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Digital Transformation and the Implementation of Agile Work in the
Financial Services Sector – A Multiple Case Study
Christoph Schwarzbach
Europäische Fernhochschule Hamburg
christoph.schwarzbach@euro-fh.de
Oliver Werth
OFFIS - Institute for Information Technology
oliver.werth@offis.de
Davinia Rodríguez Cardona
Leibniz University Hannover
rodriguez@iwi.uni-hannover.de
Michael H. Breitner
Leibniz University Hannover
breitner@iwi.uni-hannover.de
J.-Matthias Graf von der Schulenburg
Leibniz University Hannover
jms@ivbl.uni-hannover.de
Abstract
Digital transformation poses challenges for
incumbent financial services providers. Agile work
methods are implemented as a possible response. Using
Work System Theory as the underlying theoretical lens
we conducted a holistic multiple case study analysis
with a total of 21 interviews from three different
financial services companies. This allows us to
investigate three implementation journeys: (1) an agile
working environment parallel to the traditional
organization, (2) a complete business area
implementing agile work in a horizontal internal
substructure, and (3) agile methods applied in an
external workspace. Our interviews indicate that agile
work is suitable for traditional financial services
providers to organize digital transformation projects
within a holistic digitization strategy. New
organizational cultures must be open-minded and
inclusive toward existing structures. Back-end systems
need to be compatible with the developed technologies.
Keywords: Digital Transformation, Financial Services,
Multiple Case Study, Agile Work, Work Systems
1. Introduction
Digital transformation (DT) attracts ongoing
interest across diverse areas. While DT poses different
challenges for the entire society, important traditional
sectors such as banking (Rodrigues et al., 2022) and
insurance (Eckert et al., 2022) face increasing
requirements in their daily business processes.
Changing customer requirements threaten incumbent
companies in the financial services (FS) sector, which
cannot react to these challenges in the same ways as,
e.g., FinTech startups (Werth et al., 2023). New
technological possibilities cannot be developed, tested,
and adapted quickly in existing, primarily vertical,
company structures. Consequently, these new dynamics
entice incumbent companies to change their traditional
business structures and (work-)systems (Alter, 2013)
into new, better-suited, customer-centric configurations
and processes. One possibility for them to change
internal processes and systems is to implement agile
work that differs from work in the traditional, vertical
structures.
However, to date, only limited information is
available regarding how traditional FS companies react
to and benefit from implementing agile work with the
goal of adopting and developing digital innovations
(Beretta & Smith, 2023; Sjödin et al., 2020). Additional
empirical research on more networked organization
forms that enforce a redesign of the organizational
architecture seems promising to expand our
understanding of DT’s influence on work practices
(Wessel et al., 2021). These organizational structures
utilize new technologies through agile co-creation
processes (Sjödin et al., 2020). In the FS sector, in
contrast to general views on agility (Morton et al.,
2018), only limited information is available concerning
how traditional companies can benefit from
implementing agile principles to manage the adoption of
digital innovations better (Sjödin et al., 2020; Girod et
al., 2023). Against this background, we conducted a
multiple-case study in the FS sector, observing
implementations of agile work. We link these
observations to argumentations and elements of the
work systems theory (WST) (Alter, 2013).
With this methodology, we provide an in-depth
view of how FS providers implement agile work to
support DT. We also describe and discuss the
consequential impacts on the (work-) systems. Finally,
we present practical recommendations that can serve as
a foundation for organizational decision-making. The
following research question guides our investigation:
How do FS providers cope with DT through the
implementation of agile work, what are the
consequential effects on their work systems, and what
recommendations can be derived?
We investigated three implementation forms of
agile work within traditional FS companies: (1) an agile
working environment parallel to the vertical
organizational structure, (2) agile work in a horizontal
internal substructure as a complete business area, and
(3) agile working methods used in an external
workspace. We conducted a total of 21 semi-structured
interviews with involved stakeholders to generate
insights and views of their experiences with the
implementation of the corresponding agile work.
2. Theoretical background
2.1. Digital Transformation in the Financial
Services Sector
The deployment of new digital technologies, such
as artificial intelligence (AI), mainly drives the global
process of structural change at social, political, and
economic levels. Customer needs and expectations shift
with respect to service offerings, resulting in the
restructuring of the competitive environment across
many traditional sectors, including FS providers (Vial,
2019). Within this research, we view “financial services
providers” as companies offering banking and/or
insurance products and services (Eden et al., 2020). As
a strategic response to cope with the challenges and
opportunities presented by the digital era and to
guarantee future survival and success, incumbent
companies must adopt new ways to create value through
digital innovation and enable the corresponding
organizational and digital transformation processes
(Peter et al., 2020; Fischer et al., 2024). Within this
context, DT in the FS sector entails continuously
developing possibly disruptive innovations. These are
driven by exploring and exploiting the benefits of new
digital technologies to support the creation and capture
of business value through redesigning financial products
or services, organizational structures, management
approaches, key business operations, and processes
(Matt et al., 2015). This strong trend has even increased
with the COVID19-pandemic (Marx et al., 2023).
In contrast to incumbent companies, the business
architectures of FinTech companies are lean, customer-
oriented, and agile since FinTechs require virtually no
physical infrastructure but mainly staff with finance
expertise and technological know-how (Drummer et al.,
2016). These structures enable them to offer services at
a low-profit margin to attract as many customers as
possible (Lee & Teo 2015). Studies of “disruptive” DT
in the financial sector focus on the restructuring of the
competitive environment and the shift in customers’
value propositions resulting from the entrance of new
competitors such as BigTechs (e.g., Amazon, Apple,
and Google) and FinTechs into the market (Stulz, 2019;
Vial, 2019; Werth et al., 2020). To foster the capacity of
incumbents to internalize and adopt the new digital-
enabled business logic into their specific context, they
must shift to new ways of working (Sjödin et al., 2020).
2.2. Agile Work and Work System Theory
One possibility for companies to change their
internal processes and systems is to implement agile
work, which differs significantly from work in
traditional, vertical structures. Even though other
methods exist, the prevailing agile method is Scrum
(Tahir et al., 2019). Research on digital servitization
within industrial firms drew attention to agile work and
their methods (which are derived from the software
industry) as potential approaches to the development of
flexible, lean, and rapid-reaction digital innovation
processes (Sjödin et al., 2020). Incumbents try to
transform their processes into more responsive
structures to meet customers’ requirements better by
using novel technological solutions, e.g., for new
products. Consequently, work itself (which is the use of
resources to produce products and services (Alter,
2013)) changes and influences the efficiency of the
overall work system.
We structure our findings and implications using
WST as an underlying theoretical lens. WST states that
systems in organizations are “work systems” rather than
merely technical artifacts. According to Alter (Alter,
2013, p. 75), a work system can be defined as “a system
in which human participants and/or machines perform
work (processes and activities) using information,
technology, and other resources to produce specific
products/services for specific internal and/or external
customers.” This conceptualization implies that systems
in organizations can be either sociotechnical or
automated work systems. All their components and
interactions must be oriented towards attaining the work
system’s goals (e.g., the provision of products/services
for their customers). Consequently, in the case of
performance gaps or misalignments in the components
or their interactions, the work system must be modified.
This, in turn, indicates that work systems are
transformed over time due to a combination of planned
and unplanned changes.
To represent both the static and dynamic
perspective of a work system, WST embodies the work
system framework (WSF) and the work system life
cycle (WLSC) model. We use the WSF to refer to the
description and organization of the components used to
represent a work system, i.e., a FS provider. The WSF
depicts a work system during a period of relative
stability or incremental change through nine elements:
(1) processes and activities, (2) participants, (3)
information, (4) technologies, (5) customers, (6)
products and services, (7) environment, (8)
infrastructure, and (9) strategies. The first four elements
(1-4) are considered to be within the work system. The
following two elements (5-6) are regarded as both
internal and external to the work system. The last three
(7-9) are viewed as external elements.
3. Methodology and data collection
Our dataset used for this study is part of a more
comprehensive two-stage research project. In the first
data collection phase of the entire research project, we
asked eleven experts in the FS sector, e.g., consultants
and labor representatives, to articulate their opinions
and observations regarding the DT within the FS sector
in Germany. The results of this first collection phase are
out of the scope of this research. With the help of these
experts, we were able to identify and get in contact with
FS companies currently implementing (IT) projects
influenced by DT. Subsequently, we presented our
research project, i.e., an in-depth investigation of
existing DT projects, to C-level managers in identified
FS providers. Finally, ten providers agreed to participate
in our research project. While in seven companies, we
observed very large software introductions within the
existing company structure, the DT projects of the three
(n=3) in-depth cases presented in this study focused on
implementing agile work.
To answer our RQ, we conducted a holistic multiple
case study analysis (Yin, 2017) within these three
companies from the FS sector, denoted as “Case 1”,
“Case 2”, and “Case 3”. Holistic case study research is
advantageous if “the relevant theory underlying the case
study is mainly of a holistic nature” (Yin, 2017, p. 52).
Because we use WST as the theoretical lens for our
analysis, which can be considered a comprehensive
view of the organization, we chose a holistic case study
as the research design. All three cases implemented
agile work into their company’s structure, which is the
comparable overall context of our holistic multiple case
study. We chose these three providers for our research
because they presented different types and depths of the
implementation of agile work in their organizations. In
all cases, the implementation was a reaction to the
influences of DT within the FS sector. All projects are
embedded within the overall digitization strategy of the
respective company.
We conducted ten (n=10, Case 1), five (n=5, Case
2), and six (n=6, Case 3) semi-structured interviews
with key project participants (e.g., management, labor
representatives, and workers) who were involved in the
implementation process and/or were using the
implemented agile work and processes. The
interviewees’ functions can be found here in Table 1 of
the online appendix. The interviews were conducted
face-to-face within the premises of the three companies
with two interviewers in the third quarter of 2019.
Reliability was achieved through the usage of the same
interview guidelines for all three cases (Silverman,
2016). Throughout the interviews, we could generate
insights by directly interacting with the interviewees,
who were encouraged to articulate their own
experiences with regard to the implementation of the
corresponding agile work (Gioia et al., 2013). We asked
questions relating to, e.g., the role of the interviewees in
the implementation process, the rationales behind it, and
their attitude to and opinions of the new form of work.
The interviewees were also asked to articulate problems
and friction that became apparent within the project or
the company during the implementation process. The
interviews lasted between 60 and 120 minutes, were
held in German, recorded, subsequently transcribed, and
anonymized. The resulting interview transcripts served
as primary data for our case study analysis. Also, we
studied business reports and income statements of the
involved companies, which served as secondary data to
enhance our understanding of the companies’ overall
situation. The analysis stage within our research was
followed by pattern-matching techniques (Yin, 2017),
which allowed us to compare the results from the three
cases and to synthesize patterns and parallel
explanations (Yin, 2012; Yin, 2017). Thereby, we were
able to answer our RQ, explain why agile work was
implemented, and provide results on how the work
systems of the companies were influenced. Table 3 of
the online appendix presents a definition of each WSF
element and a corresponding anchor example from our
transcripts. It can be found here.
We used MAXQDA 2022 and employed coding
techniques from Grounded Theory (GT) (Glaser &
Strauss, 1999) for the coding process of our interview
transcripts (Corbin & Strauss, 2015). GT is used here as
a method to code and structure our interview material
(Charmaz, 2006). Axial coding allowed us to analyze
categories, such as the WSF’s elements (Glaser, 1978;
Strauss, 1987). The coding process and corresponding
text passages from the transcripts provide the basis for
our adapted pattern-matching technique (Yin, 2017).
4. Case descriptions and observations
Figure 1 in the appendix illustrates the three
different implementations of agile work in our observed
cases, which are described below. It can be found here.
4.1. Case 1 – parallel structure
Case 1 observes a FS provider with around 700
employees, six billion Euro assets under management,
and also revenue. With a broad product portfolio, the
main sources of income are provisions and interest
earnings. The analyzed company faces losses of
customer contacts, which results in lower sales. This
threat results from new online channels and online
service providers preferred by (new) customers.
Additionally, the company has difficulties finding
employees for all vacancies.
In Case 1, we observe the implementation of an
agile working environment realized parallel to the
established vertical company structure. The
implementation in 2016 results directly from threats by
new entrants, such as FinTechs or BigTechs. Top-level
management's intentions are to develop a flexible and
responsive environment for all projects with respect to
DT. A limited number of employees from each
department work part-time in the agile working
environment (the “change-organization”) parallel to
their usual routines and working processes (the “run-
organization”). In the change-organization, cross-
sectoral teams can experiment and develop new
technological solutions, e.g., AI applications, or
optimize existing processes. Meetings are held in
already existing conference rooms. Generally, existing
infrastructure is used. For example, a new online
customer platform is a result of this agile environment.
However, daily processes and services must
continuously be offered through the run-organization. In
this regard, the company envisions the processes as a
parallel organizational structure. The goal is to establish
a digital mindset within the company and build a
collaborative cross-departmental company culture. An
example is that all departments collaborate with the
information technology (IT) department and learn from
each other’s previous experiences.
We find positive statements towards the
implementation of the agile working environment. The
decision-making process is quicker because of the
increased awareness of all team members within the
agile environment and the participation of different
decision-makers. Including experienced employees in
agile work (e.g., from the IT department) leads to know-
how sharing. Employees without prior knowledge of
agile work have the chance to learn and are more self-
motivated to participate in trainings to acquire agile
knowledge. The implemented agile environment also
allows employees to learn about emerging topics related
to new technologies through learning by doing. This
way, employees learn to develop and consider more
customer-centric products and services. Small agile
teams become experts in their field (e.g., in AI) and can
share their knowledge with others. In addition, agile
work allows the company and its management to be
more transparent with relevant stakeholders about
deadlines and budgets in the working processes.
Substantial investments are unnecessary for the agile
working environment since existing infrastructure is
used. Positively mentioned is the ability to enable cross-
sectoral working and facilitate a more collaborative
cross-sectoral company culture. Overall, implementing
a parallel agile structure leads to a quicker development
of new products and services (inspired mainly by
competitors) and the acquisition of new customers. This
is in line with the company’s strategy.
The implementation of a parallel agile environment
alongside the vertical structure also presents challenges.
The risk of an uneven distribution of tasks and
responsibilities among the employees exists. E.g., each
agile team has a member from the IT department.
Hence, the IT department has participants in many agile
teams and parallel projects while still having to allocate
time to administrate the Back-end systems and perform
other routine tasks. The parallel structures can lead to
mental and physical stress and overload for employees
because they are expected to deliver the same
performance in two separate structures.
Management tasks also change due to the
implementation. Supervisor-employee relationships
become less clear and need to be adjusted. In Case 1, it
is evident that a lack of communication of the
expectations on the part of C-level management leads to
uncertainty among employees. Challenges also arise if
the Back-end system is not well prepared for the
integration and interconnection of new technical
solutions. Products and services developed in the agile
structure do not always fit into the Back-end systems,
complicating their implementation. In addition, agile
work is not entirely compatible with a linear work
setting, resulting in discontinued projects and
participants being dissatisfied with the outcomes of the
agile environment. According to the interviewees’, the
whole organization must be particularly aware of a
possible mission drift. The traditional focus on the retail
of FS (their core businesses) could get lost to the
software development driven by the agile environment.
4.2. Case 2 – internal substructure
The second case (Case 2) observes a medium-sized
FS provider (around 5,400 employees, 4 billion EUR
revenue, 29 billion EUR assets under management) in a
stable business environment and a fundamentally good
economic position. As is typical in the sector, it offers a
broad product portfolio. The analyzed company
observes existing megatrends in customer expectations
resulting in a strategy adjustment towards becoming an
agile organization. Against this background, the
implementation in Case 2 is supported and overseen by
the top-level management.
The underlying agility framework is similar to
Scrum methods and is tested among others in the
observed pilot project. The main goal is to enable
quicker reactions and decisions. The pilot serves to
answer the question of whether this organizational
system can be expanded into more parts of or even the
entire company and to create a roadmap for this later
intended transformation of the organization.
The observed pilot covers the entire development of
a financial product from the initial concept through its
implementation and, finally, sales. This is achieved in
multiple cross-functional teams, each consisting of
employees from various departments. Essentially, for
the intended product development, these departments
would have had to work together also in the old
structure. Now, the collaboration method is more direct
and quicker. The observed substructure has around 50
employees in different teams and exists “within” the
traditional organization, representing one business unit.
The team members are not fixed but remain, however,
relatively constant. Some are not assigned full-time to
the project and still have tasks in the “traditional”
organization for their respective functional departments.
Some participants have prior experience with agile
work, which helps at the project start. Open-mindedness
towards the method is imperative. The sub-organization
maintains a backlog/to-do list for new tasks, ideas, and
topics. The teams prioritize and pick their tasks for the
next sprint from this list. As mentioned, the team’s
organization is similar to the Scrum method (e.g.,
functions like Scrum master and product owner exist).
The methods are adapted and further developed within
this group to fit the needs better. Initially, external
consultants provided support. Now, the teams
themselves design and offer training. They also conduct
internal and external coordination. For (primarily
middle) managers located and rooted in the traditional
company structure and, therefore, outside the project,
the method prescribes that they address the teams
through predefined members.
In Case 2, we see positive statements with regard to
the processes and activities of the company. A clear
backlog/to-do list for new tasks is perceived positively.
Additionally, the sprints make it possible to detect
problems and errors in development activities earlier,
reducing innovation costs and allowing the company to
adapt faster to shifting market conditions. The
cooperation is advantageous since the team members
not only bring professional expertise from their
departments but also decision-making competence.
Thus, organizational complexity is reduced, as well as
freedom, flexibility, and scope of action for the
employees are increased. One management task used to
be resource-allocation negotiations regarding an
employee’s assignment to a joint project. This is now
unnecessary due to the fixed setup of the sub-
organization. This results in increased motivation and
faster decision-making as a team. The project team is
situated in renovated rooms, which better fit its needs
(more open spaces and meeting opportunities),
facilitating collaboration and teamwork while also
improving the reputation in- and outside the company.
Within this agile substructure, an innovative
customer-centric modular product is developed. In
addition, faster response times, e.g., to market changes,
are achieved. Overall, the implementation is considered
successful and serves as a blueprint for the whole
company’s strategy to become more agile.
We also find negative statements about the agile
substructure. The employees’ reaction is diverse. Some
do not welcome the new structure because their
workday is less plannable, has less routine, and their
responsibility is less defined. They seem to identify less
with their work results, making them less proud of their
achievements. Other employees are highly committed
and excited about the possible impact. They tend to
work overtime and overestimate the potential
accomplishments in a sprint. Employees’ involvement
in the agile substructure leads to a loss of information
and exchange with colleagues in the linear structure,
especially regarding current topics in the linear working
environment and the respective field. For the delegating
departments and especially their managers, it is a
learning and transition process that is more challenging
and takes longer than expected. For example, middle
managers perceive transferring employees from a linear
department to the agile team differently. Some even see
it as losing team members. The difference can be
observed when tasks relevant to the linear department
and outside the agile project teams must be delegated to
“their” team member. While some middle managers are
disciplined and follow the agile rules, others stick to
traditional structures and still assign tasks directly.
Across the traditional organization, feelings of a
“two-tier society” arise. This perceived inequality might
be caused by the renovated office space given to the
agile teams and not necessarily by the new
organizational structure. Nevertheless, this sentiment is
quite apparent and will be addressed. With regard to the
developed products, the clients are transferred from the
old product slowly and stepwise, resulting in a
complicated parallel structure and a lengthy process.
The agile substructure does not fit to the current work
regulation (i.e., German co-determination laws). Here,
collaboration with the employees’ representatives is
fundamental to bringing agile work in the organizational
structure together with, e.g., collective wage
arrangements, agreed-upon working hours, and new
employee performance measurements. At last, the
implementation strategy was initially somewhat
associated with cost-cutting programs, resulting in
negative perceptions among the employees.
4.3. Case 3 – external structure
Case 3 is an established FS provider with a broad
product and service portfolio for private and corporate
customers, around 1,700 employees, 700 million EUR
revenue, and 35 billion EUR assets under management.
In the past, the organization modernized its online
channels and developed an overall digitization strategy
for the company. We investigate the implementation of
agile work organized in a separate physical working
space outside the headquarters buildings. These offices
and the agile methods used therein are one part of the
company’s digitization strategy.
The motive for the implementation is the perceived
need for a physical working space away from the usual
routines at headquarters to experiment and develop new
technological solutions. Ideally, these new solutions
later are implemented in the existing organizational
environment. Employees can experiment with new
technical solutions, e.g., blockchain technologies, and
make them suitable for customer services or
applications within the organization. Overall, the
rationale behind this implementation is to provide a
space for working on innovative ideas or projects
connected to DT without interrupting the regular
organizational routines and workflows. Another
intention is to move traditional vertical company
structures for daily processes and workflows towards
agile, non-hierarchical structures for (mainly IT)
projects. For this purpose, employees receive training in
agile methods during the project phases in the external
workspace, with the intention of transferring this
knowledge back to the traditional organization. Every
company employee is invited to develop an idea in this
working space with an agile team as well as present it to
the management and possible stakeholders within the
company. The latter are asked to adopt and promote the
ideas for further development. The projects use agile
working methods (e.g., Scrum) and cross-sectoral teams
consisting of members, e.g., from the management, IT
department, or marketing. For the project’s duration,
employees separate from their routine workflows while
working full-time in the agile external environment.
We document many advantages of this structure
and the agile work, such as improved flexibility in the
innovation process. In addition, more freedom and
confidence to test and investigate new technologies are
perceived positively by the participants. Problems from
the current traditional structure can be examined, and
ideas for solving them can be easily exchanged in the
external space. Employees point out the advantage of
developing new ideas and technological solutions
within this separate working environment as having
more innovative freedom compared to their usual work
routines and office spaces. The external environment
increases this positive sentiment. This “experimental
area” provides the creative freedom to develop and test
new, more customer-centric products more easily. Also,
it improves the company’s environment and culture by
making it more digitally minded. The employees begin
to be more aware of digital customer-centric projects
and products. As a result, our interviews suggest an
increased acceptance of the external working space and
agile working methods in the workforce.
Regarding processes and activities, no expectations
about the output of agile work in general and the sprints
in the external environment in specific are defined. This
is perceived as unfavorable by the involved employees.
In addition, excessive workloads lead to long hours and
exhaustion of highly engaged employees. Mainly
(middle) managers articulate some inconvenience
regarding the unavailability of employees when they
work in the rather distant agile workspace. Additionally,
top-level managers are concerned about a possible loss
of control and influence on the employees. Case 3 also
shows challenges related to the structure of the
information flows. Initially, the inclusion of, e.g., the
human resource department into the introduction
process was partially missing. Travel time increases for
participating employees, which is intuitive considering
the workspace is intentionally set up in a more creative
city area away from the company. This is seen as
somewhat negative. Another problem resulting from
this working space is a lack of prioritization for the
developed products/services concerning their
transformation and implementation into the regular
organizational structure. Interviewees express concerns
about a disregard or even an unwillingness to include
the new solutions in the organizational routines in the
long term. After the sprint, a middle manager adopts the
product or process developed within the agile
environment into his or her department. This person
within the traditional structure is responsible for
continuing development and testing. This
implementation process is often characterized by a lack
of willingness, time, mindset, and commitment within
the traditional structure. Therefore, solutions developed
in the agile structure are not always sustainable.
Another concern for acceptance can be a negative
attitude of employees or even resistance, e.g., by mid-
level managers, towards agile work. It can overburden
workers who prefer or are accustomed to their routines
and vertical structures. Also, the under-formalization of
agile working methods within this space can give rise to
bad experiences for team members.
Table 2 in the appendix summarizes the
consequential effects of the implementation of agile
working methods with regard to the elements of the
Work Systems Framework (WSF). It can be found here.
5. Discussion, implications, and
recommendations
All investigated FS providers implement agile
working methods within their organizational structure.
Consequently, processes and activities within the work
system are affected. We observe three different forms of
implementation of agile work (Case 1, Case 2, Case 3).
All providers still have their classical vertical structure
with the existing processes so that the established
customer services (their core business) remain available.
We find no evidence for a complete substitution of
vertical structures favoring agile working environments
(Case 1; Case 3), even though it is openly
communicated as a pilot project with the prospect of
more widespread implementation (Case 2). DT contains
complex and extensive influences, which can be
managed by breaking them down into smaller tasks
through the described methods. This leads to faster
prototypes and results. Interviewees in all cases respond
that the visualization of work, e.g., through a Kanban
board, puts the tasks and the work itself into the
foreground in these agile environments. In general, the
implemented agile working methods are appropriate and
more productive for non-routine, mainly innovative
tasks in the FS sector, especially when multidisciplinary
teams are needed.
Focusing on the participants, we find positive and
negative opinions and influences of agile work and these
environments in all three cases. On the one hand,
employees gain the freedom to make individual and
relevant decisions. On the other hand, they have more
responsibilities within the new agile working
environment and particular projects. In all cases, the
perceived responsibility for the success of the products
or services developed with the new agile work lies
mainly with the agile working teams. In Case 1, we find
no evidence of this being a negative issue. However, in
Cases 2 and 3, some participants miss a clear link
between their individual efforts and the overall results
since the team’s outcome is mainly of interest.
Sometimes, newly introduced work, which is usually
more intellectual, challenging, and interdisciplinary,
leads to an excessive workload for the employees.
Continuous learning concerning agile work and new
technologies is crucial in all our cases, both within and
outside the observed organizational structures.
Additionally, we observe an increased feeling of
responsibility for the success of the new working
environment within the team implementing and
organizing agile work (Case 2; Case 3). This can lead to
overwork and even frustration if other employees are
not as supportive as expected. As acknowledged by
previous research (Renault & Tarakci, 2023),
management work itself (leadership) changes in all
cases from hierarchical to collaborative leadership
forms since agile leadership requires different qualities
in the leaders (Geffers et al., 2024). Employees evaluate
this leadership change positively, but some middle
managers have concerns about losing control. Labor
representatives are seen as having an informal position.
In all cases, the danger of dividing the workforce into
two classes (agile and non-agile) is seen. This can lead
to feelings of unfairness and negatively influence the
company’s culture. A company’s culture can be
interpreted as a loose framework with which the
employees identify. It can drift to a “results only”
working culture, where results and success are leading
indicators. This might happen even though failures and
the corresponding learnings are integral to agile
development. Agile projects are particularly successful
if central initiators show commitment (Case 1; Case 2).
Our interview material suggests that the
implementation is perceived as too fast. In line with the
literature (Morton, 2023), interviewees criticize that due
to a lack of communication and information from top-
level management, not all relevant employees are
included in the process (Case 1; Case 2). Information
flows in and out of the agile environments to
communicate ideas and results to the overall company
are essential. This can lead to a more open-minded
company culture concerning DT. Information flows
within the agile teams are generally evaluated as
positive and, in Cases 1 and 2, accelerated using
collaboration technologies. Agile working methods and
processes were initially used for software development
(Sjödin et al., 2020). In all our cases, at least one team
member collaborating in the agile environment is a
representative of the IT department. This way,
information concerning company-specific or generally
new technologies can be shared.
The FS sector is highly influenced by new
technologies and subsequent innovations (Matt et al.,
2015; Rodrigues et al., 2022). Our findings indicate that
profound knowledge concerning the underlying
technologies and agile working methods is crucial for
the environments’ success (Case 2; Case 3). Without
technological knowledge and fully functional back-end
systems, opportunities derived from agile working
environments are difficult to realize, and the whole
project can fail. We find examples of increased usage of
collaboration and communication tools like Skype
(Case 1) or Jira (Case 2). These technologies leverage
the communication between the agile team members.
Each case differs concerning the company’s
implemented (physical or technological) infrastructure.
Back-end systems must be suitable, and in reality, they
mostly need modernization to facilitate the adoption of
the products and services developed within agile
working environments. We find very diverse facilities
provided for the agile working methods and processes.
For Cases 2 and 3 they differ intensely from the usual
workplaces in the companies, whereas in Case 1,
existing meeting rooms are used. Special offices or
working spaces are evaluated positively for the overall
agile working atmosphere of the involved employees. It
is noteworthy that in Cases 2 and 3, contrary to the
definition by Alter (2013), other work systems do not
use the infrastructure. However, working areas available
specifically for agile working methods and aside from
already existing offices, are advantageous. The level of
infrastructure and equipment used should not exceed
existing standards since this can be seen as favoring
these projects, which might aggravate the impression of
a two-class system (Case 2).
The rationale behind all the implementations of the
agile environments is mainly the development of new
products and services in the face of the DT. FS
providers in our case studies see a demand for more
customer-centric products. Agile working environments
allow for the responsive and productive development of
such FS and products. Since customers demand more
technical solutions from companies, agile working
methods facilitate their development and enhance
existing services’ quality. As mentioned, the existing
back-end infrastructure needs to be modernized. It must
be suitable for newly developed technological solutions,
like e.g., the online portal developed in Case 1. These
findings are mainly consistent with results by other
researchers examining rationales of new customer-
oriented services in the FS sector (Werth et al., 2020;
Schwarzbach et al., 2023). Yet, it is essential to receive
feedback from all relevant stakeholders about the
developed products or services and include this in the
agile environment to achieve customer-centricity.
FS providers operate in highly regulated
environments (Du, 2018). Regulatory obligations
continue to rise and influence the companies’ working
requirements. In addition, they face everyday challenges
of changing customer demands as well as pressure from
new and existing competitors. All these influences,
driven by DT, force the companies in our study to
rethink their hierarchical working processes.
Concerning labor laws, we find difficulties applying
existing German law to agile working methods (Case 1,
Case 2). Performance measurement of collaboratively
working employees in agile working environments is
rather complicated and should be conducted carefully
with all relevant participants, e.g., labor representatives.
All implementations of agile work are part of the
overall company strategy driven by DT. Agile
innovation leaders known in the sector can serve as
inspiration (Case 1; Case 2). Based on our observations
and findings, this is a fundamental factor in building
acceptance among employees for the introduction of
agile processes. The rationales and patterns behind the
implementations are articulated nearly identically for
the three companies. In all observed FS providers, C-
level managers are aware of the necessity to react more
quickly to market demands, e.g., emerging through new
entrants like Amazon or Google. It becomes clear that
commitment not only from the top-level but also from
the mid-level management is crucial for a successful
implementation of agile work. Otherwise, acceptance of
such introductions within the workforce is low.
Learning from experience, all three cases deduce that
the traditional hierarchical structures cannot cope with
the influences of DT and that the implementation of
quicker processes is necessary. Concerning human
resources and recruiting, interview partners (Case 2;
Case 3) articulate that such working environments
support the recruitment of young, new employees.
Interviewees respond that agile working is the future of
work in the FS sector for the so-called Generation Y and
Z. These potential employees are mainly interested in
responsible work, flexible office hours, and mobile
work. This is consistent with findings by Kim et al.
(2009) concerning expectations of Generations Y and Z.
In summary, competitive pressure from market
entrants with more customer-centric products based on
new technological solutions forces incumbents to
rethink their traditional structures and business models.
Each observed implementation corresponds to the
respective company, is further improved over time, and
forms part of a broader business realignment effort to
ensure competitiveness. This is achieved through
reduced reaction times to counter market challenges as
well as increased flexibility, innovativeness, and
attractiveness for the whole company. Our findings
indicate that the implementation of agile work within
the investigated FS providers is not dependent on the
success or failure of implemented systems or processes.
Instead, the promotion of success stories from the
projects boosts confidence and involvement.
Participants mostly appreciate the increased
transparency, decision-making freedom, and resulting
responsibilities. Yet, agile work systems may lead to
overwork by key team members, difficulties to adjust by
middle managers, and problems with existing work
regulations. Nevertheless, even large and complex agile
work systems seem to provide a viable answer for
incumbent companies to existing market challenges.
In Figure 1, we present a synopsis and practical
recommendations derived from our discussion
regarding the WSF-elements. In contrast to Alter
(2013), we consolidate the elements “Technology” and
“Physical Infrastructure” as well as “Products &
Services” and “Customers”. During our data collection
and analysis, it became more intuitive to discuss these
elements together since the former are strongly
connected in the FS sector and the latter are represented
by a product owner in the agile environments.
Figure 1. Synopsis (S) and practical recommendations (R) structured according to the WSF
6. Limitations and future research
Our data collection phase allowed us to generate a
snapshot regarding the implementation of agile work
within three FS providers. In Cases 2 and 3, these agile
working environments were introduced shortly before
our data collection. Therefore, some results are only first
opinions regarding the effectiveness and efficiency of
the implementations in a pre-COVID19 time-setting.
Multiple observations of a project would be advisable to
examine long-term influences on the company’s work
system. Repeated observations with case study research
using the WSLC model as an underlying analytical basis
in real-world settings can enhance the usefulness of
WST for research and practice (Niederman & March,
2014; Alter, 2015). Involved stakeholders should be
interviewed at different times of the process to enable
an evaluation of the implementations’ (quantitative)
efficiencies. Researchers can achieve an overview of the
assessments and opinions of the stakeholders regarding
these working methods. Methodologic guidance, like
the time-series analysis proposed by Yin (2017), can
serve as a foundation for such investigations.
The comments and recommendations of the WSF
element “environment” are mainly based on statements
regarding German and European Union laws and
regulations. These include pre-COVID19 home- and
mobile-office regulations. Consequently, the
transferability of these results to countries other than
Germany or even outside the European Union is
hindered. Future research can incorporate different legal
systems for a cross-cultural perspective when studying
the FS sector or other highly regulated industries.
7. Conclusion
DT heavily influences incumbent FS providers.
They face everyday challenges, e.g., the pressure of new
market entrants and changing customer demands, and
must respond appropriately to such influences. One
possible reaction is the implementation of agile working
environments into their organizational structures. We
used the WSF as an underlying theoretical lens to
examine the rationales and opinions of all involved
stakeholders in three implementations of agile work.
With a multiple case study, we investigated (1) The
usage of an agile working environment parallel to the
vertical organizational structure, (2) agile work in a
horizontal internal substructure as a complete business
unit, and (3) agile working methods in an external
workspace. Agile work is suitable for projects driven by
DT in the FS sector. However, companies’ culture and
Back-end systems must be prepared and suitable for
new customer-centric products and services developed
in such agile working environments. Our research
elucidates evaluations of and influences on
stakeholders’ work in the FS sector and presents
practical recommendations. Since DT and its direct and
indirect effects on work are relevant for most
businesses, our results can also provide some insights
into other sectors.
8. Funding
This research was partly funded by the Hans-
Böckler-Foundation, Düsseldorf, Germany under the
project number 2017-442-1.
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