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Managing The Application Portfolio: Strategic Planning For Information Systems
Managing The Application Portfolio: Strategic Planning For Information Systems
for Information
Systems
Third Edition
CHAPTER 7
Managing the
Application Portfolio
John Ward and Joe Peppard
Managing the Applications
Portfolio
• Set of known requirements and potential
Applications portfolio concept is a means
of bringing together existing, planned and
potential Information Systems and their
business contribution
• Usefulness of “Matrix” approach is borne
out by the ease with which management is
willing and able to categorize systems in
this way
Managing the Applications
Portfolio
Conclusions from Various Matrices and
Models
– A number of matrices developed to help management
decision making with respect to IS/IT planning,
utilisation and resourcing
– Ideas and concepts are generally complementary, even
convergent
– More recent versions of the “matrix” devised to address
developments in the 1990s are also very similar -
terminology is different
– Composite matrix - see fig. 7.1 pg. 301
Composite Matrix
– Composite Matrix based on:
• The Sullivan matrix considered a range of IS/IT
management issues that depend on the
combination of infusion and diffusion of IS/IT in
the organisation
• Infusion is the degree to which IS/IT has
penetrated a company in terms of importance,
impact or significance
• Diffusion is the degree to which IS/IT has been
disseminated or scattered throughout the
company
Sullivan matrix
Sullivan matrix
• Identifies need for new, demand-driven
decentralised approaches to improve
management of strategic and high
potential quadrants
ITAA Matrix
• Information technology Assessment and
Adoption Matrix ITAA (Munro and Huff)
– considers how organisations have adopted
IS/IT as a competitive weapon based on
premise that most organisations are either:
– technology-driven – looking for ways of
deploying new technology to advantage
– Issues-driven – looking for new business
opportunities within known possibilities of
existing technology
ITAA Matrix
Technology Normative
High
Driven Ideal
Technology
Emphasis
Breakthrough Operational
High
Strategies Excellence
Business
criticality
Leading edge
Centrally planned
Free market
DEMAND
CENTRALISED DECENTRALISE
D
Relationship of applications portfolio and generic IS strategies
Generic Application Management
Strategies
• Relationship between generic strategies
and styles of management proposed by
Simon (1995):
– Boundary control - appropriate when
objectives and constraints are clear – allows
project team discretion about how best to
achieve required outcome – correlates with
aspects of free market and scarce resourcing
Generic Application
Management Strategies
• Styles of management cont.
– Diagnostic control - implies clear, prescriptive control
based on sound knowledge of what has to be done to
achieve performance targets – appropriate for key
operational projects - monopoly
– Interactive control – appropriate where there is a vision
of the potential ‘end point’ but much to learn in order to
define, scope and develop appropriate solution –
similar to concept of central planning
– Belief system – project team is expected to create a
new and innovative application that will be closely
congruent with business strategy and relate to needs of
strategic investment – also similar to central planning
Generic Application
Management Strategies
• Generic strategies have primarily two uses in
IS/IT strategy development:
– Diagnostic – way of assessing current
strategies being used – clear way of
expressing how IS/IT applications &
investments are actually being managed
– Formulative - used to identify a migration
path toward the mix of approaches required
in the future – attractive when central
planning is needed
Generic Application
Management Strategies
• Relating approaches to IS strategy
formulation & generic implementation
strategies
– Should be a logical relationship between
HOW an organisation plans its IS investments
and approach it adopts for implementation
– Correlation is not perfect and there are some
anomalies
Generic Application
Management Strategies
• Relating approaches to IS strategy formulation &
generic implementation strategies cont.
– Organisation led - implies cross-functional views of
IS to ensure investments are targeted on business
objectives and key themes implied by the objectives
(follows centrally planned approach)
– Business led - IS investments driven by plans for
particular business areas, should lead to uncovering
high potential & in due course strategic applications
(aligns with free market strategy)
Generic Application
Management Strategies
• Relating approaches to IS strategy formulation & generic
implementation strategies cont.
– Administrative approach - main objective is budgetary
control of IS/IT which can result in a scarce resource
approach to implementation
– Method driven - involves highly analytical and
structured approach to determining needs and priorities
for investment (monopoly)
– Technology led - and leading edge are very similar but
anomalous when placed in portfolio context. Difference
is one of perception and time. Implies incremental
adoption of technology as available and proven to
enable technology efficiency
Portfolio, Planning and Generic
Strategies Evolution
(alternative strategy)
Strategic High Potential
4 BUSINESS LED
5 ORGANIZATIONAL and Free market (or
and Central Planning Leading Edge
technology)
3 ADMINISTRATIVE LED
and Monopoly and Scare
Resource
1 TECHNOLOGY LED
2 METHOD LED and Scare Resource
and Monopoly (Free Market) or even
Monopoly
Return to
Re-engineer for Re-evaluate standards
long-term use benefits & costs
Fully integrated
with other Evaluate lower-cost
applications for options to meet core
effectiveness needs
DEVELOPER ENTREPRENEUR
CONTROLLER CARETAKER
BUSINESS UNIT 3
BUSINESS UNIT 2
BUSINESS UNIT 1