Experiences in Strategic Information Systems Planning

M.J. Earl

Presented by Taleen Serebrakian

Approaches to Information Systems

Planning

Topics1. Introduction to SISP (Strategic Information Systems Planning)2. 2-Stage Survey Methodology 3. Objectives and Benefits of SISP4. Stage 1 of Study: Unsuccessful Features, Concerns, Necessary

Conditions 5. Stage 2: Five SISP Approaches6. SISP Approaches: Summary / Strengths and Weaknesses 7. Factors of Success vs. Approaches8. Qualitative Measures9. The Best Approach10. Open Discussion: Personal SISP Experiences / Q&A

An Introduction to SISP• Defined as ‘the process of deciding the objectives for

organizational computing and identifying potential computer applications which the organization should implement’ (Lederer and Sethi, 1988)

• Top IS concern of chief executives• An SISP Industry has grown as IT manufacturers and

management consultants have developed methodologies and techniques.

An Introduction to SISP (Cont.)SISP involves:• Aligning Investment in IS with Business Goals

• Exploiting IT for Competitive Advantage

• Directing Efficient & Effective Management of IS Resources

• Developing Technology Policies and Architectures

Information

Systems Strategy

Information

Management

Strategy

Information

Technology Strategy

Survey Methodology• 1988-1989, Two-stage survey• Goal: To discover the intents, outcomes and experiences of SISP efforts• Stage 1:

• Examined case histories of six companies previously studied• Based on accounts of the IS Director, IS Strategic Planner and internal docs• Guided questions to ask in Stage 2

• Stage 2:• Field studies on 21 large, UK companies from various industries • Experiences w/ formal SISP activities ranged from 1-20 yrs• In-depth interviews w/ 3 stakeholders from each co. (total of 63 execs. interviewed) :

• IS Director or IS Strategic Planner: Suggest what can be achieved technically• CEO or General Manager: Set direction and policies• Senior Line or User Manager: Contribute application ideas or make system requests

• Questionnaires w/ each question posed in both an open manner (raw responses) and a closed manner (quantitative responses using scores and ranks)• Interviews focused on intents, outcomes and experiences w/ SISP

Objectives and Benefits of SISP

Table 7.1

Objectives of SISP

Rank Objective1 Aligning IS with business

needs2 Seek competitive advantage

from IT3 Gain top management

commitment4 Forecast IS resource

requirements5 Establish technology path and

policies

• Suggests that companies have more than one objective for SISP

• Aligning IS w/Business Needs = #1 objective

Table 7.2

Benefits of SISP

Rank Benefit1 Aligning IS with business

needs2 Top management support3 Better priority setting4 Competitive advantage

applications5 Top management involvement6 User/line management

involvement

• Respondents asked to state benefits of SISP

• Also suggests a multidimensional picture

• Aligning IS with Business Needs = #1 benefit

Unsuccessful Features of SISPTable 7.3

Unsuccessful Features of SISP

Rank Unsuccessful Feature1 Resource constraints2 Not fully implemented3 Lack of top management

acceptance4 Length of time involved5 Poor user-IS relationships

Top 5 of the 65 features contributing to dissatisfaction aka ‘Concerns’

Method Concerns• Centered on the SISP technique, procedure, or methodology

employed.• Firms had used proprietary methods (such as Method 1,

Information Engineering), or applied generally available techniques (value chain analysis) or invented their own methods by customizing well-known techniques.

• Among the stated concerns were lack of strategic thinking, excessive internal focus, too much or too little attention to architecture, excessive time and resource requirements, and ineffective resource allocation mechanisms.

• General Managers emphasized these concerns, perhaps because they have high expectations but find IS strategy making difficult.

Implementation Concerns• Even where SISP was judged to have been successful, the

resultant strategies or plans were not always followed up or fully implemented.

• Even though clear directions might be set and commitments made to develop new applications, projects often were not initiated and development did not proceed.

• Interviews revealed that typically resources were not made available, management was hesitant, technological constraints arose, or organizational resistance emerged.

• In the case where plans were implemented, other concerns arose, including technical quality, time and cost involved, or lack of benefits realized.

• IS Directors emphasized these concerns, perhaps because they are charged with delivery or because they hoped SISP would provide hitherto strategic direction of their function.

Process Concerns• Included lack of line management participation, poor IS-user

relationships, inadequate user awareness and education, and low management ownership of the philosophy and practice of SISP.

• Line Managers were the most vocal about the management and enactment of SISP methods and procedures and whether they fit the organizational context.

Necessary Conditions for Successful SISP• Analysis of the reported concerns suggests that Method,

Process and Implementation are all necessary conditions for successful SISP

Method

Process

Implementation

SISP

Necessary Conditions for Successful SISP• Respondents volunteered success factors based on their

organization’s experience and they conveyed a multiple perspective.

• No single factor is likely to lead to universal success in SISP.• SISP is more probable when organizations realize that method,

process, and implementation are all necessary issue sets to be managed.

Table 7.5

Success Factors in SISP

Rank Success Factor1 Top management

involvement2 Top management support3 Business strategy available4 Study business before

technology5 Good IS management

Process FactorsMethod FactorsImplementation

Factors

Strategic Planning Activities and Behavior• Cannot assume that SISP requires selection and use of just one

methods or one special planning exercise. • As discovered in the interviews, companies engage in a variety of

strategic planning activities and behavior. This became apparent when respondents were asked the open-ended question, ‘Please summarize the approach you have adopted in developing your IS strategy (or identifying which IT applications to develop in the long run)’.

• Replies recounted a rich history of initiatives, events, crises, techniques, organizational changes, successes, and failures all interwoven in a context of how IS resources had been managed.

Shift in Focus• Prompted by the list of concerns and narrative histories of

planning-related events, the focus of the study shifted and the object of analysis became the SISP approach.

• Approach viewed as the interaction of method, process, and implementation, as well as the variety of activities and behaviors upon which the respondents had reflected.

• Features of SISP were compared across the 21 companies and five distinct approaches were identified.

What is an Approach?

Five SISP Approaches Identified

Business-Led Method-DrivenAdministrativeTechnologicalOrganizational

Business-Led Approach• Underpinning Assumption: Current business direction is the only

basis upon which IS plans can be built and, therefore, business planning should drive SISP.

• Business plans/strategies are analyzed to identify where information systems are most required. Usually an annual endeavor. Responsibility of the IS Director or IS Strategic Planner. Plan is later presented to the board for questioning, approval, priority-setting.

• General Managers view this approach as simple, common sense. • IS Execs see this form of SISP as their most critical task.• Business strategies are not clear or detailed enough to specify IS

needs, so interpretation and further analysis become necessary. Documents have to be studied, working papers written, tentative proposals on IS implications of business plans put forward. Trial and Error basis.

Business-Led Approach: Pros and Cons

Advantages:• IS function receives greater legitimacy because Information

Systems are seen as a strategic resource• Important strategic thrusts that require IT support can be

identified• If business strategy is clearly/fully presented, IS strategy can be

well-aligned Disadvantages: • Emphasis on top-level input reduces contribution of users and

visibility of local requirements • Users complain of inadequate involvement • Top management delegates SISP to specialists and as a result,

may be unsure of the recommendations and hesitant to commit resources. This impairs implementation

Method-Driven Approach• Underpinning Assumption: SISP is enhanced by, or depends on, use of

a formal technique or method. • IS Director may believe that management will not think about IS needs

and opportunities without the use of a formal method or the intervention of consultants.

• Typically search for the best method (or at least better than the last method adopted.

• Because formal methods are usually sponsored by IS department, they may fail to win the support or involvement of the business at large. So a second or third method may be attempted while the IS department tries to verify the business strategy and encourage the participation of a wider set of stakeholders.

• Vendor or consultant plays significant role and consultants often become the drivers of the SISP and have substantial influence on the recommendations. Strategies are labeled ‘xyx’ strategy, where ‘xyz’ is the consulting firm (these strategies are rarely owned by the business).

Method-Driven Approach: Pros and Cons

Advantages:• Provides a methodology: Formal technique(s)• Plugs strategy gaps• Raises strategy profile: Shows the need for business strategiesDisadvantages: • Limited user involvement: Users may view this method as unreal

and high level because it excludes the managers who matter (themselves)

• Too influenced by method: Introduction of a formal method rarely provides a remedy because it is unlikely to be a strong enough business strategy.

• Implementation unlikely: General Managers see this as ‘business strategy making in disguise’ and become resistant of the option suggested by the application of this method. As a result, IS strategic plans may lose their credibility and never be fully initiated. Recommendations may be forgotten.

Administrative Approach• Underpinning Assumption: wider management planning and

control procedures are expected to achieve aims of SISP through formal procedures for allocating US resource. Emphasis is on resource planning.

• IS development proposals submitted by business units to committees who examine project viability, common system possibilities, resource consequences.

• Hierarchical approval procedure, all decisions made by planning investment or steering committees.

• Produces a one-year or multi-year development portfolio of approved projects and no application is developed until it’s on the plan.

• Parallel of the company’s normal financial planning.

Administrative Approach: Pros and Cons

Advantages:• Procedure is visible, all users and units have opportunity to submit

proposals• Emphasis on viability, project approval, resource planning produces

application development portfolios that are eventually implemented.• IS managed in congruence with other activities, permitting complementary

resources to be allocated in parallel.Disadvantages: • Viewed as not strategic, bottom-up instead of top-down• Ideas for radical change not ID’d, Strategic thinking absent, bus-as-usual

dominates• Enterprise-level applications remain in background• Conflict, drama, game playing as a result of resource allocation procedure• Emphasis on resource planning leads to resource-constrained outcome

(budget cuts being applied to US budget damages business as a whole)

Technological Approach• Underpinning Assumption: Information Systems-oriented model of

the business is a necessary outcome of SISP and therefore, analytical modeling methods are appropriate. Emphasis on deriving architectures or blueprints for IT and IS, often Information engineering is used.

• Formal method applied based on mapping activities, processes and data flows of the business.

• End product is a business model (or series of models).• Architectures for data, computing, communications and

applications might be produced and computer-aided software engineering might be used as a tool.

• Proprietary technology-oriented method might be used or adapted in-house.

• IS Directors and General Managers tend to emphasize objectives of rigorous analysis and building a robust infrastructure.

Technological Approach: Pros and ConsAdvantages:• Factoring down the approach into smaller exercises may

produce benefits, such as a database definition or an IT architecture for a particular function

• Focus on building better IT infrastructuresDisadvantages: • Demanding in terms of effort and resource requirements• High-profile activities• Takes too long to implement, stakeholders complain• Technical dependencies displace business priorities (complex

analysis)• Little top management support and user rebellion

Organizational Approach• Underpinning Assumption: SISP is not special/neat endeavor but is

based on IS decisions being made through continuous integration between the IS function and the organization.

• Emphasis on process, especially management understanding and approval.

• IT applications identified and selected by employing methods as required to fit particular purpose: value analysis, workshops, business investigation projects, vendor visits etc.

• Organizational learning important:1. IS development concentrates on only one or two themes growing in scope

over several years: organization begins to appreciate the potential benefits2. Special studies are important: project teams and task forces assigned to

tackle business problem from which IS initiatives will later emerge 3. Focus on implementations: themes broken down into identifiable and

frequent deliverablesThese three learning characteristics can be seen

collectively as a preference for incremental strategy making

Organizational ApproachThe approach is Organizational because:

1. Collective learning across the organization is evident.2. Organizational devices or instruments (teams, task forces, workshops,

etc.) are used to tackle business problems or pursue initiatives. 3. The IS function works in close partnership with the rest of the

organization, especially through having IS managers on management teams or placing IS executives on task forces.

4. Devolution of some IS capability is common, not only to divisions, but also to functions, factories, and departments.

5. In some companies SISP is neither special nor abnormal. It is part of the normal business planning of the organization.

6. IS strategies often emerge from ongoing organizational activities, such as trial and error changes to business practices, continuous and incremental enhancement of existing applications, and occasional system initiatives and experiments within the business.

Organizational Approach: Pros and ConsAdvantages:• SISP becomes normal• Emphasis on implementation • Promotes IS-user partnershipDisadvantages: • Theme generation: worrying about how the next theme will be

created• Soft methodology: Because approach is fuzzy or soft, not always

confident that it can be transplanted to another part of the business

• Architecture becomes difficult: Incrementalism of this approach leads to creation of inferior infrastructures

Five Approaches SummarizedBusiness-

LedMethod-Driven

Administrative

Technological

Organizational

Underpinning Assumption

Business plans and needs should drive IS plans

IS strategies will be enhanced by use of a formal SISP method

SISP should follow /conform with the firm’s management planning & control procedures

SISP is an exercise in business and information modeling

SISP is a continuous decision-making activity shared by the business and IS

Emphasis of Approach

Business leads IS and not vice versa

Selection of the best method

Identification and allocation of IS resources to meet agreed needs

Production of models and blueprints

Organizational learning about business problems / opportunities & IT contribution

Major Influence of Outcomes

IS planners Practitioners of the method

Resource planning and steering committees

Modeling method employed

Permanent and ad hoc teams of key managers, including IS

Slogan Business drives IS

Strategy needs method

Follow the rules IS needs blueprints

Themes with teams

Five Approaches: Strengths & Weaknesses

5 Approaches vs. 3 Conditions for SuccessMetho

dProces

s

Implementation

SISP

Business-Led

Method-Driven

Administrative

Technological

Organizational

Method Low High Low High MediumProcess Low Low Medium Low HighImplementation

Medium Low High Medium High

Business-Led Approach Method-Driven

ApproachAdministrative Approach

Technological ApproachOrganizational

Approach

Qualitative Measure 1: Success

Business-Led

Method-Driven

Administrative

Technological

Organizational

Total Mean (3 Stakeholders)

3.25 3.83 3.60 4.00 3.94

Table 7.10 Mean Success Scores by Approach (5 = high; 1 = low) Mean score across all companies: 3.73

Most intensive approach in terms of technique earned highest score, perhaps because it represents what respondents thought an IS planning methodology should look like.

Lacks formal methodologies; earned lowest score

Qualitative Measure 2: Concerns

Business-Led

Method-Driven

Administrative

Technological

Organizational

Method 2.75 2.50 2.80 1.75 1.33Process 0.75 3.00 1.60 2.50 2.16Implementation

2.75 1.00 1.60 3.00 1.83

Total 6.25 6.50 6.00 7.25 5.32

Table 7.11 SISP Concerns per Firm (5 = high dissatisfaction; 1 = low dissatisfaction)

Least concerns total

Qualitative Measure 3: Competitive Advantage

Competitive Advantage Application Frequency

Business-Led 4.0 applications per firmMethod-Driven

1.5 applications per firm

Administrative

3.6 applications per firm

Technological

2.5 applications per firm

Organizational

4.8 applications per firm

Table 7.12 Competitive Advantage Propensity

Most themes pursued were perceived to have produced a competitive advantage

Multidimensional Picture

Business-Led

Method-Driven

Administrative

Technological

Organizational

Success Score Ranking

5 3 4 1 2

Least Concerns Ranking

2 3 4 5 1

Competitive Advantage Potential Ranking

2 5 3 4 1

Sum of Ranks 9 11 11 10 4Overall Ranking

2 4 4 3 1

Table 7.13 Multidimensional Ranking of SISP approaches (1 = top; 5 = bottom)

Organizational Approach is substantially superior, hence the best SISP approach

•Based on quantitative and qualitative evidence •Least formal and least structured

Discussion / Q&A