How to shift to an agile organization and agile development, which is the key to DX?

In promoting DX, we must respond to intense business evolution. As a result, conventional development methods and organizational systems are no longer available.

Would you like to review existing development methods and organizational systems to promote DX? In this article, we will explain agile development and agile-type organizations that can respond to rapid changes in the business environment, and introduce the success points.

What is DX

First, let’s talk about DX. DX (Digital Transformation) means that companies utilize data and digital technology while responding to drastic changes in the business environment to change services and business models based on the needs of society and customers .

Along with this, it also means reforming the organization, business processes, corporate culture and climate, and establishing a competitive advantage . In the near future, digitization will bring drastic changes to the industrial structure.

For this reason, DX is also a management issue of ” surviving organizational reforms for a new society where all things are connected via the Internet” and “surviving competition by creating new products and services that win the support of customers .”

What is Agile

Agile is called Agile in English and means “quick” and “quick”. In Japanese, it is used like “agile development” or “agile organization”.

In this article, I will introduce points and examples of both “agile development” and “agile organization”.

What is an Agile Organization?

Introduce Agile organization. Agile organization refers to an organization with excellent sense of speed as the meaning of agile .

The speed of decision-making and implementation is fast, and it is an organization that can flexibly and quickly respond to changes in policy, so it is an advantageous organizational system in the promotion of DX, which requires change.

A traditional organization is called a pyramid organization as opposed to an agile organization. The purpose of a pyramid-shaped organization is to move people efficiently. For this reason, as expressed as vertical division, instructions only flow from the top to the bottom, and groups are formed one by one to realize the instructions from above.

Pyramid-shaped organizations were divided into functional units in order for human resources to carry out instructions from above. Agile organizations , however, solve problems in teams of diverse people .

Organizational chart of Agile organization

Let’s compare the org chart of the Agile organization with the org chart of the traditional pyramid organization. The diagram below shows a traditional pyramidal organization.

In contrast, the diagram belowrefers to an Agile organization.

In this way, Agile organizations can be said to be flat teams. Also, all members have rights.

Reasons why agile organizations are attracting attention in DX

So why are agile organizations attracting attention in DX?

Agile mind necessary for DX promotion

In promoting DX, it is necessary to review management and business strategies, take on new challenges, and introduce new things. In this way, DX promotion requires a lot of man-hours, so productivity improvement is essential if you want to gain a competitive advantage.

In order to improve productivity, agile elements and an agile mind are necessary. Agile development gives each member roles, responsibilities, and decision-making authority. This motivates employees and improves performance. In addition, the speed of work can improve the productivity of the entire organization.

In this way, DX promotion requires productivity improvement, so an agile mind is required.

Companies and businesses suitable for agile organizations

The characteristics of companies that are suitable for Agile organizations are as follows.

・A business that repeats trial and error

A characteristic of an agile organization is the ability to move things around quickly. Therefore, it is not suitable for a business that has a long-term strategy and carefully executes it.

– Decision-making is completed by one team

If there are many points of contact with other organizations such as stakeholders, the organizational structure and speed of the agile organization cannot be utilized.

・Ability of members

In agile development, roles, authority, and decision-making are passed to each member. Therefore, if the individual ability is insufficient, defects will appear.

3 Benefits of an Agile Organization

The advantages of an Agile organization are:

1. Easy to seize business opportunities
2. short time to decision
3. Employee engagement can be improved

I will introduce each of them.

① Easy to seize business opportunities

Agile organizations are quick to implement and flexible to change . As a result, they tend to seize business opportunities.

In promoting DX, flexible changes such as business transformation are required, making it easier to seize business opportunities.

(2) Short time to decision making

Another characteristic of Agile organizations is the short time to decision making. In addition, since each member is given authority when making decisions, it is easy to express opinions, and active exchange of opinions can be expected.

(3) Employee engagement is easy to improve

Since each member has a clear role and responsibility, we can fulfill our purpose. Increased motivation can lead to increased productivity.

Two Disadvantages of Agile Organizations

Agile organizations also have their drawbacks. The two disadvantages are:

1. need autonomy
2. difficult to manage

I will introduce each of them.

(1) Autonomy is required

Members of an agile organization are empowered to make decisions, so they need autonomy. If decision-making in the traditional organizational system is biased towards specific people, we must start by establishing the autonomy of the members.

(2) Management is difficult

If it is a flat organization with equal discretion and position, it is difficult to build a management system, and sometimes members may not get along well or there may be members who do not function.

Agile Organization Success Points 3

So how does an Agile organization succeed? I will also introduce the disadvantages that I introduced earlier.

There are three keys to a successful Agile organization:

1. Shift to an organizational culture that encourages challenges
2. foster autonomy
3. improve communication skills

(1) Shift to an organizational culture that encourages challenges

An agile organization can move quickly because the team does everything from strategy to execution. To take advantage of this characteristic, it is necessary to build an organizational culture that encourages challenges.

Specifically, let’s formulate a follow-up system for the organization and management when the business fails .

② Foster autonomy

An agile organization cannot function without the autonomy of its individual members. Foster member autonomy. Ask for individual input, or break down roles if you don’t have a lot of autonomy.

③Improve communication skills

Since we work in teams, we have to communicate with a variety of people. Therefore, communication skills are questioned. In order to facilitate communication, first increase the frequency of communication between members.

Agile organization example

Here are some successful cases of shifting to an agile organization.

spotify technology

Spotify Technology, which operates the music distribution service Spotify, has adopted an agile organizational structure called the Spotify model. The “Spotify model” consists of four teams: Squad, Tribe, Chapter, and Guild.

First, the smallest unit of the organization is a development team called a squad, and the product owner gathers at the same place to work. A squad is a collection of squads that are related through the product.

Each squad is an independent team with decision-making power, but in order to cohesively unite the company as a whole, there are branches that gather people with the same skills and guilds that are communities that want to share the same knowledge. I’m here.

Founded in Sweden in 2006, the company has grown rapidly to become the world’s largest company in the field of music distribution services in just 10 years. It is believed that the decisive factors behind the company’s rapid growth were its ability to maximize operational efficiency and productivity through agile organizational management, and its ability to grasp the needs of society earlier than anyone else.

What is agile development

Now that we’ve covered Agile organizations, let’s introduce Agile organizations.

Unlike the conventional waterfall type development, it is a method that repeats design, development, verification, and planning step by step, instead of proceeding with each process according to the plan decided at the beginning .

Difference from waterfall type development

Waterfall type development is a method of proceeding with the process while checking the development procedure one by one. We divide the development into each process and proceed with the work. Waterfall-type development is characterized by the fact that it is easy to schedule until the effectiveness verification because the development procedure is confirmed one by one.

However, it takes time to verify the effect because the process is advanced one by one. In addition, since there is only an opportunity to define requirements at the beginning of the project, many man-hours will be required if the specifications change during the project or after verification.

On the other hand, agile development uses a method called scrum, where we hold daily meetings to determine the priority of the system and work together smoothly, so it is possible to quickly correct the course .

Three representative methods of agile development to realize DX

There are three approaches to Agile development:

1. scrum
2. extreme programming
3. User function driven development

I will explain each.

①Scrum

It is the most frequently used development method in agile development.

Scrum rules are defined in the Scrum Guide . Be sure to check back as the content is updated every 1-2 years.

Scrum sorts customer requirements according to the criteria of value, risk, and necessity, and always reveals the current situation and problems. In that order, work proceeds in fixed short time periods called time boxes.

Regularly check the progress, whether the product you are making will produce the expected results, and whether there are any problems with the way work is being done. This is a test in Scrum. If there is a problem with what we call adaptation, or if there is a better way, we change the way we do things.

The scrum flow is as follows.

②Extreme programming

Scrum builds deliverables quickly, while Extreme Programming focuses on continuous growth.
The following five values ​​are advocated for this extreme programming.

(3) User function-driven development

It is a method of promoting development focusing on valuable functions from the user’s point of view. The feature is that it is easy to handle large-scale projects because teams are divided according to the function to be developed and planning, designing and coding are done.

Why agile development is attracting attention in DX

Why is agile development attracting attention in DX? This is because the tools for promoting DX in recent years have evolved significantly.

IT tools are coming out one after another. For this reason, agile development, which makes it easy to change specifications, is suitable.

Organizations and projects suitable for agile development

Agile development is suitable for organizations with a small number of teams . In addition, it is suitable for projects that can be repeatedly verified. Since it works as a team, especially when introducing agile development for the first time, try it with a few people.

Two advantages of agile development in DX

What are the advantages of agile development in DX?

① Quick correction possible

Agile development allows for quick revisions, so the best service for customers is created to realize DX.

② Speedy development

In order to realize DX, a certain amount of speed is necessary. Also, in order to verify the effectiveness and modify the service, development must proceed quickly.

Disadvantages of Agile Development

Agile development also has its drawbacks.

Difficult to control schedule

It is characterized by the fact that it is difficult to proceed on schedule due to repeated course corrections.

Agile development process in promoting DX

Introduce the agile development process.

development plan

Assemble your team and plan your resources. Since there are many course corrections, we do not set strict deadlines and specifications.

Requirement definition → design → implementation → test

From requirements definition to testing, we will execute it on a team-by-team basis. Repeating these cycles in a short period of time is called an iteration.

Agile development success points 3

There are three keys to successful agile development:

1. Pre-project preparation
2. Hire Project Manager
3. Building relationships of trust with customers

I will explain each.

①Preparation before starting the project

Hire veteran personnel in the team to define requirements, plan, test, and verify the effect on a team-by-team basis .

Also, if the axis of the project is not fixed, the project will deviate from the project you want to complete as you repeat the iterations many times . Let’s keep

② Hire a project manager

We iterate on a team-by-team basis, but we need someone to check how far we’ve progressed overall.

(3) Build a relationship of trust with customers

If there is a lot of man-hours or if it differs from the conventional development method, the customer side will feel uneasy. Therefore, let’s dispel anxiety by building a relationship of trust with customers by frequently sharing progress.

Agile development success stories

Here are some successful examples of agile development.

CRM development for AXA Life

AXA Life developed CRM with agile development. CRM is a customer management system that is often used by sales people, so it is an indispensable system for insurance companies with many sales people.

Customer data was scattered across multiple in-house systems, and it took a long time to confirm accurate information, but with this CRM, it is now possible to centrally refer to information related to a single customer. .

It is necessary to change the development method and organization in promoting DX

DX means that companies utilize data and digital technology while responding to drastic changes in the business environment to change services and business models based on the needs of society and customers. Along with this, it also means reforming the organization, business processes, corporate culture and climate, and establishing a competitive advantage.

When transforming services and business models, it is necessary to review traditional organizational and development methods. Consider shifting to agile development and an agile organization.