Why are organisations increasingly turning to agile? For some, it’s to become more innovative and respond to disruption. For others, it might be to cut out waste and streamline processes, or to attract top talent by fostering a more modern way of working. Most however are turning to agile for a competitive edge.
At its core, agile is about getting the right people working closer together, orientating around the customer and getting to value sooner, informed by continual feedback loops. Applying this concept at scale across an entire organisation however can be complex.
Businesses are increasingly undertaking ‘agile transformations’, going all in with agile across technology, business and support functions. This involves more than simply introducing new ways of working, and often incorporates new structures, processes and cultures — it’s a big shift for the workforce that can’t be underestimated.
In some cases, organisations are fortunate enough to have visionary leaders who will trail-blaze through internal politics and make the change regardless of cost or complexity, but for many others it’s more complicated. Leaders will want to know what the payback is for the investment, how it can be measured and when they will see results. And all too often, ‘cost out’ becomes the primary driver — after all, it’s easier to measure than intangible benefits such as the ability to respond more quickly to disruption.
Therefore, as management teams and boards try to understand the benefits of agile, it’s important to develop a more holistic case beyond just costs, and be more strategic in understanding and identifying the full spectrum of benefits.
Whilst an agile transformation may reduce some level of bureaucracy for teams and reduce levels of hierarchy, a much greater benefit lies in the more efficient use of company resources. More efficient means lower cost, right? Not always.
Consider the following scenario: an organisation manages to simplify their decision-making structures that in turn improve speed of delivery. However, If they want to realise this as a cost saving, many assume this means reducing headcount, and probably from the very team that was trying to deliver value in the first place.
Another way of looking at it, however, is that agile ways of working mean that teams are able to spend more time being productive, and therefore a greater share of the firm’s investment in new products or services is spent on creating value instead of internal bureaucracy and processes.
So how can you build a compelling case for change? And how can the cost of any ‘transformational’ effort be reduced? Let’s look at some pragmatic examples of measuring tangible benefits.
We also need to be mindful of the cost of an agile transformation. With one of the promises of running an agile business being its return on investment, transformation budgets are often in the firing line. Here are a few strategies to leverage existing momentum in other areas and reduce the upfront investment ask.
An agile transformation is more than just a fancy new way of working. At the company level, it has the potential to streamline processes, reduce waste and ensure that investments are spent on value adding, not paper pushing and red tape. While the adoption process should be strategic, starting small and leveraging existing areas of innovation and forward-thinking staff, the return on investment can be well worth it. Optimised work flows will decrease overheads, reduce the rate of failed projects and transform the employee experience. Moreover, an agile transformation can ready a company to respond quickly, and resiliently to disruption. In today’s fast-paced world of technological and social change, such an agility should not be underestimated as a differentiator.
For more information on agile transformations, visit PwC Australia’s Agile Advisory practice.
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