domains:

Business Strategy (Business):
  • Business Strategy clearly defined and communicated
  • Clear defined goals for objectives for each of the business units
  • Responsibility and Accountability
  • Enterprise culture
  • Innovation capability

Operations Framework (Business):

  • Alignment of the business unit objectives to the enterprise objectives
  • Alignment of operations teams across business silos
  • Accountability and measurement of delivery to enterprise goals, rather than business unit goals
  • Global Business Process definitions with localization capabilities
  • Politics and interaction between business units
  • Major part of compensation liked to enterprise goals, rather than business unit goals.

Information Strategy (Business):

  • Identified clearly information needs for supporting business process
  • Identified common business entities/objects such as customers, products, orders and partners that span business processes and silos
  • Classified data into reference, transactional, master and analytics
  • Information Governance for managing common data across business units

Governance (Business & IT)
  • Business Governance (details to follow later)
  • IT Governance (details to follow later)

Branding (Business & IT)

  • Business Branding (customer, web site, multi-channel, products, etc.)
  • IT Branding (Business perception, customer/partner perception, IT staff, etc.)

Technology Strategy (IT)

  • Developing IT Roadmap (SOA Blueprinting, Standards, Architecture, etc.)
  • Current state (baseline)
  • Future/Target state
  • Technology Roadmap aligned to business priorities

Program Management (IT)

  • Program Management Office
  • Application life cycle
  • Application Portfolio Management
  • SOA life cycle
  • IT Governance (SOA Governance)

IT Operations Maturity (IT)

  • CMM Level
  • ITIL adoption
  • SLAs
  • Business Continuity
  • Infrastructure maturity

These are defined at a very board level and need to be drilled down to identify or develop a maturity model for each of these domains.

- Yogish -


Unknown said...

Nice Post
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