Service orientation and Business Agility

In this post i wish to discuss Business agility and How Service orientation can achieve this business objective.

Business Agility

A business lives in its ecosystem. I.e it lives and thrives in a dynamic system of all stake holders (Regulator, customers, suppliers, etc) of the business. These stakeholders expect business to respond to all the requests that they make on them. For example Regulators would introduce new reporting requirements, Customers would expect more value from the business and suppliers would expect more transparency. Business agility is the ability of a business to adapt to the different stresses placed on it. In this new age of heightened competitiveness, it is important to the business that they respond effectively to each of these stresses.

How does thinking along Services bring about this Agility?

In the name of efficiency, standardization of activities were followed. Processes were defined so that activities were formalized and were measured. But this led to software and processes that are monolithic. I.e. software and processes are defined as a set of steps that are pre-defined. As these steps could be repeated flawlessly, internal operational efficiency improved significantly.

But customer’s interests were sacrificed at the altar of efficiency. For example, for operational efficiency, customer input forms were standardised. So, if the customer wanted to do only one thing and the process expected to fill up all information, then the customer had to fill up all the information even though half the information is not used in the steps that follow. This lowered customer satisfaction as he/she felt burdened and termed the process bureaucratic.

Increasingly business are realizing that the most important stakeholder in the business is customer and felt that their process should respond to the customer requirements with minimum friction.

Think along services to create Responsive process.

Traditionally, processes by sequencing activities using the flow based terminology (e.g., decision boxes, process, swim lanes, Fork/Join, etc). This lead to processes that were monolithic and difficult to change.

Now instead of considering process as a linked set of activities, imagine the whole organization is divided as a collection of services. These raw services or service composed of these are all offered to the customer. These services could be either be done by this organization or could be done by partners. When a customer comes with a request, the sales person, puts together a process from these menu of services. This leads to processes that are very agile, as the organization is able to respond to external demands dynamically.

We have seen how Service orientation can lend itself to business agility. But is this helping the customer, how do we measure how Effective we are. That is a subject, i will discuss in the next post.