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The business value of agile software development: Results from a systematic literature review

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Abstract

A key promise of agile software development (ASD) is to deliver business value. While research and practice indeed report multiple benefits resulting from the adoption of ASD methodologies, the bandwidth of the achievable business values is not well understood yet. To clarify the concept of ASD business value and provide a systematic perspective on its multidimensional nature, we present the results of a literature review, in which we investigated the attainable benefits when adopting ASD methodologies. The contribution of the paper is twofold. First, we provide a systematic overview of 43 distinct ASD business values, which includes prominent values such as increased productivity and less regarded values, for example improved business IT alignment. Using a conceptual lens based on Chow and Cao (2008), we furthermore relate the identified business values to the factors determining the success of ASD projects, thus proposing a novel model to explain ASD success.
Association for Information Systems Association for Information Systems
AIS Electronic Library (AISeL) AIS Electronic Library (AISeL)
ECIS 2022 Research Papers ECIS 2022 Proceedings
6-18-2022
The business value of agile software development: Results from a The business value of agile software development: Results from a
systematic literature review systematic literature review
Jan-Niklas Meckenstock
University of Bamberg
, jan-niklas.meckenstock@uni-bamberg.de
Nico Hirschlein
University of Bamberg
, nico.hirschlein@uni-bamberg.de
Sebastian Schlauderer
University of Bamberg
, sebastian.schlauderer@uni-bamberg.de
Sven Overhage
University of Bamberg
, sven.overhage@uni-bamberg.de
Follow this and additional works at: https://aisel.aisnet.org/ecis2022_rp
Recommended Citation Recommended Citation
Meckenstock, Jan-Niklas; Hirschlein, Nico; Schlauderer, Sebastian; and Overhage, Sven, "The business
value of agile software development: Results from a systematic literature review" (2022).
ECIS 2022
Research Papers
. 24.
https://aisel.aisnet.org/ecis2022_rp/24
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Thirtieth European Conference on Information Systems (ECIS 2022), Timișoara, Romania 1
THE BUSINESS VALUE OF AGILE SOFTWARE
DEVELOPMENT: RESULTS FROM A SYSTEMATIC
LITERATURE REVIEW
Research Paper
Jan-Niklas Meckenstock, University of Bamberg, Bamberg, Germany,
jan-niklas.meckenstock@uni-bamberg.de
Nico Hirschlein, University of Bamberg, Bamberg, Germany,
nico.hirschlein@uni-bamberg.de
Sebastian Schlauderer, University of Bamberg, Bamberg, Germany,
sebastian.schlauderer@uni-bamberg.de
Sven Overhage, University of Bamberg, Bamberg, Germany,
sven.overhage@uni-bamberg.de
Abstract
A key promise of agile software development (ASD) is to deliver business value. While research and
practice indeed report multiple benefits resulting from the adoption of ASD methodologies, the
bandwidth of the achievable business values is not well understood yet. To clarify the concept of ASD
business value and provide a systematic perspective on its multidimensional nature, we present the
results of a literature review, in which we investigated the attainable benefits when adopting ASD
methodologies. The contribution of the paper is twofold. First, we provide a systematic overview of 43
distinct ASD business values, which includes prominent values such as increased productivity and less
regarded values, for example improved business IT alignment. Using a conceptual lens based on
Chow and Cao (2008), we furthermore relate the identified business values to the factors determining
the success of ASD projects, thus proposing a novel model to explain ASD success.
Keywords: Business Value of Agile Software Development, Agile Methodologies, Literature Review
1 Introduction
Delivering business value is one of the key promises of agile software development (ASD) methodolo-
gies and declared as a fundamental principle in the Agile Manifesto (Beck et al., 2001; Alahyari et al.,
2017). Yet, while literature provides ample evidence that ASD methodologies can indeed create
business values of various kinds, the concept itself has not been clearly defined in the field of ASD.
Literature emphasizes that the business value of ASD is not only manifested in the final software
product and its characteristics, “but also in the development process as such” (Racheva et al., 2010, p.
132). Beyond this observation, however, evidence regarding the achievable benefits remains scattered
across the literature base and has not been consolidated so far (Racheva et al., 2009). As a
consequence, it is still left somewhat unclear, which kind(s) of business value(s) can be expected from
ASD and how the adoption of ASD methodologies exactly contributes to the success of development
efforts. Clarifying the connection between ASD and achievable business values appears necessary,
though, as ASD methodologies are usually adopted with specific goals in mind and need to prove their
merits.
Agile Software Development Business Value
Thirtieth European Conference on Information Systems (ECIS 2022), Timisoara, Romania 2
To clarify the connection between ASD and the achievable benefits, we present the results of a study,
in which we analyzed the potential of ASD methodologies to create business value. Our goal is to
define the term business value in the context of ASD and to establish a better understanding of its
multidimensionality, that is, of the different forms of business value that ASD methodologies can
create. We study the following research questions: Which forms of business value can the use of ASD
methodologies create? In which ways do these business values contribute to ASD project success?”
To answer these questions and gain in-depth insights into the multidimensional nature of the ASD
business value concept, we conducted a systematic review of the information systems (IS) literature.
Based on the findings of 34 research articles, we systematically identify the business values observed
in the application of ASD methodologies and organize them into a coherent concept. In developing a
new conceptual lens based on the critical success factor model by Chow and Cao (2008), we relate the
identified business values to the factors that determine the success of ASD projects. The results
contribute to the body of knowledge in two ways: first, we formulate a more profound definition of the
so far still blurry business value concept in ASD and provide a consolidated view into its multifaceted
nature. To better explain ASD success, we moreover provide a new lens that describes how the
achieved business values contribute to the success of ASD projects. It provides insights into the so far
mostly hidden mechanisms of ASD methodologies and may help to uncover some of the theoretical
glue (Conboy, 2009) that defines the essence of agility in the field of IS development (ISD).
We proceed as follows: in the next section, we describe the theoretical background, the conceptual
lens derived from Chow and Cao (2008), and related work. The research approach behind our study is
documented in section 3. In section 4, we present the ASD business values identified in our literature
review. We discuss the results as well as the implications for academia and practice in section 5. The
paper ends with a conclusion and an outlook on future research avenues (section 6).
2 Theoretical Background and Related Work
2.1 Agile Software Development Methodologies
ASD methodologies such as Scrum or Extreme Programming (XP) introduce new approaches to
software development (SD) that rely upon agility to facilitate the development process. Basically, SD
agility can be understood as “the continual readiness of an ISD method to rapidly or inherently create
change, proactively or reactively embrace change, and learn from change while contributing to
perceived customer value […] through its collective components and relationships with its
environment” (Conboy, 2009, p. 340). As a unified base to conceptualize SD agility, the Agile
Manifesto defines twelve agile principles that express the essence of the term (Beck et al., 2001).
Thereby, the first principle mandates to deliver business value, specifically in the form of “valuable
software” (Beck et al., 2001). Generally, the principles can be understood as abstract “guidelines”
(Abrantes and Travassos, 2011) to realize agility through the application of agile practices. Agile
practices hence support the implementation of agile principles on site by introducing concrete
working, interacting, and managing procedures for the development process (Gupta et al., 2019). An
ASD methodology then comprises a certain set of agile practices that aim at improving the agility of
development teams in different ways. The ASD methodology being used accordingly defines the
subset of agile principles that are being implemented. While the connection between agile practices
(e.g., daily meetings) and the corresponding agile principles (e.g., direct communication) often seems
obvious, it is typically less clear how certain agile practices contribute to the creation of business
value. This unclear connection is partly caused by the missing definition of the term ASD business
value, thus calling for a clearer conceptualization of the value creation in ASD methodologies.
2.2 Business Value of Agile Software Development
The need to clarify the creation of business value through use of ASD methodologies has been
emphasized by several researchers (Racheva et al., 2010; Alahyari et al., 2017). While business value
Agile Software Development Business Value
Thirtieth European Conference on Information Systems (ECIS 2022), Timisoara, Romania 3
is often understood as an economic term that manifests itself in constructs like costs or productivity,
literature has shown that the use of ASD methodologies can lead to several additional benefits such as
employee-wellbeing related values (Racheva et al., 2010). These observations suggest that business
value in the context of ASD “is not only dollars” (Racheva et al., 2010, p. 131) but instead depicts a
multifaceted concept. To our best knowledge, however, there exists no clear definition of the term yet.
To define the term ASD business value, we refer to the notion of IS business value, which describes
the creation of business value through the effective usage of IS. In literature, IS business value is
defined as “the impact of investments in particular IS assets on the multidimensional performance and
capabilities of economic entities at various levels, complemented by the ultimate meaning of
performance in the economic environment” (Schryen, 2013, p. 141). To extend this rather economic
perspective, we propose a tailored definition to capture the essence of ASD business value:
ASD business value is the multidimensional impact of the utilization of ASD methodologies on the
performance and capabilities of organizational entities at various levels, resulting in overall increased
performance in terms of development success.
Based on this conception, our goal is to investigate the multidimensional impacts of ASD on the
performance of various organizational entities and to develop the abstract definition of ASD business
value into a more tangible concept. Assessing this multidimensionality through a systematic lens
appears particularly important, as the concept still needs clarification. Prior research has shown that
the success of ASD depends upon several factors as antecedents (Misra et al., 2009; Dikert et al.,
2016; Chow and Cao, 2008; Ahimbisibwe et al., 2015). To depict the role of critical success factors
for ASD project success, the conceptual model by Chow and Cao (2008) distinguishes organizational,
people, process, technical and project factors. Since the objective of our research is to analyze the
multidimensionality of the ASD business value concept on distinct levels, we adopt this model as
conceptual lens. In this line of thought, literature also suggests that the usage of ASD methodologies
leads to the realization of distinct positive effects on the level of these success-driving factors.
Examples from the extant body of literature discuss improved communication within the team
(Hummel et al., 2015), reduced work exhaustion of the individual developer (Venkatesh et al., 2020),
increased business IT alignment (Elbanna and Murray, 2009; Tessem, 2014), and improvements in
process performance and flexibility (Begel and Nagappan, 2007; Tarhan and Yilmaz, 2014).
In our analysis, we use the conceptual logic of Chow and Cao (2008) to attribute the observed effects
of ASD methodologies to the various success factors. We assume that the use of ASD methodologies
positively influences these success factors and the resulting ASD success dimensions. Therefore, we
propose to examine the ASD business value concept on the level of the critical success factors and on
the level of the development success. Thereby, we consider the organizational level, individual level,
team level and process level, as well as traditional success criteria on the ASD success level for our
conceptual lens. During an analysis of related work, we found that research in the ASD domain
frequently investigates people factors on the team level (Hummel et al., 2015) and the individual level
(Venkatesh et al., 2020) as disjunct units of analysis. We consequently separate the people factor
described by Chow and Cao (2008) into two distinct levels, resulting in an individual and a team level.
Note that the model by Chow and Cao (2008) also includes technical factors as another critical success
factor. As these factors characterize the application of various ASD practices i.e., refactoring, regular
delivery, and integration testing, see Chow and Cao (2008, p. 963, Table 2) , we summarize them as
the use of ASD methodologies rather than depicting them as separate success factors for ASD success
in our lens.
In addition, project characteristics are also deemed to be a critical success factor by Chow and Cao
(2008). While we acknowledge the importance of project characteristics i.e., project size and project
complexity for the resulting ASD success, we consider project characteristics to be a moderator
between the different success factors and the resulting ASD success. This perspective is in line with
recent research on ASD projects (Ahimbisibwe et al., 2015). As we intend to investigate the general
breadth of facets of ASD business value, the analysis of the role of this moderator is not within the
scope of our research endeavor. Therefore, we excluded the project factors from our conceptual lens.
Agile Software Development Business Value
Thirtieth European Conference on Information Systems (ECIS 2022), Timisoara, Romania 4
In sum, our conceptual lens comprises individual, team, organizational, process, and ASD success
levels. We deem breaking down the assessment into these five levels to be adequate, as it allows for a
multidimensional analysis of the ASD business value concept in the following chapters.
2.3 Related Work
While the knowledge base on ASD business value is still in a nascent state, several studies have
examined the creation of business value through the application of ASD methodologies, leading to
first steps towards the definition of ASD business value. Extant research has focused on identifying
success factors for ASD from diverse perspectives, for instance by analyzing the perceived success of
ASD projects (Lee and Xia, 2010; Hummel and Epp, 2015). Yet these contributions typically assess
success and value creation through traditional performance indicators only, thus neglecting the
multidimensionality of ASD success. In contrast, especially more recent studies emphasize the
multifaceted nature of ASD business value (Alahyari et al., 2017). Examples for examined business
value dimensions that go beyond traditional performance indicators include employee and customer
satisfaction (Heidenberg et al., 2012; Racheva et al., 2010), collaboration (Korpivaara et al., 2021) as
well as increased innovation and learning (Alahyari et al., 2017). To highlight the centrality of the
customer in ASD business value realization, scholars have also investigated the perceived benefits of
ASD from a customer perspective. Exemplary findings that extend traditional performance indicators
include improved transparency and better requirements meeting as distinct benefits of ASD
(Schlauderer and Overhage, 2013). While these studies provide some insights into the business value
of ASD methodologies, the evidence remains scattered across the literature base and has not been
consolidated so far (Racheva et al., 2009). As stated in Racheva et al. (2009), “the notion of [ASD]
business value is slippery and highly volatile (p. 14), thus indicating a lack of coherence in literature.
To reduce this gap in the literature, we therefore aim at obtaining both a clearer understanding of the
term ASD business value as well as providing a consolidated overview of its multiple dimensions.
3 Research Methodology
To systematize and summarize the current body of knowledge on ASD business value in IS research,
we conducted a systematic literature review according to the guidelines of vom Brocke et al. (2009).
We pursue the objective of clarifying the concept of ASD business value, particularly focusing on the
multifaceted forms of business value resulting from the usage of ASD methodologies.
The first step of our literature review pertains to the definition of our review type. We adopted the
taxonomy of Cooper (1988) to determine the characteristics of our study. Due to page limitations, we
provide a full characterization online, see https://doi.org/10.6084/m9.figshare.19403489. In the second
step of our literature review, we defined central terms and concepts that are related to our research
objective. Before delineating the concept of ASD business value, we shed light on ASD
methodologies as the general underlying topic. Hence, we perceived ASD methodologies, ASD
practices and the different notions of added values resulting from the usage of ASD methodologies
(i.e., benefits, advantages, or improvements) to be the fundamental terms that constitute our research
topic. In this step, concepts generally related to the notion of agile, i.e., agile supply chains and agile
manufacturing, were explicitly excluded, as these terms do not correspond to our focus on ASD
methodologies. In the following, we developed the search string below, which emphasizes the
different notions of business value and ASD-related terms, while it also excludes irrelevant terms:
(((“agile software development” OR “agile method*” OR “agile practi*” OR “agile development”)
NOT (“agile manufacturing” OR “agile supply chain” OR “agile engineering” OR “organizational
agility”)) AND (value* OR “business value” OR benefi* OR advantage* OR perform* OR achiev*
OR increase* OR success* OR profit* OR accept* OR adoption*))
Using this search string, we searched the AIS eLibrary to identify articles in AIS-related conferences
and journals. Secondly, we used the search string to identify relevant articles in the Senior Scholars
Basket of Journals, which are not fully included in the collection of the AIS eLibrary. As a result, we
identified 224 potentially relevant research articles. To ensure the validity of the identified research
Agile Software Development Business Value
Thirtieth European Conference on Information Systems (ECIS 2022), Timisoara, Romania 5
articles, we applied a structured literature evaluation process. First, we defined distinct inclusion and
exclusion criteria. For the final review sample, we only included articles that were published within
the last 15 years (2006-2021), as the discussion on ASD in scientific literature gained momentum from
2006 onwards (Dingsøyr et al., 2012; Baham and Hirschheim, 2021). Furthermore, the articles needed
to be explicitly relevant to the scope of our literature study (i.e., benefits and other notions of ASD
business value). We also rejected opinions, keynotes, viewpoints, and other articles that cannot be
characterized as full research papers. Lastly, we excluded articles that thematize agility as a general
concept and do not refer to the context of ASD methodologies. Along the identified inclusion and
exclusion criteria, we scanned the initial review sample using a title- and abstract-based screening
procedure. As a result of this step, we excluded 154 research articles from our review sample and
analyzed the 70 resulting articles in a full-text screening. Based on the full-text screening and
additional forward and backward searches, we defined a final review sample of 34 research articles.
The fourth step thematizes the analysis of the literature sample. To ensure scientific rigor, we applied a
systematic coding scheme following the guidelines of Gioia et al. (2013) and Wolfswinkel et al.
(2013). Both articles propose a three-step coding scheme to establish a systematic data structure,
consisting of open, axial, and selective coding. This grounded theory-oriented approach allows for the
exploration and systematization of extant findings on ASD business value, while also supporting the
theorization of the ASD business value concept and thereby identifying prospective avenues for future
research (Wolfswinkel et al., 2013). In the open coding step, we extracted 298 text fragments from our
review sample that relate to the notion of ASD business value. As a result, we derived 43 distinct 1st
order concepts depicting ASD business values. In the axial coding step, we synthesized the 1st order
concepts into 14 2nd order themes. As this step entails a clustering of the text fragments, we grouped 1st
order concepts that bear similarities on complementary ASD business values. As the subsequent
selective coding step entails the identification and development of relations between the 2nd order
themes (Wolfswinkel et al., 2013), we grouped the 14 identified 2nd order themes along the levels of
the conceptual lens. Here, themes manifesting themselves on a similar level were clustered together.
As an example, interaction and cohesiveness of the team were both assigned to the team level.
Analogously, themes that discuss traditional success criteria or depict a specific value for the customer
were categorized within the ASD success category. In sum, we were able to classify all identified 2nd
order themes into one respective element of our proposed ASD business value concept. This
classification can be found online in full detail: https://doi.org/10.6084/m9.figshare.19403489.
As a final step, vom Brocke et al. (2009) suggest the proposal of a research agenda. For our research
endeavor, we derived three distinct propositions that inform both researchers and practitioners with an
interest in ASD business value, thus depicting avenues for future research and practical application.
4 Results: Systematization of ASD Business Values
In the following sections, we present the results of our classification along the constitutive elements of
our conceptual lens on ASD business value. We delineate the identified business value themes and list
the values, exemplary contributions, and the identified frequency in the literature (Σ) in Tables 1-5.
4.1 Individual Level Values
Business values assigned to this category represent values that are manifested on the level of the
individual employee that applies ASD methodologies. Table 1 summarizes the value concepts and
corresponding themes described in the following. This value category particularly focuses on the
human side of value creation and encompasses employee-wellbeing-related values, values that
indicate an improved job perception as well as improved individual inventiveness.
The first business value theme depicts employee-wellbeing-related values. This theme encompasses
improved employee satisfaction, increased employee motivation & engagement, increased employee
pride, and reduced work exhaustion as business values that can be achieved by applying ASD
methodologies. First, several studies reported a general increase of employee satisfaction (Tripp et al.,
Agile Software Development Business Value
Thirtieth European Conference on Information Systems (ECIS 2022), Timisoara, Romania 6
2016; Karrenbauer et al., 2019), stating higher degrees of enthusiasm (Fitzgerald et al., 2006) and
more enjoyment at work (Fitzgerald et al., 2006; Bose, 2008). Besides, developers in ASD projects
were also reported to show increased motivation (Elbanna and Murray, 2009; Cao and Park, 2017) and
more engagement at the workplace (Huck-Fries et al., 2019). The increased motivation and general
employee satisfaction were particularly evident in Cao and Park (2017, p. 7): “It was great to get the
feedback at the end of the iteration. What you had done, the value of it, become clear to me and that
motivated me because I saw the value of my work, and it was certainly enjoyable working this way”.
In addition, developers also showed signs of increased pride of their project work (Cao and Park,
2017). A fourth business value pertains to reduced work exhaustion, as employees showed less
tendencies for burnout (Ghobadi and Mathiassen, 2017) and reduced stress (Overhage and
Schlauderer, 2012b; Venkatesh et al., 2020). This was particularly due to more balanced workloads
(Huck-Fries et al., 2019) and reduced fluctuations, indicating a more sustainable pace in the
development process (Overhage and Schlauderer 2012b).
The second identified business value theme comprises job-perception-related values. For this theme,
we identified improved role understanding, an increased job autonomy as well as improved job
meaningfulness as distinct ASD business values. As an initial insight, Venkatesh et al. (2020)
observed more congruent role perceptions in ASD, thus indicating an improved role understanding,
which was also reported in Huck-Fries et al. (2019) due to reduced role ambiguity. Moreover, the
general usage of ASD methodologies provided developers with increased job autonomy (Tripp et al.,
2016; Huck-Fries et al., 2019). Together, these benefits result in overall improved working conditions,
which was also indicated through improved job meaningfulness (Huck-Fries et al., 2019).
Table 1: Individual Level ASD Business Values
The last value theme discusses inventiveness-related values, covering increased employee
innovativeness and increased employee creativity. As stated in Elbanna and Murray (2009), ASD
methodologies allow employees to find alternative and complementary ways that enhance the
management and deliverables of the project” (p. 12), highlighting an increased employee creativity
through the use of ASD methodologies. In addition, Karrenbauer et al. (2019) reported increased
employee innovativeness on the individual level, particularly in innovation projects. As such, highly
motivated [employees] bring in more innovations (Karrenbauer et al., 2019, p. 841), while also
allowing new ideas and features [to surface] that increased creativity (Fruhling and Vreede, 2006, p.
57).
1st Order Value Concept
2nd Order
Value Theme
Description
Exemplary Contributions
Improved Employee Satisfaction
Employee-
Wellbeing-
related Values
Added values
indicating an increase
in employee's mental
welfare
Fitzgerald et al. (2006)
Tripp et al. (2016)
11
Increased Employee
Motivation & Engagement
Elbanna and Murray (2009)
Cao and Park (2017)
5
Increased Employee Pride
Cao and Park (2017)
1
Reduced Work Exhaustion
Ghobadi and Mathiassen (2017)
Venkatesh et al. (2020)
4
Improved Role Understanding
Job-
Perception-
related Values
Added values
indicating an improved
employee's attitude
towards the working
conditions defined by
the respective job
Venkatesh et al. (2020)
Huck-Fries et al. (2019)
2
Increased Job Autonomy
Huck-Fries et al. (2019)
Tripp et al. (2016)
2
Improved Job Meaningfulness
Huck-Fries et al. (2019)
1
Increased Employee Creativity
Inventiveness-
related Values
Added values
indicating an increased
imaginativeness
Elbanna and Murray (2009)
2
Increased Employee
Innovativeness
Karrenbauer et al. (2019)
1
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Thirtieth European Conference on Information Systems (ECIS 2022), Timisoara, Romania 7
4.2 Team Level Values
The business values identified in this section particularly manifest themselves on the team level. In
Table 2, we list the corresponding business values and 2nd order themes. These include interaction-
related values, capability-building-related values as well as team-cohesiveness-related values.
Table 2: Team Level ASD Business Values
For the team level, we first describe the interaction-related value theme, which entails improved
communication, improved team collaboration, improved coordination of the team as well as improved
stakeholder collaboration. As regards improved communication, ASD methodologies such as Scrum,
provide “a clear communication structure and procedure” (Hummel and Epp, 2015, p. 5051), which
leads to generally improved communication, i.e. through mutual understanding (McHugh et al., 2011).
As a second business value, ASD facilitates improved team collaboration, observable through mutual
support between the team members (Cao and Park, 2017; Vidgen and Wang, 2009; Fitzgerald et al.,
2006). The third business value depicts improved team coordination, which seems to result
particularly from the flexibility of ASD methodologies (Overhage and Schlauderer, 2012b). Besides,
improved stakeholder collaboration was also mentioned in extant literature. Involving customers in
sprint reviews helps to understand customer demands (Hummel and Epp, 2015), thus working
“collaboratively rather than in an adversarial relationship” (Ghobadi and Mathiassen, 2017, p. 706).
The second group of business values refers to capability-building-related values and encompasses
improved learning effects and improved team knowledge dissemination. In particular, the latter not
only refers to the transfer of technical knowledge, but also to the distribution of “knowledge about
who knows what” (Vidgen and Wang, 2009, p. 363). In addition, XP practices, i.e. pair programming,
support knowledge sharing among team members (Balijepally et al., 2014; Fruhling and Vreede,
2006). Similarly, other ASD practices facilitate mutual learning and enable team members to improve
their skill set (Cao and Park, 2017; Vidgen and Wang, 2009).
The last identified 2nd order value theme pertains to factors depicting team-cohesiveness-related
values. This category encompasses improved team cohesion, reduced social loafing, improved team
morale, and increased trust among employees. Extant research in this field reported that ASD
methodologies “promote high levels of social cohesion and a sense of ownership among team
members” (McAvoy and Butler, 2006, p. 9), thus indicating an improved team cohesion. Another
2nd Order
Value Theme
Description
Exemplary Contributions
Interaction-
related Values
Added values
indicating an
improved
cooperation and
synergistic
interaction between
agile team members
and stakeholders
McHugh et al. (2011)
Hummel and Epp (2015)
11
Cao and Park (2017)
Vidgen and Wang (2009)
13
Bonner et al. (2010)
Overhage and Schlauderer (2012b)
3
Hummel and Epp (2015)
Ghobadi and Mathiassen (2017)
2
Capability-
building-
related Values
Added values
indicating improved
knowledge sharing in
ASD teams
Cao and Park (2017)
Vidgen and Wang (2009)
8
Fruhling and Vreede (2006)
Balijepally et al. (2014)
9
Team-
Cohesiveness-
related Values
Added values
indicating stronger
team unity and
coherence between
agile team members
Fruhling and Vreede (2006)
McAvoy and Butler (2006)
5
McAvoy and Butler (2006)
1
Fitzgerald et al. (2006)
Fruhling and Vreede (2006)
4
Hummel and Epp (2015)
McHugh et al. (2011)
3
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Thirtieth European Conference on Information Systems (ECIS 2022), Timisoara, Romania 8
aspect was the reduction of social loafing behavior, implying mutual commitment and engagement
(McAvoy and Butler, 2006). In addition to communication, Scrum also facilitated building morale
and helping the team to ‘gel’”, (Fitzgerald et al., 2006, p. 209). The final value concept pertains to the
increased trust among employees practicing ASD methodologies, which is for instance gradually
established in daily meetings and joint retrospectives (Hummel and Epp, 2015; McHugh et al., 2011).
4.3 Organizational Level Values
While the first two examined levels allowed for a distinct assignment of the different value concepts to
either individuals or entire teams, we also identified several values that affect the entire organization.
We grouped these under the term collective organization-related value. Herein, we refer to the
business values of improved resource usage, improved business IT alignment, improved business
innovativeness and better market sensing. These values are listed in Table 3.
Table 3: Organizational Level ASD Business Values
First, we found that ASD leads to improved resource usage. This was particularly evident in Gerster et
al. (2018), who observed that “efficient resources allocation […] avoids wasting resources for
applications or features not valued accordingly by the business (p. 7), emphasizing the ability of ASD
methodologies to prioritize valuable features for the customer. Another consequence of ASD
methodology use that affects the entire organization lies in the improved alignment of business and IT.
For instance, the use of Scrum as a popular ASD methodology “increases business knowledge on the
IT side” (Overhage et al., 2011, p. 6). In addition, Elbanna and Murray (2009) report the closure of the
business-technical gap, as both sides were aware of each other’s internal operations, which “improved
the business ability to innovate” (p. 11). Hence, ASD methodologies can also lead to improved
business innovativeness. Finally, improved market sensing represents the last business value in this
category. Anderson et al. (2017) report that “frequent iterations enable a firm to explore the market
space without overreacting to spurious market signals” and thus “improve market fit” (p. 8).
4.4 Process Level Values
The business values identified in the 4th section concern the ASD process itself and the benefits that
can be observed directly on the process level. Table 4 shows the identified values and corresponding
2nd order themes. We found process-flexibility-related values, process-complexity-related values as
well as process-performance-related values as relevant 2nd order themes for this level.
Regarding process-flexibility-related values, we identified improved responsiveness to requirements
change and continuous process refinement as business values illustrating improved process flexibility.
In a first step, we describe the improved responsiveness to requirements change. ASD methodologies
allow to “react faster to changing market requirements” (Karrenbauer et al., 2019, p. 841) and support
“the introduction of new requirements later in the lifecycle” (Balijepally et al., 2014 p. 10). Likewise,
ASD methodologies allow for continuous process refinement. In particular, retrospectives help
“finding the root causes of problems to avoid repeating the same issues (Rodríguez et al., 2015, p.
4776), allowing the team to adjust its behavior accordingly (Balijepally et al., 2014).
The group of value concepts that constitute the 2nd order theme of process-complexity-related values
comprises improved complexity management, improved uncertainty management, improved
1st Order Value Concept
2nd Order
Value Theme
Description
Exemplary Contributions
Improved Resource Usage
Collective
Organization-
related Values
Added values
affecting an entire
organization when
developing software
using ASD
methodologies
Fruhling and Vreede (2006)
Jentsch (2017)
3
Improved Business IT Alignment
Elbanna and Murray (2009)
Overhage et al. (2011)
2
Improved Business Innovativeness
Elbanna and Murray (2009)
1
Better Market Sensing
Anderson et al. (2017)
1
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transparency, increased compliance to employee needs, and improved focus on simplicity. Pertaining
to overall improved complexity management, ASD was found to help cope with technical complexity,
regulatory constraints as well as planning for both short and long-term perspectives (Karrenbauer et
al., 2019). In addition, the use of ASD methodologies allows for improved uncertainty management,
as handling scenarios with a high degree of uncertainty gave developers “a sense of security, and
control over their work” (Vidgen and Wang, 2009, p. 369) when using ASD methodologies,
particularly if the definition of the final product is not quite clear at the beginning of the project
(Karrenbauer et al., 2019, p. 839). As a third value in this theme, improved transparency in ASD
processes can result from the use of techniques such as the daily scrum (Bonner et al., 2010), as the
current project status and the encountered problems [become more] transparent (Overhage and
Schlauderer, 2012a, p. 10). Higher transparency also seems to be related to improved compatibility to
employee needs regarding the SD process, as it meets their preferred working mode. As a last point,
we identified an improved focus on simplicity in the SD process through a simpler documentation
mode and simplified implementations (Karrenbauer et al., 2019; Fruhling and Vreede, 2006).
Table 4: Process Level ASD Business Values
Lastly, several articles describe performance-related values, incorporating improved productivity,
reduced waste, and increased efficiency. Development in pairs as well as co-location as guiding
principles in ASD seem to positively stimulate improved productivity (Bonner et al., 2010; Parsons et
al., 2008). In regards to reduced waste, Karrenbauer et al. (2019) state that the advantage in an agile
environment is that the waste previously generated with conventional methods is no longer necessary,
which reduces the effort and increases the efficiency in software development (p. 841). The improved
workflow in ASD also contributes to improved efficiency, for example as “pair-programming
developers did not get stuck wondering what to do next” (Fitzgerald et al., 2006, p. 206).
4.5 ASD Success Level Values
The business values identified in the last section deal with the outcomes of the SD process, depicting
the constitutive elements of ASD success. Table 5 shows the enclosed values and corresponding 2nd
order themes. In this context, we identified customer-demand-fulfillment-related values, product-
quality-related values, timeliness-related values, and one single cost-related value.
1st Order Value Concept
2nd Order
Value Theme
Description
Exemplary Contributions
Improved Responsiveness to
Requirements Change
Process
Flexibility-
related Values
Added Values indicating
an improved SD process
flexibility and demand
changes adaptability
Balijepally et al. (2014)
Karrenbauer et al. (2019)
5
Continuous Process
Refinement
Balijepally et al. (2014)
Rodríguez et al. (2015)
6
Improved Complexity
Management
Process
Complexity-
related Values
Added values indicating
a simpler execution of
the SD process
Karrenbauer et al. (2019)
Schmidt et al. (2014)
3
Improved Uncertainty
Management
Vidgen and Wang (2009)
Karrenbauer et al. (2019)
3
Improved Transparency
Overhage and Schlauderer (2012a)
Bonner et al. (2010)
4
Increased Compatibility
to Employee Needs
Bonner et al. (2010)
Overhage and Schlauderer (2012a)
3
Improved Focus on Simplicity
Karrenbauer et al. (2019)
Fruhling and Vreede (2006)
3
Improved Productivity
Process
Performance-
related Values
Added values indicating
an improved operational
performance of the SD
process
Bonner et al. (2010)
Parsons et al. (2008)
2
Reduced Waste
Gerster et al. (2018)
Rodríguez et al. (2015)
5
Increased Efficiency
Karrenbauer et al. (2019)
Fitzgerald et al. (2006)
5
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Table 5: ASD Success Level Business Values
The first 2nd order value theme concerns customer demand fulfillment and encompasses better
customer requirements meeting, frequent software delivery, as well as increased customer satisfaction.
For the notion of better customer requirements meeting, the short release and feedback cycles
(Anderson et al., 2017) as well as sprint review meetings (Elbanna and Murray, 2009) prove
beneficial. In addition, the iterative and frequent delivery of software (Wang et al., 2012) allows for
early recognition whether development is moving in the wrong direction and thus for counter-steering
quickly (Vidgen and Wang, 2009). As a result of requirements fulfillment, customer satisfaction
regarding the product and the overall work of the project team is improved (Cao et al., 2009).
As another 2nd order value theme, we deem product-quality-related values to be an important category
of the resulting ASD success. Here, we include the improved overall software quality, improved code
quality and reduced code complexity. Regarding overall improved software quality, noticeable benefits
comprise reduced defect density (Balijepally et al., 2014; Fitzgerald et al., 2006) and reduced bug
severity (Maruping et al., 2009). In addition, ASD methodologies allow for the production of
qualitative code (Jentsch, 2017) and reduction of overall software complexity (Maruping et al., 2009).
Besides adherence to schedule as an important timeliness-related value (Fitzgerald et al., 2006; Lee
and Xia, 2010; Cao et al., 2009), indicating on-time-delivery, a second benefit concerns reduced time
to market and the early availability of results. Software is thus not only available within a shorter
timeframe (Gerster et al., 2018), but already accessible and usable at an early stage of the project
lifecycle (Karrenbauer et al., 2019; Fruhling and Vreede, 2006; Overhage and Schlauderer, 2012a).
Lastly, for a cost-related value, our findings indicate that ASD can support on-budget delivery (Cao et
al., 2009; Lee and Xia, 2010), while also delivering value in terms of superior productivity, quality
and stakeholder satisfaction, without a significant increase of cost (Parsons et al., 2008).
5 Discussion
5.1 Key Findings and Contributions
To capture the essence of our research results, we derive three distinct propositions that depict the key
contributions of our systematic literature review. In doing so, we propose an updated perspective on
value creation in ASD processes, which suggests an extension beyond traditional ISD success criteria.
1st Order Value Concept
2nd Order
Value Theme
Description
Exemplary Contributions
Better Customer
Requirements Meeting
Customer
Demand
Fulfillment-
related Values
Added values indicating
the constant fulfillment of
customers’ demands and
requirements
Vidgen and Wang (2009)
Anderson et al. (2017)
12
Frequent Software Delivery
Vidgen and Wang (2009)
Wang et al. (2012)
2
Increased Customer
Satisfaction
Balijepally et al. (2014)
Cao et al. (2009)
2
Improved Overall
Software Quality
Product
Quality-related
Values
Added values indicating
an enhancement of the
overall product quality
Fruhling and Vreede (2006)
Balijepally et al. (2014)
9
Improved Code Quality
Maruping et al. (2009)
Jentsch (2017)
5
Reduced Code Complexity
Maruping et al. (2009)
1
On-Time Delivery
Timeliness-
related Values
Added values indicating
an expedited or timely
delivery of software
Lee and Xia (2010)
Fitzgerald et al. (2006)
3
Reduced Time to Market
Gerster et al. (2018)
Karrenbauer et al. (2019)
7
On-Budget Delivery
Cost-related
Value
Added value indicating
the adherence to budget
Lee and Xia (2010)
Parsons et al. (2008)
3
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Thirtieth European Conference on Information Systems (ECIS 2022), Timisoara, Romania 11
P1: The use of ASD methodologies leads to business values that go beyond economic aspects.
As recognized by Racheva et al. (2009; 2010) early in the debate on ASD business value creation, the
value derivable from the use of ASD methodologies involves a variety of dimensions that go beyond
economic impacts. Our findings show that the application of ASD methodologies implies value
creation opportunities for all factors of our lens, which collectively lead to the realization of ASD
success. To summarize our findings, we propose a preliminary version of a novel ASD business value
model shown below. The model comprises the levels of the initial conceptual lens presented in chapter
2.2, with a more detailed elaboration using the 2nd order value themes that resulted from our literature
analysis. While the perspective on ASD success comprises the traditional project success criteria, i.e.,
time, cost and quality, the success level is further extended with a dedicated dimension that highlights
the centrality of the customer in ASD projects. This extension of the traditional view on development
success follows the notion of the core principles of the Agile Manifesto (Beck et al., 2001), stating that
the highest priority is to satisfy the customer (Beck et al., 2001) through frequent delivery of
software. Therefore, ASD business value is also illustrated by the success dimensions pertaining to the
fulfillment of customer demands and the timely delivery of high-quality products. Remarkably,
business values indicating an economic impact of ASD methodology use are rarely featured in the
extant body of literature. The only economic indicator found in our literature analysis depicts the
adherence to the defined project budget, which was furthermore marginally represented in our
literature sample. Generally, it was notably apparent that the concept ASD business value manifests
itself particularly on the levels of the individuals, the development team, the organization, and the
development process. Based on these observations, we propose the concept of ASD business value to
be extended beyond prior, rather economically oriented conceptions of business value within the IS
domain. Since the literature analysis emphasizes the multidimensionality of the ASD business value
concept, we can conclude that it appears necessary to broaden our general perspective on the notion of
business value. In doing so, extending the rather financially dominated stance with a set of more
intangible value aspects to grasp the complexity business value realization in ASD is required.
P2: The realization of certain ASD business values is tied to distinct ASD practices.
As a prominent result of our analysis, we found that the realization of certain ASD business values is
linked to the application of a distinct ASD practice. We identified several practices that enhance
specific ASD business values, especially in the domain of rather technically oriented practices.
Examples include code refactoring, which led to performance improvements of the code (Fruhling and
Vreede, 2006) and improved the detection of bugs, thereby reducing debugging time (Fitzgerald et al.,
2006). In addition, pair programming and frequent testing both reduced the defect density of the
developed software product (Fitzgerald et al., 2006; Balijepally et al., 2014). Also, we observed
socially oriented practices, i.e., daily stand-ups and retrospective meetings, to increase collaboration
and communication within the team, thereby building up trust among the team members (McHugh et
al., 2011; Hummel and Epp, 2015). In consideration of these observed effects, we conclude that
certain ASD practices lead to ASD business values on distinct levels. In particular, we found
technically oriented practices to foster business values on the ASD success level, whereas socially
oriented techniques most notably affected values on the individual and team level. While we found
Figure 1: ASD business value creation model
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some direct links between realized ASD business values and applied ASD practices as first
implications in the literature, however, the origin of a certain ASD business value remains yet to be
uncovered in many cases. In literature, various realized ASD business values were depicted to stem
from the general application of ASD methodologies, while the underlying mechanisms of value
realization, i.e., the applied practices, still remain to be a black box. Considering the identified links as
a starting point, we propose that the application of certain practices promises the realization of a
baseline of ASD business values. Realizing the full potential of ASD methodologies to leverage the
whole bandwidth of ASD business values, however, appears to be due to a complex interplay of
different ASD business value factors that needs to be further understood, as proposed below.
P3: The complex interplay of different value factors leads to a surplus of ASD business value.
During our analysis, we observed numerous interdependencies between the different investigated
value levels as well as relationships between distinct value themes within a certain value level. As
such, we noted that different ASD business values manifestations mutually defined and enriched one
another, thus indicating complex interrelationships between different values. For instance, we found
interactions between several team values in Fitzgerald et al. (2006) and McHugh et al. (2011). In these
cases, improved communication through the use of ASD practices led to facilitated collaboration,
while also increasing trust among members of the development team. Further interrelationships were
identified in Elbanna and Murray (2009), where an improved alignment of business and IT
departments resulting from the use of ASD practices fostered the business ability to innovate and to
extend the system to cover more business processes and departments (Elbanna and Murray, 2009, p.
11), thus indicating an improved business innovativeness resulting from the achieved business IT
alignment. As a consequence, we argue that the realization of an ASD business value surplus entails
an interaction and mutual enrichment of the different facets, depicting a complex system of
interwoven value aspects. Following the logic of Tanriverdi (2006), we propose that the synergistic
interaction between different value aspects may lead to an extension of the realized business value
resulting from of the use of ASD methodologies. We observed several initial indications illustrating
these synergistic interactions in contributions in our sample, however, the interplay between the
different facets of ASD business value yet remains to be systematically understood. Therefore, we
argue that a systematization of these interactions represents a promising avenue for future research.
5.2 Implications for Research and Practice
Our research has implications for academia and practice alike. As regards academia, the results
contribute to the emerging research strand on ASD business value creation, indicating several avenues
for future research. First, with our systematization, we propose an initial conceptualization for the
multidimensionality of the ASD business value concept. However, given the limited focus on the IS
literature base only, we propose that an extension of the scope into other research domains like
computer and management science seems fruitful. Secondly, the results of our analysis exhibit a
certain imbalance regarding the attention different value aspects have received. Some value aspects,
including team communication and collaboration, customer requirements meeting, and employee
satisfaction, have been examined in detail in the extant body of knowledge. In contrast, we also found
numerous values that remain largely unresearched, particularly on the organizational level. Moreover,
in the current state of research, findings on financial impacts resulting from the use of ASD
methodologies that affect the bottom-line of the organization also remain scarce. This negligence
appears noteworthy, since financial and organizational impacts have been studied extensively in other
research domains, i.e., in the IS domain or the big data analytics domain (Schryen, 2013; Elia et al.,
2020). Consequently, we encourage future research to assess the potential economic impacts resulting
from the use of ASD methodologies, while also addressing organizational impacts in greater detail.
Lastly, we identified several indications that certain agile practices foster the realization of a distinct
ASD business value. Simultaneously, we observed that most contributions do not state exactly what
agile practices were used to realize certain business values. Consequently, the analysis of the effect of
individual ASD practices on ASD business value embodies an avenue for future research, together
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with the depicted complex interplay of ASD business value that proposedly leads to a surplus of ASD
business values. We suggest that a better understanding of ASD practices and the underlying value
realization mechanisms would support a more value-targeted application of ASD methodologies in
practice. To summarize the academic implications of our findings, we enrich extant insights on ASD
business value creation (Racheva et al., 2009; 2010; Alahyari et al., 2017). As such, we contribute
towards the understanding of ASD business value and help reduce the missing theoretical glue
(Conboy, 2009) in ASD research, while also suggesting distinct new pathways for future research.
For ASD practitioners, our research provides a systematization of the spectrum of ASD business
values, supporting organizations in understanding the possible benefits they may derive from the
application of ASD methodologies. As such, our findings may help organizations pinpoint specific
levels where business value is either already being created through ASD or support the recognition of
unused potential and take appropriate actions. As another practical implication, our results may help
organizations in answering the question why to implement and effectively use ASD methodologies in
their daily practice. Depending on the respective context of an organization, different specificities of
ASD business value may motivate the adoption of ASD methodologies. Our systematization can thus
guide organizations in assessing whether ASD methodologies can satisfy their organizational needs.
5.3 Limitations
Our research is not without its limitations. As such, our results potentially suffer from a subjective bias
of the researchers. This issue particularly pertains to the selection of review articles and the enclosed
data extraction. While we independently assessed the articles quality- and content-wise and
subsequently merged our results in iterative rounds of discussion, we cannot fully rule out a potential
bias. Hence, a limited probability of potentially omitted articles remains. In addition, our scope for the
conducted literature search only focuses on IS research, leading to a possibly reduced breadth of
distinct ASD business values. Future research that includes other outlets than the AIS eLibrary and the
Senior Basket of Journals could thus further extend our perspective on ASD business value. Moreover,
we have not empirically validated the identified ASD business values. This limitation is interwoven
with the fact that we conducted a literature study on the potential of ASD methodology usage for
business value creation. Hence, our study can only serve as a value-potential assessment of ASD
methodology usage. To stabilize these findings, we plan to conduct a survey on the identified business
values based on the results of the literature review. Another considerable limitation lies in solely
taking a positive stance to delineate the concept of ASD business value. Consequently, we only report
on the positives of ASD, leaving the potential dark side of ASD out of scope. Despite the mentioned
limitations, we still hope to contribute to a clearer understanding of ASD business value.
6 Conclusion
Although ASD methodologies have become widespread in practice, the delivered business value is
still not well understood. To mitigate this literature gap, we proposed a definition to clarify the ASD
business value concept and provided a systematic overview of its multiple dimensions. Based on a
literature review, we identified 43 distinct ASD business values and related them to five factors that
determine the success of ASD projects. Our findings lead to a new model that describes how ASD
methodologies facilitate ISD by providing business values for the involved individuals, the team, the
organization, the employed process, and with respect to the resulting ASD success.
As the body of knowledge in this field is still nascent, we concentrated on examining and describing
the general potential of ASD methodologies to create business value. The presented results open
numerous possibilities for future research. Such research endeavors could for instance examine the
specific business value that can be achieved depending on the applied ASD practices, the business
domain, or the complexity of the software. Future research endeavors could also complement our
results with empirical insights into how ASD creates business value, particularly focusing on the
complex interplay between various business values facets. We hope that our study can serve as a
starting point to further enhance our understanding on how to realize business value through ASD.
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... Agile software development (ASD) methodologies have gained considerable popularity in software development (SD) practice and are frequently praised for their beneficial outcomes. Research has identified various benefits of ASD, including better customer requirements meeting (Vidgen & Wang, 2009), reduced time to market (Overhage & Schlauderer, 2012), and increased productivity (Tarhan & Yilmaz, 2014), which are summarized under the concept of ASD business value (Meckenstock et al., 2022). However, in addition to desirable consequences, research also suggests that ASD can have significant negative implications. ...
... Although ASD research is a well-established field that has received significant attention since the introduction of the methodologies over two decades ago (Baham & Hirschheim, 2022;Dingsøyr et al., 2012), a distinct research gap seems apparent for this dark side of ASD compared to research on its business value. Thus far, progress has primarily been made towards systematizing the beneficial facets that constitute the business value of ASD (Meckenstock et al., 2022;Racheva et al., 2010). Moreover, advances towards explaining these benefits, i.e., how ASD creates benefits that jointly contribute to software quality (Alami & Krancher, 2022) or how pair programming stimulates team performance (Kude et al., 2019) have enriched our understanding. ...
... Note that this systematization does not intend to discredit ASD methodologies for their potential shortcomings, but instead aims to provide more clarity on the spectrum of the possible negative outcomes, since the dark side has been less regarded in extant research. For academia, our work can thus aid future research in investigations on the concurrent positive and negative implications of ASD, as it complements findings on its business value (Meckenstock et al., 2022) with an up-to-date systematization of the opposite side of effects. We thereby also fulfill a prerequisite for investigations into "if, how, why and when" (Baham & Hirschheim, 2022, p. 5) ASD methodologies create different outcomes. ...
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... Research has found that agile software development can lead to several benefits, among them being increased productivity or better customer requirements meeting as prominent examples (Meckenstock et al., 2022). However, the introduction of agile methodologies can also lead to negative outcomes (Petersen & Wohlin, 2009;Petersen & Wohlin, 2010). ...
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