Approaches to Information Systems Planning

1. Approaches to Information Systems Planning Experiences in Strategic Information Systems Planning M.J. Earl Presented by Taleen Serebrakian

2. Topics Introduction to SISP (Strategic Information Systems Planning) 2-Stage Survey Methodology Objectives and Benefits of SISP Stage 1 of Study: Unsuccessful Features, Concerns, Necessary Conditions Stage 2: Five SISP Approaches SISP Approaches: Summary / Strengths and Weaknesses Factors of Success vs. Approaches Qualitative Measures The Best Approach Open Discussion: Personal SISP Experiences / Q&A

3. 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.

4. 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

5. 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

6. Objectives and Benefits of SISP Respondents asked to state their firms’ current objectives of SISP • Suggests that companies have more than one objective for SISP • Aligning IS w/Business Needs = #1 objective • Respondents asked to state benefits of SISP • Also suggests a multidimensional picture • Aligning IS with Business Needs = #1 benefit

7. Unsuccessful Features of SISP Respondents asked in what ways SISP has been unsuccessful Top 5 of the 65 features contributing to dissatisfaction aka ‘Concerns’ • The 65 ‘Concerns’ were examined and two patterns emerged • Could be grouped almost equally into three distinct categories: • Method • Process • Implementation • Concerns could be grouped among the three Stakeholders: • IS Directors • General Managers • User Managers • …

8. 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.

9. 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.

10. 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.

11. 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 SISP Implementation

12. 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. Process Factors Method Factors Implementation Factors

13. 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.

14. 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.

15. What is an Approach? Is not a technique per se, nor is it an explicit study or formal, codified routine so often implied in past studies of SISP. Can’t be captured by one event, single procedure, or a specific technique. May comprise a mix of procedures, techniques, user-IS interactions, special analyses, and random discoveries. Combines formal activities and informal behavior. Sometimes IS planning is a special endeavor and sometimes it is a part of business planning at large. When members of an organization describe how decisions on IS strategy are initiated and made, a coherent picture is gradually painted where the underpinning philosophy, emphasis, and influences stand out. .. …an approach is identified

16. Five SISP Approaches Identified • Business-Led • Method-Driven • Administrative • Technological • Organizational

17. 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.

18. 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

19. 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).

20. Method-Driven Approach: Pros and Cons Advantages: Provides a methodology: Formal technique(s) Plugs strategy gaps Raises strategy profile: Shows the need for business strategies Disadvantages: 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.

21. 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.

22. 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)

23. 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.

24. Technological Approach: Pros and Cons Advantages: 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 infrastructures Disadvantages: 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

25. 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: • IS development concentrates on only one or two themes growing in scope over several years: organization begins to appreciate the potential benefits • Special studies are important: project teams and task forces assigned to tackle business problem from which IS initiatives will later emerge • Focus on implementations: themes broken down into identifiable and frequent deliverables These three learning characteristics can be seen collectively as a preference for incremental strategy making

26. Organizational Approach The approach is Organizational because: • Collective learning across the organization is evident. • Organizational devices or instruments (teams, task forces, workshops, etc.) are used to tackle business problems or pursue initiatives. • 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. • Devolution of some IS capability is common, not only to divisions, but also to functions, factories, and departments. • In some companies SISP is neither special nor abnormal. It is part of the normal business planning of the organization. • 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.

27. Organizational Approach: Pros and Cons Advantages: SISP becomes normal Emphasis on implementation Promotes IS-user partnership Disadvantages: 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

28. Five Approaches Summarized

29. Five Approaches: Strengths & Weaknesses

30. 5 Approaches vs. 3 Conditions for Success Method Process Business-Led Approach Method-Driven Approach SISP Administrative Approach Technological Approach Implementation Organizational Approach

31. Qualitative Measure 1: Success Table 7.10 Mean Success Scores by Approach (5 = high; 1 = low) Mean score across all companies: 3.73 Lacks formal methodologies; earned lowest score Most intensive approach in terms of technique earned highest score, perhaps because it represents what respondents thought an IS planning methodology should look like.

32. Qualitative Measure 2: Concerns Table 7.11 SISP Concerns per Firm (5 = high dissatisfaction; 1 = low dissatisfaction) Least concerns total

33. Qualitative Measure 3: Competitive Advantage Table 7.12 Competitive Advantage Propensity Most themes pursued were perceived to have produced a competitive advantage

34. Multidimensional Picture 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

35. Discussion / Q&A