Executives would like to see IT take the lead in improving organisational agility, but to do so requires the ability to manage change in the face of complexity.

1. 1 © The Economist Intelligence Unit Limited 2016
Executives would like to see IT take the lead in improving
organisational agility, but to do so requires the ability to manage
change in the face of complexity
In the digital economy, market conditions change fast. Ever-increasing customer
expectations, new regulatory requirements and market disruption by digitally native
start-ups contribute to a pace of change that is only accelerating.
As a result, every organisation must confront the challenge of responding to shifting
conditions seamlessly. That requires the ability to adapt both quickly and effectively to
new market realities. In the context of digital transformation, agility means constantly
adapting products, services and processes in response to circumstances as they evolve.
There is a widespread recognition of the importance of agility. In a global survey of 812
executives, conducted by The Economist Intelligence Unit (EIU) and sponsored by SAP,
39% of respondents see improving agility as being critical to the success of their digital
initiatives.
Respondents from the healthcare sector are most likely to view agility in this light,
with 47% of respondents identifying it as a critical success factor. This suggests that
respondents in that industry are especially frustrated with their current inflexibility.
The IT department plays a critical role in enabling agility. If the IT system is unable to keep
up with rapidly changing priorities and remains bogged down by the maintenance of
legacy systems, then it cannot support the evolving demands of the business.
An article from the Economist Intelligence Unit

2. 2 © The Economist Intelligence Unit Limited 2016
However, only 11% of respondents believe their IT team plays a leadership role in
achieving this mission-critical objective. Over half (58%) say that the IT department
makes an active but supporting contribution to agility, and one-quarter (26%) say that IT
has a passive supporting role.
This is a situation that many executives believe must change: 39% overall say that in an
ideal world the IT department would have a leading role in improving agility, although
this view is more common among IT executives (43%) than among other functions (36%).
Overcoming complexity
IT departments are beginning to address the issue. Of the 400 IT executives included in
the survey, 17% have adopted Agile software development to support their company’s
digital initiatives, while 15% have adopted DevOps, in which software development and
IT operations are converged. Both methods are designed to support agility by allowing
IT projects to be rolled out incrementally and iteratively, responding to user feedback
and evolving business requirements.
“Speed and agility are huge themes for us,” says Bill Murphy, CIO at hotel chain Hilton
Worldwide. “We’ve migrated towards an Agile methodology for software development
because we can’t survive in today’s market by spending three to four months
addressing a small change [in software]. We can’t go through the traditional waterfall.
We have to be able to react to business needs quicker, we have to deliver quicker, we
have to experiment quicker. That requires a different mode of adoption.”
The UK’s Driver and Vehicle Licensing Agency (DVLA), where IT systems have been
run through outsourcing deals with systems integrators for the past 20 years, shares this
ambition. The DVLA has now begun to bring IT back in-house to create a more agile
Achieving agility
Which of the following capabilities are most important to the success of
your organisation’s current digital initiatives?
(% of respondents who reply 'improving our organisational agility')
Energy &
natural
resources
High tech/
technology/
software
HealthcarePublic sector/
government
Consumer
products
RetailFinancial
services
28%
36% 36%
40%
47%
39% 39%
Source: The Economist Intelligence Unit.

3. 3 © The Economist Intelligence Unit Limited 2016
operating model and approach to service delivery, with IT and the business working in
partnership.
But as the DVLA found when introducing its View Driving Licence solution, which
provides an online application and renewal process for driving licences, achieving
agility is easier said than done, especially when confronted with a complex estate of
legacy systems. “That project took quite a long time, which doesn’t feel very agile, but
we had a lot of barriers to overcome,” recalls the DVLA’s technology lead John Bramer.
“We needed to integrate with the existing systems, so working out how that happened
took a long time.”
Change management is a particular challenge, he adds. “It’s a very old, complex,
tightly coupled, integrated, spaghetti-and-meatball infrastructure, which means that
change is very slow because a change somewhere can affect something else.”
Nevertheless, digital change management is firmly within the IT department’s remit:
46% of respondents to the EIU survey say that managing change resulting from digital
technology is one of the IT function’s key contributions to digital initiatives. This figure is
especially high among technology companies (52%), where time to market in a highly
competitive industry is critical, but low among public-sector organisations (36%), where
conservatism and resistance to change are common.
According to David Doherty, director of ICT at Ofcom, the UK’s communications
regulator, IT leaders should be encouraging their peers in the business to take more
responsibility for their agility for the processes they own.
Often, business units will complain that they do not have as much control over their
processes as they would like, he says, but balk when they are confronted with the
prospect of taking full ownership of them. Delivering the agility that business units need
therefore requires that the IT department speaks the same language as the business
units. “We have to work with them and with their culture,” says Mr Doherty, “and get
under the skin.”
IT is in a difficult position when it comes to agility. Everyone can see the rapid evolution
of digital technology, and their eagerness to pursue the opportunities it presents is
understandable. But few understand the complexity of successfully integrating new
digital systems into the business. Nevertheless, IT leaders must find a way to overcome
this complexity, so that their business can keep pace with the speed of digital
innovation.
Achieving agility
About this article:
Digitising IT is a research programme by The Economist Intelligence Unit, sponsored
by SAP. This article draws on a multinational survey of 812 senior executives,
conducted in March 2016. Just under half of the respondents (49%) are senior IT
executives, while the remainder represent a range of other functions. Respondents
are drawn from a range of industries and from countries in Europe, Asia, North
America and Latin America.