What is Business Agility? - Definition & Process

An error occurred trying to load this video.

Try refreshing the page, or contact customer support.

Coming up next: Agile Documentation: Methodology, Requirements & Examples

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
 Replay
Your next lesson will play in 10 seconds
  • 0:04 What Is Business Agility?
  • 1:27 Business Agility Process
  • 4:28 Lesson Summary
Add to Add to Add to

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Login or Sign up

Timeline
Autoplay
Autoplay
Lesson Transcript
Instructor: Mike Miller
How do businesses respond to changing conditions? This lesson will go over business agility, why it's important, and how to follow the six-step process to implement changes.

What Is Business Agility?

Have you heard of a company that just sticks to its products as is, and doesn't make changes or invest in advancement? Probably not. Those types of companies either go out of business or they have a monopoly niche that they don't have to change. As competition emerges, the latter will become the former. So how do businesses respond to changing conditions?

Business agility refers to a company's ability to respond to changing conditions. Just about anything can cause a need for change. Changing conditions can refer to both internal and external factors. Some internal factors are reorganization, being purchased, new policies and procedures, or a new chief executive officer. External conditions are supplier shortages, new technology, or regulatory requirements.

A company's business agility is critical to their long-term viability and sustainability. The faster a company can respond the better chances the company has for long-term survival. Innovation is key. The more and faster a company can innovate, in both its brand and products, the better the company's agility will be.

Business agility has its roots based in agile project management, where a project team sets their priorities, tracks progress, and makes changes as needed to help the project perform at its peak.

Business Agility Process

Okay, so a business has to keep its edge. But how? Just like everything else in business, there is a process.

In the first step, the business identifies a need for change. This need could come from an external factor such as a regulatory requirement or supplier issues. The business will identify a lead to take on the responsibility for managing the changes and who will determine what will be required to process the change. Say Larry's Laptops needs to change their laptop product line because a competitor has developed a new processor that is faster than theirs. The company identifies Jeb as the lead. Jeb does some research and determines how they can change their processor to increase speed while maintaining current costs.

During the recycle phase, the change lead will determine what, if anything, the company can recycle, using their current systems to help implement this new one. This could be modifying current organization process, such as procedures, IT systems, or supply chains. The lead will also determine which key performance indicators (KPI) will be used during the change implementation and manage the change down the road. Examples of key performance indicators are earned value, customer loyalty, and cost of poor quality. Jeb reviews the company's processes, policies, and KPIs. He plans on reusing the majority and modifying a small percentage. He does need to work with supply chain to identify new suppliers for the new processors.

To unlock this lesson you must be a Study.com Member.
Create your account

Register for a free trial

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back
What teachers are saying about Study.com
Free 5-day trial

Earning College Credit

Did you know… We have over 160 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it free for 5 days!
Create An Account
Support