CONSULTING

The Agile
Operating
Model of the
Future
How a highly flexible and
responsive organization will be
positioned for lasting success.
Companies today are under greater pressure than ever to de- Companies are having to reset their strategic direction in re-
liver shareholder value – be it in the form of top-line revenue sponding to this new wave of personalization. They want to be
growth, cost reduction, greater working capital or elevating more agile, quicker to react, and more effective at creating dif-
the customer experience. Delivering this value in a highly com- ferentiated propositions that command premium prices. They
petitive marketplace has entered an entirely new stratosphere also want to deliver extraordinary customer experiences, exploit
in 2018. One that thrives in a rapid-speed environment and is disruptive new technologies to cut costs and improve the quali-
anchored in ground-breaking technology advances – both of ty of their offerings to realize a heightened state of value.
which have become incubators for new sources of competition.
These lofty ambitions are requiring more dynamic business
Inspired by communities across social media that interact al- models on the production line and within the organization itself,
most exclusively via mobile devices, consumers are becoming which require companies to rapidly evolve their overall opera-
increasingly emboldened to demand what they want, how they tions into one which is highly agile and flexible.
want it, where they want it and when they want it. These sav-
vy users are demanding a more personalized experience, and in
some cases, even welcome the opportunity to actively co-cre- Prototyping & Minimal Viable Products
ate with companies the products and services they consume.
Our teams of experts at Infosys Consulting have witnessed the
This rise in mass personalization is driving companies to realign
shift to “agile delivery” as the go-to development approach
their capabilities (people, processes, technology) and resourc-
in response to these market dynamics. For the organization of
es to meet individual consumer desires to win market share.
the future, technology developments must be delivered at rapid
pace due to the speed of change across marketplace environ-

The Fast, Agile Organization will ments and to meet customer requirements BEFORE business
operating models can even be re-calibrated.
Thrive in the Future
More and more organizations are exploring how to work in an
Being closer to the consumer in order to react faster to their needs early prototyping, minimal viable product (MVP) fashion, as CEOs
fundamentally changes the tenets of a firm’s operating model, as no longer have the luxury to wait a year or more for products
well as organizational boundaries that have traditionally existed to be delivered. Early movers operating in this principle smartly
in the enterprise. Decentralized decision making is challenging prioritize and release developments to reflect market priorities in
traditional leadership structures and necessitating more open, such a way as to start adding value immediately, and then itera-
non-hierarchical conversations across the company, and beyond tively evolving as customer requirements are refined (along with
organizational boundaries with suppliers and customers. their demand).

Evolution of the Enterprise

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Welcome to the Age of the • New Sources of Competition – We have seen the com-
petitive paradigm shake up a number of industries. For
Flexible Operating Model example, the supermarket business being challenged
by Amazon. Or the traditional high street retail industry
To create value and provide compelling customer experiences
versus new omni-channel competitors.
at the most efficient cost, companies are moving towards a new
concept we call the “flexible” operating model. These organiza- • Regulatory Changes – As the speed of change inten-
tion structures are new generational ways of running a compa- sifies, especially when driven by technology and data,
ny that combine disruptive technologies and agile operational governing bodies will continue to review and revise reg-
capabilities in an integrated way to achieve next-level improve- ulatory requirements to protect and support consumers
ments in mass personalization. (e.g. the new global data protection regulation). This is
also shaping how organizations approach their future
If implemented with precision, this can lead to incremental or
planning.
accelerated revenue growth, with innovative and engaging cus-
tomer experiences. A number of trends are helping foster this
evolution. The Implications on the “Flexible”
• Disruptive Technology – AI, blockchain, digitalization,
Organization
Internet of Things (IoT), machine learning and robotic As a result of the above trends, we have seen a dramatic shift
process automation have all intensified the velocity of in our clients’ adopting agile as their methodology of choice
change and the impacts they have on job roles, people, for product development – to respond to real-time needs of
skill-sets required, and the need for a DevOps culture today’s demanding consumer. The success of agile-led devel-
versus silo-based delivery. opments is leading senior decision makers across almost every
industry to consider the benefits of flexible, agile working for
• Demand Trends – Customer preferences are constant-
their broader operating model.
ly changing with more bespoke, tailored solutions. De-
mand is often coming quicker and who is creating the This requires an adaptation in their existing strategies and ap-
demand (e.g., millennials versus baby boomers) is hav- proach to organizational design, people, processes and tech-
ing a profound impact. nology. Let’s explore these areas in more detail…

Flexible Organization Structure

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1. Strategy >> 4. Working Processes >>

A sound strategy sets out how people can affect and influence New products and services are developed in close interaction
the future direction, and how real-time trends and data are fed with customers - and ideas and prototypes are field tested ear-
back into the business to ensure ongoing relevance. The strat- ly in the development process, so units can quickly gather data
egy will seek to identify tangible and measureable outcomes on improvements. Co-creation through the value chain with
which can be used by operating units and individuals to set key customers and suppliers will need specific engagement

performance targets, and more meaningfully to measure their and relationship skills, as these stakeholders become critical

contribution to success. Key principles underlying the agile partners of the product development process.

organization include the shift from project-based working to

Standardized processes deployed within functions across mul-
product development, pre-eminence of customer focus, entre- tiple regions with a common language enable mobility and
preneurialism, transparency and standardized processes. scaling. For example, moving people between geographies
to add value where it is most needed can produce a global
2. Organizational Design >> capability where changing demands require rapid action and

A critical feature of the flexible organization is the need to solutions. Teams will need measurable performance goals for

shift from a traditional, silo approach to end-to-end processes processes to help track customer satisfaction and to determine
how processes can be improved.
and products which become the focal point of collaboration
between multiple organizational skill-sets to deliver valued People are encouraged to experiment and iterate to seek ways
outcomes. Flexible organizations will identify well-defined of improving process and customer outcomes. ‘Fail fast’ is en-
competency homes, such as for traditional technology teams couraged, while an entrepreneurial spirit is supported (and re-
like architects, analysts and data engineers. Performance is warded) throughout the organization.
more appropriately measured and rewarded according to their
work as part of cross-cutting, multi-disciplined product devel- 5. Fostering Collaboration >>
opment teams formed to address key market needs (and their
The way an organization fosters strong collaboration between
ability to add value as they move from one team to another).
silos will need to be addressed from the outset. Strong prod-
uct owners who can mobilize multi-skilled teams around
3. Empowering People >> cross-cutting value propositions are critical to this process.
Developing agile, flexible ways of working has significant im- Product owners need to have sufficient knowledge to work
pact on almost every aspect of the organization, including with and understand issues raised by team members from
structures, roles, responsibilities, business vocabulary, pro- diverse groups such as IT, Sales and Marketing. Transparency of

cesses, collaboration models and technology. Product owners information and data becomes even more critical if self-man-

are the focal point of ensuring the consumer is at the center aged teams are to identify ongoing improvements and share

of product development. They need to be given authority to learnings across teams.

make key decisions and engage directly with customers to

6. Data-Driven Automation >>
avoid unnecessary roadblocks. Direct customer interaction en-
sures clear communication of requirements and priorities into Advanced analytics is the autonomous processing of data
the agile development process, which in turn drives agility and using sophisticated technology to discern insights and make
increased productivity. recommendations. It provides intelligence to improve decision
making and can especially enhance customer personalization
Leaders will need to adapt, as some roles go from front-line journeys. Digital tools have the capacity to transform custom-
leadership of projects to managing capabilities which add val- er journeys in powerful ways, by reshaping time-consuming
ue as part of product developments led by product owners. or transactional elements of the journey. Robotic process au-
For employees, it will be critical to understand and adapt to tomation (RPA) is an emerging technology that can replace
working more flexibly across a range of projects where they human effort in processes that involve aggregating data from
will need to leverage their core skills to deliver value across a multiple systems, or taking a piece of information from a writ-
range of projects. ten document and entering it as a standardized data input.

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Running a Flexible Operating Collaboration and Co-creation
Model. as the Backbone
Senior executives need to actively and visibly lead the change Agility requires a shift to a flexible operating model where per-
in culture as they evolve into a flexible operating model. A formance is measured and rewarded. Staff also need to receive
sound leader should clearly identify, agree on and adopt the a greater share of training and coaching as it relates to the is-
values and behaviors that will enable them to shift to an ag- sues and opportunities they are helping to address. Traditional
ile-based culture. Leaders will need to challenge and confront
silos are replaced by capability teams that come together to
behaviors which are a barrier to collaboration between tradi-
deliver end-user focused outcomes. Here these teams receive
tionally silo’d teams to ensure they can come together to deliv-
specialist training and coaching from SMEs in their field of ex-
er the greatest value for the organization and their customers.
pertise. However, their performance is increasingly measured
In this spirit, senior decision makers need to take time to en- in terms of their contributions as members of cross-cutting
sure they are sufficiently conversant in agile working concepts teams formed to address specific requirements.
and how they impact governance. Key examples include:
Several other elements play a key role helping to realize an ag-
• Budgets – Decisions to progress development is based
ile approach:
on return-on-investment and meeting pre-agreed
product performance targets, rather than a single • Co-Creation – Business and IT co-create and collabo-
budget being agreed and tracked for the duration of rate with requirements shaped together on an almost
a program. day-to-day basis, versus requirement gathering being

• Design – Iterations to requirements are not considered a one-time event at the outset of the project.
‘change requests,’ but rather natural evolutions on de-
• Development Waves – Agile team composition evolves
sign that add greater value as a result of ongoing cus-
and morphs according to prioritized sprints and the
tomer interaction.
components to be developed. Teams are structured to
• Planning – Priorities are driven by the product owner support development waves.
in conjunction with ongoing collaboration with end
users, business units and IT to ensure the greatest val- • Broader Business Support – It is critical other parts of
ue can be generated in the shortest possible time. Pri- the business are prepared to support developments in
orities may shift through a product to reflect a revised an agile way to prioritize sprints and identify highest
value perception. ROI for customers.

Agile Framework

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 A Model for Innovation Co-Creation

Global
Global Talent Pools
Network of Skilled
Resources Individuals
of Firm
Company n ce E nv i ro n m Experts and
and
e rie e Enthusiasts
xp Enthusiasts

nt
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s
Co - c re at i ve I nte rac t i o ns
as t he Lo c us o f
I N N OVAT I O N

ms
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Global

fo r
ov
Global io Thematic

at
at
n

Pl
Network Co t Communities
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Resources of Customers,
of Suppliers Users, and
and Partners their
Suppliers Customers Network
Partners
and Partners and Users

A Culture of Continuous
Improvement
The essence of a great, high-performing culture in the agile op- • Make Mistakes Early, Learn & Adapt – Flexible oper-

erating model is one that embodies several core principles. It’s ating models focus on continuous learning and the
fluidity of knowledge and experience sharing within
one that is always streamlining processes, eliminating waste
the teams to support accelerated progress. This helps
and fostering a continuous culture of learning and improve-
to avoid blockers in the future, and to learn early from
ment.
mistakes.
• Customer Value-Focused – Teams continually assess
• Speed & Progress – Business development teams pro-
requirements with a lens of generating the most value
actively share progress and the value of their projects
to the end-user as early as possible. Not all require- with the broader business. The development teams
ments are equal and there is no single finish line, as should not be viewed as elitist and should be encour-
with a traditional waterfall approach. aged to evolve learning of agile related concepts.

IDE N TIFY
Opportunities
in the process
workflow.

THE
REVIEW P L AN
CO N T I N U O U S How can the
How changes
working for the IMPROVEMENT current process
team? be improved?
C YC L E

E XE CU TE
Implement
changes.

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Today, Only the Flexible will lining processes, eliminating waste, and fostering a culture of
continuous improvement with the integrated use of agile ap-
Survive and Thrive! proaches and capabilities.

Consumer demand for increased personalization runs counter

With nearly nine out of ten of the Fortune 500 companies that
to the ‘command and control’ of the traditional, centralized op-
existed in 1955 now gone, merged, or contracted, this demon-
erating model. It’s clear much consideration has to be given to
strates the extreme of market disruption that is abound. Com-
the devolution of decision making power and accountability
panies need to deeply understand that the innovation driven
for results in the enterprise of tomorrow.
by the endless pursuit of profit can only come from serving
Decentralized decision making is changing traditional leader- customers with better prices, high quality products and great
ship structures and necessitating more open, non-hierarchical customer service – and can only be realized by having an ag-
conversations across organizations, as well as outside into the ile, flexible operating model.
value chain through co-creation.
The companies that are best positioned to thrive will embrace
The full impact of this flexible operating model comes from these concepts, while the ones that don’t will likely risk losing
combining operational improvement efforts around stream- customer loyalty, revenues and market share at a rapid pace.

BIGGEST SURVIVORS

EXXON MOBIL GENERAL GENERAL

MOTORS ELEC TRIC

N E W S TA R S

WALMAR T APPLE AMAZON

VIC TIMS OF E VOLUTION

AMERICAN DE TR OIT ZENITH

MOTORS STEEL ELEC TR ONICS

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About Infosys Consulting
We are a global advisor enabling organizations to reimagine their future and create sustainable value leveraging disruptive tech-
nologies. And as part of technology leader Infosys, we have access to a global network and delivery capability of 200,000 pro-
fessionals that help our consultants implement at scale. To see our ideas in action, please visit InfosysConsultingInsights.com.

About the Experts

Sujal Katechia – Senior Principal, C-Suite Advisory Practice

Sujal is a leader within our C-Suite Advisory Practice with over 11 years consulting and 9 years industry experi-
ence in helping client executives harness disruptive technology, more effectively manage technology resources
to drive agile, next-level business performance and optimize the value of their strategic IT investments. He leads
the firm’s operating model center of excellence helping clients design, enable and implement flexible operating
models ensuring alignment between people, process and technology capabilities to achieve transformational
outcomes. Sujal has an Executive MBA from Imperial College Business School, and is the lead author of this point-
of-view paper.

Nim Sanghera – Associate Partner, Transformation Management Practice

Nim is an expert in organizational design, target operating models and change management for Infosys Consulting.
He has 25 years of experience working across industries ranging from oil and gas, to finance and insurance and
consumer products. Nim currently leads a number of the firm’s organizational design and business transforma-
tion programs for our global clients. He has a Master’s degree in management and administration and is a special
contributor to this report.

Jonquil Hackenberg – Partner, C-Suite Advisory Practice

As partner and UK advisory and supply chain practice head, Jonquil defines the go-to-market strategy for digi-
tally-focused market offerings - and leads strategic change and complex supply chain transformation programs
for the CPG and manufacturing industries. Her focus includes organizational solutions around flexibility, pre-
dictability, sustainability and traceability. She is passionate about people, ardent about leadership and about
developing high-performing teams with a sense of purpose, internally leading all coaching initiatives for the
UK. As an educationist, she is committed to learning and growth – reflected in her part-time role as a lecturer at
Beuth University, Berlin, and in her authorship on sustainability and renewables in Industry 4.0. She possesses an
MBA from Beuth University and is fluent in German, English and Spanish. She is a special contributor and subject
matter expert to this paper.

For more information, contact consulting@infosys.com

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