Application of Agile in Product-Service System Development

The aim of this report is to provide insights into the uncertainty faced by manufacturers when developing Product-Service Systems (PSS), and how to navigate this uncertainty better through agile management practices. PSS are compound offerings comprising of an artefact (the tangible or intangible product), and supporting engineering services.

To provide these insights, this report describes the results of a study undertaken in the American aerospace and defence industry. An in-depth case study of a large-scale PSS development program, provides insights about the emergence of five uncertainty types: technical, environmental, resource, relational and organizational uncertainty.

Moreover, the application of the agile method SAFe during the development provides insight about the changed ability of uncertainty management. The deductive analysis of the case study has confirmed the presence of all five uncertainty types. In particular, the organizational uncertainty was perceived as most challenging, and formed the root-cause for many other uncertainty types.

All case results were compared with the findings of a benchmark study undertaken in the Nordic manufacturing industry about PSS development and found to be coherent. This points strongly towards the general relevance of the five uncertainty types, particularly the organizational uncertainty in PSS development.

The application of agile management practices has shown high success in the management of uncertainty. Specifically, agile provided the program with the ability to quickly identify, communicate, and resolve uncertainty. The inductive analysis has revealed the concepts of adoption and adaption of agile.

The adoption of agile gave rise to initial uncertainty through the challenges of learning the novel structures, processes, roles, and governance of agile in contrast to the traditional plan-based approach. This uncertainty decreased over time as the learning curve increased. The adaption of agile gave rise to uncertainty through the need for modification of the agile method to the specific characteristics of the local case setting.

This uncertainty varied across the levels (or hierarchies) of the program, where the most uncertainty was perceived in the levels most directly interfacing with the plan-based surrounding organization. The case company has successfully managed the adoption of agile and the navigation of the uncertain setting trough the use of agile management practices.

Potential for improvement is given in the adaption of agile. The program would benefit among other from a clear Definition of Done, a continuous focus on agile training, the use of the architectural runway, structured stakeholder management, and a more disciplined implementation of agile. Concluding, the case study has shown that the development of PSS is non-trivial and gives rise to five uncertainty types.

The most challenging uncertainty is represented by the organizational uncertainty type. The use of agile management practices has shown strong success in the management of all five uncertainty types. Yet, while agile is able to reduce uncertainty, if the method is induced within a plan-based environment, the adoption and adaption of agile give rise to additional uncertainty.