Customer value through Agile methodology : A case study of an IT consulting firm

Abstract: When organizations are growing, hierarchical structure makes it tougher to adapt to change. In a dynamic and fast-changing world, the need for flexibility in organizations to meet customer demands are higher thanever. What customer demands, and how customer value is created, is to some extent unclear since it varies between industries, companies, and individuals. Although many researchers have discussed customer valuefor a long time, accurate conclusions seem hard to find. Recently, many organizations have adopted Agile methodology to handle challenges in a changing business environment. However, few scientific studieshave emphasized how this can be managed well in the IT consulting industry.This study aims to investigate how customer value is affected by Agile methodology, hence an investigationof what drives customer value in the IT consulting industry is conducted. Through a literature study on customer value in the IT consulting industry, the authors have identified 16 key dimensions of customer value, which have been divided into product-based value, service-based value, and relationship-based value.A case study on Elvenite AB, who is currently transforming into an Agile organization, is used as research approach, where a total of 19 interviews with experts, employees and customers were conducted. Data wasalso collected via a validation form and by participating observation, where the authors participated in Agile ceremonies at the case study company.An analysis of the result shows that the value dimensions responsiveness, empathy, reliability, and supplier solidarity with customers are very important to customers. The results also shows that Agile methodologypositively affects the value dimensions responsiveness, communication, and flexibility the most. A chart between customer value and Agile methodology’s impact, shows that responsiveness and empathy should be emphasized the most if an Agile organization wants to maximize customer value in the IT consulting industry. Agile working methods and an Agile mindset creates value through increased transparency, alignment, and through an incremental value delivery where various stakeholders are involved. On an external level, IT consulting firms should emphasize the importance of highly valued dimension in the Agile delivery. On an internal level, Agile organizations should make sure to enable an optimal flow of prioritization andcommunication in the organization, decentralize decision-making and build Agile teams around valu