Today‘s business environment is very much dynamic, and organizations are constantly changing their software requirements to adjust with new environment. They also demand for fast delivery of software products as well as for accepting changing requirements. In this aspect, traditional plan-driven developments fail to meet up these requirements. Though traditional software development methodologies, such as life cycle-based structured and object oriented approaches, continue to dominate the systems development few decades and much research has done in traditional methodologies, Agile software development brings its own set of novel challenges that must be addressed to satisfy the customer through early and continuous delivery of the valuable software. It‘s a set of software development methods based on iterative and incremental development process, where requirements and development evolve through collaboration between self-organizing, cross-functional teams that allows rapid delivery of high quality software to meet customer needs and also accommodate changes in the requirements. In this paper, we significantly indentify and describe the major factors, that Agile development approach improves software development process to meet the rapid changing business environments. We also provide a brief comparison of agile development methodologies with traditional systems development methodologies, and discuss current state of adopting agile methodologies.