Many modern intelligent products and systems (e.g., automotive, consumer electronics, telecommunications) contain more and more embedded software. Often the new product development (NPD) companies developing such products operate under turbulent circumstances stemming from the business environment, technology development and other, even disruptive sources. The embedded software development functions of such NPD organizations then face the uncertainties directly or indirectly, often coupled with time-to-market, quality and productivity pressures. Agile software development has been advocated as a new way of coping with such circumstances in particular with small independent teams developing customer-driven software products. This thesis investigates in contrast how it can be utilized with embedded software development teams in large-scale market-driven industrial NPD context. The exploratory, problem-driven research process is based on interpretive design science and action research principles. The author worked as a full-time software quality and process development specialist employee inside the case organization, thus acting as a reflective practitioner. The longitudinal study research cycles were conducted over several years in that particular NPD organization context. The cycle viewpoints evolved from first recognizing typical software project problems and uncertainties, and developing certain solutions to software team knowledge management and software process model selection. This development led to consider, what problems current agile software methods address. The realization of agile software development was then further examined with respect to the cost factors, and finally towards integrating agile software product development teams into larger-scale NPD organization. The main result of this research is that agile software development models address many typical key issues in large-scale industrial NPD context, and the cost/benefit factors are in principle justifiable. However, if agile software methods are applied just bottom-up trying to integrate isolated agile software teams into larger organizational context, this inside-out approach leads often to problems with organizational barriers and impediments. Thus, in order to be able to leverage the potential benefits, agile software development should be approached more from the strategic business perspective (outside-in), viewing the software development functions as elements of the total value-creation system in the NPD organization. Different software development (project) teams may have different roles and needs for agility in this complex over time. The contributions imply that rational software team-level improvements require in many cases wider, even enterprise-level perspectives in creating and improving the agile capabilities of the NPD organization. It is thus fundamental to conceptualize agility in the NPD context by combining software development with the overall NPD processes. In particular in large organizations, the improvements may require more actions at the organizational level than in software teams.
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