Companies that rely on their information systems to provide a competitive advantage must employ development methodologies that: facilitate innovation, improve customer and supplier relationships, and enable change at the speed of business. Potential development approaches include traditional, object-oriented, and vision and value oriented methodologies. The recommended approach is a hybrid methodology that incorporates agility, adaptability, reuse, collaborative thinking, and evolving innovation. At the foundation of this approach are agile development philosophies and practices, and the system designer. From an architectural perspective, the approach utilizes SOAs and SOMA methods. And, design thinking and innovation evolution cycle principles are incorporated to drive system innovations.

1. Selecting a Development Approach for Competitive Advantage 1
Running head: Selecting a Development Approach for Competitive Advantage
Selecting a Development Approach for Competitive Advantage
Matthew L. Todd
Bellevue University
CIS620-T301
Professor Cass

2. Selecting a Development Approach for Competitive Advantage 2
Abstract
Companies that rely on their information systems to provide a competitive advantage must
employ development methodologies that: facilitate innovation, improve customer and supplier
relationships, and enable change at the speed of business. Potential development approaches
include traditional, object-oriented, and vision and value oriented methodologies. The
recommended approach is a hybrid methodology that incorporates agility, adaptability, reuse,
collaborative thinking, and evolving innovation. At the foundation of this approach are agile
development philosophies and practices, and the system designer. From an architectural
perspective, the approach utilizes SOAs and SOMA methods. And, design thinking and
innovation evolution cycle principles are incorporated to drive system innovations.

3. Selecting a Development Approach for Competitive Advantage 3
Selecting a Development Approach for Competitive Advantage
Organizations that utilize an in-house development approach do so because their systems
provide them a competitive advantage. Some custom applications are developed and maintained
for internal use, or for use as an inter-organizational application. Other custom applications are
developed and evolved for resale to the organization’s customers. Companies that rely on their
information systems to provide a competitive advantage must employ the best development
methodologies to facilitate the innovative change needed to differentiate themselves from their
competition, and to improve customer and supplier relationships. And, they must be able to
adapt their systems at the speed of business to respond to changes dictated by their competitors,
customers, suppliers, and other external forces (Laudon & Laudon, 2007, p. 96-103).
The first section of this paper describes various systems development methodology
alternatives that can be employed to build custom applications. The second section of this paper
defines the recommended approach, toward resolving the aforementioned problem.
Alternatives
There are many systems development methodologies that have been used over the years to
analyze, define, design, build, test, implement, and maintain custom computer applications.
These approaches include (Jacobsen, Booch, & Rumbaugh, 1999, p. 4-5; Sliger, 2006; Turban &
Volonino, 2009, p. W281-W282; Woodward, 2009, p. 3-6):
- traditional development methodologies, like the waterfall development methodology,
that employ a plan driven approach, where the desired feature set is defined at the
beginning of a project, and cost and schedule are manipulated to adhere to the pre-
defined requirements

4. Selecting a Development Approach for Competitive Advantage 4
- object oriented approaches, like the Rational Unified Process, which offer an extensive
modeling language and development framework that combines a plan driven phased
approach with iterative refinements
- vision and value driven approaches that stress agility, adaptability, reuse, collaborative
thinking, and evolving innovations; with these approaches timeframe and resources are
usually fixed, and the feature set is adapted based on the value each feature adds to the
overall vision
Waterfall Development Approach
The first systems development methodology under consideration is the waterfall
development approach. According to Gartner, the waterfall approach is used 56% of the time
when a formal development approach is required (Prentice, 2009, p. 2). The waterfall approach
is a sequential approach where each project phase is completed prior to initiating the next phase:
analysis and requirements definition is completed and approved, then a solution is designed and
approved, then the solution is constructed and tested, and finally the solution is implemented
after user acceptance is obtained (Whitten & Bentley, 2007, p. 89-92). The strengths of the
waterfall approach are: it offers a more strict framework which provides support for less
experienced project staff, it enables up front budgeting for the entire project, and it encompasses
well defined milestones for measuring progress against a baseline plan. The weaknesses of the
waterfall approach are: it is inflexible and slow, it depends on early identification of all
requirements, problems might not be identified until late in the project life cycle, it promotes the
chasm between end users and systems developers, and it doesn’t respond well to unknown and
changing requirements (CMS, 2005, p. 2; Woodward, 2009, p. 3).

5. Selecting a Development Approach for Competitive Advantage 5
Rational Unified Process
The second methodology alternative is the Rational Unified Process (RUP). RUP was first
released in 1998. It evolved from the Ericsson Approach which was used to model systems in
the 1960s using a set of interconnected diagrams. The Ericsson Approach was the foundation for
the Rational Objectory Process, which eventually evolved into RUP. RUP uses a set of models,
and constructs, called the Unified Modeling Language (UML) as the foundation for defining and
designing systems and data structures. The RUP approach is driven by user wants and needs,
which are modeled via use cases to define a system’s functionality. It is architecture centric,
meaning a high level architecture, providing the system’s form, is produced or enhanced as early
as possible before proceeding into detail design and construction. RUP is iterative and
incremental, where iterations represent steps in the overall process, and increments represent
product growth. The approach has distinct phases: Inception, Elaboration, Construction, and
Transition. And within each phase there may be one or more iterations that proceed through
requirements, analysis, design, implementation, and testing (Jacobsen, Booch, & Rumbaugh,
1999, p. xx-xxvi, 3-13). The strengths of RUP are in its applicability to large system
development projects where iterative refinements and incremental delivery are required. It has
many of the plan related advantages of a waterfall development approach, without the
shortcomings of a purely linear approach (Woodward, 2009, p. 4). The robust incremental
nature of RUP, however, can be a disadvantage when trying to employ an efficient streamlined
approach for projects of short duration where architectural and integration risks are low (CMS,
2005, p. 6). Designing an application using object-oriented techniques and UML can entail the
development of many different models, including: class diagrams, collaboration diagrams,
sequence diagrams, state diagrams, and various architecture and interface diagrams. And this is

6. Selecting a Development Approach for Competitive Advantage 6
prior to writing a single line of code. According to Meiler Page-Jones (2000, p. 71-72), object
orientation is both an organizational and technical transition. Jones says that it’s important to use
UML and object orientation as a means to reach your goal, not as an end in itself. “If you don’t
keep your goal in mind, then object orientation with all its transitional costs (financial,
organizational, social, and emotional) will seem like an expensive boondoggle.”
Agile Development Philosophy
The third systems development alternative, agile, is more of a development philosophy
than it is a development methodology, although there are distinct agile based methodologies
including Scrum, Extreme Programming, and feature driven development (Keston, 2009b, p. 2).
The core principles underlying the agile philosophy are (Cockburn, 2002, p. 148, 216):
- a focus on individuals and their face to face interactions, because this is the fastest and
least expensive method for exchanging knowledge and information
- the delivery of working software as the primary goal and only meaningful deliverable
- collaboration between developers and customers throughout the project, which reduces
the need for intermediate deliverables and the formalities associated with “heavy”
methodologies
- adaptation to any change that brings value to the project, system, or business
In addition, the agile approach depends on the use of small self-managed teams, pragmatic
development choices, code refactoring, and frequent testing. Code refactoring leads to simpler
software, and frequent testing leads to reduced risk (Keston, 2009a, p. 2-4). Smaller teams
require less methodology and formality, which helps to reduce cost and improve overall
efficiency (Cockburn, 2002, p. 149). Agile views software development as an exercise in
communication, understanding, and invention, where the ampleness of the delivered solution is

7. Selecting a Development Approach for Competitive Advantage 7
the ultimate goal and achievement. Agile presumes that the best systems are built by individuals
in collaboration with other individuals, and that making mistakes and failure are a natural part of
the human condition and software development process. For those reasons agile depends on an
incremental, iterative, time-boxed approach to deliver value to the business (Cockburn, 2002, p.
28, 34, 48-49).
An agile approach requires developers with a broader overall skill set, strong business
acumen, and the ability to adapt to an informal approach and changing circumstances. Agile is
best suited for innovative initiatives where requirements are unknown and likely to change
(Keston, 2009a, p. 4-5).
Organizations that are able to adapt to the agile philosophy and approaches experience
significant increases in productivity, and substantial development cost reductions. A 2008 study
conducted by QSM Associates concluded that organizations using agile approaches are 16
percent more productive, and able to get products to market 37 percent faster, than organizations
that use traditional development approaches (QSM, 2009, p. 1). A second study, conducted by
Forrester Research in 2004, concluded that the use of ThoughtWork, Incorporated’s agile
development approach and tools provides organization’s a three year ROI of between 23 and 66
percent, with a 13 to 15 month payback period (Forrester, 2004, p. 4, 6).
Service-Oriented Modeling and Architecture
The fourth application development approach alternative is service-oriented modeling and
architecture (SOMA). This approach considers software functionality as a service that is made
available by a provider, through an easy to use interface, to a service consumer. Knowledge
about available services and service operations is made available to service consumers through
published service descriptions. Service descriptions are searchable and they provide all the

8. Selecting a Development Approach for Competitive Advantage 8
information needed by a consumer to connect to and use the operations of any available service.
Services can be developed to expose functionality provided by all types of applications: Web-
based applications, client-server applications, and mainframe applications. Service-oriented
architectures (SOA) provide many advantages for both information technology (IT) and business
professionals. For IT, SOAs create a framework of loosely coupled, functionally cohesive
components that can be easily used in new combinations to deliver new functionality to the
business. For business stakeholders, SOAs provide a technology that allows the business to
respond effectively and efficiently to changing demands (Arsanjani et al., 2008, p. 377-379).
The IBM SOMA methodology is comprised of seven phases: Business modeling and
transformation, solution management, identification, specification, realization, implementation,
and deployment, monitoring and management. SOMA phases are not linear. SOMA is an
iterative and incremental approach where the breadth and depth of method usage depends on the
objectives, scope, and risks of a project. SOMA can be used to develop everything from flexible,
easy to maintain enterprise architectures, to robust business applications, to integrating software
components (Arsanjani et al., 2008, p. 381-383, 395).
SOAs can provide substantial cost savings in the development of software. The level of
component reuse with SOAs is 2.5 times greater than with other software development
approaches. And, although the cost associated with building services is 20% higher than the cost
associated with building non-reusable software, the savings associated with service reuse pays
for the increased development cost after 1.3 uses. Every reuse after the breakeven point
produces a 90% cost savings when compared to traditional software development approaches
(Poulin & Himler, 2006, p. 2-3).

9. Selecting a Development Approach for Competitive Advantage 9
Design Thinking and the Innovation Evolution Cycle
The final two alternatives are design approaches that depend on observation and the
experience gained through application usage as the driving forces for innovation. The first
approach, design thinking, originates product innovations by gaining an understanding of what
people need and want in a product through direct observation by multi-disciplinary teams
(Brown, 2008, p. 86). The second approach, the Innovation Evolution Cycle, depends on
designers and users working collaboratively to evolve information systems that meet the ever
changing needs of the operational environment (Davern & Wilkin, 2008, p. 133).
Design thinking follows an iterative and incremental approach for product design. Design
teams are comprised of multiple skill sets, and areas of expertise, with the designer(s) at the
center of the process. A design thinking project begins with the inspiration phase, where
observation and group brainstorming are used to determine what problem or opportunity the
project will focus on solving. From inspiration a project proceeds to ideation, where the multi-
disciplinary team uses brainstorming and prototyping to generate ideas and observable models of
possible solutions. A project then iterates between inspiration and ideation until a desired
solution is reached. Once a desired solution is reached the project proceeds to the
implementation phase, where the prototyped solution is transformed into a finished product
(Brown, 2008, p. 87-90).
IDEO, a product design consulting company, and its predecessors, David Kelley Design
and ID Two, have used the design thinking approach, over the last 30 years, to develop
numerous innovative products and processes including: Apple’s first mouse, the first laptop
computer, the Palm V PDA, and the Oral-B toothbrush (Brown & Wyatt, 2010, p. 33). Design
thinking is a light and flexible approach that, much like agile methods, depends on the skills and

10. Selecting a Development Approach for Competitive Advantage 10
expertise of the project team to determine what path the project needs to follow to deliver the
desired solution. The approach depends on designer involvement throughout the project: from
inspiration to implementation. And it relies on heavy user involvement, from a multi-
disciplinary team, and an experimentation mentality from all project team members (Brown,
2008, p. 87, 90).
The final approach under consideration, the Innovation Evolution Cycle, is similar to
design thinking in that it uses observation, and collaboration, as the driving forces toward
product growth. It puts the designer in the role of observing and understanding how users
interpret and use systems to get their work accomplished. Gaining an understanding of real
world use is the first step toward the innovative evolution of a system. The second step involves
cooperative interaction between designers and users to encourage innovative solutions to solve
system inadequacies. If employed effectively this approach should lead to a continuous cycle of
innovative system improvements. The ideal cycle begins with conformant use of an application,
followed by user led innovation to meet changing job needs, followed by the incorporation of
innovations into the system. Then the cycle begins again, and repeats continuously over the life
of the system (Davern & Wilkin, 2008, p. 133, 135).
Recommendations
The recommended development approach, for developing applications that provide a
competitive advantage to an organization, is a hybrid approach which incorporates agility,
adaptability, reuse, collaborative thinking, and evolving system innovations. This hybrid
approach should, at its foundation, be based on the agile development philosophy and practices.
An agile approach works well in environments where software must be adapted quickly to meet
the changing needs of the business (Schwalbe, 2010, p. 60-61). In addition, an agile approach

11. Selecting a Development Approach for Competitive Advantage 11
adheres to the Standish Group’s Chaos Report “Bridge to Success” recommendations: deliver
software early and often, follow an iterative software growth approach, and keep projects as
small and as simple as possible (Standish, 1995, p. 8).
From an architectural perspective, the hybrid approach should utilize SOAs and SOMA
methods. SOMA “SOA business modeling, transformation, and solution management” should
be used to ensure alignment with the business and evolving SOA architectures. And SOMA
“SOA implementation, deployment, monitoring, and management” techniques should be used to
drive the reuse and production implementation of services. Finally, design thinking and
Innovation Evolution Cycle principles should be incorporated to help drive system innovations.
Design thinking should be used to drive application visioning and significant product growth.
And, the Innovation Evolution Cycle should be incorporated to facilitate continuous innovations
toward conformant application use.
The agile hybrid development approach should be rolled out following a staged
implementation approach, starting with a single team, and a single pilot project (Rally, 2009, p.
1). Throughout the staged rollout it is imperative that the Chief Information Officer (CIO) play
the role of chief advocate and change leader. It will take time for this approach to begin reaping
the benefits that full agile practices and SOA architectures promise over time. There will be

12. Selecting a Development Approach for Competitive Advantage 12
resistance by some in the organization, and a steep learning curve to overcome for others. The
business will have to adapt to full time user involvement on projects, and IT staff will have to
develop a wider range of skills (Barretta, 2009).
During the pilot project the organization should use a community or freeware version of
agile methods and tools. And consulting expertise should be used to help integrate the various
aspects of the hybrid approach. The first project should be viewed as, primarily, a learning
exercise. The scope of the pilot should be a small, non mission critical application, or
application sub-system. The goals of the pilot are to master the collaborative, iterative approach,
and to prove that the approach is a good fit to the organization. The team should be made up of
IT staff and business experts who are enthusiastic about the adaptive, integrated, and innovative
nature of agile and design thinking. The IT team members should have the requisite
development skills necessary to design, build, and test the software. And, all team members
should exude the design thinker characteristics: empathy, integrative thinking, optimism,
experimentalism, and collaboration (Brown, 2008, p. 87; Keston, 2009a, p. 6; Rally, 2009, p. 1).
The second stage of the rollout involves multiple teams using the agile hybrid approach on
selected projects. This will require upgrading from a freeware or community version of agile
methods and tools to an integrated toolkit that will support multiple teams. The goals of the
second stage are to master multiple projects running at the same time, release management, and
to prove that the new approach can deliver value to the organization. Once the organization has
accepted the new approach, and adapted to the intricacies of agile development, it is time to
begin using the approach throughout the organization (Rally, p. 2). Team members, from
completed projects, should be disbursed to the new teams to help facilitate the transfer of
knowledge, and lessons learned.

13. Selecting a Development Approach for Competitive Advantage 13
One of the critical success factors to the expansion of the agile hybrid approach is the
identification of the designers/ developers that can facilitate the success of each project.
According to Dr. Fred Brooks, hiring and nurturing great designers is the most significant step an
organization can take to improve their software design and construction (Brooks, 1995, p. 202).
This depends on the realization that the designer/ developer should be involved, as the center
figure, on every development effort. This is especially important in agile based development
where documentation is minimal and continuous collaboration and communication, throughout
the life of a project, is critical to its success (Cockburn, 2002, p. 216-218). The ideal iteration is
like a surgical operation, with a small team supporting the lead designer/ developer, much like a
surgical team supports a chief surgeon (Brooks, 1995, p. 32). This encourages an integrated
thinking approach that is critical to agile development, and is the most effective and efficient
mode of operation for humans (Drucker, 1954, p. 293).
Costs-Benefit Analysis
The costs directly related to the implementation of the agile hybrid approach are consulting
costs, training and education costs, the costs associated with the acquisition of agile methods and
tools, and the costs associated with any hardware required to run the agile tools. The estimated
benefits associated with the agile hybrid approach, when compared to traditional approaches,
include: development team productivity improvements of between 16 and 25 percent, the ability
to get products to market 37 percent faster, 2.5 times more software reuse, and an improved
ability to envision, design, and delivery innovative software products (Brown, 2008, p. 92;
Poulin & Himler, 2006, p. 3; QSM, 2009, p. 1).
Using a cost benefit model (see table 1) that is based on the findings from the QSM
associates’ The agile impact report: proven performance metrics from the agile enterprise (p. 1-

14. Selecting a Development Approach for Competitive Advantage 14
6), the use of an agile based approach for the development of software products can be expected
to provide a 3-year ROI of 200%, with a payback period of less than 2 years. The model
assumes: a discount rate of 8 percent, a development organization consisting of 40 developers,
average salary and benefits of $125,000.00 per year per developer, one-time hybrid approach
integration consulting costs of $150,000.00, yearly training costs of $2,000.00 per developer, and
the use of Rally Software’s software as a service (SaaS) delivered agile methods and tools.
Because SaaS delivered methods and tools are being used, there are no additional hardware
costs. In addition conservative productivity gains are being assumed: 5 percent for the first year,
10 percent for the second year, and 15 percent for the third year.

15. Selecting a Development Approach for Competitive Advantage 15
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