Agility in Virtual Business Networks
Agility means responding to rapid changes and continuous change management. With the rapid economic changes and unexpected market behavior, the virtual business networks have to adapt themselves to be able to respond in a timely and fast manner. Therefore agility provides the virtual business networks the ability to minimize losses and also as a risk deterrent. Agility can also be thought of as flexibility. The traditional businesses are more rigid in formulating a project flow and sticking to the plan till its completion.
Agility in the view point of business networks means the flexibility in incorporating changes during the execution of a long term project. This is the latest trend among the business network communities. This article will bring out the salient features of agility, its need and applicability in business networks.
Need for Agility
Agility is an important factor in case of projects that run into several years. It is not possible to forecast accurately about the risk factors and problems associated with such long term projects. The research and development programs for the defense sector are the best example for such projects. The business networks realized the requirement of formulating and re-designing their supply chain process to provide for such rapid change request and adaptability. Based on research for several years, the new model of Agile Business network principles have been introduced. Hence Agility factor is considered as a strategic success tool. In order to evaluate the agility strategy considerable amount of time is required.
Factors Affecting Agility
To incorporate agility in business networks, it is important to understand the factors which affect its implementation in the business networks. There are other factors which contribute to the success in coordination with agility in a business network. The factors that are essential to be considered before adopting agility strategies in a business network are described below.
Social factors: Social dynamics play a major role in determining the influence on agility of a business network. This is because most of the networks are formed with social and cultural interests in small regions around the world. Adopting a radical and new principle is considered risky and hence there is great resistance causing direct influence on the agility of the business network.
Cultural Paradigms: The next important factor that affects agility is the cultural paradigms. These are age old polices and conventions followed for years by the members of a business network. In certain cases these paradigms are nation wide, and are accepted by the major business networks and vary from country to country.
Management Metrics: Agility requires accurate results produced through analysis and management metrics. The factor of management metrics relies on accurate data for formulating metrics and measures which provide indication of the success of a particular business network model or process flow. Early detection of problems will lead to corrective action and prevent major disasters.
Common Principles: The key factor that influences the agility in a business network is the formulation and adoption of a unified objective and goal. This involves a thorough study of the individual member businesses or companies of the business network and analysis to work out the unified vision acceptable by all the members.
Before taking steps to incorporate agility in the business networks, there is a need to thoroughly understand the implications and effort involved. Implementing agility in a business network needs a lot of effort and time. The process of estimating and analysis in a business network after adopting strategies for agility is very complex and different from other e-commerce estimation and assessment techniques.
The costing and performance estimation in agility are different from the normal static e-commerce costing and ERP strategies. Flexibility is key factor which is applied to each and every assessment techniques applied for performance assessment in agile business networks. A new approach is required for formulating the process flow and how supply chains are maintained in an agile environment.
There is also requirement to adopt parallel lines simultaneously and estimate the progress of each line accurately to determine the performance metrics. These performance metrics can give the ability to predict the future course of action and expected results in following a particular process model. If problems are detected during the progress of a particular process work flow, alternative or the parallel line can continue to earn the revenue and compensate for the losses incurred in the failed process lines. This ensures good success rates and also reduces the risk of failure in long term projects in general.
Therefore a correct understanding of agility is mandatory for defining strategies based on agility in the collaborative business networks. The correct understanding of agility will also aid in formulating the optimum strategies for achieving good success estimates on long term project.
Tools for agile business networks
Agility is very complex factor in a business network. Since the agile strategies are very difficult to formulate and also to assess, specialized software tools and methods have been devised to help the agile business networks to take advantage of the agility principle. These tools help in clearly defining the Infrastructure Elements and their impact on the agile business networks. The study on these infrastructure elements leads to creating the Infrastructure Observations and highlighting the key result areas and critical processes that need to be guarded.
The tools also formulate a set of Best Agile Practice methodologies for the practitioners to follow. The best agile practices are dependent heavily on the network hierarchy and hence there is a need to adopt these best practices on case to case to basis instead of blindly following them. The next important aspect in an agile business network is the heavy reliance on the Information Theory aspects.
Secure and accurate communication and information flow mechanisms need to be adopted for successful implementation of agility in business networks. This requires a thorough study of the existing information flow process in the business network. The results of the study can be analyzed using the mathematical tools for determining the changes required to adopt the existing information infrastructure to agile business network environment. There are several tools and software which are aimed at measuring and assessing performance through Metrics.