10 benefits of an Agile Operating Model

Person taking notes in a notebook about Agile operating model benefits in operations

Implementing an agile operating model can be a game-changer for organizations, transforming processes ranging from decision-making to product development. As agile becomes even more mainstream in tech and business circles, some of the benefits — like quicker market feedback — have become more well-known. But other benefits are less so. Here are 10 benefits of introducing agile in operations that are commonly experienced, some of which may come as a surprise.

1) Changes in the supplier’s way of working

Suppliers change the way they deliver products and services in response to newly-adopted agile principles. Organizations need to push for these changes because they will benefit from the suppliers’ greater value creation capacity and organizations’ business value focus.

2) No more “too big to fail” mentality during projects

Responsiveness is a keystone concept in an agile operating model, so it makes sense that “this is the way we’ve always done it, so that’s the way it will always be done” thinking is one of the first legacies of the old model to go. Under an agile model, business demand will be prioritised to ensure maximum value can be accomplished in a shorter timeframes.

3) Greater financial control

An agile operating model upends the notion that the best way to manage risk is to predict the future. The agile model provides substantially more control over programs and projects, allowing for a greater ability to provide innovative solutions, mitigate risk and control costs, which is critical to increasing profitability and the overall financial health of an organization.

4) Reduced skepticism

The quick wins that can be delivered during the first few months of implementing an agile operating model, such as a more streamlined decision-making process, make it easier to change the minds of skeptics.

5) Former skeptics become “agile evangelists”

When the benefits of agile become clear to former skeptics, it is impressive how often such team members become the most outspoken advocates for agile principles. Why? It’s because their skepticism caused critical thinking about the agile operating model, and seeing its true, tangible benefits won them over. Their hard-won enthusiasm will give the project even greater momentum and a better working environment.

6) Renewed focus on providing value

It’s surprising how often the concept of delivering business value  can be lost in the daily grind of operations. Implementing an agile operating model shakes that way of thinking to its core and replaces it with a fresh perspective on product and service delivery.

7) Consistency

With a clear set of principles and practices in place, companies can be more consistent in the delivery of their products and services. Gone are the days of long lead times and missed opportunities.

8) Alignment between the business and IT

Technology is such a key factor in a company’s ability to compete in today’s market that it can be surprising how often IT is operating in a silo within an organization. When an agile operating model gets the IT and business operations team working together, progress is faster and profits are stronger.

9) Opportunity to see larger transformation

The shift in workplace culture toward collaboration, improved customer relationships, and a continuous desire to learn new skills provides long-term returns in terms of employee retention as well as improved products and services.

10) The courage to attempt more

Agile operating models take the stigma out of failure as failures provide a company the opportunity to see what went wrong and how to improve that product or service in the next delivery round.

An agile operating model that’s implemented properly should inspire every department within an organization, whether the results are tangible or not. Many companies describe an intangible “feel good” factor that takes place under an agile model, providing a greater feeling of success throughout the organization.

More tangible results can come from departments like sourcing and procurement, where very long and oversized legacy processes are replaced with agile principles that cut waste and add value. For instance, Deutsche Telekom experienced impressive savings by implementing a more effective sourcing model to support its cost-saving objectives.

As, Jurg Haselhoff, the VP in charge of the project stated “The approach assisted us in finding an offshore test center. Through expertise in the practices we achieved a significant speedup in the RFP-process and in selecting a qualified supplier. The methodology and market knowledge was key to our success in this venture.”

As you can see, there are many benefits of an agile operating model, with adopters able to make far-reaching changes to their business operations.