When most people hear of the term “Digital Agility”, it is normally assumed to mean Agile IT methods such as Scrum, Kanban etc.
Though Agile IT is part of Digital Agility, Digital Agility is actually much more – with companies such as Amazon, Alibaba and Grab (a Asian company that started with ride sharing) being good examples of Digital Agility.
Digital Agility is the use of transformative digital enablement to allow organisations to respond quickly to the changes in the market and business environment to achieve business success. The emphasis is on the organisational business outcomes from the use of digital, and not just on the project outcomes of individual IT projects. The other key aspect is in achieving flexibility and velocity with quality so as to cater flexibly, quickly and successfully to changes in the market and business environment.
For example, in the case of Grab, in response to growing customer familiarity with digitalised services and increasing threat of competition, Grab has been very agile in expanding from just providing GrabTaxi ride hailing service to now having a broad range of businesses, all within the relatively few short years of its existence. The broad range of businesses include GrabCar, GrabShare, GrabPay, GrabRewards, GrabWheels (eScooters), GrabFood, GrabExpress (Delivery), GrabClub (Subscriptions), Hotels, Videos. The last two years were especially prolific with 6 new business areas being launched.
Grab is an example of an organisation which made good use of its digital assets to allow agile expansion into new business areas – for example with GrabPay in place, it could easily cater to other services requiring payment; GrabCar could ride on the work already done for GrabTaxi; GrabExpress could also ride on work done for GrabFood.
Most importantly, Grab has a platform or super app that is already installed in the smartphone of customers of its existing services, and this provides a ready base of customers to target new businesses to.
The above is one form of Digital Agility called Strategic Digital Agility which is the use of digital to enable agile expansion of an organisation into new business areas so as to exploit changing business environment and market. The new business areas can be in terms of new business models, new market segments and/or new product lines.
Another form of Digital Agility is called Operational Agility – where within its existing businesses, an organisation is able to respond quickly to changes to the market and business environment to achieve business success. GrabTaxi and GrabCar are also examples with their ability to sense changing real-time market demand for rides and meet this demand with surge pricing so that even in cases of peak hours and rainy days, there is better chance of rides being available and being matched quickly to those in need for such rides. This would not have been possible to be carried out efficiently if purely manual processes were used.
Another example is the fashion e-commerce company called ASOS which operates mainly in Europe, US and Australia. With its team of data scientists and agile product teams, it is continually thinking of better ways to accurately sense new fashion trends and better ways of automating and speeding the design, manufacture and delivery of new designs that arise from their fashion trend sensing. It is so successful (among the highest revenue growth and fastest speed of response) that it is used as an MBA case study (e.g. by Harvard Business School). Examples of its Operational Digital Agility initiatives include an AI photo search app where customers can use screen shots of favourite pieces from, say, haute couture pre-season fashion shows, to search for similar items in ASOS online catalogue. This creates an effective crowd-sourced channel for ASOS to sense trending fashion demand – especially via items that have high search requests but are not carried by ASOS yet. ASOS can then use data analytics to prioritise and select which types of designs to design and manufacture. ASOS then uses measures such as CAD/CAM to ensure that design and manufacturing is speeded up. Together with its highly automated logistics, this ensures fast design, manufacture and delivery of new fashion items so as to achieve better business success as compared to its competitors.
The above may give the impression that only big organisations can achieve Digital Agility. This is not true as Agility-as-a-service is now available to enable organisations to get started quickly and pay only what they use (so as to minimise big up-front investments). However, this is a big topic in itself and will be covered separately.
With the above examples, it can be seen that Digital Agility is more than Scrum and other Agile IT methods. With the rise of digitalised competitors and the increasingly dynamic business environment, Digital Agility becomes essential in order for organisations to cater to the fast pace of change and achieve success.