The Agile Enterprise: Reinventing your Organization for Success in an On Demand World

THE AGILE ENTERPRISE

THE

AGILE ENTERPRISE Reinventing your Organization for Success in an On Demand World

NIRMAL PAL

eBusiNt;ss RESEARCH CENTER SMEAL COLLEGE OY BUSINESS PENNSYLVANIA STATE UNIVERSITY

• DANIEL C. PANTALEO STRATEGIC ISSUES GROUP

SAPAG

fyA Springer

Library of Congress Catalog ing-in-Publication Data A CLP. Catalogue record for this book is available from the Library of Congress. ISBN 0-387-25077 -8 (HC)

ISBN 0-387-24373 -9 (SC)

e-ISBN 0-3S7-25078-6

Printed on acid-free paper. © 2005 Springer Science*Business Media, Inc. All rights reserved. This work may not be translated or copied in whole or in part without the written permission of the publisher (Springer Scienc&4-I}usiness Media, lnc. t 233 Spring Street, New York, NY 10013, USA), except for brief excerpts in connection with reviews or scholarly analysis. Use in connection with any form of information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now know or hereafter developed is forbidden. The use in this publication of trade names, trademarks, service marks and similar terms, even it' the arc not identified as such, is not to be taken as an expression of opinion as to whether or not they arc subject to proprietary rights. Printed in the United States of America, 9 8 7 6 5 4 3 2 1 spnngeronline.com

SPIN 11363873

Dedication To the corporate sponsors oj the (Business Research Center at the SMEAL College of Business at the Pennsylvania State University for their financial and material support, as well as their enthusiasm in publishing this book, —Nirnial Pal —Daniel C. Pantaleo

To my wife, Mitra, my daughters Nee/a and Nupur. and my grand children Nina and Nilihilfor their sustaining love and support. —Nirmal Pal

To my wife. Judy, and all of my children, Elizstbeth, Sarah, Schotland, and Briumion, for their sustaining love and support and for the innovation and agility they each demonstrate in doingso, —Daniel C Pamaleo

Table of Contents Acknowledgements Introduction: The Agile Enterprise: Reinventing Your Organization for Success in an On Demand Vforld

xiii 1

BY NIRMAL PAL AND DANIEL C. PANTALEO

Chapter 1: Emergence of the Agile Enterprise: Building Organizations for the Global, Digital Economy

11

BY N:RMAL PAL AND MICHAEL LIM

Introduction Em erging Agility Agile Enterprise Organizing for Agility Visions and Values Breakthrough Culture Adaptive!Innovative Team

Adaptive Infrastructure Conclusion

Chapter 2: Business Process Automation: A Framework foi Combining Best and Next Practices for the Agile Enterprise

33

BY MATHIAS KIRCHMER AND DANIEL C. PANTALEO

Introduction Business Agility Through Best and Next Practices Business Process Automation as Enabler The Business Process Factory; A Critical Link

Chapter 3: Services are the Language and Building Blocks of an Agile Enterprise BY MICHAEL URAM AND BILL STEPHENSON

Introduction Agile Enterprises Deliver Value in the Form sfServices

49

viii

THE AGILE ENTERPRISE

The Architecture of Agility: Services art- the Building Blocks of an Agile Enterprise Architectural Change From What and for Whom to How Management of Change Aligning the Tactical for Strategic Intent Summary

Chapter 4: The On Demand World: Mapping the Government Genome

87

BYJANETCALDOW

The Government Genome On Demand Information Technology Infrastructures Case Study: On Demand Arizona Understanding Where We've Been and Where Were Going

Chapter 5: Innovation Management in an Agile Enterprise

101

BY ANTHONY C. WARREN AND MARKTURRELL

Introduction Background The Collapse of Protective Barriers New Models of Innovation Corporate Culture Innovation Management Conclusion

Chapter 6: Agile Enterprises and Offshore Outsourcing

127

BY RAVI KALAKOTA

Introduction What is Offshore Outsourcing? The Offshore Outsourcing Process Landscape Executing Offshore Outsourcing Summary C h a p t e r 7 : Adaptive I n n o v a t i o n M a n a g e m e n t BY VtNKATHSH SHANKAR AND JELENA SPANJOL Introduction Solutions-based Innovation Management: Agility versus Adaptivity What is Adaptive Innovation Management? The Model

151

TABLE OF CONTENTS

ix

Moving fiom Prodtici-to-Customer to Capability-to-Customer Problems Linking Burrten to Deep Capability to Customer Problems Linking How Can Firms Move from Conventional to Adaptive Innovation Management? Implications of Adaptive Innovation Management

Chapter: 8 The DNA of Organizational Agility

167

BY RALPH W K L B O R N AND ViNCt KASTEN

Uncertainty is the Mother of Invention—and Agility Con' Challenges to Organizational Agility Root Causes The DNA of Organizational Agility—Answering the Question of the How The 3D Business Blueprint—Creating Semantic Consistency Fred Skinner Faces a Crisis Building the Agile Court System Success in Western Australia A 90-Day Plan: Converting the Agility DNA to Use From Tacit to Executable—'The Crux for Agility—One More Time

Chapter 9; Agile and Adaptive: Making Organizations More Responsive to Customers - A Xerox Case Study Bv DI/VNL-: M C G A R R Y AND FRUD HELLER

The Solution—A New Way of Keeping Satisfied Customers... Keeping Customers Satisfied The Sentinel Customer Satisfaction Assurance System How Sentinel Works How Sentinel is Deployed Comparison With Satisfaction Surveys Experience-Based Learning Information Management Never Had Measures ofSuccess Customer Experiences With Sentinel Future Deployment National Integrated Healthcare Delivery System XBRG Findings on the Xerox Satisfaction Measurement Process—Seeing the Forest, Not the Trees

195

x

THE AGILE ENTERPRISE

Chapter 10: Implementing the Agile Enterprise: The E-Business Opportunity Model

219

Bv DAVID SCHUFF, JACQUELINE ZINN, AND MUNIR MANDVIWALLA

Executive Overview Understanding the Potential of E-Business Technologies Building the E-Business Opportunity Model Contextual Opportunity factors Product Opportunity Factors Transactional Opportunity Factors Opera tionalizing the EOM as the EOl Application of the EOl: Life Insurance and Pharmaceutical Manufacturing Common E-Business Opportunities across Industries Common E-Business Challenges across Industries Drawing Lessons from the E-Business Opportunity Model Chapter 11: Security and Privacy for the Agile Enterprise

255

;

BY BRIAN GEFFERT AND latAN SAII

Security aridPrivacy's Role m the Agile Enterprise Not the Roadblock hut a Process Breakdown Root Cause: Lack of Common Risk Language Additional Factors Leading to Security and Privacy Breakdown Silo Security and Privacy: Ineffective and Inefficient Use of Resources Impact of the Security and Privacy Breakdown on the Organization Agile Enterprise Approaches to Security and Privacy Strategic Approach to Enterprise Security and Prmacy Impact on Current Initiatives Security and Privacy: The Enabling Foundation Agile Security and Privacy: Strategic Approach and Foundation

Chapter 12: Small Manufacturers and the Agile Enterprise BY DAVE CRANMER

Introduction Today's Environment

Infrastructure Business Processes Manufoctu ring Processes System Requirements

277

TABLE OF CONTENTS

xi

Relationships Basic Components in the Agile Enterprise Tomorrow's Strategies Conclusion

Chapter 13: IT and the Agile Government: The Role of Information Technology in Improving the Efficiency of Government Functions

295

BY SAMIR SHAH AND ARTHUR STEPHENS

Introduction Customer Drivers of Agility Agility Barriers The Agility Framework The Pennsylvania Technology Case Study IT Governance Strategic Planning IT Projects Must Measure-Up Focusing on Customer Service is Key to Success Being Efficient and Effective is Always a Process Developing a Committed IT Workforce Takes Managerial Commitments Consistent Communications is Critical Conclusion About the Contributors Index.....

.,

309 321

Acknowledgments Leading business publications, university and corporate studies, and anecdotal conversations with corporate leaders, make very clear that corporate ability will continue to dominate corporate thinking and drive business and technology decisions imo the near and longer term future. The 211' century has brought with it an increase in the already rapid pace ot change in all spheres of life and business. Successful enterprises are beginning to respond rapidly to these changes with business process innovations and using technology to support those innovations. Agility is competitive power and depends on the ability to successfully connect thought and action, theory and practice, and business and technology. To fully understand the pervasive implications of agility in industry, government, and academia requires a wider collaboration among technologies, competencies, policies, and business models. That is precisely why we invited recognized thought leaders representing each of these segments [o share [heir experiences and insights on the opportunities and challenges associated with corporate responsiveness and flexibility. All of them are well known in their respective fields of work, and they are all very busy individuals. Yet they made the time to address these issues because of the importance of agility. We are eternally grateful to our chapter authors and acknowledge their contributions. We also thank our publisher, Kiuwer Academic Publishers, and specially Sean Lorre, for recognizing the potential of this book and encouraging us to complete the manuscript with speed. We thank Danielle Wolfe and, Ray Liddick of Open Door Visions tor helping us with copy editing and typesetting respectively. We thank our student intern, Blair Goldberg, for his untiring efforts in coordinaring activities ar various stages of this book. Finally, we thank our colleagues at the eBusiness Research Center (www.ebrc.org) at the Pennsylvania State University and our corporate sponsors for their help, support, and enthusiasm. Nirmal Pal University Park, Pennsylvania Daniel C Pantaleo Newton Square, Pennsylvania December 2004

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4HEVARIOUSCHAPTERSINTHISBOOKCOVERTHEhWHYv THEhWHATv ANDTHEhHOWv FROMTHEPERSPECTIVESOFTHECONTRIBUTINGEXPERTS7E THEEDITORSOFTHISBOOK DID NOTATTEMPTTORATIONALIZETHEVARIOUSCHAPTERSINTOONECOHERENTTHOUGHT)NSTEAD WEMAINTAINEDTHEORIGINALITYANDTHEINTEGRITYOFTHEANALYSISANDTHEINSIGHTSSO THATYOUTHEREADERWILLHAVEAFEASTOFIDEASTOTHINKABOUTANDlNDTHEMOSTTHAT SUITTHEINITIATIVESWITHINYOURORGANIZATION !LSO THEPREMISEOFTHISBOOKISNOTTOBEPRESCRIPTIVE ASPRESCRIPTIONSWILL VARYCASEBYCASE7EATTEMPTEDTOBEDESCRIPTIVE USINGANECDOTESTOMAKEAPOINT CASESTUDIESTODELIBERATEONKEYISSUES ANDPERSONALEXPERIENCESANDINSIGHTSTO IDENTIFYEMERGINGBESTPRACTICES

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#HAPTERSUMMARIES #HAPTER  %MERGENCE OF THE !GILE %NTERPRISE "UILDING /RGANIZATIONS FORTHE'LOBAL $IGITAL%CONOMY 4HE EMERGING GLOBAL DIGITAL ECONOMY IS FORCING BUSINESSES TO DEVISE NEW STRATEGIES DEVELOP NEW CAPABILITIES DESIGN NEW ORGANIZATIONAL STRUCTURES AND DEPLOY NEW BUSINESS MODELS 4HE DISRUPTIVE EFFECT OF FAST TECHNOLOGICAL INNOVATIONS AND ADOPTIONS REDElNE THE ESSENCE OF TODAYS COMPETITIVENESS 4RADITIONAL FORMS OF ORGANIZATION CAN NO LONGER RESPOND EFFECTIVELY TO THE NEW MARKETPLACEDYNAMICS"USINESSESCANNOTCOMPETEWITHINmEXIBLEINFRASTRUCTURES OUTMODEDBUSINESSMODELS ANDlXEDPRODUCTSANDSERVICES!CROSSTHEBUSINESS LANDSCAPE WEAREWITNESSINGTHEEMERGENCEOF!GILE%NTERPRISE)NORDERTOTHRIVE SUCCESSFULLY THESEENTERPRISESADOPTNEWVISIONSVALUES EMBRACEBREAKTHROUGH CULTURE CULTIVATE ENTREPRENEURIAL TEAMS AND CONSTRUCT ADAPTIVE INFRASTRUCTURES

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7EUSETHECONCEPTTOACCENTUATETHEIMPERATIVENESSOFTODAYSORGANIZATIONSTO ANTICIPATECHANGES ADAPTSWIFTLYTOTHECHANGESANDASSERTEFFECTIVELYFORSTRATEGIC GAINS4HISCHAPTERELABORATESANDEXPLORES!GILE%NTERPRISEWITHINTHECONTEXTOF TODAYSMARKETPLACE

#HAPTER"USINESS0ROCESS!UTOMATION!&RAMEWORKFOR#OMBINING "ESTAND.EXT0RACTICESFORTHE!GILE%NTERPRISE !GILE ENTERPRISES MUST ADAPT TO CONTINUALLY CHANGING BUSINESS ENVIRONMENTS IN ORDERTOSURVIVEINTHELONGTERM4ODOSOTHEYHAVETOCOMBINEBESTANDNEXT BUSINESS PRACTICES "EST PRACTICES ENSURE EFlCIENCY NEXT PRACTICES REALLY LEAD TO COMPETITIVE ADVANTAGES 4RADITIONAL BUSINESS PROCESS AUTOMATION SOLUTIONS LIKE %20 3#- OR#2-SYSTEMSFOCUSONTHEIMPLEMENTATIONOFBESTPRACTICES.EXT GENERATIONPROCESSAUTOMATIONENABLESTHEIMPLEMENTATIONOFNEXTPRACTICESATAN ECONOMICALLY ACCEPTABLE COST LEVEL4HIS IS POSSIBLE THROUGH A mEXIBLE INTEGRATION OF BUSINESS PROCESS DElNITION AND SOFTWARE APPLICATION SUPPORT4HE APPROPRIATE SOFTWARESUPPORTMUSTBEDYNAMICALLYADAPTABLETOTHEBUSINESSPROCESSESDElNITION SOTHATITSUPPORTSTHEEXECUTIONOFENTERPRISESPECIlCPROCESSES"USINESSPROCESS MODELSREmECTINGBESTANDNEXTPRACTICESDRIVETHECONlGURATIONOFNEXTGENERATION PROCESSAUTOMATIONSOLUTIONSTHAThORCHESTRATEvTHEAPPROPRIATEAPPLICATIONSUPPORT 4HEYBECOMETHECRITICALLINKBETWEENSTRATEGYANDEXECUTION

#HAPTER  3ERVICES ARE THE ,ANGUAGE AND "UILDING "LOCKS OF AN !GILE %NTERPRISE !FUNDAMENTALPRECEPTOFhSERVICESvISTHATTHECUSTOMERISTHEJUDGEOFTHEVALUE )TISCRITICALLYIMPORTANTTODELIVERVALUE INTERNALLYANDEXTERNALLY ASFORMALIZED SERVICES BECAUSE FORMALIZED SERVICES ARE THE CUSTOMER DRIVEN GOVERNANCE MECHANISM OF AN !GILE %NTERPRISE &ORMALIZED SERVICES BY THEIR VERY NATURE CANSERVEASTHECOMMONLANGUAGEBETWEENANENTERPRISEANDITSCUSTOMERSAND BETWEENTHE,/"SAND)4"YUTILIZINGAHORIZONTALARCHITECTURALMODELSUCHAS $ARWIN FORMALIZEDSERVICESCANSERVEASTHEBUILDINGBLOCKSOFAN!GILE%NTERPRISE !SERVICEMATURITYMODELTHATIDENTIlESWHATSERVICESAREDELIVEREDTOINTERNALAND EXTERNALCUSTOMERSCANSERVEASTHEFRAMEWORKFORJUDGINGPROGRESSALONGTHE!GILE %NTERPRISEJOURNEY4HISSERVICEMATURITYMODELCANBEEXTENDEDACROSSMULTIPLE MANAGEMENTOFCHANGEDISCIPLINESTOGUIDEPROGRESS REDUCERISK ANDMAXIMIZE RETURNONINVESTMENTS4HETACTICALCHANGES EXPERIENCEDBYEVERYENTERPRISEON AREGULARBASIS CANBELEVERAGEDTOWARDSTHESTRATEGICINTENTOFTRANSFORMINGINTO AN!GILE%NTERPRISE



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#HAPTER4HE/N$EMAND7ORLD-APPINGTHE'OVERNMENT'ENOME 4HE GOVERNMENT GENOME IS AN EXCELLENT STRUCTURE TO UNDERSTAND INFORMATION mOWS AMONG COMPONENTS 4HE ENTERPRISE ARCHITECTURE DElNES THE STANDARDS GOVERNINGHOWINFORMATIONISMANAGEDANDEXCHANGED4HE)4CAPABILITYINCLUDES COMPUTINGPLATFORMS OPERATINGSYSTEMS SOFTWARE DATA ANDNETWORKSREQUIREDTO SUPPORTTHECOMPONENTSINTHEOVERALLBUSINESSMODEL 4HEENTERPRISEARCHITECTUREPROVIDESTHEFRAMEWORKFORSELECTINGSPECIlCPRODUCTS AND BUILDING A CAPABILITY THAT CAN ADAPT TO CHANGING REQUIREMENTS OVER TIME )4 IS THE LIFELINE TO ENABLE INTEGRATED BUSINESS ACTIVITIES TO WORK BY SEAMLESSLY CONNECTING GOVERNMENT DEPARTMENTS PARTNERS AND SUPPLIERS 4HE CUMULATIVE RESULTOFTHESETECHNOLOGYINFRASTRUCTURECHANGESISAREALOPPORTUNITYTOLEAPFROG INCREMENTALCHANGE TOINTEGRATEDISPARATE STANDALONEOPERATIONSINTERNALLYAND EXTERNALLY ANDOPTIMIZETHEMASANINTEGRATEDWHOLESOTHEYWORKBETTERTOGETHER ANDDELIVERADDITIONALVALUE

#HAPTER)NNOVATION-ANAGEMENTINAN!GILE%NTERPRISE 4HISCHAPTERLOOKSATTHEKEYROLEINNOVATIONMUSTPLAYWITHINANENTERPRISE FACEDWITHUNCERTAINTYINARAPIDLYCHANGINGGLOBALENVIRONMENT4OSETTHESCENE WEBRIEmYDISCUSSTHEMACRO ECONOMICTRENDSTHATMAKEINNOVATIONMANDATORY NOTALUXURY4HESETRENDSLEADTOFUNDAMENTALCHANGESINTHENATUREOFINNOVATION FROMAPURELYPRODUCTORSERVICEFOCUSTOCONTINUOUSANDHOLISTICCREATIVITYINALL ASPECTSOFBUSINESS4OSUCCEEDTHEENTERPRISEBECOMES AN hINNOVATION ENGINEv 4HIS DEMANDS NEW MANAGEMENT SKILLSˆSKILLS THAT MOST OF YOU WILL NOT HAVE LEARNEDAS EVENNOW THEYAREJUSTAPPEARINGINEDUCATIONCURRICULA9OUWILLGAIN INSIGHTINTOTHESEhNEWvINNOVATIONFORMSTHROUGHSOMESHORTCASESILLUSTRATING THESEVENMAJORNEWATTRIBUTESTHATSUCCESSFULhINNOVATIONENGINESvEXHIBIT7E ALSO DISCUSS HOW AS MANAGERS YOU CAN LEAD YOUR CORPORATE CULTURE TO SUPPORT CONTINUOUS AND AGILE INNOVATION &INALLY YOU WILL LEARN HOW INNOVATIONS IN INNOVATION MANAGEMENT ITSELF CAN BE USED TO MINE THE KNOW HOW EXPERIENCE AND CREATIVE CAPACITY OF YOUR ORGANIZATION IN REAL TIME WHILE UNDERPINNING A SUPPORTIVECULTURE

#HAPTER!GILE%NTERPRISEAND/FFSHORE/UTSOURCING )NTERNET ENABLED OFFSHORE OUTSOURCING IS ENABLING lRMS TO BECOME AGILE 4HE STRATEGYHASMATUREDCONSIDERABLYOVERTHEPASTlVEYEARSANDOFFERSSIGNIlCANT ADVANTAGESTOCOMPANIESTHATKNOWHOWTODOITRIGHT#OMPANIESLOOKINGTOCUT OPERATINGCOSTS FOCUSONCORECOMPETENCIES EXTENDCUSTOMERSERVICE COMPLYWITH

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NEW REGULATIONS OR ACHIEVE OTHER GOALS NOW COUNT OFFSHORE OUTSOURCING AS ONE ORGANIZATIONALSTRATEGYTHEYCANUSETOPROCESSANDABSORBCHANGE/RGANIZATIONAL STRATEGIESTENDTOCOMEANDGO BUTOFFSHOREOUTSOURCINGHASSTAYINGPOWER)TIS APOWERFULIDEA ALBEITADIFlCULTONETOIMPLEMENT THATCANPRODUCESUBSTANTIAL REWARDS!DAPTIVEENTERPRISESSUCHAS$ELL )"- (0 AND'%HAVEALREADYSEIZED THISMODELTOCREATENEWVALUEPROPOSITIONS#HANGEISCONSTANTINTHEBUSINESS WORLD)NmEXIBILITYINANYFORM WHETHERINLEGACYSYSTEMSOREMPLOYEEATTITUDES ISTHEENEMYOFADAPTIVE COMPETITIVECOMPANIES)FAGILITYISTHEGOAL OFFSHORE OUTSOURCINGISONEOFTHEMETHODSORGANIZATIONSCANUSETOATTAINIT

#HAPTER!DAPTIVE)NNOVATION-ANAGEMENT 4HISCHAPTERIDENTIlESTHATMANAGERSWHOPRIMARILYFOCUSONINCREASINGTHESPEED OF THEIR INNOVATION PROCESSES LOSE SIGHT OF THE LONG TERM STRATEGIC IMPLICATIONS OF THEIR INNOVATION DECISIONS -OREOVER AGILITY DEMANDS AN UNDERSTANDING OF CUSTOMER DEMANDS AND RELIANCE ON CUSTOMER FEEDBACK )RONICALLY SIMPLE CUSTOMERFEEDBACKMASKSTHEUNDERLYINGCUSTOMERPROBLEMSETSˆANDONLYADEEP UNDERSTANDING OF CUSTOMER PROBLEM SETS ALLOW MANAGERS TO DEVELOP INNOVATIVE CUSTOMER SOLUTIONS THAT BREAK OUT OF STANDING CUSTOMER NEED AND PRODUCT DElNITIONS (ENCE MANAGERS MUST RECOGNIZE HOW IMPERATIVE A DEEP LINKING TO CUSTOMERS MARKETS AND PROBLEM SETS ARE )N LINKING TO CUSTOMER PROBLEM SETS THE SCOPE OF INNOVATION MUST ALSO BE REDElNED 2ATHER THAN WORKING ON DEVELOPING NEW PRODUCTS OR SERVICES OR PRODUCTSERVICE PLATFORMS COMPANIES MUST UNDERSTAND AND LINK THEIR INTERNAL CAPABILITIES TO CUSTOMER PROBLEM SETS 4HIS REQUIRES INNOVATION AT AN ORGANIZATIONAL LEVEL WITH A STRATEGIC SYSTEMATIC AND SYSTEMIC FOCUS #OMPANIES THAT IMPLEMENT SUCH AN ADAPTIVE INNOVATION MANAGEMENTMODELWILLHAVETOENSUREASUPPORTIVEINFRASTRUCTUREANDCULTURE BUTCANLOOKFORWARDTOSIGNIlCANTRETURNSTOTHEIRINNOVATIONINVESTMENT

#HAPTER4HE$.!OF/RGANIZATIONAL!GILITY 4HEPROCESSOFCODIFYINGANDSCALINGTACITKNOWLEDGEINTOWELL DElNEDBUSINESS PROCESSES TECHNOLOGY ENABLERS AND OTHER hHARDv ASSETS AND ARTIFACTS THAT MANY OTHERSCANUSECONSISTENTLY EFFECTIVELY ANDCOST EFFECTIVELYDETERMINESWHETHEROR NOTANORGANIZATIONCANBEANDISAGILE(OWSO"EINGAGILEREQUIRESACRITICAL MASSOFPEOPLEANDUNDERLYINGPROCESSESSUPPORTINGTHOSEPEOPLETOBEABLETO MOVEQUICKLYINRESPONSETOORINANTICIPATIONOFSPECIlCOPPORTUNITIES4HEONLY WAYTOMOBILIZESUCHABROADBASEOFPEOPLEANDPROCESSESMOVINGINADIRECTED FASHION IS THROUGH A SHARED UNDERSTANDING OF WHAT IS EXPECTED OF WHAT TO DO OFHOWTODOIT ANDOFMEASURINGTHEVALUEOFTHOSEACTIONS7EOFTENHEARTHE



4(%!'),%%.4%202)3%

DISCUSSIONS AROUND @STANDARDS @FRAMEWORKS AND THE NEED FOR @SHARED BUSINESS ANDORTECHNOLOGYSEMANTICSFOREFFECTIVEACTION ALLOFWHICHREmECTTHEENDRESULT OFTHISPROCESSOFCODIFYINGIDEAS NASCENTVALUEPROPOSITIONS ANDBESTPRACTICES INTOORGANIZATIONALACTIVITIESANDMEANSTHATCANBESCALED!NDITISTHISPROCESSOF CODIlCATIONTHATCOMPRISESTHEUNDERLYING$.!FORORGANIZATIONALAGILITY

#HAPTER!GILEAND!DAPTIVE-AKING/RGANIZATIONS-ORE2ESPONSIVE TO#USTOMERSˆ!8EROX#ASE3TUDY 7HATSTARTEDASASEARCHFORREASONSASTOWHY8EROXCUSTOMERSATISFACTIONDATAWAS NOTASSURINGCUSTOMERLOYALTYOREXPLAININGDEFECTIONSFROM8EROXHASGONEWELL BEYOND THAT CREATING A MODEL FOR CUSTOMER RELATIONSHIPS THAT IS MAKING 8EROX BOTHMOREAGILEANDMOREADAPTABLEINSERVINGCUSTOMERS4HEWORKTHATLEDTO THEDEVELOPMENTOF3ENTINELHASPROVIDEDPLAUSIBLEREASONSWHYMANYCUSTOMERS DEFECTˆTHELACKOFQUICKIDENTIlCATIONANDAPPROPRIATESOLUTIONSOFALLPROBLEMS CUSTOMERENDUSERSMAYHAVE#ONVENTIONALCUSTOMERSATISFACTIONMEASUREMENT CANNOTADDRESSTHISLACKITTOOKTHEDEVELOPMENTOFANINNOVATIVENEWSOLUTION 3ENTINEL TO DO THAT 3ENTINEL IS REALLY A TRUE SENSE AND RESPOND SYSTEMˆA CUSTOMER BACK ROLE ANDACCOUNTABILITYSTRUCTUREFORACTION)TSMUCHMORETHAN AGREATMARKETINGIDEA3ENTINELISAWAYFOR8EROXANDITSCUSTOMERSTOCO CREATE NEWVALUE!NDTHATSTHEREALDElNITIONOFADAPTABILITY

#HAPTER)MPLEMENTINGTHE!GILE%NTERPRISE4HE% "USINESS /PPORTUNITY-ODEL %STABLISHEDORGANIZATIONSCONTINUETOSTRUGGLEWITHHOWTOEVALUATETHEPOTENTIAL OFAPPLYING)NTERNET4ECHNOLOGIESTOCREATECOMPETITIVEADVANTAGEANDIMPLEMENT THECONCEPTOFANAGILEENTERPRISE4HEEXAMPLESANDINSIGHTSPRESENTEDBYOBVIOUS )NTERNET SUCCESS STORIES SUCH AS !MAZONCOM DO NOT EASILY APPLY OR LEVERAGE THE STRENGTHS AND WEAKNESSES OF ESTABLISHED lRMS AND INDUSTRIES 4HE % "USINESS /PPORTUNITY-ODEL%/- ANDITSASSOCIATED% "USINESS/PPORTUNITY)NDEX%/) DESCRIBEDINTHISARTICLEPROVIDESMANAGERSWITHANEASYTOAPPLYANDCOMPREHENSIVE TOOLFORANALYZINGANINDUSTRYANDTARGETINGAREASOFOPPORTUNITYTOIMPLEMENTTHE AGILEENTERPRISE4HE%/-AND%/)PROVIDEMANAGERSWITHATOOLTOPRACTICEOPEN ENDEDPROCESSESOFSTRATEGICDISCOVERYNEEDEDTOCREATETHEAGILEENTERPRISE7ESEE THROUGHTHECASESTUDIESTHATE BUSINESSCANPOTENTIALLYREDUCEBARRIERSTOENTRYAND PROVIDEOPPORTUNITIESFORINCREASESINTHEEFlCIENCYOFTRANSACTIONS(OWEVER OUR ANALYSISALSOREVEALSTHATTHECOMPLEXITYOFVARIATIONSINGOVERNMENTREGULATIONAND THELACKOFABILITYFORE BUSINESSSITESTODELIVERASENSORYEXPERIENCETOCUSTOMERSCAN BEBARRIERSTOTHEIMPLEMENTATIONOFANAGILEENTERPRISESTRATEGY

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#HAPTER3ECURITYAND0RIVACYFORTHE!GILE%NTERPRISE /RGANIZATIONSTHATMAINTAINTHEmEXIBILITYTOQUICKLYADAPTTOCHANGESINTHEIR ENVIRONMENT REQUIRE TOOLS FRAMEWORKS AND REPEATABLE PROCESS TO ALLOW THEM WORK THROUGH THE UNCERTAINTY AND APPROPRIATELY ADDRESS THE RISKS GENERATED BY THE CHANGES IN THEIR OPERATIONS OR BUSINESS ENVIRONMENT &OR EXAMPLE ORGANIZATIONS THAT ALLOW CUSTOMERS TO ACCESS AND MANAGE THEIR PERSONAL DATA THROUGH ON LINE SYSTEMS TO REDUCE THE AMOUNT OF CUSTOMER SERVICE CALLS HAVE OPENEDUPTHEORGANIZATIONS)4ENVIRONMENTTOTHE)NTERNETANDTHEPOTENTIAL THREATS ENCOMPASSED IN USING THE )NTERNET AS A MEANS OF COMMUNICATION )N TERMS OF SECURITY AND PRIVACY FOR DATA WITHIN TODAYS ORGANIZATIONS AND THEIR ABILITYTOPROTECTTHATDATAINLIEUOFNEWANDCHANGINGMETHODSTOUSETHATDATA IE ACCESSING INFORMATION ON LINE OR OUTSOURCING DATA PROCESSING THE !GILE %NTERPRISENEEDSTOHAVEINPLACEASECURITYANDPRIVACYFOUNDATION4HISSHOULD EFlCIENTLYANDEFFECTIVELYADDRESSTHERISKSRELATEDTOITSCURRENTENVIRONMENTOR NEWBUSINESSINITIATIVES ANDPROVIDETHEAPPROPRIATERISKMIGRATIONSTRATEGIESTHAT WOULDALLOWTHEORGANIZATIONTOTAKEADVANTAGEOFTHECHANGEINTHEMARKETPLACE WITHOUTADDINGADDITIONALRISKTOTHEOVERALLORGANIZATION

#HAPTER3MALL-ANUFACTURERSANDTHE!GILE%NTERPRISE "ECOMINGANAGILEENTERPRISEWITHTHEABILITYTORESPONDQUICKLYANDEFFECTIVELY TO CHANGES IN THE GLOBAL BUSINESS ENVIRONMENT IS A BUSINESS NECESSITY 4HAT MEANS ADDING THE TOOLS TECHNIQUES AND TECHNOLOGIES TO YOUR SMALL BUSINESS OPERATIONS7HICHTOOLS WHICHTECHNIQUES ANDWHICHTECHNOLOGIESDEPENDSON YOURCUSTOMERSANDMARKETS'ETCLOSERTOYOURCUSTOMERS&INDOUTWHATTHEIR REALNEEDSARE!DDSERVICESTOWHATYOUOFFER-AKEYOURSELFINDISPENSABLE!SK YOURSELF h7HATVALUEDO)BRINGTOMYCUSTOMERS)SITINDESIGN SERVICE BEING CLOSETOTHEMARKET ORSOMETHINGELSEv)FYOUMAKEAPRODUCT TAKEAGOODLOOK AT THE ONES THAT REQUIRE TIGHT TOLERANCES ARE DIFlCULT TO MANUFACTURE OR HAVE CRITICAL RELIABILITY REQUIREMENTS ,OOK AT THE PROCESSES USED TO MAKE THEM !RE THEYUNIQUEPROCESSES ORDOTHEYREQUIRESPECIALIZED SKILLEDLABORTHATGIVESYOU ANADVANTAGE(AVINGASKEDYOURSELFTHESEPRODUCTANDSERVICEQUESTIONS NOWASK YOURSELFABOUTYOURCUSTOMERS$OYOUHAVETHERIGHTCUSTOMERS.EXT ASKABOUT YOURCOMPANYSOPERATIONS!REYOUASCOSTCOMPETITIVEASYOUCANBE5SINGTHE ANSWERSTOTHOSEQUESTIONS THENINVESTINANDRESTRUCTUREYOURBUSINESSTOBECOME ASAGILEASPOSSIBLE ANDBEPOSITIONEDTOTAKEADVANTAGEOFOPPORTUNITIESASTHEY BECOMEAVAILABLE



4(%!'),%%.4%202)3%

#HAPTER  )4 AND THE !GILE 'OVERNMENT 4HE 2OLE OF )NFORMATION 4ECHNOLOGYIN)MPROVINGTHE%FlCIENCYOF'OVERNMENT&UNCTIONS 4HE PROCESS OF SETTING UP GOVERNMENT )4 SYSTEMS AND ORGANIZATIONS TO ACHIEVE AGILITY IS AN ARDUOUS PROCESS ! LONG LIST OF CHALLENGES SUCH AS LIMITED BUDGETS LEADERSHIPTURNOVER RESTRICTIVEREGULATIONS ANDRETENTIONOFMANPOWERCONTINUE TOMAKETHEPROCESSACHALLENGINGONE4OEFFECTIVELYUSE)4TOACHIEVETHELONG TERMGOALOFAGILITY GOVERNMENTORGANIZATIONSNEEDTOBEAWAREOFTHESEBARRIERS AND BE WILLING TO MEET THESE CHALLENGES 4HIS CHAPTER USES 4HE 0ENNSYLVANIA 3TATE'OVERNMENTTOILLUSTRATEHOWGOVERNMENTSMUSTRESPONDTOTHECHALLENGE OF BECOMING AN AGILE ORGANIZATION 4HE 0! 3TATE 'OVERNMENT IS MADE UP OF  SEPARATE AGENCIES SERVES OVER  MILLION PEOPLE AND OVERSEES A  BILLION BUDGET OF STATE AND FEDERAL EXPENDITURES 4O WORK WITH MAXIMUM EFlCIENCY AND EFFECTIVENESS THE STATE HAS TO BE ABLE TO RESPOND QUICKLY TO A CHANGING ENVIRONMENT 4HE CHALLENGE IS HOW TO ACHIEVE AGILITY GIVEN THE COMPLEX AND SOMEWHATCUMBERSOMESTRUCTUREOFGOVERNMENT 6ARIOUS CHAPTERS IN THIS BOOK OFFER MULTIPLE PERSPECTIVES ON THE IMPERATIVES AND CHALLENGES OF AN !GILE %NTERPRISEˆFROM VERY BROAD STRATEGIC ISSUES DOWN TO IMPLEMENTATION ISSUES OF PROCESS TRANSFORMATION E BUSINESS LEVERAGE AND )4 INFRASTRUCTURE4HECHAPTERSADDRESSVARIOUSPERSPECTIVESONAGILITYFROMINDUSTRY TOGOVERNMENT FROMLARGETOSMALL ANDFROMSTRATEGICTOTACTICAL4HEREWILLBE MANY OPPORTUNITIES FOR INNOVATION AND ENHANCEMENTS IN REALIZING A REAL TIME ENTERPRISE IN THE DECADES AHEAD OF US 7E HOPE THAT THE FOUNDATIONS OFFERED IN THIS BOOK WILL HELP READERS AND RESEARCHERS IN MAKING THOSE NEXT PRACTICES INNOVATIONS

2EFERENCES "REEN "ILLh,IVINGIN$ELL4IMEv&AST#OMPANY.OV 4HE#ONFERENCE"OARDh#%/#HALLENGEv3TUDY  )"-h9OUR4URN4HE'LOBAL#%/3TUDYv 0AL . AND*2AY0USHINGTHE$IGITAL&RONTIER)NSIGHTSINTOTHE#HANGING,ANDSCAPEOFE "USINESS .P!-!#/- 

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4(%!'),%%.4%202)3%

4ODAY MORETHANEVER CORPORATESUCCESSDEPENDSONTHEABILITYTOANTICIPATE ADAPT ANDACTONECONOMIC TECHNOLOGICAL ANDSOCIALCHANGESOVERTIME)TSTOUGH TOSENSEASWELLASRESPONDTOTHECHANGESINTHEGLOBAL DIGITALECONOMYˆANDITS GETTINGHARDERALLOFTHETIME0REDICTABILITY LINEARITY ANDhONEBESTWAYvNOLONGER CHARACTERIZE THE BUSINESS ENVIRONMENT 3CHUMPETERS GALES OF CREATIVE DESTRUCTION ARESWEEPINGFEROCIOUSLYACROSSTHEECONOMICECOSYSTEM4HISISEVIDENCEDINTHE 'LOBAL #%/ 3TUDY  CONDUCTED BY )"- "USINESS #ONSULTING 3ERVICES IN WHICH#%/SACROSSALLINDUSTRIESHIGHLIGHTEDMARKETFORCESASTHEMOSTIMPORTANT EXTERNALFACTORTHATWILLAFFECTTHEIRORGANIZATIONSINTHENEXTTHREEYEARS

&IGURE-ARKET&ORCESINTHE'LOBAL $IGITAL%CONOMY

)T IS THE AGGLOMERATIONS OF MARKET FORCES THAT ARE FUELING TODAYS VOLATILITY AND VELOCITY &ACED WITH GREATER VARIETY AND CHOICES IN THE MARKETPLACE THE POWER HAS SHIFTED TOWARD CONSUMERS 4HEY ARE DEMANDING HIGHER QUALITY PRODUCTS GREATERPERSONALIZATION BETTERSERVICES FASTERDELIVERY ANDBIGGERDISCOUNTS)TSNO WONDERTHATONE#%/IN)"-S'LOBAL#%/3TUDYREMARKEDh!PRODUCT THATUSEDTOSCORENINEOUTOFTENWITHITSCUSTOMERS NOWMERELYGETSASIXv !TTHEPRESENTTIMEANDTHEFORESEEABLEFUTURE THE)NTERNETREMAINSONEOF THEMAJORDISRUPTIVEFORCESINTHEMARKETPLACE#YBERSPACEENABLESCONSUMERSTO FORMONLINECOMMUNITIES WHICHCANADVERSELYAFFECTBRANDNAMESANDCOMPANY REPUTATIONS-OREANDMORECONSUMERSAREALSOUSINGTHE7ORLD7IDE7EBTO INmUENCETHEIRPURCHASINGDECISIONS4HEGLOBAL DIGITALSUPERSTRUCTUREHASCAUSED THEWORLDMARKETTOBECOMEMOREINTEGRATED BUTATTHESAMETIME CONSUMERNEEDS AREBECOMINGMOREDIVERSEANDSEGMENTED CAUSINGORGANIZATIONSTORESPONDWITH

%-%2'%.#%/&4(%!'),%%.4%202)3%



MARKETING SALES ANDDISTRIBUTIONPROGRAMSTHATAREMOREDIVERSEANDSEGMENTED 0ROCTERAND'AMBLEISAGOODCASEINPOINT4HE&ORTUNEHOUSEHOLDPRODUCTS COMPANYHASBEENMANUFACTURINGTHEIRFAMOUSBRAND4IDEDETERGENTSINCE 4HEIR SECONDCOMMERCIALSONNATIONALTELEVISIONCHANNELSARELEGENDARYAND ARE OFTEN CONSIDERED TO BE BENCHMARKS IN MASS MARKETING 4ODAY THEY HAVE FOURTEENVERSIONSOF4IDE SPECIALLYDESIGNEDFORFOURTEENDIFFERENTTARGETMARKETS WHICHHASCAUSEDTHEIRMARKETINGCAMPAIGNSTOBEMORECUSTOMIZED4HEYNOW SPEND LESS ON BROADCAST MEDIA LIKE NETWORK TELEVISION AND MORE ON NARROWCAST MEDIA LIKE THE )NTERNET RADIO CHANNELS AND SPECIALIZED MAGAZINES AND CABLE TELEVISIONCHANNELS %XECUTIVESAREALSOFACINGUNRELENTINGlNANCIALPRESSURES4HEMEDIANRATEOF RETURNFOR53CONSUMERPRODUCTGOODSHASFALLEN3HAREHOLDERSANDANALYSTSTOO ARE BECOMING IMPATIENT WITH MARKET VALUATION CONCERNS !CCOUNTING SCANDALS BREDMISTRUSTANDCAUSEDTHEIMPOSITIONOFSTRICTERREGULATIONSEGTHE3ARBANES /XLEY !CT )N RECENT YEARS ORGANIZATIONS HAVE FACED NUMEROUS NEW REGULATORY ISSUES NAMELYCROSS BORDERE COMMERCE ONLINETAX PRIVACYISSUES ANDHOMELAND SECURITY4HISISCOMPOUNDEDBYTHEUNPREDICTABLESOURCESOFEXTERNALTHREATSEG THE7ORLD4RADE#ENTERATTACK 3!23 THEWARIN)RAQ -AD#OWDISEASES THE "IRD &LU %PIDEMIC THE POWER BLACKOUT IN .ORTHEASTERN 5NITED 3TATES IN  ANDCOMPUTERVIRUSES 4HE DISRUPTIVE EFFECT OF FAST TECHNOLOGICAL INNOVATIONS AND ADOPTIONS REDElNE THE NATURE OF TODAYS COMPETITIVENESS 7ITH THE INmUX OF NEW AND INNOVATIVE COMPETITORS IN THE GLOBAL MARKETPLACE THE DYNAMICS OF INDUSTRIES ARE CHANGING4HE )NTERNET AND ADVANCES IN COMMUNICATION TECHNOLOGIES HAVE MADEOUTSOURCINGMOREECONOMICALLYCOMPELLING ESPECIALLYOFFSHOREOUTSOURCING

&IGURE&ROM6ALUE#HAINSTO6ALUE.ETWORKS



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WHICHISEXPECTEDTOREACH53 BILLIONINFROM53 BILLIONIN  )$#  6ERTICALLY INTEGRATED VALUE CHAINS ARE DISINTEGRATING INTO VIRTUALLY INTEGRATED VALUE NETWORKS SEE &IGURE  WHERE COLLABORATION CO CREATION AND CO OPETITIONBETWEENlRMSARECRITICALSUCCESSFACTORS )NDUSTRIESARERECONlGURINGANDREDElNINGASTHETHRUSTOFTHEIRMAINPRODUCTS ANDSERVICESUNDERGOTRANSFORMATION#OCA#OLAISMAKINGMOREMONEYSELLING BOTTLEDWATERTHAN#OKE'-ISMAKINGMOREPROlTFROMITSlNANCINGOPERATIONS '-!#&INANCIAL3ERVICES THANITSAUTOMOTIVEDIVISIONOF5NISYSREVENUE IS COMING FROM SERVICES THAN PRODUCTS /VER  OF )"-S REVENUE IS COMING FROM SERVICES4O REMAIN COMPETITIVE IN SUCH A RAPIDLY CHANGING AND COMPLEX ENVIRONMENT ORGANIZATIONSARETRYINGTOCHANGEBUTARECHALLENGEDWITHINmEXIBLE BUSINESSAND)NFORMATION4ECHNOLOGY)4 INFRASTRUCTURES!TTHESAMETIME THEY FACECULTURALISSUESTHATALSORESISTRAPIDCHANGE)"- WHICHISATEXTBOOKSUCCESS STORYINTRANSFORMATION TOOKSIXYEARS FROMTO TOALIGNITSELFWITHTHE INDUSTRY 4HEINCREASINGLEVELOFUNCERTAINTYANDCOMPLEXITYREQUIRESNEWORGANIZATIONAL CONlGURATIONS AND OPERATING MODELS 4RADITIONAL FORMS OF ORGANIZATION CAN NO LONGER RESPOND EFFECTIVELY TO THE NEW MARKETPLACE DYNAMICS -ECHANISTIC ORGANIZATIONSHAVEDIFlCULTYRESPONDINGTOTHECHANGINGCIRCUMSTANCES"USINESSES CANNOLONGEROPERATEWITHINmEXIBLEINFRASTRUCTURES OUTMODEDBUSINESSMODELS AND lXED PRODUCTS AND SERVICES -ANUEL #ASTELLS ONE OF WORLDS BEST KNOWN SOCIAL SCIENTISTS OBSERVED THIS ERA AS THE hCRISIS OF THE TRADITIONAL CORPORATE MODELOFORGANIZATIONBASEDONVERTICALINTEGRATION ANDHIERARCHICAL FUNCTIONAL MANAGEMENTv#ASTELLS P )NTHISERA WEAREWITNESSINGTHERISEOF NEW ORGANIZATIONAL PRINCIPLES 7ITH TECHNOLOGICAL ADVANCES ALTERNATIVE MODELS BECOMEPOSSIBLE VIABLE ANDFEASIBLEFORMANAGINGINTODAYSMARKETPLACE

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SENSE AND RESPOND(AECKELAND.OLAN  "USINESSESHAVETOBECOMEAGILETO THRIVEINTHEVOLATILEANDCOMPLEXENVIRONMENT 7E NEED THE REDElNITION AND RECONCEPTUALIZATION OF AGILITY )N THE RAPIDLY CHANGING MARKETPLACE TECHNOLOGIES SET THE PACE )NFORMATION TECHNOLOGY PARTICULARLY THE )NTERNET IS CAUSING UPHEAVAL IN MANY INDUSTRIES4HE )NTERNET TOOKONLYFOURYEARSTOREACHMILLIONUSERSWHEREASTHETELEPHONETOOKOVER YEARS THERADIOTOOKYEARS ANDTHETELEVISIONTOOKYEARS4HE)NTERNETIS DISSOLVINGBOUNDARIES ANDITSIMPACTISEXPERIENCEDWORLDWIDETHOUGHNOTEVENLY DISTRIBUTEDYET 4HEGLOBALDIGITALNETWORKOFFERSAWIDERANGEOFPOSSIBILITIESFOR ENTERPRISES TO CO CREATE WITH THEIR CUSTOMERS TO COORDINATE WITH SUPPLIERS AND PARTNERS ANDTOGENERATEREVENUE !S BUSINESSES PROGRESS UP THE LEARNING CURVE WE OBSERVE MORE CREATIVE AND PRODUCTIVEAPPLICATIONSOF)NTERNETTECHNOLOGIESFORREVENUEGENERATIONANDCOSTS REDUCTION $ELL )NC #HARLES 3CHWAB )NTEL "OEING )"- .44 $O#O-O (0 &ORD-OTOR E"AY ANDMANYMOREGLOBALCORPORATIONSAREUTILIZINGTHE)NTERNETFOR MILLIONSOFDOLLARSOFTRANSACTIONSEACHDAY'ENERAL%LECTRIC #ISCO3YSTEMS /RACLE ANDMANYMORECLAIMEDTOHAVESAVEDBILLIONSOFDOLLARSINEXPENSESBYDIGITIZING THEIR OPERATIONS )NCUMBENTS ARE REDElNING AND REDESIGNING EXISTING BUSINESS METHODOLOGIES AND START UPS ARE CARVING AND SOLIDIFYING THEIR NICHES IN THE NEW ECONOMY&ULLSTEAMAHEAD
4ODAY EXECUTIVES ARE FORCED TO RETHINK MANY KEY BUSINESS ISSUES 2ULES EXPECTATIONS PROCESSES STRUCTURES RELATIONSHIPS TACTICS AND WINNING FORMULAS ARE CHANGING 4HE )NTERNET IS RECONlGURING THE WAY ENTERPRISES COMMUNICATE REDElNINGVALUE CREATIONPROCESSES ENHANCINGCUSTOMERVALUEDELIVERYCHANNELS STREAMLININGSUPPLYCHAINS ALTERINGINDUSTRIALSTRUCTURES ANDRE WRITINGTHERULES OFCOMPETITION)THASALSOEXPOSEDTHEVULNERABILITIESOFMANYTRADITIONALBUSINESS MODELS AND ASSUMPTIONS &OR EXAMPLE THE MUSIC INDUSTRY IS COUNTERING THE ONSLAUGHTOFONLINElLE SHARINGACTIVITIES-0TECHNOLOGYCOMPRESSESTHEMUSIC lLE WITHOUT SIGNIlCANTLY DETERIORATING ITS QUALITY -0COM WAS A COMMUNITY WHEREARTISTSANDMUSICFANSCOULDDOWNLOADANDUPLOAD-0lLES(OWEVER ITS INHERENTLACKOFCONSIDERATIONFORPROTECTIONAGAINSTTHEILLEGITIMATEDOWNLOADING OF COPYRIGHTED MUSIC lLES INSTIGATED THE @WRATH OF THE MUSIC INDUSTRY 4HE 2ECORDING)NDUSTRY!SSOCIATIONOF!MERICA2)!! SUED-0COMANDSUCCEEDED INPROVINGTOTHECOURTTHATITVIOLATEDCOPYRIGHTSIN!PRILOF !TTENTIONSTHENSHIFTEDTO.APSTER.APSTERTECHNOLOGYOPERATESONAPEER TO PEERARCHITECTURETHATENABLESMEMBERSTOSWAP-0MUSIClLESWITHGREATER EASE)N.APSTERSCOMMUNITY -0lLESARENOTSTOREDIN.APSTER OWNEDSERVERS BUTINHUNDREDSOFTHOUSANDSOFINDIVIDUAL0#SWHICHBELONGTOTHEMEMBERSOF THE.APSTERCOMMUNITY.APSTERONLYPROVIDESSERVERSFORDIRECTORIESANDSEARCH CAPABILITIES WITHIN THE COMMUNITY )N .OVEMBER OF  ALONE  BILLION



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!NOTHER EXAMPLE IS %NCYCLOPEDIA "RITANNICA4HOUGH THIS IS A MUCH USED EXAMPLE WETHINKITISAPPROPRIATETOREVISITITHERE&ORALONGTIME ITSOLDITS VOLUMESETFORMORETHAN 53ANDEMPLOYEDANARMYOFSALESAGENTS"ILL 'ATESOFFEREDTOBUNDLETHECONTENTWITH-ICROSOFTPRODUCTS BUT%NCYCLOPEDIA "RITANNICA REFUSED ,ATER -ICROSOFT DEVELOPED %NCARTA ON #$ 2/- WHICH THREW THE CENTURY OLD BUSINESS INTO A TAILSPIN SINCE %NCARTA OFFERED A MUCH CHEAPERALTERNATIVEWITHADAZZLINGMULTIMEDIAPRESENTATIONOFINFORMATION )N A HIGHLY DYNAMIC MARKETPLACE OPPORTUNITIES ARE mEETING AND BUSINESSES MUST IDENTIFY AND SEIZE OPPORTUNITIES AS THEY ARISE 4HERE ARE MANY CASES OF ORGANIZATIONS WITH GREAT INVENTIONS THAT FAILED TO PROlT FROM THEM 0ROBABLY THE BEST KNOWN EXAMPLE IS THE FAILURE OF 8EROX #ORPORATION TO CAPITALIZE ON ITS0ALO!LTO2ESEARCH#ENTERS0!2# INNOVATIONSSUCHASTHE'RAPHICAL5SER )NTERFACE'5) ANDTHECOMPUTERMOUSE8EROX3YSTEMS$EVELOPMENT$IVISION COMMERCIALIZED'5)AS@8EROX3TAR BUTONLY UNITSWERESOLD(OWEVER !PPLE WENT ON TO UTILIZE '5) AND ALSO THE MOUSE FOR ITS THEN REVOLUTIONARY -ACINTOSH ANDTHERESTISHISTORY!NOTHERCASEIS$AIMLER#HRYSLERS04#RUISER 4HECARMAKERCOULDNTPRODUCETHECARFASTENOUGHTOMEETTHEMARKETSDEMAND FORITSANDMODELYEARS4HECARMAKERSPENTMILLIONDEVELOPING THE 04 #RUISER AND IT WAS A BIG HIT IN THE MARKET !LTHOUGH ITS4OLUCA PLANT IN -EXICO COULDNT ROLL 04 #RUISERS OFF OF THE ASSEMBLY LINE FAST ENOUGH THE CARMAKERCOULDNTSHIFTOVERmOWPRODUCTIONTOITSPLANTIN"ELVIDERE )LLINOIS4HIS ISMAINLYDUETOTHEINCOMPATIBILITYBETWEENTHETWOPRODUCTIONPLANTSTHEPAINT SHOPATTHE"ELVIDEREPLANTISNOTTALLENOUGHFOR04#RUISER)TISESTIMATEDTHAT $AIMLER#HRYSLERMISSEDTHEOPPORTUNITYTOADDANOTHERMILLIONTOITSPRETAX PROlT)NmEXIBILITY ASILLUSTRATEDINTHEEXAMPLESOF8EROXAND$AIMLER#HRYSLER STRATEGICALLY IMPEDES BUSINESSES CAPABILITIES AND CAPACITIES TO COMPETE AND RESPONDTOUNEXPECTEDSHIFTSINTHEINDUSTRY !GILITY IS ALSO ABOUT EXPLOITING DISRUPTIONS OR PUNCTUATED EQUILIBRIUM AND TOTHRIVEINNEWAREASOFGROWTH"USINESSESMUSTJUMPTHECURVEANDLEVERAGEON ANYINDUSTRYSHIFTS&OREXAMPLE E "USINESS%XCHANGEE "8­ AN)"-0REMIER "USINESS 0ARTNER STARTED OUT AS A PRINTING COMPANY SECURITY CHECKS CONSUMER PACKAGING STOCK SCRIPTS  )N  THE CHANGING TECHNOLOGICAL LANDSCAPE IGNITED THECOMPANYSWHOLESALETRANSFORMATIONINTOAN)4COMPANY4ODAY THECOMPANY PROVIDESE BILLING E PROCUREMENT PAYMENTSYSTEMS ANDSERVICESTOBIGCORPORATIONS EG!N0OST)RELAND #ABLE7IRELESS(+4 $EUTSCHE"ANK (3"#AND(ANG 3ENG "ANK 3INGAPORE4ELECOM AND TOGETHER WITH #ITIGROUP SUPPORTED &ED%X %6!!IR $AIRY&ARMERS AND#ARGOLUX.OKIA THEWORLDSLEADINGMOBILEPHONE MAKER HAS ALSO DISPLAYED A SIMILAR SORT OF TRANSFORMATION )T WAS ONCE A &INNISH CONGLOMERATEWITHDIVERSEBUSINESSESFROMMANUFACTURINGPAPERANDRUBBERBOOTS TOPRODUCINGCABLESFORTELEPHONEANDTELEGRAPHNETWORKS)N-AY .OKIAS MANAGEMENTMADEASTRATEGICDECISIONTODIVESTALLNON COREBUSINESSESANDFOCUS



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ANDRESEARCHERS!GILEENTERPRISEISTODAYSORGANIZINGFORMULA)TISDESIGNEDTO ADAPTANDINNOVATEWITHTHEKEYCHARACTERISTICSOF mEXIBILITYTOCHANGESAND  SENSITIVITYTOhWHATSGOINGONOUTTHEREv)TENCAPSULATESTHEMOVEMENTTOWARDS THEDEVELOPMENTOFANEWORGANIZATIONALPARADIGMANDFORMFORTHESTCENTURY ECONOMY

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P )MAGESOFORGANIZATIONAREhINTERPRETIVECONSTRUCTSORWAYSOFSEEINGx ALSOPROVIDEFRAMEWORKSFORACTIONv-ORGAN P 4HECONCEPTOFAGILE ENTERPRISE SENSITIZES US TO THE FUNDAMENTALS OF TODAYS BUSINESS ENVIRONMENTˆ NAMELYHIGHERVELOCITYOFCHANGEˆANDTHEKEYTOSURVIVALISTHEABILITYTOADAPTTO THECHANGESINREAL TIME)TADOPTSTHEOPENSYSTEMENVIRONMENTALMODEL WHERE ENVIRONMENTALFORCESSIGNIlCANTLYINmUENCETHEORGANIZATIONALSTRUCTURES STRATEGY ANDSUCCESS*AFFEE  )NADDITION THECONCEPTACCENTUATESTHEIMPERATIVENESS OFCONTINUOUSANTICIPATION SENSITIZATION ANDREACTIONTOINDUSTRYDYNAMICS IN ORDERTOGAINANDSUSTAINORGANICGROWTH!TTHESAMETIME ITALSOEMPHASIZESTHE ROLEOFINNOVATIONINCARVING ENTRENCHING ANDEXTENDINGLEADERSHIPNICHESINTHE INDUSTRYECOSYSTEM)TSTRETCHESOURSPECTRUMOFPOSSIBILITIESASWESTRIVETOBUILD ENDURINGORGANIZATIONS $ISRUPTIVE FORCES SUCH AS GLOBALIZATION DIGITIZATION DEREGULATION AND CUSTOMERIZATION STIMULATE ORGANIZATIONAL MUTATION OVER TIME -ILES AND 3NOW  DESCRIBE THE PROCESS OF SYNCING WITH THE BUSINESS ENVIRONMENT FOR COMPETITIVENESSASACHIEVINGSTRATEGIClT3UCHlTMUSTOCCURWITHINANDWITHOUT AN ORGANIZATION -ANAGEMENT PROCESSES AND ORGANIZATIONAL STRUCTURE INTERNAL MUSTBEAPPROPRIATELYDESIGNEDTOSUPPORTTHESTRATEGYEXTERNAL -ILESAND3NOW  EXPLAIN h&ITISAPROCESSASWELLASASTATEˆADYNAMICSEARCHTHATSEEKSTOALIGN THEORGANIZATIONWITHITSENVIRONMENTANDTOARRANGERESOURCESINTERNALLYINSUPPORT OFTHATALIGNMENTPERFECTlTISMOSTOFTENACONDITIONTOBESTRIVENFORRATHERTHAN ACCOMPLISHEDv P  4HE ECONOMICAL TECHNOLOGICAL AND SOCIETAL STATE OF mUX MAKESPERFECTlTHARDTOACHIEVE4HINK(ERACLITUSSmUXDOCTRINE h9OUCANNOT STEP TWICE INTO THE SAME RIVER FOR FRESH WATERS ARE EVER mOWING IN UPON YOUv 4HISISAMANIFESTATIONOFAGILITYTHATWECALLlTORADAPTATIONTOTHECHANGESIN ABUSINESSENVIRONMENT'ENERALLYSPEAKING WHENTHECHANGESAREINCREMENTAL THENADAPTATIONISANAPPROPRIATERESPONSE .OTONLYADAPTING AGILEENTERPRISESALSOINNOVATETOEXERTTHEIRINmUENCEIN THEMARKETPLACEORINNOVATEINRESPONSETOTHERADICALCHANGESINTHEMARKETPLACE 4HISINVOLVESTHECULTIVATIONOFVIBRANTANDROBUSTINDUSTRYECOLOGIES7ELL KNOWN ECOLOGIES IN THE )4 INDUSTRY INCLUDE -ICROSOFTS 7INDOWS 0ALM /3 3ONYS 0LAY3TATION AND .INTENDOS 'AME"OY WHICH ARE ORCHESTRATING AND MANAGING THROUGHTHEIRTECHNOLOGICALPLATFORMS!S)"-STABILIZEDITSELFINTHEMID S IT BEGANTOEXERTITSELFANDAIMEDTOBECOMETHESTANDARD BEARERINTHE)4INDUSTRY AGAIN)TBOLDLYPROPAGATEDITSVISIONOFE "USINESS ANDTHENTOOKALEADERSHIPROLE BYINVESTINGBILLIONSOFDOLLARSINDRIVINGFORWARDTHEOPENSOURCESOFTWARE,ATELY )"-ISEMBRACINGTHE/N$EMANDVISION WHICHISANOTHERNAMEFORTHEAGILE ENTERPRISE !GILITY CAN BE ATTAINED THROUGH A lTADAPTATION APPROACH ANDOR THROUGH AN INNOVATIVE APPROACH REFER TO &IGURE   7E CALL THIS THE CAUSE AND EFFECT OF

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&IGURE4HE"ALANCEBETWEEN!DAPTATIONAND)NNOVATION

AN AGILE ENTERPRISE4HROUGH ITS INNOVATIVE CAPACITY THE ENTERPRISE CHANGES THE ENVIRONMENTANDBECOMESTHECAUSEOFDISRUPTIONINTHEMARKETPLACE(OWEVER IT ALSO REACTS TO MARKET CHANGES AND REPRESENTS THE EFFECT OF MARKET CHANGES h"EHAVIOR IS A CONSEQUENCE OF THE CONTEXT CONFRONTING THE ORGANIZATIONv 0FEFFER AND 3LANCIK  P  4HE IDEA OF CAUSE AND EFFECT DElNES THE ESSENCE OF ANAGILEENTERPRISEAPERPETUALCYCLEOFREACTIVEANDPREEMPTIVEBEHAVIORSINTHE MARKETPLACE NOTONLYABSORBINGINDUSTRYFORCES BUTALSOGENERATINGANDEMITTING DISRUPTIVEFORCESINTHEINDUSTRYECOSYSTEM(ENCE THEAGILEENTERPRISENEEDSTO EFFECTIVELYSTRIKEABALANCE  #ONTINUOUSLY SENSING CHANGES IN MARKET FORCES AND RESPONDING WITH INCREMENTALCHANGESINBUSINESSMODELS7ECALLTHISADAPTATIONORlT  !NTICIPATINGRADICALCHANGESINMARKETFORCESANDRESPONDINGWITHNEW ANDBREAKTHROUGHBUSINESSMODELS7ECALLTHISINNOVATION (OWEVER A HIGHER DEGREE OF AGILITY SHOULDNT IMPLY IMPROVEMENT GREATER COMPETITIVENESS AND THE FORMULA FOR CORPORATE LONGEVITY 7E NEED TO DISSIPATE THETENDENCYANDFALLACYOFASSUMINGTHATHIGHERLEVELOFAGILITYDENOTESAUTOPIAN OR END STATE !N AGILE ENTERPRISE IDIOSYNCRATICALLY EMERGES FROM THE BUSINESS LANDSCAPE)TISANIDEAWHOSETIMEHASCOMETHATSWHYAGILEBEHAVIORSENACTED ANDSITUATEDINTODAYSMARKETPLACEDRAWITSPOTENCY7ESHOULDTHENFOCUSON HOW TO CULTIVATE FERTILE GROUND FOR NURTURING THE AGILE BEHAVIORS /UR QUEST IS NOT TO UNCOVER DETAILED PREDICTIONS BUT TO EXPLAIN THE FORM OF AGILE ENTERPRISES IN THE TODAYS MARKETPLACE %DITH 0ENROSE  WRITES AN ORGANIZATION hIS NOTANOBSERVABLEOBJECTPHYSICALLYSEPARABLEFROMOTHEROBJECTS ANDITISDIFlCULTTO



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&IGURE/RGANIZINGFOR!GILITY

DElNEEXCEPTWITHREFERENCETOWHATITDOESORWHATISDONEWITHINITvP !N AGILEENTERPRISEISABOUTGAININGCOMPETITIVENESSANDSUSTAININGGROWTHWITHTHE RIGHT VISIONVALUES BREAKTHROUGH CULTURE ADAPTIVEINNOVATIVE TEAMS AND ADAPTIVE INFRASTRUCTUREREFERTO&IGURE ASWELLASCONSTANTLYORCHESTRATINGTHESEFOURCORE COMPONENTS TO ACHIEVE COHESIVENESS AND INNOVATIVENESS 7E WILL DISCUSS THESE ELEMENTSOFANAGILEENTERPRISEINTHEFOLLOWINGSECTION

/2'!.):).'&/2!'),)49 4RADITIONALLY CENTRALIZED HIERARCHIES TRIUMPH AS ORGANIZING MECHANISMS FOR COORDINATING PROCESSES ALLOCATING RESOURCES AND MANAGING COMPLEXITY #ASTELLS   4ODAY WE ARE WITNESSING THE EMERGENCE OF ORGANIZATIONS WITHANEWTYPEOFAGILITY&IGUREILLUSTRATESTHECORECOMPONENTSOFTHEAGILE ENTERPRISE %NVIRONMENTAL FORCES SIGNIlCANTLY INmUENCE THE STRATEGIC BEHAVIORS OFTHEENTERPRISE4OTHRIVE BUSINESSESNEEDTOADOPTNEWVISIONVALUES NURTURE ADAPTIVEINNOVATIVETEAMS CULTIVATEBREAKTHROUGHCULTUREANDDEVELOPADAPTIVE INFRASTRUCTURE )NTODAYSMARKETPLACE ALIGNINGWITHINDUSTRYSHIFTSISMADEPOSSIBLEBYTHE ABILITYTOCAPTUREVARIOUSMARKETSIGNALSBYUSINGANADAPTIVE)4INFRASTRUCTURE 4HE EMERGING AGILE ENTERPRISES ARE MORE CAPABLE TO ANTICIPATE AND SENSE THE ENVIRONMENTASWELLASRESPONDWITHMOREINFORMEDDECISIONSANDACTIONSINTODAYS BUSINESSLANDSCAPE4HEPERVASIVEAPPLICATIONOFDIGITALTECHNOLOGIESTOBUSINESS

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PROCESSESENABLESORGANIZATIONSTOACHIEVEANEWLEVELOFAGILITY4HETECHNOLOGIES ENHANCETHECAPABILITIESANDEXTENDTHECAPACITIESOFORGANIZATIONSTOACCUMULATE STORE RETRIEVE ANALYZE ANDSYNTHESIZEGREATERAMOUNTOFMARKETSIGNALS DATA AND INFORMATION 4HIS EFFECTIVELY EXPANDS THE BOUNDARY OF ORGANIZATIONAL BOUNDED RATIONALITY !LSO IT FACILITATES ORGANIZATIONAL COLLECTIVE INTELLIGENCE TO mY IN FORMATIONTOACHIEVEDESIREDBUSINESSGOALS3AWHNEYETAL ELABORATESh)NA CONNECTEDWORLD INTELLIGENCEBECOMESmUIDANDMODULAR mOATINGFREELYLIKEMOLECULES INTHEETHER COALESCINGINTOTEMPORARYBUNDLESWHENEVERANDWHEREVERNECESSARYTO SOLVEPROBLEMSvP !CROSSTHEAGILEENTERPRISE INTELLIGENCEISLOOSELYCOUPLEDTO CREATEANDDELIVERDIFFERENTIATEDVALUESTOCUSTOMERS )NADDITIONTO)4 ORGANIZATIONSNEEDTOCRAFTNEWVISIONSANDCUSTOMERVALUES CULTIVATEADAPTIVEINNOVATIVETEAMS ANDNURTUREBREAKTHROUGHCULTURES4OMOVE ANORGANIZATIONFROMONESTATETOANOTHER TOPMANAGEMENTNEEDSTOADOPTNEW PARADIGMSANDMINDSETSFROMLINEARITYTOMULTI DIMENSIONAL VERTICALINTEGRATION TO ON DEMAND INTEGRATION PRODUCTION TO CO CREATION AND VALUE CHAIN TO VALUE NETREFERTO4ABLE 4HISSHIFTISPARTICULARLYCRUCIALASOURMENTALMODELSOF THEWORLDAROUNDUSDETERMINEANDGUIDEOURACTIONS7ITHTHEADOPTIONOFNEW MODELS EXECUTIVESCANBEGINTOSHAPEANDDESIGNTHEORGANIZATIONSTHATCANTHRIVE INTODAYSBUSINESSLANDSCAPE 0RE $IGITAL!GE ,INEARITY 6ERTICAL)NTEGRATION 0RODUCTION (OMOGENEITY -ASS0RODUCTION &OCUSON#OSTS #OMPETITION "RICKS AND -ORTAR 0ROCESS2EENGINEERING $IVERSIlED )N HOUSE 'LOBALBY#HOICE 6ALUE#HAIN

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6ISIONSAND6ALUES ! VISION STATEMENT OUTLINES WHAT AN ORGANIZATION ASPIRES TO ACHIEVE IN THE MARKETPLACE AND THE NATURE OF VALUES IT INTENDS TO CREATE AND DELIVER TO ITS CUSTOMERS )T IMPLIES A GAP BETWEEN THE FUTURE STATE AND THE PRESENT STATE .ORMMAN   )T PROVIDES THE FRAMEWORK IN WHICH THE LOGIC OF EXISTENCE OFTHEORGANIZATIONRESIDES4HECREATIONOFTHEVISIONISTHEINTELLECTUALTASKOF THE SENIOR MANAGEMENT 4RANSFORMATIVE CHANGE NEEDS TO START FROM THE TOP RESPONSIBLEFORGALVANIZINGTHEENTIREORGANIZATIONWITHACOMMONPURPOSE7ELL KNOWNEXAMPLESAREHOW,OU'ERSTNERANDHISMANAGEMENTTEAMTRANSFORMED OUT OF SYNC )"- IN THE S TO BECOME TODAYS )4 SERVICES POWERHOUSE AND HOW #ARLOS 'HOSN GOT UNDER THE HOOD OF .ISSAN -OTORS #O TO OVERHAUL AND REVUPITSCOMPETITIVENESSENGINES!T0ROCTER'AMBLE WEAREWITNESSINGHOW #%/!',AmEYISQUIETLYMAKINGTHE YEAR OLDCOMPANYMOREINNOVATIVE ANDRESPONSIVETOTHEMARKETPLACE4HERECONlGURATIONOFORGANIZATIONAL$.! REQUIRESSUCHSTRONG DEDICATED ANDCOMMITTEDLEADERSHIP )N AN AGILE ENTERPRISE THE LEADERSHIP IS CRUCIAL IN DEVELOPING A FERTILE ENVIRONMENT OR CONTEXT FOR AGILE BEHAVIORS TO EMERGE AND SUSTAIN OVER TIME ,EADERS NEED TO INSTILL A BREAKTHROUGH CULTURE PUT IN PLACE THE RIGHT TEAMS ANDDEVELOPANADAPTIVEINFRASTRUCTURETOSUPPORTBUSINESSACTIVITIES4OACHIEVE AGILITYINTODAYSMARKETPLACE THEWHOLEORGANIZATIONNEEDSTOCOLLECTIVELYMARCH TOGETHERTOANTICIPATEANDRESPONDTOCHANGES&UNCTIONALTEAMSANDCOMMUNITIES OFPRACTICEACROSSTHEORGANIZATIONNEEDTOSHAREINFORMATIONANDWORKTOGETHER TO ACHIEVE THE NEW LEVEL OF AGILITY 4HE VISION IS THE LIGHTHOUSE FOR EVERY ORGANIZATIONAL MEMBER /NCE THE VISION IS CREATED IT MUST BE COMMUNICATED WITHINTHEORGANIZATIONSOTHATTHEVISIONISCOMMITTEDTOANDSHAREDBYALL !CASEINPOINTIS)"-S)NTEGRATED3UPPLY#HAIN)3# INITIATIVE)N )"- ANNOUNCED THE )3# ORGANIZATION LED BY "OB -OFFAT 4HE SUPPLY CHAIN HANDLESROUGHLYBILLIONWORTHOFPROCUREMENTEACHYEAR)"-S/N$EMAND VISIONANDTHEWAYTHEVISIONISTRANSFORMING)"-PROVIDESTHEFOUNDATIONFOR THE )3# VISION h4HE VISION FOR THE )3# ORGANIZATION IS TO BE THE WORLDS lRST hON DEMANDvSUPPLYCHAINSOTHAT)"-CANSENSEANDRESPONDTOTHENEEDSOFOURCUSTOMERS INTERFACEWITHOURSUPPLIERSINTHATSAMEWAY ANDDRIVETHEEND TO ENDEFlCIENCIES AND QUICK RESPONSIVENESS THAT )"- #%/ 3AM 0ALMISANO TALKS ABOUT v SAYS ,INDA #ANTWELL 6ICE0RESIDENT "USINESS'ROWTH)NITIATIVES )NTEGRATED3UPPLY#HAIN "OB-OFFAT WHORUNSTHE)NTEGRATED3UPPLY#HAIN WANTSTOMAKESURETHATALL OFTHE EMPLOYEESOFTHEIR)3#ORGANIZATIONUNDERSTANDTHESTRATEGYAND THE VISION AND THAT THEYRE ALL MARCHING SYNERGISTICALLY TO GET )"- TO ACHIEVE THATVISION(EHASBEENVERYAGGRESSIVEABOUTMAKINGSURETHATTHE)3#VISIONIS COMMUNICATEDTOALLOFTHEIREMPLOYEESAROUNDTHEWORLDSOTHATTHEYUNDERSTAND ITSSPIRITANDCOMMITTOBECOMINGANhONDEMANDSUPPLYCHAINv4O)"-ANDTHE

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)3#LEADERSHIPTHEREISNOENDSTATE)TISAJOURNEYOFCONTINUOUSLYINNOVATINGAND REINVENTING4HEYCHARACTERIZELEADERSHIPINANAGILEENTERPRISE )NADDITIONTOVISION ANAGILEORGANIZATIONHASTOCONSTANTLYREVISITHOWIT WILLCREATEANDDELIVERVALUETOITSCUSTOMERS4HISREQUIRESANABILITYANDPASSION TOCONSTANTLYCHALLENGEEXISTINGPRODUCTSANDSERVICES INHERENTASSUMPTIONS AND THE UNDERLYING INFRASTRUCTURE WHICH INCLUDES BUSINESS PROCESSES INFORMATION TECHNOLOGY ANDHUMANRESOURCES)NTHEEARLIERMENTIONED)"-S'LOBAL#%/ 3TUDY AGREATMAJORITYPERCENT OFTHE#%/SIDENTIlEDREVENUEGROWTH ASTHEKEYFOCUSAREAFORTHEIRORGANIZATIONSlNANCIALPERFORMANCEOVERTHENEXT THREE YEARS 'ROWTH STRATEGY SHOULD BE DETERMINED BY VALUE PROPOSITIONS BUT hPRECIOUSFEWCOMPANIESKNOWTHEMSELVESTHEIRVALUEPROPOSITIONS WELLENOUGHTODO IT$AY P v$AYWENTONTOGROUPTHEVALUEPROPOSITIONSINTOTHREE CATEGORIES NAMELY  0RICE VALUELEADERSLIKE$ELLOR7AL -ART4HEYGROWBYEXTENDINGTHEIR LOWCOSTVALUEPROPOSITIONSTOADJACENTMARKETS  0ERFORMANCE VALUELEADERSLIKE-EDTRONIC )NTEL OR.OKIA4HEYGROWBY CONTINUOUSINNOVATIONOFEMERGINGANDCONVERGINGTECHNOLOGIES  2ELATIONAL VALUELEADERSLIKE&IDELITY)NVESTMENTSOR)"-'LOBAL3ERVICES 4HEYGROWBYPROVIDINGANDEXTENDINGINTEGRATEDSOLUTIONS 3O IFYOUAREINTHEPRICE VALUELEADERSEGMENTASABOVEWITHPLAYERSLIKE$ELL OR7AL -ART HOWDOYOURE POSITIONYOURVALUECREATIONANDDELIVERYPROCESSES TO DIFFERENTIATE YOUR PRODUCTS AND SERVICES )F YOU DO NOT ACT FAST ENOUGH YOU MAY SOON BECOME EXTINCT EVEN BEFORE YOU REALIZE IT -ANY CHAINS LIKE + -ART HAD TO CLOSE DOWN MANY OF THEIR RETAIL SHOPS AS THEY COULD NOT COMPETE WITH 7AL -ARTINTHELOWCOSTMODEL7EHAVENOTEDTHAT)"-RECENTLYSOLDITSLOW ENDSERVERMANUFACTURINGPLANTSTO3ANMINA#ORPORATIONBECAUSE)"-ISSIMPLY UNABLETOCOMPETEWITH$ELLONTHELOWCOSTVALUEPROPOSITIONFORHIGHVOLUME PRODUCTS/NTHEOTHERHAND )"-WASREPORTEDTOBETHELEADERINTHEHIGH END SERVERMARKETINTHESECONDQUARTEROF/BVIOUSLYINTHISSEGMENTOFTHE MARKET THE"IG"LUECONTINUESTODELIVERDIFFERENTIATEDVALUE3IMILARLY IFYOUARE INTHEPERFORMANCEVALUELEADERSEGMENTLIKE)NTELOR.OKIA ORINTHERELATIONAL VALUELEADERSEGMENTLIKE)"-'LOBAL3ERVICES YOUNEEDTOREEXAMINEYOURVALUE PROPOSITIONTOIMPROVEYOURCOMPETITIVEPOSITIONING 4HEREFORE RE EXAMINING AND REDElNING THE VALUE PROPOSITION AND USING THATASABASISTODEVELOPTHEVISIONISAKEYPREREQUISITEFORSUSTAINEDBUSINESS PERFORMANCE 4HE CYCLE OF CONTINUOUS INTROSPECTION AND REINVENTION WHILE MAINTAINING FOCUS ON GROWTH AND COST CONTROL IS THE MANAGEMENT CHALLENGE OF THISAGE4HISISWHATTHEAGILEENTERPRISEISALLABOUT



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"REAKTHROUGH#ULTURE #ULTURE DESCRIBES THE COLLECTIVE BEHAVIORAL TENDENCY OF AN ORGANIZATION )T CHARACTERIZESTHEWAYORGANIZATIONALMEMBERSPERCEIVE ACT ANDREACTTOMARKET ANDOPERATIONALOPPORTUNITIESANDCHALLENGES)TISTHEhTRAINING IMPROVEMENT AND RElNEMENT OF MINDv 7EBSTERS DICTIONARY AND THE WAY THE ENTIRE ORGANIZATION WORKFORCE BEHAVES &OR EXAMPLE IN THE GLOBAL DIGITAL ECONOMY PEOPLE WILL HAVE TO LEARN HOW TO WORK IN TEAMS QUITE OFTEN IN VIRTUAL TEAMS ACROSS FUNCTIONAL BOUNDARIES AND HOW TO WORK TOWARDS COMMON GOALS WITH SHARED COMMITMENTS ACROSS CULTURAL GEOGRAPHIC AND COMPANY BOUNDARIES 2OSABETH -OSS +ANTER  USES THE TERM E CULTURE TO EXPLAIN THE EMERGING CULTURE IN TODAYS ORGANIZATIONS !CCORDING TO +ANTER THE 7EB IS FORCING A FUNDAMENTAL SHIFT hTOWARDS MORE COLLABORATIVE WORK RELATIONSHIPS ONES THAT RESEMBLE OPEN INCLUSIVECOMMUNITIESvP ANDAWAYFROMTHEBUREAUCRATICANDMECHANISTIC ADMINISTRATIVE MODEL4EAMS WILL BE DYNAMICALLY FORMED AND DISBANDED BASED ONTHENEEDSOFTHEBUSINESS BUTWILLBEMEASUREDANDREWARDEDBASEDONTHE ATTAINMENTOFCOMMONANDAGREED UPONGOALS)TISABRANDNEWBALLGAME
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2ESISTANCE TO CHANGE IS THE MOST IMPORTANT OBSTACLE TO OVERCOME WHEN AN ORGANIZATION IS TRYING TO BECOME AGILE 7HEN )"- FOUNDER 4OM 7ATSON 3R STARTEDADRESSCODEWITHIN)"-WITHBLUESUITSANDWHITESHIRTS HEDIDTHATTO CONFORMTOTHEDRESSCODESOFHISMAINCUSTOMERS WHICHATTHATTIMEWEREBANKING INSTITUTIONS"UTAS)"-SBUSINESSGREWTOCOVEROTHERINDUSTRIES )"-EMPLOYEES FORGOTTODRESSLIKETHEIRCUSTOMERSINSTEADTHEBLUESUITSANDWHITESHIRTSBECAME THE )"- STANDARD /NLY AFTER THE  BUSINESS DEBACLE WHEN )"- LOST CLOSE TO  BILLION AND A NEW MANAGEMENT TEAM LED BY ,OU 'ERSTNER WAS INSTALLED DID)"-DRESSCODECHANGE/NEOFTHEAUTHORSOFTHISCHAPTERATTENDEDAN)"- &ACULTY3UMMITINMID  WHERE)"-CHAIRMAN 3AM0ALMISANOAPPEAREDIN ASPORTSJACKET WHICHWOULDBEUNTHINKABLEINTHEPRE ERA"USINESSLEADERS MUSTDEVELOPANORGANIZATIONALCULTURETHATISACCUSTOMEDTOCONTINUOUSCHANGE ANDHELPTHEIRPEOPLETOADAPTTOITWHILERELENTLESSLYLEVERAGINGTHATCHANGETO THEIRADVANTAGE

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FROM THESE ESTABLISHED PROCEDURESv /N THE OTHER HAND INNOVATION REFERS TO hTHE CHARACTERISTICBEHAVIOROFINDIVIDUALSWHO WHENCONFRONTEDWITHAPROBLEM ATTEMPTTO REORGANIZEORRESTRUCTURETHEPROBLEM ANDTOAPPROACHITINANEWLIGHT FREEFROMANYOF THECUSTOMARYPERCEPTIONSWHICHWOULDBECONVENTIONALSTARTINGPOINTSFORITSSOLUTIONv .EITHER TYPE IS LIKELY TO BE MORE OR LESS INTELLIGENT RESOURCEFUL CREATIVE OR SUCCESSFUL !DAPTORS ARE MORE CONTROLLED PRACTICAL PRUDENT RELIABLE AND COLLABORATIVE )NNOVATORS ARE MORE RADICAL mEXIBLE INDEPENDENT RISK TAKING ANDSPONTANEOUS!DAPTORSAREMORESENSITIVETOTHREATSFROMWITHINTHESYSTEMS DEVISINGADOWNSIZINGPLAN DURINGGOODTIMES TORIGHT SIZERESOURCES WHEREAS INNOVATORSTUNEINTOENVIRONMENTALTHREATSEGMARKETTRENDS INDUSTRYSHIFT AND EMERGINGTECHNOLOGICALDEVELOPMENT 3UCHDIVERSEDISPOSITIONSAREPARTICULARLY IMPORTANTINTODAYSCOMPLEXANDEDGEOFCHAOSBUSINESSENVIRONMENTTOSOLVETHE ENDLESSSTREAMOFPROBLEMSANDMARKETCHALLENGESTHATARISE )F A TEAMS SCOPE IS PRIMARILY LIMITED TO INSIDE THE COMPANY ACTIVITIES LIKE MANUFACTURING PRODUCTION SCHEDULING ETC THEN THE TEAMS PROlLE SHOULD BE MORE!DAPTIVE)FATEAMSSCOPEISPRIMARILYEXTERNALFACINGLIKESALES CONSULTING ETC THENTHETEAMSPROlLESHOULDBEMORE)NNOVATIVE4HEMOSTSUITABLECHANGE AGENTFORAN!DAPTIVETEAMWOULDBEAN)NNOVATIVEMANAGER#ONVERSELY THEMOST SUITABLECHANGEAGENTFORAN)NNOVATIVETEAMWOULDBEAN!DAPTIVEMANAGER)N AN AGILE ENTERPRISE THE CRITICAL SUCCESS FACTOR IS TO DEVELOP AN APPROPRIATE MIX AND BALANCE OF !DAPTIVE AND )NNOVATIVE TEAMS TO MAXIMIZE AGILITY WITHOUT COMPROMISINGEFlCIENCY

!DAPTIVE)NFRASTRUCTURE "USINESS PROCESSES AND THE SUPPORTING INFORMATION TECHNOLOGY ARE THE UNDERPINNINGSOFANYINFRASTRUCTUREINTERMSOFITSCAPABILITY4HEGLOBAL#%/S INTHE)"-STUDYMENTIONEDEARLIERINTHISCHAPTER IDENTIlEDhCREATINGADAPTABLE PROCESSESTHATALLOWREAL TIMERESPONSEvASONEOFTHETOPTHREEACTIONSTHEYWILLTAKE RELATEDTOAGILITY4HEOTHERTWOAREASARE  #APTUREANDUTILIZECUSTOMERINFORMATIONFORSWIFTDECISIONS AND  $EVELOPVEHICLESTOCAPTURECUSTOMERNEEDSANDPREFERENCES !LLOFTHETHREEACTIONAREASAREABOUTBUSINESSPROCESSCAPABILITIES.OW HOWDO YOUDESIGNANADAPTABLEPROCESSTHATALLOWSREALTIMERESPONSE

)NCLUSION &IRST AND FOREMOST IS TO INCLUDE ALL STAKEHOLDERS INTO THE PROCESS 3O IF IT IS A CUSTOMER FACING PROCESS YOU SHOULD INCLUDE PARTICIPATION BY THE CUSTOMER

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%XAMPLES OF CUSTOMER FACING PROCESSES INCLUDE CUSTOMER ORDER ENTRY CUSTOMER ORDER FULlLLMENT INVOICING AND BILL PAYMENT ORDER STATUS ENQUIRY PRODUCT SHIPMENT ANDMANYMORE/THERSHAVETRIEDQUITESUCCESSFULLYTOHAVECUSTOMERS PARTICIPATEINTHENEWPRODUCTDESIGNANDDEVELOPMENTPROCESSES#OMPANIESLIKE $ELL )"- ANDMANYOTHERSHAVECREATEDCUSTOM7EBSITESFOREACHOFTHEIRKEY CUSTOMERS SOTHATTHESESPECIALCUSTOMERSCANSEAMLESSLYDOBUSINESSWITHTHEM /THER STAKEHOLDERS LIKE SUPPLIERS OR BUSINESS PARTNERS SHOULD SIMILARLY BE INCLUDEDINTHEPROCESSESTHATHAVETHEIRINVOLVEMENT7HEN)"-SOLDOFFTHE PLANTS THAT MANUFACTURED LOW END SERVERS TO 3ANMINA #ORPORATION ONE OF THE AUTHORSOFTHISCHAPTERASKEDAN)"-EXECUTIVEHOWTHISISGOINGTOWORKFROM THECUSTOMERSVIEWPOINT(ISRESPONSEWASTHATTHECUSTOMERISNOTGOINGTOSEE ANY DIFFERENCE BECAUSE THE PROCESSING NEEDS OF 3ANMINA #ORPORATION HAD BEEN INCORPORATEDWITHIN)"-SORDERSCHEDULINGANDCUSTOMERFULlLLMENTPROCESSES

'OVERNANCE "EFORE)"-TRANSFORMEDINTOAGLOBALOPERATION EVERYCOUNTRYANDBUSINESSUNIT USEDTOHAVEITSOWNSETOFKEYBUSINESSPROCESSESANDAPPLICATIONS"UTAFTERTHE LARGESTLOSSINCORPORATEHISTORYIN )"-SLOWLYTRANSFORMED ANDNOWHAS ONLYONESETOFKEYBUSINESSPROCESSESACROSSALLCOUNTRIESANDBUSINESSUNITS4HERE ISONEGLOBALPROCESSOWNER WHOISASENIORBUSINESSEXECUTIVEANDISRESPONSIBLE FOR THE PERFORMANCE OF HISHER ASSIGNED BUSINESS PROCESS ACROSS ALL GEOGRAPHIES (ESHE ALSO OWNS THE SUPPORTING BUSINESS APPLICATIONS %ACH OWNER HAS A GOAL FORTHEIRASSIGNEDPROCESSESTOATTAININDUSTRYBENCHMARK INTERMSOFAGILITYAND EFlCIENCY ANDISMEASUREDANDREWARDEDACCORDINGLY&OREXAMPLE "OB-OFFAT REFERREDTOEARLIERINTHISCHAPTER ISTHEGLOBALOWNEROF)"-SINTEGRATEDSUPPLY CHAINPROCESS ANDISRESPONSIBLEFORITSPERFORMANCEACROSSTHEWORLD 4HISSINGLEPOINTOFOWNERSHIPGIVES)"-PROCESSOWNERSTHESPANOFCONTROL NECESSARYFORTHETASKATHAND WHICHISTOACHIEVEOREXCEEDINDUSTRYBENCHMARKS INTERMSOFAGILITYANDEFlCIENCY

4ECHNOLOGY)NFRASTRUCTURE 4ECHNOLOGYACTSBOTHASANENABLERANDATRANSFORMER4HEADVENTANDADOPTION OF THE )NTERNET AND RELATED TECHNOLOGIES IN THE S AND NOW WIRELESS AND ASSOCIATEDTECHNOLOGIESHAVEENABLEDMANYNEWANDREVOLUTIONARYCHANGESINTHE WAYWEDOBUSINESS"UTFORMANYORGANIZATIONS DISPARATEANDHERITAGEBUSINESS APPLICATIONS HAVE PROVEN TO BE AN ENORMOUS CHALLENGE TO SURMOUNT 4HERE IS AN URGENT NEED IN MANY ORGANIZATIONS TO HARMONIZE STANDARDIZE INTEGRATE ANDCONSOLIDATEDISPARATEINFORMATIONTECHNOLOGYINFRASTRUCTURES-OSTOFTENIT REQUIRES ORGANIZATIONS TO MOVE TO AN ENTIRELY NEW TECHNOLOGY BASE TO MAKE IT WORK4HEREFORE ITISIMPORTANTTOCAREFULLYCHOOSEWHICHTECHNOLOGIESWILLMAKE THEREALDIFFERENCE INVESTONLYINTHOSETECHNOLOGIES ANDSTAYFOCUSED



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&URTHERMORE THEREISALWAYSTHEDEBATEABOUTWHETHERITISPRUDENTTODEVELOP THE SOLUTIONS IN HOUSE OR TO BUY IT FROM OTHERS $O YOU DEVELOP AN ENTERPRISE RESOURCE PLANNINGSUITEOFAPPLICATIONSBYYOURSELFORBUYITFROM3!0$OYOU DEVELOP YOUR #2- SOLUTION OR BUY IT FROM 3IEBEL OR 3!0 $O YOU DEVELOP YOUROWNCUSTOMDATABASESORBUYITFROM)"-OR/RACLE3TUDIESHAVESHOWN THAT BUYING IT IS BETTER IN MOST CASES THAN MAKING IT /NE EXECUTIVE RECENTLY COMMENTEDWHILETALKINGABOUTPROCURINGAN%20SOLUTIONFROMAVENDOR h)TIS EASIERTOSHIFTTHECORPORATEOFlCEBUILDINGBYTHREEFEETTOTHELEFTTHANTODEVELOPYOUR OWN%20SOLUTIONv 4HE OTHER ASPECT OF TECHNOLOGY AS IDENTIlED BY THE GLOBAL #%/S IN THE )"-STUDY ISTOCAPTUREANDUTILIZEALLINFORMATIONASSOCIATEDWITHCUSTOMERSTO UNDERSTANDTHEIRCHANGINGNEEDSANDPREFERENCESFORSWIFTDECISIONS

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AND MAINTAIN AGILITY $ARWIN GUIDES KEY DECISIONS PREVENTING ORGANIZATIONS FROMBEINGLOCKEDINTOORHELDUPBYHIDDENPROPRIETARYCONTROLPOINTS$ARWIN FOCUSES ON THE AGILITY RELATIONSHIPS BETWEEN COMPONENTSˆHOW THE COMPONENTS ANDELEMENTSOFTHEENTERPRISENEEDTOINTER RELATEWITHONEANOTHERINORDERTO MAINTAINTHEABILITYTOCHANGEQUICKLY 4HIRD YOU WILL NOTICE THAT FORMALIZED SERVICES PLAY AN ESSENTIAL ROLE IN THE $ARWIN ARCHITECTURE 4HERE ARE THREE PRIMARY LAYERS OF SERVICES BUSINESS SERVICES APPLICATION SERVICES AND INFRASTRUCTURE SERVICES 4HESE LAYERS ARE ORGANIZED AS HORIZONTAL SETS OF FUNCTIONS THAT ARE DELIVERED TO THE NEXT LAYER ABOVE AS A SET OF FORMALIZED SERVICES %ACH LAYER IS % % %

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