An agile transformation is first and foremost an organization transformation, and an agile transformation second. One cannot simply introduce agile development practices and expect them to take. In any organization that has long-established non-agile software development processes, there are massive impediments to converting to agile methods. (See the discussion of strategic challenges). The dominant impediment is most likely the existing organization structure and the culture that it produces, which is generally aligned around silo-ed sequential - and therefore non-collaborative - process steps such as analysis, requirements, design, development, testing, quality assurance, deployment, and infrastructure. In an agile scenario, all of these functions must work together: they cannot be silo-ed. Further, they must work together in near real time. Changing this means changing the organization in deep and broad ways.
Organizations that start out by approaching agile transformation only at a team level nearly always go through a lifecycle in which they have isolated successes, but then have great trouble "scaling out" the agile processes, at which time the eventually start to look at the problem in terms of organization change. Yahoo is a great example. (See the article by Gabrielle Benefield here, and the presentations by Tathagat Varma and Keith Nottonson here and here, respectively.) For this reason, it is important that management views and treats an agile transformation as a strategic change that will affect how everyone works - from the CIO down - and will also impact business level interactions between IT and the rest of the organization.
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