The 4th module of the MIPLM program is about organization. Structure is key to implement strategies. Companies look for the structure-strategy-fit, which means, that their organization fits with their respective strategic objectives. Within the digital transformation it is a challenge for traditional companies to find appropriate organizational structures and processes for new business models. In addition, digitalization also demands different innovation and IP management.
Traditionally there are three different forms of organization distinguished: Structural, process and project organization. Structural organization describes the hierarchical and functional structure of a company. It is a static system to assign competencies and responsibilities to organizational entities like departments. Process structure represents the way how tasks are fulfilled within the necessary working steps. Structure and process organization represent a thinking style in constant and repeating activities and business transactions.
Project management differs basically from this kind of thinking. A project has certain characteristic features: It is unique, it has clear objectives, it is timely limited, it is financially limited, it has dedicated and specific staff, it is separated from other ventures within the organization, it has its own organization and typically it is something new and to a certain extend something innovative.
Agility and digitalization seem to be the pillars of the future of successful companies. Or is it just a current bubble that will burst and everything is going on as usual? Honestly, these concepts do not really deal with new insights. The term agility has been around since the 16th century and what is associated with digitalization begins in 1980 at the latest, with the introduction of the first audio CD. So why are these terms so common in current management discussions?
It is not long ago that there were times where change was hard. We did not have email or social media — let alone video chat — to speed up communication. Our idea of checking out what’s “trending” required making a visit, in person, to the nearest retail store. We used snail mail. We met for lunch and worked in traditional office spaces. We managed from the top-down. And because of that, change did not happen overnight.
Fast forward to 2021, and change is a completely different story. In today’s market, change is not only happening quickly, but also forcing businesses themselves to change quickly. It is a constant flow of innovation, disruption — and sometimes chaos — that is moving us ahead, even faster than we ever imagined. Many say agility is the key to surviving in the age of technological hairpin turns. In fact, 68% of companies identify agility as one of their most important initiatives. But what does agility really mean? And how can it help you survive in the current landscape?
Software development and its importance
The world as we know it is a very tech-savvy one, and that’s no different when it comes to work and business. In fact, without the use of updated technology and media, it’s practically impossible to be successful.
What is software development?
Put simply, software development is the process of creating and maintaining applications and frameworks which help to increase your business’s productivity. Software development agencies are able to create customized software packages to suit the specific needs of your business, making life easier and better for you and your employees.
What are the benefits?
Apart from boosting productivity, software development can also enhance your business in several other aspects such as:
- Reducing costs on things such as training, licenses, and upgrades where possible
- Increasing the flexibility of your business
- Putting you at a competitive advantage compared to other businesses in your sector
- Increasing the value of your company
- Improving the overall quality of your business
Who can benefit from it?
In this day and age, software development is imperative for success in any kind of business – and the more updated the technology is, the better. This means that no matter what sector your business is in, or how big or small it is, it can most definitely benefit from software development in one way or another.
What is Agile software development?
Agile is a type of software development methodology that anticipates the need for flexibility and applies a level of pragmatism to the delivery of the finished product. Agile software development requires a cultural shift in many companies because it focuses on the clean delivery of individual pieces or parts of the software and not on the entire application.
Benefits of Agile include its ability to help teams in an evolving landscape while maintaining a focus on the efficient delivery of business value. The collaborative culture facilitated by Agile also improves efficiency throughout the organization as teams work together and understand their specific roles in the process. Finally, companies using Agile software development can feel confident that they are releasing a high-quality product because testing is performed throughout development. This provides the opportunity to make changes as needed and alert teams to any potential issues.
Agile has largely replaced waterfall as the most popular development methodology in most companies, but is itself at risk of being eclipsed or consumed by the growing popularity of DevOps.
Individual interactions are more important than processes and tools. People drive the development process and respond to business needs. They are the most important part of development and should be valued above processes and tools. If the processes or tools drive development, then the team will be less likely to respond and adapt to change and, therefore, less likely to meet customer needs.
A focus on working software rather than thorough documentation. Before Agile, a large amount of time was spent documenting the product throughout development for delivery. The list of documented requirements was lengthy and would cause long delays in the development process. While Agile does not eliminate the use of documentation, it streamlines it in a way that provides the developer with only the information that is needed to do the work — such as user stories. The Agile Manifesto continues to place value on the process of documentation, but it places higher value on working software.
Collaboration instead of contract negotiations. Agile focuses on collaboration between the customer and project manager, rather than negotiations between the two, to work out the details of delivery. Collaborating with the customer means that they are included throughout the entire development process, not just at the beginning and end, thus making it easier for teams to meet the needs of their customers. For example, in Agile, the customer can be included at different intervals for demos of the product. However, the customer could also be present and interact with the teams daily, attend all meetings and ensure the product meets their desires.
A focus on responding to change. Traditional software development used to avoid change because it was considered an undesired expense. Agile eliminates this idea. The short iterations in the Agile cycle allow changes to easily be made, helping the team modify the process to best fit their needs rather than the other way around. Overall, Agile software development believes change is always a way to improve the project and provide additional value.
Here is a short introduction to agile project management:
In addition, the 4th MIPLM module gives an introduction into organizational economics which is the economic analysis and design of organizations. Organizational economics is primarily concerned with the obstacles in the coordination of activities inside and between organizational entities like firms, alliances, institutions and markets as a whole. Organizational economics can be divided into three lines of argumentations:
- Transaction cost theory: costs incurred to organize an activity, especially regarding research of information, bureaucracy, communication etc.
- Agency theory: dilemmas connected to making decisions on behalf of, or that impact, another person or entity.
- Contract theory: ways economic actors use to construct contractual arrangements, generally in the presence of asymmetric information.
Complementary, the 4th MIPLM module discusses also institutional economics. This perspective attempts to extend economics by focusing on social and legal norms and rules, which are called institutions. The concepts of institutional economics are used to analyze organizational arrangements like property rights, transaction costs, enforcement mechanisms, monitoring costs and bargaining strength. With these powerful tools in hand, students can analyze the fit between strategic objectives and organizational implementation of a strategy.