Navigating Digital Transformation: A Survey Study on Agile Adoption Impact

Ramljak, Ivan; Talajić, Mirko; Brkljačić, Maja Article Navigating Digital Transformation: A Survey Study on Agile Adoption Impact ENTRENOVA - ENTerprise REsearch InNOVAtion Provided in Cooperation with: IRENET - Society for Advancing Innovation and Research in Economy, Zagreb Suggested Citation: Ramljak, Ivan; Talajić, Mirko; Brkljačić, Maja (2025) : Navigating Digital Transformation: A Survey Study on Agile Adoption Impact, ENTRENOVA - ENTerprise REsearch InNOVAtion, ISSN 2706-4735, IRENET - Society for Advancing Innovation and Research in Economy, Zagreb, Vol. 10, Iss. 1, pp. 412-427, https://doi.org/10.54820/entrenova-2024-0034 This Version is available at: https://hdl.handle.net/10419/317977 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc/4.0/ 412 ENTRENOVA - ENTerprise REsearch InNOVAtion Vol. 10 No. 1 Navigating Digital Transformation: A Survey Study on Agile Adoption Impact Ivan Ramljak Algebra University, Zagreb Mirko Talajić Algebra University, Zagreb Maja Brkljačić Algebra University, Zagreb Abstract Enhancing organizational agility is important for successful digital transformation. This study investigates the impact of agile practices on large organizations in Croatia, aiming to determine their effect on HR, process performance, clients, and technology, and to identify correlations among these dimensions. A survey of employees from large Croatian companies revealed that agile methodologies positively impact all organizational dimensions. Key findings indicate improvements in employee motivation, interpersonal relations, internal communication, team productivity, change management, and faster problem detection. Agile practices also enhance client satisfaction, communication, and user participation in product development. However, the adoption of cutting-edge technologies like AI and blockchain remains limited. Strong correlations among the dimensions suggest that improvements in one area positively influence others, underscoring the benefits of agile transformation. This study emphasizes the need for leadership support, cultural readiness, and continuous learning to drive digital change effectively. The findings provide actionable insights for organizations aiming to implement agile methodologies, highlighting their versatility across various sectors including public administration, healthcare, and marketing. By focusing on large companies in Croatia, this research adds a new regional perspective to the global discourse on agile and digital transformation. Keywords: agile transformation, digital transformation, organizational agility, leadership JEL classification: O30, M15, L86 Paper type: Research article Received: 3 May 2024 Accepted: 6 August 2024 DOI: 10.54820/entrenova-2024-0034 413 ENTRENOVA - ENTerprise REsearch InNOVAtion Vol. 10 No. 1 Introduction Enhancing organizational agility is critical for successful digital transformation. Agile practices, as noted by various researchers, enable quick adaptation to market demands and customer needs, fostering collaboration, responsiveness, and continuous feedback. This adaptability is crucial for driving digital innovation and maintaining a competitive edge. Agile leadership is particularly essential, as it cultivates a dynamic capability within organizations to navigate rapid technological changes. Practical applications of agile methods, such as daily stand-up meetings and sprint planning, enhance collaboration and transparency, key elements for iterative and incremental digital transformation processes. However, a significant risk of failure in digital transformation efforts exists, often due to a disconnect between business and technology leaders. Shared ownership and collaborative goals between these teams are vital for bridging this gap and enhancing success rates. The study investigates the impact of agile transformation on digital transformation within large organizations in Croatia. It aims to determine the effect of agile practices on key organizational dimensions and identify correlations among them. A survey conducted among employees of large Croatian companies focused on HR, process performance, clients, and technology. Results indicate a positive impact of agile methodologies on all dimensions, emphasizing the importance of leadership support, cultural readiness, and continuous learning for successful digital transformation. This paper addresses the importance of agile transformation in enhancing organizational adaptability and innovation, examining the following research questions: (i) Can agile transformation positively impact the five dimensions of interest? (ii) Is there a significant correlation among these dimensions? (iii) How can organizations enhance the success of digital transformation through effective agile practices? The results from the survey among large Croatian companies will be discussed, highlighting the implications for practice and future research. Literature review The literature consistently highlights the critical role of agile methodologies in driving successful digital transformation across various sectors. The adoption of agile practices not only enhances organizational adaptability and innovation but also addresses specific industry challenges, from public administration to healthcare and marketing. Agile methodologies in business in general The complexity of business requires innovative and new approaches in all aspects of development. Whether it is the development of an idea or software, testing solutions, or other similar aspects. Agile methods stand out as a possible solution for increasing business efficiency Agile methodologies significantly increase the success of business projects across various industries, especially in organizations focused on software development and digital transformation. Fogoroș et al. (2020) suggest that aligning business models with agile methodologies can improve process acceleration and management facilitation, highlighting the need for a cultural shift toward employee and customer-centric approaches. Frameworks like Scrum and XP are very popular, so Alrajhi, and Saeedi (2018) emphasize that those frameworks enhance flexibility and customer engagement, crucial for successful digital transformation in almost every part of business area. Patnuri (2023) identifies agile leadership as essential for overcoming digital 414 ENTRENOVA - ENTerprise REsearch InNOVAtion Vol. 10 No. 1 transformation challenges in IT organizations, with benefits such as improved communication and faster time to market. Agile adoption as a prerequisite for successful digital transformation The complexity of digital transformation projects necessitates the adoption of agile methods for success. Sallam et al. (2024) highlights the positive relationship between agile maturity and digital transformation success, emphasizing practices like performance management and customer availability. Scrum and Kanban are important agile methodologies in enhancing flexibility and adaptability for every digital transformation project, according Popoola et al. (2024). Using agile gives a possibility of early adjustments in case of unforeseen circumstances that may affect the agreed deadlines and success of the digital transformation. Simon and Schmitt (2023) advocate for 'Agile Science' to enhance interdisciplinary collaboration and responsiveness in digital transformation research. Integration of agile values in digital transformation model to enhance organizational agility is crucial for Bergkvist and Magnusson (2023) while Ibrahimi and Benchekroun (2023) underscore the role of organizational agility in supporting digital transformation, focusing on risk-taking and experimentation. Delioğlu and Uysal (2022) emphasize the pivotal role of agile leadership in fostering dynamic capabilities and strategic flexibility within organizations, crucial for adapting to rapid technological changes. Sector-Specific Applications and Challenges Agile methodologies have been tailored to meet the unique needs of different sectors, demonstrating their versatility and effectiveness. Ciancarini, Giancarlo, and Grimaudo (2024) discuss the adaptation of agile methodologies like Scrum in public administrations, which improve the quality of digital services by promoting flexibility and responsiveness. Palfreyman and Morton (2022) highlight that strategic agility is essential for fostering innovation in the UK healthcare sector, with agile processes helping to overcome governance and financial constraints. Advancements in the healthcare sector, especially considering the impact of AI, necessitate the ability for rapid adaptation, which is achievable using agile methods Moi and Cabiddu (2020) explore agile marketing capabilities in international digital marketing contexts, emphasizing quick adaptation and continuous innovation. Similar as in healthcare sector, technological advancements make it very important being quick in adoptions and adjustments. Agile model for the digital transformation of universities and focus on integrating digital techniques into teaching and learning activities to drive growth and competitiveness is proposed by Kerroum et al. (2020). This becomes extremely important in the context of the increasing focus on online learning and teaching. Those who successfully perceive and can quickly adapt to these trends will attract a larger number of students Wiechmann et al. (2022) identify key factors influencing the success of agile management in digital transformation within medium-sized businesses, highlighting organizational structure, technology adoption, and cultural change. 415 ENTRENOVA - ENTerprise REsearch InNOVAtion Vol. 10 No. 1 Methodology The survey aimed to gather data from employees of large companies in Croatia across five key organisational dimensions: HR, Process, Performance, Clients, and Technology. Each section included multiple items designed to measure the respondents' perceptions and experiences with agile methodologies. A questionnaire was constructed that examined how people in the organisations they work for see agile as a methodology. The questionnaire consisted of six parts. The first part examined the demographic characteristics of the sample and the methods and tools to support agile methods used in the organisation. The other five parts consisted of 5-6 questions each within five categories, which are: HR dimension and influence on relations in the organisation; Process dimension and influence on processes in the organisation; Performance indicator; Clients and service users; Technological dimension and use of technology in the organisation. The questionnaire was distributed through the LinkedIn social network and through business addresses within companies using agile methodology. As the research area is the use of agile methodology in large companies, all answers of respondents who are employed in companies with less than 250 employees were excluded from the analysis. Furthermore, all answers of participants who do not use agile methodology in their work were excluded from the analysis. The survey was distributed electronically to a targeted sample of employees across various industries. A total of 350 responses were collected, providing a robust dataset for analysis. In total, 115 participants employed in large software companies took part in the research. Large companies have more than 250 employees. There were 10 participants (8,7%) in the 18-25 age group, 44 participants in the 26-35 age group (38,3%), 45 participants in the 26-35 age group (39,1%), while there were 16 participants in the 46-55 age group (13,9%). Most participants fall within the 26-45 age range, comprising nearly 78% of the sample. Gender distribution is as follows: 67 are men (59,3%), while 48 are women (41,7%). According to job functions, 20 participants (17,4%) work in administrative positions. Fifty-two employees (42,2%) work in managerial positions, and 43 (37,4%) work in projects. Agile methodologies are widely used across various job functions, with a significant presence in management and project roles. Results Full The results will be presented according to five dimensions, which were also used in the survey. Basic measures will be shown, as well as the relationships between the dimensions through the calculation of the Pearson correlation coefficient. Impact of agile methodology on human relations in organisation Table 1 presents a set of questions about the impact of agile methodologies on human relations with the basic statistical measures. The mean score of 3.53 indicates a generally positive perception of agile methodologies to increase employee motivation. With a mean score of 3.63, respondents generally agree that interpersonal relations improved after adopting agile methodologies. The mean score of 3.89 suggests a relatively strong agreement that internal communication between departments improved. For the question related to the quality of new hires, the mean score of 3.35 suggests a moderate perception that this part improved. 416 ENTRENOVA - ENTerprise REsearch InNOVAtion Vol. 10 No. 1 Table 1 Descriptive statistics of variables measuring the perceived impact of agile methodology on human relation in organisations Survey statement N Min Max Mean SD After using the agile methodology in work, the motivation of the employees increased. 115 1 5 3.53 1.079 After using the agile methodology in the work, interpersonal relations improved. 115 2 5 3.63 0.985 After using the agile methodology in work, internal communication between departments improved. 115 1 5 3.89 1.130 After using the agile methodology, more quality people are employed. 115 1 5 3.35 1.116 After the use of agile methodology, more people who are familiar with agile work methods are employed. 115 1 5 4.26 0.974 After the use of agile methodology, internal training improved for employees. 115 1 5 3.32 1.232 Source: Authors’ work The very high mean score of 4.26 indicates strong agreement that more “agilecompetent” employees are being hired. Moderate perception of improved internal training for employees is justified with a mean score of 3.32. Impact of agile methodology on efficiency of software development Table 2 presents a set of questions about the impact of agile methodology on the efficiency of software development. The mean score of 3.98 indicates a positive perception of improved team productivity after adopting agile methodologies. Respondents generally perceive better management of changes and greater flexibility in product development with agile methodologies, indicating a mean score of 3.9. Improvements in team management due to agile methodologies got a mean score of 3.88. A very high mean score of 4.17 indicates a strong result that agile methodologies lead to faster problem detection in product development. The mean score of 3.98 shows that respondents experience frequent changes in product development direction with agile methodologies. 417 ENTRENOVA - ENTerprise REsearch InNOVAtion Vol. 10 No. 1 Table 2 Descriptive statistics measuring the perceived impact of agile methodology on efficiency of software development Survey statement N Min Max Mean SD After using the agile methodology in the work, team productivity improved. 115 1 5 3,98 1,402 After using the agile methodology in the work, changes in product development are better managed, and greater flexibility is observed. 115 1 5 3,97 1,429 After using the agile methodology in the work, better team management is observed. 115 1 5 3,88 1,562 After using the agile methodology in the work of the agile methodology, there is a faster detection of problems in product development. 115 1 5 4,17 1,410 After using the agile methodology in the work, there are frequent changes in the direction of product development. 115 1 5 3,98 1,622 After using agile methodology in work, better product/software maintenance is observed. 115 1 5 3,64 1,596 Source: Authors’ work Impact of agile methodology on the quality of software quality In Table 3, the mean score of 3.57 indicates a moderate positive perception of improved product quality following the adoption of agile methodologies. The “Time to market faster” dimension got a mean score of 3.83, and it reflects a general agreement that products reach the market faster with agile methodologies. Regarding cost reduction in product/software development, the mean score of 2.93 indicates a lower perception of cost reductions because of agile. This score is slightly below the mid value, suggesting that respondents are less convinced about the costsaving benefits of agile methodologies. The moderately positive perception that agile methodologies contribute to higher company income is indicated with a mean score of 3.37. The results indicate that respondents generally perceive agile methodologies to positively impact performance indicators such as product quality, faster time to market, and higher company income. However, there is less confidence and variability concerning cost reduction and risk management. 418 ENTRENOVA - ENTerprise REsearch InNOVAtion Vol. 10 No. 1 Table 3 Descriptive statistics measuring the perceived impact of agile methodology on the software quality Survey statement N Min Max Mean SD After using the agile methodology in our work, we notice that the products are of better quality. 115 1 5 3,57 1,036 After using the agile methodology in the work, the products reach the market faster. 115 1 5 3,83 1,209 After using the agile methodology in the work, costs in product/software development are reduced. 115 1 5 2,93 1,269 After using the agile methodology in the work, the company's income is higher. 115 1 5 3,37 1,135 After using the agile methodology in the work, the project risk is reduced. 115 1 5 3,23 1,257 Source: Authors’ work The impact of agile methodology on the satisfaction of clients or users of developed software solution Table 4 presents the impact of agile methodology on the satisfaction of clients or users of developed software solutions. The mean scores of 4.01, 4.00, and 4.25 indicate that respondents generally perceive a positive impact of agile methodologies on client/user satisfaction, communication, and participation in development. These results suggest that the implementation of agile methodologies has a significant and generally consistent positive impact on client/user satisfaction, communication, and participation in development. A more moderate perception of agile methodologies' impact on attracting potential users and user recommendations is indicated with mean scores of 3.34 and 3.38, respectively. These scores are closer to the neutral midpoint, suggesting mixed perceptions. Results suggest that while some respondents see benefits in terms of increased visibility and user recommendations due to agile methodologies, these benefits could be more consistently experienced across the organisations. The high variability indicates that the impact of agile practices on these aspects may depend heavily on specific contexts, implementation strategies, and perhaps the nature of the products or services offered. 419 ENTRENOVA - ENTerprise REsearch InNOVAtion Vol. 10 No. 1 Table 4 Descriptive statistics measuring the perceived impact of agile methodology on the satisfaction of clients or users of developed software solution Survey statement N Min Max Mean SD After using agile methodology in our work, we notice greater satisfaction of clients or users. 115 1 5 4,01 1,547 After using the agile methodology in work, there is better communication with clients or users. 115 1 5 4,00 1,528 After using agile methodology in work, users participate more in product/software development. 115 1 5 4,25 1,438 After using the agile methodology in your work, more and more potential users notice you. 115 1 5 3,34 1,762 After using agile methodology in your work, your users recommend you to other users. 115 1 5 3,38 1,775 Source: Authors’ work The impact of agile methodology on the efficiency of technology usage Table 5 presents descriptive statistics measuring the perceived impact of agile methodology on the efficiency of technology usage. The survey results indicate that agile methodologies have a positive impact on the technological dimension within organisations, particularly in increasing the use of digital tools (mean score of 4.57) and recognising the importance of DevOps and cybersecurity (mean score of 4.3 and 4.14, respectively). However, there is more variability and less consensus on the impact of agile methodologies on product maintenance and the adoption of newer technologies like blockchain and AI (mean score of 3.64 and 2.82, respectively). 426 ENTRENOVA - ENTerprise REsearch InNOVAtion Vol. 10 No. 1 References 1. Alruwaili, F., Alrajhi, M., & Saeedi, K. (2018). How agile development and its tools support digital transformation. International Journal of Computers & Technology, 18, 7440-7449. Retrieved from https://cirworld.com/index.php/ijct 2. Bergkvist, L., & Magnusson, M. (2023). Digital transformation models: A literature review from an agile perspective. 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At Privredna banka Zagreb, Ivan contributed to the development of mobile and web banking applications and coordinated projects to improve processing times and user adoption. The author can be contacted at [email protected] Dr. Mirko Talajić's academic journey began with a bachelor’s degree in mathematics from the Faculty of Science at the University of Zagreb. He furthered his education with postgraduate studies in International Economics at the Faculty of Business and Economics in Zagreb. Mirko has been a lecturer at Algebra University and Effectus University College since 2010, teaching subjects primary related to the data science area. He has also published several scientific and professional papers that explore various aspects of data analytics and business performance. The author can be contacted at [email protected] Maja Brkljačić, PhD, Assistant Professor, Head of the research institute Algebra LAB. Maja graduated from the Faculty of Humanities and Social Sciences at the University of Zagreb, and she received her doctorate at the Central European University in Budapest. She worked as a researcher at the Institute for the Wisenschaften vom Menschen in Vienna and as a project coordinator for the Westfälische WilhelmsUniversität in Münster. She is a winner of Erich Maria Remarque's scholarship at New York University and the Alexander-von-Humboldt Foundation for Freie Universitat Berlin. The author can be contacted at [email protected]