Strategic Planning and Systems Development

Abstract
The purpose of this research paper is to attempt to find out existing facts and
concepts of aligning the development approaches with the application portfolio. The
research is aimed at identifying the current issues preventing the adaption of the
development approaches in the development such as the organization and management
issues in addition to the flaws and inappropriateness of several development models
within the context of development. This essential research to certain extends will
contribute to the nowadays IS/IT business entities that are facing with the side effects of
utilizing and developing the applications to support the business process and strategic
values. The main deliverables of this research paper are the identification of missing
areas of the existing and past research, and the recommendation for the unidentified areas
to be enhanced and to be researched further in depth.

Strategic Planning and Systems Development

1. Introduction
Most of the today business organizations are influenced by the IS/IT. IS/IT can
help organizations to directly and indirectly maximize the profits and benefits through the
appropriate usages of the IS applications that are engineered to meet the organization
needs and business requirements. As stated by Porter (2001), the industry structure has
been shaped due to the impact of the factors which Porter calls five forces. Many of the
concrete examples given by Porter (2001) showed both the success of organizations that
could see the benefits and know how to exploit IS/IT in order to survive and gain
competitive advantages, and failure of several organizations that neither have the
strategic vision brought by the IS/IT nor develop IS/IT in the right direction. The failure
in the later case is very common as the number of application portfolio including the
legacy system has increased from time to time, which is obviously emphasized by Ward
and Peppard (2002).
As stated in one of the IBM white papers Application Portfolio Management:
From assessment to transformation, it stated that Application development is often
based upon tactical considerations rather than on an enterprises strategic directions,
making it difficult to realize both short- and long-term goals, (IBM, 2003). Most of the
organizations failed to see pros and cons of applying development models to application
development which adversely leads to the long period of development and failure during
the development before applications are delivered. To cope with this problem, some of
researchers such as Ward and Peppard suggested that not only the IS/IT and business
strategy should be aligned, but the development approach and application portfolio also.
However, Ward and Peppard illustrated only the big picture of what and what to be
aligned with. They had little elaboration on what can prevent the alignment from being
adapted and which circumstances the existing alignment strategy should be re-considered
to deal with upcoming future, especially when the business is scaled up or scaled down.
This is the general fact that the growing organization can be scaled down to certain size
inevitably due to financial issues.

Strategic Planning and Systems Development

Other proponents of system development methodologies such as Avison and Fitzerald

contributed a lot on the suitability of information system development methodologies and
guidelines on how to use them effectively without strictly abiding the rules. Nevertheless,
they have weak emphasis on the relation of IS and business values. Therefore, the lights
of this research will be largely based on the mentioned researchers who will be brought
together a long with various existing research papers to find out the missing areas and the
opportunity to improve.

2. Research Method
This research paper is based on the deductive approach. Deductive approach is
appropriate in the current context of study because only the literature review will be
involved. Since some of the existing researches have been done in this area, this research
paper will go through them and find the opportunities of enhancing and further
investigating other hypotheses that have not been broadly defined and identified. By
adapting the deductive approach for this research paper, only the implication, inference
and logical conclusion based on the related facts, existing data and theories will be drawn
as the outcome and final product of this paper. The conclusion will be given at the end of
the research.
Inductive approach will not be used in this research paper because it will involve
with the empirical study requiring primary data gathering which is not appropriate with
the given time frame.
In the initial stage of looking at the existing researches to support this research
area, it was found existing researches done in this area were not rich and wide. Most of
the researches concentrate on the big spectrum of the application portfolio management
and IS/IT and business alignment which stray way a bit from the research topic aligning
development approaches to the application portfolio. As a result, there are no exact
analysis frameworks that can support this research. Therefore, the implication and logical
conclusion based on the knowledge areas and concrete supports from the outstanding
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Strategic Planning and Systems Development

researchers and scholars will be used instead. Anyways, the objectives of this research or
its hypotheses must be clearly formed first before going through so that it will minimize
the risk of misleading and looking at the irrelevant resources.
The following are the research objectives to be achieved.
1. Clarifying the actual definition of application portfolio and setting up the
baseline for investigation
2. Identifying the strength and weakness of common development approaches in
relation to the application portfolio development
3. Finding the environmental issues preventing the alignment of development
approaches with application portfolio
4. Critically explore and evaluate the existing research on the alignment and
identify the missing areas

3. Research Analysis and Evaluation

3.1 Issues in defining application portfolio
An understanding of what the application portfolio is and how it contributes to
both business processes and strategies should be clearly made at all since it can reduce
the risk of developing the wrong applications that do not return any certain benefits to the
business but additional cost to the maintenance in the long run. There are several different
definitions of application portfolios in different contexts of business. Because of the word
portfolio, some of the definitions are restricted to only the collection of the IT
infrastructures, hardware and software owned by a business entity. However, these
definitions do not answer the question whether or not these collections of IT stuffs will
bring back ROI, in what way they support the business, and why great deal of investment
should be put in it. This section will look into various views of application portfolio and
identify its types and nature, which is crucial in preparing the baseline for researching the
alignment of development approaches to the application portfolio.

Strategic Planning and Systems Development

Application Portfolio Management (2010) defined application portfolio as It is a

collection of logic, data access, and user interface of course, but it is more than that. It
supports complex business processes, it is supported by large teams across geographies,
it operates on sensitive customer data, and it is subject to a variety of regulatory burden.
(Application Portfolio Management, 2010) views the application portfolio as the general
system, which emphasizes on the business process. It characterizes the nature of the
information system which needs supports and maintenance from team. However, this
definition is not sufficient enough to illustrate the clear picture of business application
portfolio. Today, business involves more than just the ongoing business process. Some
applications even offer values to not only business process but the customers who are
ones of the key figures in bringing back the return of investment to the organization. By
taking Application Portfolio Management (2010) definition into practice, the collection of
legacy system and IT infrastructures such as computers and email system for routine
business functions without being integrated can be viewed as the application portfolio.
The number of IT facilities may not be the key in enhancing the business functions
because those facilities are not built in mind with the business process unique to each
organization. For example, giving a collection of computers with Microsoft Excel to the
staffs to work with the inventory in contrary with giving a central database and process
oriented software packages to the staffs working in the same function area can obviously
result in different performance and quality. The later system will perform better than the
former one. By defining the application portfolio limited to only the collection of IT
assets may qualify only the definition of IT portfolio. The IT Infrastructure portfolio
includes those common applications that everyone uses on a day-to-day basis, primarily
for office automation. Examples include: e-mail, calendaring, and document
management, (Nasa, 2009) .Supporting the business functions and providing customer
added values should be encompassed into characteristics of application portfolio.
The concept application portfolio means in general the collection of applications,
i. e. those tools or facilities that a business or an organization is using in their process
(Ward & Griffiths, 1996). John Ward (2002) defined based on the concept of strategic
grid developed by Mcfarlan, which considered the contribution of IS/IT to the business

Strategic Planning and Systems Development

now and in the future, based on its industry impact. Mcfarlans strategic grid categorized
information system into 4 quadrants. An application can be defined as a strategic
(application that are critical to future business success), turn-around (innovative
applications which may create opportunities to gain a future), key operational
(application that sustain the existing business operations), and support (application which
improve business efficiency and management effectiveness) depending on its current or
expected contribution to business success. Similar with Steria (2009) categorized in the
same categories which are:

Strategic: Business critical core systems which support todays business goals

Key Operational: Business critical core systems which support business critical
processes, but which are not specifically linked to strategic goals

High Potential: Modern applications supporting new business lines. May assist
competitive business advantage in the future

Support Systems: Support and automate common services

Almost same with that L10nbridge (2008) defined but in different characteristic,
L10nbridge (2008) defined applications portfolio as cluster of applications, which
applications are clustered into certain characteristic. These following categories of
application:

Utility: application that support business operation

Enhancement: applications that improve business processes

Frontier: applications that increase business innovation and competitiveness.

Based on several definitions above, application portfolio can be conclude as a set

of systems/applications that have different current and future value, improve business
efficiency and management effectiveness, and give opportunities to organization to
support business strategy and business process in order to achieve business goals.

3.2 Overview of appropriateness of IS development approaches

Strategic Planning and Systems Development

Developing the application portfolio requires the proper selection of the approach
or methodologies since application portfolio consists of different types of applications
with their own values. Strategic applications may require fast delivery to the market to
gain competitive advantages and to put the barrier to the market entry from the
competitors while the operational system may cope with the functional requirement
changes amid to the current system being used. Developing approaches come in different
models and frameworks which inherently carry their own strength and weakness and
which do not address all the application portfolios. Most of the development approach
gives the strong emphasis to how the system can be developed and how to get the
products done. As stated from IBM United Kingdom Limited, Application development
is often based upon tactical considerations rather than on an enterprises strategic
directions, making it difficult to realize both short- and long-term goals. (IBM, 2003)
They neglect to pinpoint how the system can be developed with the priority of the
immediate business needs, and for taking the current competitive advantage
opportunities.
The system development life cycle is the overall process of developing,
implementing, and retiring information systems through a multi-step process from
initiation, analysis, design, implementation, and maintenance to disposal (Shirley Radack,
2009). The SDLC has had an enormous influence as a general approach to develop
information systems (Avison & Fitzgerald, 2006). Although the SDLC has many
strengths and is still used today, it also has many potential weakness, which has led to
alternative methodologies, techniques, and tools being available.
The Waterfall Model was famously described in a paper written by Winston
Royce in 1970 titled "Managing the Development of Large Software Systems".
According to Schach (2007), this model was the only widely accepted life cycle model
until the early 1980s. One phase has to be complete before moving onto the next phase.
Like water flowing from top to bottom can not move backward. For strategic systems,
speed of development and flexibility of design are essential, and cost is less important
especially when the goal is gaining and sustaining competitive advantage (Ward &
Peppard, 2002). In developing strategic application use waterfall model may be is not
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Strategic Planning and Systems Development

appropriate approach, because waterfall is time consuming, which is strategic application

needs speed of development in order to provide competitive advantage that business
environment keep changing. Poor flexibility of waterfall model also becomes an obstacle
to meet the requirements. Once requirement change need cost and time to redevelop the
system, once passed one phase can not backward to previous phase.
Another model of SDLC is the Spiral Model. Spiral model was developed by
Barry Boehm in 1988 in the article A Spiral Model of Software Development and
Enhancement. The spiral model is an evolutionary software process model that couples
the iterative nature of prototyping with the controlled and systematic aspects of the linear
sequential model. Design stage is generally used in the Waterfall model, prototyping
phase, while a model where software is created prototypes (incomplete model), "blueprint" of his, or for example, and shown to the users/ customers to get their feedback.
This model also combines top-down design with bottom-up design, top-down design
which set the global system first, and forwarded with details of the system, while the
bottom-up design vice versa. Top-down design is usually applied to the sequential
waterfall model with her, while a bottom-up design prototyping is usually applied to the
model with the feedback obtained. Of the two combinations, namely a combination of
design and prototyping, as well as top-down and bottom-up, which also applied to the
waterfall model and prototype, then the spiral model can be described as the result of a
combination of process models of both models. Therefore, this model is usually used for
building software with a large scale and complex.
Advantages of Spiral Model

Avoidance of risk is enhanced

Strong approval and documentation control

Implementation has priority over functionality

Additional functionality can be added at a later date

Disadvantages of spiral model

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Strategic Planning and Systems Development

Highly customized limiting re-usability

Applied differently for each application

Risk of not meeting budget or schedule

Possibility to end up implemented as the waterfall framework

Several development processes or methodologies have been derived from the

classical waterfall models. Since waterfall model does not provide or strictly provides the
rooms for business requirement changes, developing certain applications in the
application portfolio may suffer from the lack of flexibility when process changes or new
business strategic concepts have to be implemented immediately. The modern
development models have been customized to provide the high level of efficiency and
effectiveness when moving backward or forward across the development stages.
Pressman (2007) categorized the prominent evolutionary models into incremental model
and spiral model.
According to Pressman, incremental model takes the view of the application
development as a set of components or features which carries their own deliverables.
Each component is chunked into different incremented versions which are developed
incrementally and independently. For one of its examples from Pressman (2007), wordprocessing software developed using the incremental paradigm might deliver basic file
management, editing, and document production functions in the first increment; more
sophisticated editing and document production capabilities in the second increment;
spelling and grammar checking in the third increment; and advanced page layout
capability in the fourth increment. (Pressman, 2007, p.35). By subdividing the
components in the application into various versions, development can be prioritized and
the critical version of the application can be highly focused. This model may be suitable
for upgrading the operational system in the application portfolio. That is because the
critical or prioritized versions will be developed in the fast manner since their sizes are

Strategic Planning and Systems Development

smaller as compared to the full versions, and users can start using the critical version as
soon as the deliverables are complete which leads to the decreasing of down time in
waiting for the whole system to be complete. Furthermore, application portfolio varies in
size. If the application is large, the development will face with the biggest challenges of
high cost and insufficient man power. Incremental model can help relieve this situation in
which the big scale application can be developed on demand basis with the amount of
sufficient and affordable resources. As pointed out by CMS in their report Selecting a
Development Approach (2005), incremental model is appropriate in large project where
the requirements are not well understood or are changing to the external changes,
changing expectation, budget changes or rapidly changing technology. (CMS, 2005)
Unlike waterfall model, iterative development approach enables
development to loop until the applications or products meet the
demands. According to Summerville (2001), iterative model consists of
a few manageable stages of development, basically the analysis and
design and implementation. The implication from (Summerville, 2001)
is that iterative model gives prides to customer views on the system,
which means that the development will go iteratively until the
customers accept the application. The characteristics of iterative
model may be useful in developing the uncertain application,
turnaround application or the products that target the customers, or
the customer value added application. In term of application portfolio
management, iterative model allows the business entity to decide to
continue or stop the development in each revisiting. This is true in the
business environment where the products can get out of demands at
anytime receiving the additional pressure from the competitors
products.

Continue

putting

the

investment

in

developing

the

application portfolio will result in low ROI since the application being
developed gained little popularity from customers. The white paper
done by IBM in their white paper The Future of IT application
development (2007) supported the fact that Iterative development

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Strategic Planning and Systems Development

allows organizations to smoothly blend resources across the project

lifecycle, making more effective, efficient use of business analysts,
subject matter experts and developers. And it enables organizations to
leverage global resources as needed to outsource basic, functional
tasks. (IBM, 2007) It also highlighted that In addition to iterative
approaches, organizations will increasingly adopt lean development
models that minimize waste. As found in (Summerville, 2001) Rapid
Application Development (RAD) is one of methodologies, which
conforms to the iterative model. Based on the characteristics and
strengths of iterative model mentioned, iterative model should be best
aligned to applications that target in providing added values to
customers for the fact that it centers on the customer views of demand
and satisfaction and that it accelerate the speed of development.
However, since great analysis and evaluation are put on customer
perspectives, many experienced analysts and skillful developers are
required which may possibly lead to the high cost of developing such
an application. It may not be appropriately aligned to the application
portfolio running under the small or medium organization at all if the
size of the application is too large.
Another modern development approach mentioned by Schach (2007) is the incremental
and iterative model. This model incorporates both incremental and iterative nature into
application development. According to Schach (2007), applications developed using this
model pass through different stages. Every stage has the same development phases which
consist of basic flows, analysis, design, implementation and testing. Each stage
emphasizes different phase. The developing products are increasingly modeled and
invented until they reach the transition stage. This hybrid mode is superior in term of
requirement changes and strategic application development as compared to classical
approaches such as waterfall or linear models. The waterfall models like SSADM do not
allow the rooms for requirement changes. In classical approaches, all the requirements
must be defined and specified at the early stages. If the requirements are modified or

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changed, the development must move backward from the current stages to the analysis or
requirement stages which lead to complexity and time consuming. In developing the
strategic application, one of the applications in the portfolio, incremental and iterative
model may contribute the most in helping the development successful since this model
allows developing the application little by little, and take into account all the changes on
demand. The strategy of the business must be flexibly changed overtime in order to
counter the product entry to the market from the competitors. Seeing this fact, the
structure or waterfall model might not be best aligned with this type of application.
According to Ward & Griffiths (1996), the object oriented modeling is a method utilized
in the incremental and iterative development model, which looks at business requirement
and concepts as objects. Ward & Griffiths (1996) also pointed out the benefits of business
application using OOP in this development model, objects, the building blocks of the
applications, are not indestructible, but they are built to last, and their basis, the business
attributes and behaviors, will be expected to persist for a long time, even if the business
operations constantly evolve over time to take advantage of newer, better methods.
(Griffits & Ward, 1996) Additionally, in the book Information System Development
(Avison & Fitzgerald, 2006) presented the Rational Unified Process (RUP), the
methodology based on incremental and iterative model, which uses OOP as its weapon
for development. Avison and Fitzgerald (2006) made a strong implication towards RUP
and its model. Implication is that the information systems developed using object
oriented techniques will be robust and error-free and quicker and cheaper to achieve.
They should also be easier to maintain and hence address another problem that has
bedeviled traditional software development. (Avison & Fitzgerald, 2006 ). However,
incremental and iterative model have less explanation on when the iteration should be
complete and how different versions of application can be managed during the
development. This problem can adversely impact the certain applications in the portfolio
especially when the application portfolios are large and constrained from the workforce.
For example, the customers in B2C system may consider of making a switch if the B2C
system is partially released with different characteristics each and every time. Therefore,
this model cannot overlook the version management and proper project management
principles and process before being put into practice.

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3.3 Issues in applying development approaches to the application portfolio

Although most of the existing researches such as those mentioned in previous
sections imply the suitability of aligning the development models with different types of
applications in the portfolio, there are some constraints that act as barriers preventing the
adaption of development models which leads to the side effects of alignment. This
research section will attempt to look at how organization and business structure influence
the alignment, and the issues in aligning the development models to complex application
portfolios.
Ward and Peppard (2002) pointed out the survey of 20 US companies done by
Lederer and Mendelow regarding the contribution of management to the successful IS/IT
development. The survey showed that top-management commitment was a prerequisite
for success, but it was often difficult to obtain. Top management lacked awareness of the
impact IS/IT is having generally and did not understand how IS/IT offered strategic
advantages. They tended to see Computers in purely an operational context, (Ward &
Peppard, 2002, p. 126). It stated that top management looked at computers as just the
operational or functional support system taking for grated its benefits in other types of
application portfolio such as strategic application. The top management point of view can
indirectly lead to adapting strictly and only the formal approach of application portfolio
development. Since the formal approaches such as SDLC can work fine for the
operational system, the decision to adapting the other flexible development models such
as iterative and incremental model might be bottle necked in the top level management
since it traditionally falls into the fallacies that application portfolio is just the
computerized system that requires only a particular development approaches such as
waterfall model and structure approaches.
In addition to the top management fallacies, resource constraints and length of
time or time and cost constraint in development can also possibly and largely contribute
to the inflexibility of adapting the development models, which is evidenced in the Earls
survey of 21 UK companies, (Ward & Peppard, 2002). Based on the lesson learned in
Earls research, it is difficult to justify solely the suitability of the development

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approaches in relation to the application portfolio if the applications to be developed are

large scaled and the resources to support the development are inadequate. In this case, the
development approach alone may not help, but the proper project management
methodologies such as PRINCE should be invoked in the alignment so that the available
resources can be properly allocated and the development schedule can be effectively
managed.
Another issue in developing the application portfolio is that some sets of system
are redundant. In a corporate strategy, each unit of business may have different strategies
applied: low cost, differentiation or targeting the niche market. Again as mentioned by
Prepard and Ward, two business units within a corporation may use the same types of
system but their strategic visions of the system might be unique. For example,
administrative work can use the common software packages, Manufacturing and
financial services organizations will require different systems, but several types of retail
companies in different market sectors could easily use common accounting
system,(Ward & Peppard, p.334). The important thing to consider is whether or not the
system should be developed independently. To avoid developing redundant system
aiming different strategic values in business units, the development approaches should
model the system as one component that can be later distributed to the different business
units. In previous section, OOP paradigm with the incremental and iterative model can
address this problem and provide the solution. Anyways, tailoring the component to
absolutely suit the business unit may take time and cost which can result in down time.
So, the priority setting for critical components to be developed should be taken into
consideration. This is the point where the invocation of the effective project management
methodologies should be invoked again.
The research on alignment between business and IS strategy done by (Sabherwal
& Chan, 2001) implicitly indicated that the business types inherently had potential
influence on the application portfolio development. Sabherwal and Chan (2001) used
(Miles & Snow, 1978) concepts of business typologies consisting of Defender, Prospector
and Analyzer to align with the IS strategy. He mapped the attributes of the four business
types to the attributes of the IS strategy. In his research, it was found that different
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Strategic Planning and Systems Development

organizations with different types of business had different degrees of emphasis on each
IS attributes or application portfolio in this current study context. For example in term of
alignment, the Defender tends to give application development priority to the operational
support system and decision support systems because it targets the specific core products
with less attention to differential strategy; whereas, Analyzer looks for the market
information system, inter-organizational system and decision support system. The study
shows the relatively accurate probability of 0.6 at least for each alignment.
Based on Sabherwal and Chan (2001) research, the development models in certain
organizations may constraint to the characteristics of the business types. The Defender
which produces the core products may not have any major issues in development models
or methodologies because the application portfolio is designed particularly for internal or
operational uses within the organization just to enhance the product development process
and to speed up product delivery. The strategic application may not be the area of interest
in this type of business. The waterfall model and structure methodologies which give
prides to full details and high quality of products should be aligned well to its application
portfolio since the Defender does not suffer the pressure of the strategic requirement
changes and the turn-around effects. Therefore, it can be concluded that the rest of
business types also influence on the adapting or aligning the development approaches
with the application portfolio.

3.4 Development approach and application portfolio alignment

There are some certain researches on the alignment of the development
approaches with the application portfolio. Most of the researches do not explicitly
address the issues of alignment, but only the surrounding issues in the alignment process,
specifically the alignment of the application with the business strategy. Interestingly, this
actual research area was brought in by Ward and Peppard (2002) who presented the
details of the alignment recommendation and its suitability. Avison and Fitzgerald (2006)
also came up with the suggestion of the methodologies for application development in the
business context. Other various researches also have contribution to this area. This

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section will present schools of thought and facts of aligning the development with the
application portfolio from various existing researches.
Ward and Peppard (2002) pointed that alignment should be dynamically based on
the criteria of complexity, speed of development, cost, quality and the strategic values of
the application not solely on the characteristics of development approach.
First, the applications in the strategic areas should be developed using the
incremental model, iterative model, or prototyping model since development process will
be extremely accelerated, (Ward & Peppard, 2002). Ward and Peppard (2002) justified
that strategic applications need to be developed in the fast manner and require the flexible
design which is crucial in keeping the competitive advantages. This should be reasonable
because strategic applications are targeted for the competitive advantages in which cost is
not the big issue. On one hand the alignment of strategic applications with the mentioned
models sounds logical as some of the first IS/IT movers such as American Airline and
McKesson did by putting considerable investment in developing the applications and
they were successful, but on the other hand the Small and Medium Enterprises (SMEs)
may argue that they cannot afford such an investment because these models requires
skilful analysts, developers and expensive tool sets like CASE tools. As a result, this
alignment does not address all the surrounding issues. There is a need to tolerate the cost
of investment in development. To minimize the cost, Steria (2009) brought in the concept
of categorizing the application according to business values and outsourcing model.
Once categorized it becomes clear which applications will require investment as a
matter of course and where there is potential for cost savings, through a move to a
shared service or outsourced model, for example, (Steria, 2009).
Second, for the operational application, Ward and Peppard (2002) found the fact
that formal structured approaches are generally used in the in-house development because
the operational application must satisfy the business process which is the core function of
the business. It means the high quality of the operational system must be maintained in
order for the business to cater the customer needs smoothly. They also added that the
business process is modified from time to time which requires the ongoing maintenances

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Strategic Planning and Systems Development

and large IT team to support it. From their points of view, the operational application
should be aligned well with just the formal structure approach if the business process will
not change very often. Anyways, what if the other models such as incremental model and
iterative model are put into practice? According to Avison and Fitzgerald (2006),
incremental model is crucially utilized when certain application demand is immediate,
and iterative model is commonly used when the requirements often change and the
requirements are not clearly identified. As a result, the formal structure approaches
should gain the pride because in this era the business process will not be harshly changed
because of the globalized and standardized process. For example, it is the fact that the
banking processes in most of the banks conform to the standard which hardly change.
Third, most of the support applications nowadays do not required the in-house
development at all. As stated in the Ward and Peppard (2002), considerable software
packages in the market are ready to be used to support the functions or individual tasks in
the process. The package should not be customized: business processes and procedures
should be amended to fit the package, (Ward and Peppard 2002). For example,
purchasing Microsoft Office to facilitate the function in the business is obviously cheaper
than developing the whole Office software package. Pressman (2006) also supported the
idea of purchasing the off-the-shelf package to be used if it really justifies the cost and
time of software development, which is termed as not reinventing the wheel. However, in
some situation the package may need to be tailored to fully support the functions. If it is
the case, Ward and Peppard (2002) again suggested that the organization should see if the
tailoring can be outsourced using the appropriate outsourcing models avoiding
investment in the in-house development. Therefore, for the support application, it is
strongly emphasized that in-house development should be in low priority.
Finally, for the high potential or turnaround application, it is advised to align it
with the development models that minimize the cost and accelerate the speed of
development (Ward & Peppard, 2002). That is because this type of application is
uncertain for the future investment and the opportunity of getting the acceptance from the
customers and users are ambiguous. According to Ward and Peppard (2002) again, high
potential application should be viewed as the independent unit during the development so
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Strategic Planning and Systems Development

that when the application is going to be abandoned it will not have impact to the existing
application in the portfolio. In this sense, the development approaches for the high
potential application should be iterative model, prototyping and incremental models. The
waterfall model or structure model should not be used in developing this application
because this model walk through all the details of development processes which are very
costly, and if the application is going to be abandoned all the invested efforts and cost
will be totally wasted. Anyways, the opportunity of waste can happen also when the
application to be developed is complicated and technical research is greatly involved. To
alleviate this problem, the development approaches should take into account not only the
characteristic of the model but also surrounding factors that contribute to the success or
failure of the development. Pressman (2006) came up with the matrix for measuring the
opportunity of success in application development. He suggested that before the
development process takes place, the 4Ps (People, Process, Project and Product) should
be deeply analyzed. He pointed that the product to be developed should be compared
with the similar past project to see the rate of possibility and applicability. This fact draws
into the conclusion that for the uncertain applications like high potential application, the
development approach should incorporate with 4Ps or similar past project matrix and
should be invoked late after 4Ps are deeply analyzed.

4. Conclusion
To sum up, various issues including the problems in defining the application
portfolio have been identified and brought into discussion and analysis. Based on this
research, definition of application portfolio was defined as the collection of applications
that support business process and create the strategic values to the business. The
characteristics of the development approaches have been explored and critically analyzed
in the domain of business needs and values. This research concludes that all the
development approaches such as waterfall model, iterative, incremental and those
mentioned in the analysis section have the equal weight although some are old because it
still can be functional and bring back success to the application development and
business needs, but the context of aligning them to the application portfolio must be taken
into justification before adapting any of them by looking at the surrounding factors such
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as organizational factors, size of the business like SME, top level management support,
resource constraints and application redundancy. Suggested methods of looking at them
could be PEST analysis and 4Ps. The missing areas of the previous researches were
explored in depth using the deductive ways. However, these missing areas were based on
the deductive approach which is not very accurate. The further research should
encompass the inductive approach where the empirical analysis should be held until the
relatively accurate artifacts are found. For the final conclusion, it is recommended that to
align the development approach with the application portfolio, the organization should
consider all the mentioned issues. Moreover, currently there are several new and practical
methodologies such as agile and XP. It is suggested that the later research should take a
look into these methodologies whether or not they can be aligned effectively within
different application portfolios in different contexts of business.

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