Organizational Implications of Agile Adoption: A Case Study from the Public Sector

While agile software development is increasingly adopted in large organizations, there is still a lack of studies on how traditionally organized enterprises adopt and scale agile forms of organization. This industrial multiple embedded case study explores how the organizational model of a large public sector entity evolved over four years to support the adoption of agile software development methods. Data was collected through semi-structured interviews and document analysis. We describe the change in three phases: pre-transformation, initial transformation, and maturing. Changes in three subcases of organizational units are further described in detail. Moving from an outsourced project-based way-of-working with separate business, IT and vendor organizations, the new organizational design emphasizes internal development capability, cross-functional autonomous teams organized around products and grouped in product areas, and continuous delivery. Starting from the IT department, the transformation expanded to the whole organization, and went beyond software development to the finance and leadership. We describe the target and intermediate organizations employed when adopting agile development methods for the whole organization and three organizational units responsible for different services. Defining suitable product boundaries, achieving alignment across teams, enhancing the competence of product owners, the coexistence of old and new types of systems, processes, and structures, and balancing the teams' need for autonomy with the organizational needs for coordination and control are remaining challenges.