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Software is one of the core elements that drive the modern economy, with visible use in areas such as personal computing, telecommunications and banking, and background use in areas such as aircraft traffic management, nuclear power generation, and automotive control systems. Organizations that build software are unique in that they span industrial domains, and at their core of what they do is codifying human knowledge. When we talk about software organizations, we think of organizations that work in the three broad areas of shrink wrapped application software, software-intensive systems, or software services.  By shrink wrapped application software, we refer to the software that one can buy in a retail store for use on his or her computer. Software-intensive systems are part of a larger system such as air traffic management, and software services focus on making software work for other organizations. This thesis uses studies of eight software organizations to understand how these organizations are able to identify changes to their environment, and create the required capabilities to meet those changes – in other words, how these organizations gain enterprise agility.

To understand enterprise agility, we ask three simple questions, namely how does the organization improve what it currently does? What does the organization do? and Who does the work that the organization chooses to do? By answering each of these questions in the context of software organizations, we identify the three mechanisms of Software Process Improvement (SPI), Creating Systems of Innovation (CSI), and Leveraging Globally Available Capabilities (LGAC). These three mechanisms are interconnected and interdependent. By creating rich descriptions of how these mechanisms are implemented in the organizations that we studied in the thesis, we are able to build confidence that these mechanisms are an accurate representation of the approaches that organizations use. In addition to identifying the mechanisms, by analyzing across the cases, we identify the four organizational enablers of stakeholder alignment, employee empowerment, group & organizational learning, and governance.

Organizations can create enterprise agility by ensuring the presence of the four organizational enablers and leveraging some combination of the three mechanisms. While it is possible for the organization to create enterprise agility in the absence of these mechanisms, we believe that the agility generated is not sustainable. To survive in the tough economic conditions of today, software organizations need to be aware of, and actively manage both the enablers and the mechanisms for sustained success. This thesis is a first step in finding more effective ways to manage software organizations as a whole, rather than as a collection of individual projects. It presents a philosophy of thinking about software organizations that addresses the uniqueness of these organizations while at the same time leveraging best practices and thought leadership from the disciplines of software engineering, quality,  knowledge management, strategy, organizational theory, and stakeholder theory.