The Fourth Wave is Already Here: What 18 Years of Agile Data Tells Us About What’s Next

For nearly two decades, Digital.ai’s State of Agile Report has served as the industry’s pulse check on how organizations adopt, adapt, and evolve their software delivery practices. Our 18th edition reveals something remarkable: we’re not just witnessing incremental change. We’re watching the early stages of what our CEO Derek Holt calls the Fourth Wave of Software Development and Delivery, and the pace of transformation is accelerating faster than many leaders realize.

From 68% to 84% in Just Under Two Years: The AI Inflection Point

In the 17th State of Agile Report released in January of 2024, 68% of organizations told us they were using or planning to use AI tools in their development processes. This year, that number jumped to 84%.

Let me put that trajectory in perspective. If AI adoption continues at even half this pace, we could see near-universal integration by our next report. But here’s what should really get C-suite attention: only around half of those organizations have proper guardrails in place.

We’re in the uncomfortable middle of a massive shift. Organizations are moving fast because competitive pressure demands it, but governance, security, and operational frameworks are struggling to keep pace. This isn’t unique to AI adoption. It’s the pattern we’ve seen with every major technology wave. The difference this time is the velocity.

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What the Fourth Wave Actually Means

Derek talks about the Fourth Wave as the shift to Agentic AI, where AI doesn’t just assist individual team members but operates with increasing autonomy in the software delivery pipeline. It sounds futuristic, but our data shows it’s already beginning.

The organizations thriving in our research aren’t treating AI as a productivity hack or a cost-cutting tool. They’re fundamentally rethinking how work gets done. They’re asking better questions:

• What if AI handles the routine so humans can focus on the complex?
• What if we measure value delivery differently when cycle times compress by orders of magnitude?
• What if the constraint isn’t coding speed anymore, but our ability to define what’s worth building?

These aren’t hypothetical questions. They’re the conversations happening right now in organizations that are moving beyond experimentation to integration.

The Visibility Paradox: Better Tools, Harder Problems

Here’s the counterintuitive finding from this year’s report: organizations have better infrastructure than ever, yet 74% say measuring business outcomes remains challenging. We’re calling this the Visibility Paradox.

As tools improve and pipelines accelerate, organizations discover new constraints. It’s not enough to ship faster if you can’t tell whether you’re shipping the right things. It’s not enough to have data if you can’t connect it to business value. When delivery accelerates, weak links in measurement, alignment, and governance become glaringly obvious.

This is why the Fourth Wave isn’t really about AI itself. It’s about fundamentally reimagining how we connect technology delivery to business strategy. AI is the catalyst, but the real transformation is organizational.

What C-Suite Leaders Should Be Asking Now

If you’re leading technology strategy, the question isn’t whether to adopt AI in your development processes. That decision has largely been made by market forces. The questions that matter are:

• Are we building governance as fast as we’re building capability? AI is scaling faster than most operating models. The challenge now is keeping it accountable ensuring automation, data, and decision-making stay aligned with enterprise needs, standards and oversight.
• How are we redefining value measurement? Many organizations still track Agile success in motion through velocity, throughput, and output. In the Fourth Wave, advantage comes from measuring impact: connecting every delivery decision to business outcomes in real time.
• Are we preparing our teams for fundamentally different work? Agile roles are expanding into more strategic territory. Portfolio managers, product owners, and delivery leaders must learn to guide AI-enabled workflows and connect everyday delivery decisions to business outcomes.

Succeeding in the Fourth Wave requires a holistic view across people, process, and technology, the same foundation Agile was built on.

How Digital.ai Helps Lead the Fourth Wave

Digital.ai Agility, our adaptive planning and portfolio management solution, helps organizations bridge the gap between AI potential and operational reality. It connects strategy, planning, and delivery using governed, contextual data that ensures AI recommendations are traceable and accurate, making rapid, AI-driven delivery sustainable.

Now, with Digital.ai Sage, those capabilities become intelligent and interactive. Sage is the AI layer within Agility that brings Agentic Planning to life, coordinating intelligent agents that help users move from ‘what’s happening’ to ‘what should happen next’ while drawing from your organization’s own data, roles, and governance rules to ensure trust and transparency.

We take a phased approach to responsible AI adoption, helping organizations advance from assistance to orchestration:

• Start small: Use AI to compose stories, estimate effort, summarize conversations, and generate release notes directly inside Agility. No integrations or external tools required.
• Build confidence: Add intelligent recommendations through specialized agents that can suggest actions like adjusting priorities, identifying dependencies, or flagging risks—always within defined governance guardrails.
• Scale safely: Introduce agentic workflows where Sage automatically selects and coordinates the right agents, so users don’t have to. It can trigger complex planning sequences, capacity checks, and optimization flows across teams while maintaining human oversight and auditability.

In the Fourth Wave, agility and AI autonomy must evolve together—but only within trusted boundaries. Sage gives organizations that balance, helping them harness AI’s speed and intelligence while keeping human judgment and oversight at the center.

Where We Go From Here

Based on 18 years of tracking Agile evolution, I can tell you this: the organizations that will lead in the Fourth Wave are the ones making strategic bets right now. They’re not waiting for perfect clarity or complete frameworks. They’re learning by doing, but they’re doing it with intentionality.

The Fourth Wave marks a new chapter in how technology and teams work together. With the right guardrails and intent, it’s an opportunity to deliver faster, smarter, and with greater purpose.