@Risk

In today’s volatile business environment, it pays to be nimble. Companies need flexible processes, ones that can quickly convert information into action in response to market movements. But, how are firms responding to this new need for agility? Are companies transitioning from their traditionally static business models to more responsive strategies?

Two recent studies suggest that the answers to those questions are mixed. Even though virtually all companies realize that today’s business environment requires agility, most are still struggling to find ways to reduce inefficiencies, improve decision-making, and develop the business dexterity needed to compete.

Results from the first survey are detailed in “Organizational agility: How business can survive and thrive in turbulent times,” a 28-page`report from the Economist Intelligence Unit and sponsored by EMC. This survey polled 349 senior executives from leading companies throughout the world in December 2008 and January 2009, asking questions about the benefits, challenges and risk associated with creating a more agile organization. The survey results show that:

• 81 percent of respondents view knowledge management and collaboration as the main drivers for increased productivity, enhanced performance and rapid innovation.

• 88% of respondents – including half of all CEOs and CIOs — believe organizational agility is critical for global business success.

• Unfortunately, though, only 23% of respondents rated their company is as agile and able to react to market changes as needed.

• Over the past three years, more than 80% of those polled have tried one or more change initiatives aimed at improving agility. But, 34% said these initiatives did not achieve the desired benefits.

• A majority of respondents believe IT will act as the agent of change for best-in-class knowledge-sharing and business agility.  Executives point to faster access to real-time information (45%), improved search functionality (38%), and better integration of IT systems across the enterprise (38%) as key enablers of business agility.  A large number surveyed report that tools enabling them to find, filter and focus content are critical drivers for business success.

The report includes a great quote from Peter Well, the director of the Center for Information Systems Research at the Massachusetts Institute of Technology (MIT).

“When I was a kid, the most successful companies were monopolies or duopolies,” he says. “But in today’s globalized, free-market environment, the ability to satisfy customer expectations is core to profitability. If you’re not agile, you can’t do it, because customer expectations are never static.”

In the wake of the credit crisis, it’s no surprise that financial institutions are lamenting their lack of agility, as well. Survey results recently released by Aleri, Inc. show that:

• Over 70% of respondents said that their firm has a need to manage risk in real-time.

• Over 50% of respondents say that they would have been better prepared for adverse market events had they been able to monitor their exposures and concentration levels in real-time.

• 55% of respondents took initiatives immediately following the financial crisis to better protect themselves from future volatility and unexpected market events.

• Only 26% of hedge funds feel they have the appropriate technology to manage risk in real-time, compared to  50% of banks.

• Of those that say they cut back on IT spending, banks and hedge funds were among the highest, with 20% and 27% respectively.