Why Most Firms Fail to Adopt Business Agility

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May 22, 2018

Over-emphasis on cost and risk aversion leads organizations to stumble in adopting business agility, finds a new study by Pegasystems. Unfortunately, organizations that fail to adopt agile business strategies report 25% lower satisfaction with performance across key business metrics. This certainly points to the fact that agility is becoming the need of the hour and organizations that are not agile and left behind the curve.

The research defined business agility as the ability to react nimbly and consistently, balancing speed and stability through operational discipline to rapidly exploit change and complexity. The study, implemented by Frost & Sullivan, surveyed nearly 500 senior executives across industry sectors, concludes that less than half of all respondents (43%) classify themselves as agile adopters today, with one in five indicating they either will not be adopting within the next 1-2 years or have no plans to adopt at all.

Organizations that prioritize reducing project costs and minimizing project risk form the majority of all non-agile adopters. In addition, a lack of executive sponsorship or insufficient support is cited by almost half (47%) of decision makers interested in adopting an agile business approach as one of the primary barriers to progress. While nearly all organizations have a focus on minimizing cost and risk, those placing the greatest emphasis on those areas were least likely to be agile adopters and, correspondingly, least likely to see the benefits adopters report.

“It’s clear that by adopting an agile approach, organizations can make themselves more efficient, more profitable, and more engaged with their customers,” said Don Schuerman, chief technology officer, Pegasystems. “However, to reap these benefits, businesses need to become more comfortable with risk. Business leaders that focus on reducing costs and resisting risk are in more danger of becoming obsolete by allowing their competitors to gain a significant advantage.”

On the contrary, those who have chosen to adopt an agile approach within their organization reported a wide range of benefits, including significant increases in revenue growth (84%), profitability (78%), customer acquisition (78%), and customer retention (77%). Meanwhile, 82% of strategic agile adopters surveyed rated overall customer satisfaction and quality of customer experience higher than their industry counterparts.

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