Agile Product Development: Managing Development Flexibility in Uncertain Environments

As product complexity and the rate of market change have dramatically increased over the last years, firms find it increasingly difficult to forecast product requirements in their development processes. This article redefines the problem from one of improving forecasting to one of increasing product development agility and thus reducing the need for accurate long-term forecasts. It introduces the notion of development flexibility, shows how it can be measured, and presents results from a large empirical study on integrated systems development, which found that projects using flexible technologies outperformed projects using inflexible technologies by a factor of 2.2 (in person-months). Finally, the article proposes three major strategies for introducing flexibility into organizations. These strategies can help firms increase their agility and position themselves to succeed in accelerating and more turbulent markets.