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How agile Project Management can drive Business Model Innovation and create superior Customer Value on the Example of

Written by Leon Clarenbach

Grade 1.3

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Term Paper


Business Administration>Management




Term Paper: A review of the concepts and theories of agile project management. The advancement of digitalization in many industries is actively destroying many organizations, so it poses a challenge to the establishment and construction of the perfect form of the company (Jong & Dijk, 2018). An in-depth report by McKinsey & Company (Aghina et al., 2019) claims that the development of agile organizations is the result of this development: As a "living organism". This marked the transformation of the paradigm of organizational design from a rigid and inflexible top-down hierarchical structure to an open and collaborative network. In this framework, compared with traditional project management, agile project management (APM) is a project management method with the following characteristics to execute corresponding projects through a flexible and iterative method (Highsmith, 2009, p. 5-6 Page). Traditionally, a project has a clearly defined goal and then targeted through a clearly structured execution, while agile methods use a broad and that feels less structured approach. The project is geared towards a vision rather than a specific goal. The way to achieve this vision is built around a short and concentrated continuous development cycle (sprint) that can flexibly adapt to changing environments and new learning along the way (Hoda et al., 2008, p. 2). The project team is independent of their work to a certain extent and is responsible for their results. Leadership in an organization can promote self-reliance actions by creating enough space for employees to actively achieve established goals and visions, rather than top-down managers (Beauchene & Cunningham, 2020). Jim Highsmith (2009, pp. 6-8) defines five different "agile business goals" in his book: First, "continuous innovation" is a mentality that constantly responds to customer feedback and meets their needs, "products "Adaptability" is to quickly respond to changing market demands and environmental factors. The author sees one of the basic concepts of agile project management, which can not only create value for today's customers, but also provide flexible final results to adapt to the future. Following this idea, "people and process adaptability" is mentioned, which represents the need for an adaptable team and process. In addition, "reduced time to market" is another key advantage of Highsmith, because APs can speed up product delivery, thereby providing a competitive advantage for deployment companies and their customers. Finally, the results delivered by agile projects are not predictable, but "reliable results", which can guarantee the delivery of customer value and meet all project requirements. A typical agile framework consists of five different phases: conceive, speculate, explore, adapt, and close (Parziale, 2017 and Khalil, 2020): In the envisioning phase, the project team collaborates to develop the overall scope and vision of the project, and determine Relevant project goals and key stakeholders that must be considered in the project. Through the active encouragement of the agile project leader, the total workload will be broken down and broken down into different work packages in the speculation phase (will be carried out in the sprint). The result is the first timeline for the delivery, identification and prioritization of key tasks and budget estimates. In the exploratory phase, the project is executed, and the team members "explore" different routes to achieve the project goals. This stage is characterized by frequent brief team reviews, in which recent results are discussed, and it also focuses on one goal at a time until a satisfactory final result is obtained. The key and differentiating factor of the agile framework is the adaptation phase: it runs partially in parallel with the exploration phase and continues to iterate the project process by analyzing external feedback from stakeholders such as customers. Therefore, the plan drafted in the speculation stage will be continuously revised and adjusted as necessary. Finally, when the final iteration cycle is completed and the finished product is completed, the shutdown phase will be initiated. At that stage, all team members gathered together to compare the final result with the adapted customer requirements and summarize the lessons learned for future projects (Khalil, 2020). The concept of APM was first established in software development to achieve a more focused and efficient method to promote faster development of high-quality software (Agile Alliance, 2020). Nowadays, agile project management and agile methods have been extended to multiple industries outside of software (Alexander, 2018), so it is most commonly used in research and development (Freeform Dynamics & CA Technologies, 2018). In a study (2017) conducted by the Project Management Institute, the survey found that 71% of global companies use agile methods in certain areas of their business practices. Another survey found that among those companies that are fully committed to it, 60% have achieved profit growth after adopting agile methods (Freeform Dynamics & CA Technologies, 2018). In general, projects using agile methods have a 28% higher success rate than traditional methods. Principles of project management (Ganesh et al., 2017). All in all, the main benefits of adopting agile methods are to find solutions faster, reduce resource waste, greater ability to respond to external changes, higher employee engagement, and higher customer satisfaction (Alexander, 2018) . Read Less