Mitchell says that "HP hasn't yet learned how to take internal capabilities and turn them into external successes." But more important, he says, is the issue of whether the corporate world is ready to open up its wallet for technology that pays off only when something goes wrong. "Most companies are biased toward quick-hit reward-seeking," he says, "not long-term risk avoidance." But he agrees that supply-chain risks demand more attention from companies. Whether HP can get them to put their money where their risks are remains to be seen.

Doug Bartholomew is a writer in Berkeley, California, and former technology editor at IndustryWeek.

A Facility for Agility

If you've ever felt that the pace of change was leaving your company in the dust, it might be time to try what Steelcase Inc. did, and get an agility checkup.

The office-furniture maker was looking for ways to adjust both its business strategy and the way IT supported that strategy so that it could adapt more quickly to shifts in pricing, changing customer preferences, and competitive pressures. "Not just at the IT level but also at the business level, we wanted to identify where we had gaps," explains John Dean, CIO at the Grand Rapids, Michigan-based company.

Enter Hewlett-Packard, which has developed an Agility Assessment Service that includes something it calls the Agility Index. Using a set of vertical-industry performance indexes developed in a joint effort with INSEAD, the international business school based in Fontainebleau, France, HP says it can take the agility pulse of almost any company in each of four industries: telecommunications, manufacturing, financial services, and IT services. HP found three important measures related to a company's agility: time (how fast an organization can make changes), range (how well change can be embraced across an organization), and ease (how much effort is needed to make changes). "We measure how companies compare as they react to change," says HP's Mike Hill. "We look at the significant business processes that drive the business."

Oddly, the joint research showed that companies' ability to respond to change has declined, rather than improved, in recent years. "The startling reality is that while market change continues, companies' ability to respond is often impeded by the rigidity of their processes or the state of their IT infrastructures," says Kishore Sengupta, associate professor of information systems and research program manager at INSEAD. With HP's own agility now put to the test, it has the opportunity to serve as its own best case study.—D.B.

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