Strategic Information Systems Planning

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Strategic Information Systems Planning

Introduction

Strategic Information Systems Planning, more commonly known by its acronym SISP, is a concern of maximum relevance in practice. When it comes to management of any organization, SISP is ranked amongst the highest for priorities and agendas. The reason why Strategic Information System Planning is in high regards is due to the opportunity that may come from Information Systems/ Information Technology in which it is beneficial and therefore advantageous to any organization that implements this practice.

History

The concept of systems planning has expanded over the last few decades into what we see today. In the late 1970's (McLean & Soden), systems planning was used to improve communication with users, to increase top management support, to better predict resource requirements and where to use resources, to determine ways to improve MIS departments, and to identify new and higher payback computer applications. In 1986 (Moscowitz) stated that the concept of systems planning needed to be expanded to include the creation of an organization-wide data architecture. At the same time, the idea of strategic planning for systems planning emerged as a necessary, if not essential, objective of SISP (Leterer 1988).

In order to put the planning for strategic information systems in perspective, the evolution of information systems according to the three-era model of John Ward, et al.(1990) is pertinent. According to this model there are three distinct, albeit overlapping, eras of information systems, dating back to the 60’s. The relationship over time of the three eras of information systems is shown in the table below.

ERA Characteristics Information System
60's Data Processing (DP) Standalone computers, remote from users, cost reduction

function.

70's & 80's Management Information Systems(MIS) Distributed process, interconnected, regulated by

management service, supporting the business, user driven.

80's & 90's Strategic Information Systems (SIS) Networked, integrated systems, available and supportive to

users, relate to business strategy, enable the business - business driven.

Definition

Stategic Information Systems Planning has been defined in this light as "the process of deciding or choosing the correct portfolio of those new information systems, the objectives for organizational computing and iden- tifying potential computer applications which the organization should implement".(Earl)

Perceptive Views of
Strategic Information Systems Planning

Understanding what Strategic Information Systems Planning really is, we must make Two Distinctions between Information Systems (IS) Strategies and Information Technology (IT) Strategies.

1. IS Strategy - "An information systems strategy brings together the business aims of the company, an understanding of the information needed to support those aims, and the implementation of computer systems to provide that information. It is a plan for the development of systems towards some future vision of the role of information systems in the organization." (Wilson 1989)

Some may argue this point and give a different aspect of the meaning Information Systems Strategies.


IS Strategy may also mean- "An IS strategy is essentially a planning process in the minds of the decision makers, users and developers of the systems. It is supported with written reports and plans, but they are of secondary importance." (Reponen 1993)

Both of these meanings have significant points that should be taken into consideration; however, when dealing with Strategic Information Systems Planning both of them should be implied.


2. IT Strategy - Supply oriented; focuses on specifying the technology as how to deliver these applications.

The correlation between IS and IT strategies apply to an organization's business strategy. These strategies support the business and drive the business (Hackney, Burn, Dhillon).

Also to help us better understand SISP, there are two core arguments on which it is based. The first argument is that a company’s information system should be closely aligned with the overall business strategy. In fact, in many cases the information system of a company becomes a source of competitive advantage. The second core argument of SISP is that organizations can best achieve the sought-after IS-based alignment or competitive advantage only by following a proactive, formal and comprehensive process (Bozarth, 2006).


According to the documentation in (Earl), it states that Strategic Information Strategic Planning targets the following areas:
* Aligning investment in IS with business goals
* Exploiting IT for competitive advantage
* Directing efficient and effective management of IS resources
* Developing technology

Purpose

The main purpose of Strategic Information System Planning is to create goals and find the most efficient way to achieve them. SISP helps professionals and users of IS establish a mutual understanding of the information systems value and also the related problems. SISP can also help firms rank the importance of IS systems in terms of their efficiency, effectiveness, and strategic value. SISP helps organizations identify their portfolio of computer-based applications. This helps to align corporate strategy and can also create a competitive advantage (Hartono et al., 2003).

Strategy Information Systems Planning Successful?

Developed by Michael Earl, he believes a business should follow these three basic key points:

  1. Method -- Techniques that lead a business to success while following the business strategy.
  2. Process -- Managers must show participation, have education and awareness.
  3. Implementation -- Strategies must be fully implemented or followed-up.

The last key point, implementation, is important for four reasons. The first reason is that if the plan is not implemented there could be lost opportunities, duplicated efforts, incompatible systems, and wasted resources. The second reason is that in order to determine the extent to which SISP meets its objectives, the plan must be fully implemented. Thirdly, the failure to implement can leave businesses unhappy with, and unwilling to, continue the SISP. The fourth and final reason is that if the plan is not implemented, problems can arise in establishing and maintaining priorities in future SISP (Gottschalk, 1999).

Data security is another factor in determining the success of SISP. The more data security, the more successful the SISP will be. Data security planning leads to greater alignment, analysis, and cooperation since it enables organizations to protect their resources and spend more time and energy on these three activities (Newkirk & Lederer, 2007).

Seven guidelines to
Strategy Information System Planning

Developed by Lederer and Sethi, these two authors have come to find that in order to develop a successful SISP, a business should adhere to the following:

  1. Implementation -- Prepare and develop plans for migration.
  2. Enthusiasm -- Plan quickly and approximately rather than slowly and meticulously.
  3. Value -- Demonstrate business value in the plan.
  4. Teamwork -- Understand top management, information technology and members should be competent.
  5. Modeling -- Use models, diagrams, matrices (not needed, very time consuming and costly).
  6. Methodology -- Do not expect a methodology to guarantee success.
  7. Consultants -- Valuable assets to a company, but again, does not guarantee success. Not using one signifies that your company is lacking IS planning.

Approaches

The following approaches were developed because it's felt that the elements to a business's decisions "can be seen as the nature and place of the method, the attention to and style of process, and the focus on and probability of implementation."(Earl) These approaches are also used in Strategic Planning for Information Systems.

  1. Business-Led –- this approach is “the current business direction or plans are the only basis upon which IS plans can be built and that, therefore, business planning should drive SISP (strategic information systems planning).”
    • Emphasis on top-down technique.
    • Uses “home-spun” procedures.
    • IS planners need to "take the lead."
  2. Method-Driven –- this approach appears “to assume that SISP is enhanced by, or depends on, use of a formal technique or method.”
    • Users judge exercises as "unreal" and "high-level" and being excluded.
    • Strategies are not usually "owned."
  3. Administrative -– for this approach emphasis is “on resource planning. The wider management planning and control procedures were expected to achieve the aims of SISP through formal procedures for allocating IS resources.”
    • Emphasis on bottom-up technique.
  4. Technological -– this approach appears to assume that “an information system-oriented model of business is a necessary outcome of SISP and, therefore, that analytical modeling methods are appropriate.”
  5. Organizational -– this approach is “that SISP is not a special or neat and tidy endeavor but is based on IS decisions being made through continuous integration between the IS function and the organization.”

Benefits Acquired from
Strategic Information Systems Planning

With most general business decisions, the most basic question is "How do we benefit from taking this course of action?" SISP requires a large amount of time and budgetary resources. Yet, the results are not always quantifiable in terms of positive budgetary results, but are intangible. Complex evaluations on the productivity and benefits over time needs to be done to show that a positive response has been made by the process. However, very little effort has been made over time to formally develop empirical-based performance characteristics. (Segars)

According to Head, there is an abundance of benefits that a business receives through (SISP). There is enhanced communication where the upper and lower level management can understand the goals of each other have set. This then entitles them to help one another build either from the top down or the bottom up. Another benefit would be establishing constraints which is basically where rules are established and created by top management that "will provide a constraining mechanism on the allocation of resources among system projects."

Controlling resources may be considered a benefit which means "the systems plan permits goals and objectives to be tied in to a budget allocations to provide better assurance that dollars are channeled to those activities that are most relevant to the achievement of strategic goals."(Head)

Managing technological change is one of the most vital of them all. Change in the world and in technology is Inevitable; it can not be stopped and will always be constantly changing. Planning creates a stable environment to help employers of an information systems planning team anticipate user demands instead of reacting to them in a manner where they "will be unable to provide for the orderly introduction of new technology to satisfy user request for new services."(Head)


SPIS

Stands for Strategic Planning for Information Systems. Please click to learn more SPIS and the differences between SPIS vs SISP.

Resources

Bhatnagar, A. Strategic Information Systems Planning : Alignment of 'IS/IT' Planning and Business Planning. 2007.

Bozarth, Cecil. (2006). ERP implementation efforts at three firms :Integrating lessons from the SISP and IT-enabled change literature. International Journal of Operations & Production Management, 26(11), 1223-1239. Retrieved September 14, 2009, from ABI/INFORM Global. (Document ID: 1140288911).

Earl, Michael J. (1993) Experiences in Strategic Information Systems PlanningAuthor. MIS Quarterly, Vol. 17, No. 1 pp. 1-24. http://www.jstor.org/stable/249507

Gottschalk, Petter. (1999). Strategic information systems planning: The IT strategy implementation matrix. European Journal of Information Systems, 8(2), 107-118. Retrieved September 14, 2009, from ABI/INFORM Global. (Document ID: 42597499).

Hartono, E., Lederer, A., Sethi, V., & Zhuang, Y.. (2003, July). Key predictors of the implementation of strategic information systems plans. Database for Advances in Information Systems, 34(3), 41-53. Retrieved September 14, 2009, from ABI/INFORM Global. (Document ID: 424678991).

Head, Robert V. (1982) Strategic Planning for Information Systems, 1 (1.3), 14-15. March 1982. Q.E.D. Information Science, INC., 180 Linden Street, Wellesley, MA. Catalog Card Number: 82-80713

Johnson, A., Lederer, A., Newkirk, H.. (2008). Rapid business and IT change: drivers for strategic information systems planning? European Journal of Information Systems 17(3), 198-218. Retrieved September 14, 2009, from ABI/INFORM Global. (Document ID: 1522198751).

Lederer, Albert. (1988). "The Implementation of Strategic Information Systems Planning Methodologies." MIS Quarterly, Vol. 12 No. 3 pp. 445-446. http://www.jstor.org/stable/249212

Lederer, A. & Newkirk, H. (2007). The Effectiveness of Strategic Information Systems Planning for Technical Resources, Personnel Resources, and Data Security in Environments of Heterogeneity and Hostility. The Journal of Computer Information Systems, 47(3), 34-44. Retrieved September 14, 2009, from ABI/INFORM Global. (Document ID: 1323422741).

Lederer, Albert & Sethi, Vijay. Seven Guidelines for Strategic Information Systems Planning. Fall 1998.

Reponen, T. (1993) Strategic information systems - a conceptual analysis. Journal of Strategic Information Systems, 2(2), 100-104.

Segars, Albert. (1998). "Strategic Information Planning Success: An Investigation of the Construct and Its Measurement." MIS Quarterly, Vol. 22 No. 2 pp. 139. http://www.jstor.org/stable/249393

Wilson, T.D. (1989) The implementation of information systems strategies in UK companies: aims and barriers to success. International Journal of Information Management, 9, 245-258.

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