The latest Hackett Group study suggests companies are not agile enough or, in their words, have failed the agility test. Hackett sees the agility problem when companies are unable to reduce key expenditure categories during the recession as fast as their revenues are plummeting.

As Hackett puts it in their latest report, “Typical Global 1000 companies (with $26 billion in annual revenue) are losing out on up to $1 billion in annual cost savings as a result of this lack of agility.”

Even if you’re not a multibillion-dollar company, you stand to benefit from increased agility. If companies are to reduce costs as fast as revenue falls, they will need to adopt some of wiredFINANCE’s six technologies that bolster agility.

Business agility results from the ability of the business to respond quickly as conditions change. Companies need to respond to customer demands or changes in behavior, moves by competitors, supply chain disruptions, or any swing in the market, be it interest rates or oil price fluctuations.

IT plays a central role in enabling agile organizations because it usually entails changes to systems and applications. Here are six technologies to help you get agile and reduce costs in the process.

1. Cloud-based services — usually available on demand, allowing you to scale services up or down and change services as needed

2. Service-oriented architecture (SOA) — enables organizations to speed integration and application development of applications by recombining functionality as reusable services based on widely accepted standards

3. SaaS — lets organizations deploy applications fast and at lower cost by accessing proven, prebuilt applications as on-demand or subscription services

4. Extreme programming (XP) — an application development methodology that uses a highly iterative approach to building applications that work and does so faster and at lower cost

5. Open source — allows organizations to take advantage of free or low-cost source code as the base for new applications or functionality

6. Virtualization — allows organizations to deploy, change, and manage logical servers more quickly and easily by inserting a layer of abstraction (in the form of a hypervisor) that masks the underlying complexity of the physical systems while allowing for the secure and efficient sharing of common system resources

You can read some of my writing on these topics in previous wiredFINANCE pieces, such as one from April on cloud computing. In addition, here is a recent case on SOA, one on virtualization, and another on SaaS.

Iterate or Die: Agile Consulting for 21st Century Business Success by Eric Berridge and Michael Kirven addresses just about all these topics.

Finally, business intelligence (BI) should be another technology you include in your agile enterprise toolkit. If agility describes the organization’s response to change, then BI makes it possible to identify the likely changes as soon as they can be detected. Organizations that have honed their ability to listen to and watch customers, suppliers, competitors, and the market and, through the use of BI, can make sense of what they learn and translate it into action should pass Hackett’s agility test. ###