experiences in strategic information systems planning* · pdf fileexperiences in strategic...

lr)formation Systems Planning

Experiences inStrategic InformationSystems Planning*

By: Michael J. EariLondon Business SchooiSussex PiaceRegents ParkLondon NW1 4SA, England

AbstractStrategic information systems planning (StSP) re-mains a top concern of many organizations. Ac-cordingly, researchers have investigated StSPpractice and proposed both formal methods andprinciples of good practice. StSP cannot beunderstood by considering format methods alone.The processes of planning and the implementa-tion of plans are equally important. However, therehave been very few field investigations of thesephenomena. This study examines SISP experi-er)ce in 27 companies and. unusually, relies oninterviews not only with IS managers but atso withgeneral managers and tine managers. By adopt-ing this broader perspective, the investigationreveals companies were using five different StSPapproaches: Business-Led, Method-Driven. Ad-ministrative. Technological, and Qrganizational.Each approach has different characteristics and,therefore, a different likelihood of success. Theresults show that the Qrganizational Approach ap-pears to be rrjost effective. The taxonomy of thefive approaches potentially provides a diagnostictoot for analyzing and evaluating an organization'sexperience with SISP.

Keywords: Strategic planning, IS strategic plan-ning, IS management

ACM Categories: H.1.0. H.4, K.6.0, K.6.1

* An earlier version of this paper was published in Proceedingsof the International Conference on Information Systems.Copenhagen, Oenmaric, December 1990.

IntroductionFor many IS executives, strategic informationsystems planning (SISP) continues to be a criticalissue.^ It is also reportedly the top IS concern ofchief executives {Moynihan, 1990). At the sametime, it is almost axiomatic that informationsystems management be based on SISP (Synottand Gruber, 1982). Furthermore, as investmentin information technology has been promoted toboth support business strategy or create strategicoptions (Earl, 1988; Henderson and Venkatraman,1989), an "industry" of SISP has grown as ITmanufacturers and management consultantshave developed methodologies and techniques.Thus, SISP appears to be a rich and importantactivity for researchers. So far, researchers haveprovided surveys of practice and problems,models and frameworks for theory-bui Id ing, andpropositions and methods to put into action.^

The literature recommends that SISP target thefollowing areas:

• Aligning investment in iS with business goals

• Exploiting IT for competitive advantage

• Directing efficient and effective managementof IS resources

• Developing technology policies andarchitectures

It has been suggested (Earl, 1989) that the firsttwo areas are concerned with information systemsstrategy, the third with information managementstrategy, and the fourth with information tech-nology strategy. In survey-based research to date,it is usually the first two areas that dominate. In-deed, SISP has been defined in this light (Ledererand Sethi, 1988) as "the process of deciding theobjectives for organizational computing and iden-tifying potential computer applications which theorganization should implement" (p. 445). Thisdefinition was used in our investigation of SISPactivity in 27 United Kingdom-based companies.

Calls have been made recently for betterunderstanding of strategic planning in general,including SISP, and especially for studies of ac-tual planning behavior in organizations (Boyntonand Zmud, 1987; Henderson and Sifonis, 1988).As doubts continue to be raised about the pay-off of IT, it does seem important to examine the

MIS Quarterty/March 1993 1

Information Systems Planning

reality of generally accepted IS managementpractices such as SISP. Thus, in this investiga-tion we used field studies to capture the ex-periences of large companies that had attemptedsome degree of formal IS planning.^

We were also interested as to whether any par-ticular SISP techniques were more effective thanothers. This question proved difficult to answer,as discussed below, and is perhaps even irrele-vant. Techniques were found to be only one ele-ment of SISP. with process and implementationbeing equally important. Therefore, a moredescriptive construct embodying these threeelements—the SISP approach—was examined.Five different approaches were identified; the ex-perience of the organizations studied suggeststhat one approach may be more effective than theothers.

MethodologyIn 1988-89, a two-stage survey was conductedto discover the intents, outcomes, and experi-ences of SISP efforts. First, case studies cap-tured the history of six companies previouslystudied by the author. These retrospective casehistories were based on accounts of the IS di-rector and/or IS strategic planner and on inter-nal documentation of these companies. Thecases suggested or confirmed questions to askin the second stage. Undoubtedly, these casesinfluenced the perspective of the researcher.

In the second stage, 21 different U.K. companieswere investigated through fieid studies. All werelarge companies that were among the leaders inthe banking, insurance, transport, retailing, elec-tronics, IT, automobile, aerospace, oil, chemical,services, and food and drink industries. Annualrevenues averaged £4.5 biilion. They were allheadquartered in the U.K. or had significant na-tional or regional IS functions within multi-nationalcompanies headquartered elsewhere. Their ex-perience with formal SISP activities ranged fromone to 20 years.** The scope of StSP could beeither at the business unit level, the corporatelevel, or both. The results from this second stageare reported in this article.

Within each firm, the author carried out in-depthinterviews, typically lasting two to four hours, withthree "stakeholders." A total of 63 executives

were interviewed. The IS director or IS strategicplanner was interviewed first, foiiowed by theCEO or a general manager, and finally a seniorline or user manager. Management prescriptionsoften state that SISP requires a combination orcoaiition of iine managers contributing applica-tion ideas or making system requests, generalmanagers setting direction and priorities, and ISprofessionals suggesting what can be achievedtechnically. Additionally, interviewing these threestakeholders provides some triangulation, bothas a check on the views of the IS function andas a useful, but not perfect, cross-section ofcorporate memory.

Because the IS director selected the inter-viewees, there could have been some sampiebias. However, parameters were laid down onhow to select interviewees, and the responsesdid not indicate any prior coiiusion in aligningopinions. Respondents were supposed to be theIS executives most involved with SISP (whichmay or may not be the CIO), the CEO or generalmanager most invoived in strategic decisions onIS, and a "typical" user line manager who hadcontributed to SISP activities.

Interviews were conducted using questionnairesto ensure completeness and replicability, but amix of unstructured, semi-structured, and struc-tured interrogation was employed.^ Typically, asimple question was posed in an open manner(often requiring enlargement to overcome dif-ferences in organizational language), and rawresponses were recorded. The same questionwas then asked in a closed manner, requestingquantitative responses using scores, ranking,and Likert-type scales. Particular attention waspaid to anecdotes, tangents, and "asides." In thisway, it was hoped to collect data sets for bothqualitative and quantitative analysis. Interviewsfocused on intents, outcomes, and experiencesof SISP.

It was also attempted to record experiences withparticular SiSP methodologies and relate theiruse to success, benefits and problems. However,this aim proved to be Inappropriate (becausefirms often had employed a variety of techniquesand procedures over time), and later was jetti-soned in favor of recording the variety andrichness of planning behavior the respondentsrecalled. This study is therefore exploratory, witha focus on theory development.^

2 MtS Quarterly/March 1993

Intormation Systems Planning

Interests, Methods, andOutcomesData were collected on the stimuli, aims, benefits,success factors, problems, procedures, andmethods of SISP. These data have beenstatistically examined, but only a minimum ofresults is presented here as a necessary contextto the principal findings of the study.'

Respondents were asked to state their firms' cur-rent objectives for SISP. The dominant objectivewas alignment of IS with business needs, with69.8 percent of respondents ranking it as mostimportant and 93.7 percent ranking it in their topfive objectives (see Tabie 1). Interview commentsreinforced the importance of this objective. Thesearch for competitive advantage appticationswas ranked second, reflecting the increasedstrategic awareness of IT in the late 1980s. Gain-ing top management commitment was third. Theonly difference among the stakeholders was thatIS directors placed top management commitmentabove the competitive advantage goal, perhapsreflecting a desire for functional sponsorship anda clear mandate.

Table 1 suggests that companies have more thanone objective for SISP; narrative responsesusually identified two or three objectives spon-taneously. Not surprisingly, the respondents'views on benefits were similar and also indicateda multidimensional picture (see Table 2). Allrespondents were able to select confidently froma structured list. Alignment of IS again stood out.with 49 percent ranking it first and 78 percent

ranking it in the top five benefits. Top manage-ment support, better priority setting, competitiveadvantage applications, top management in-volvement, and user-management involvementwere the other prime benefits reported.

Respondents also evaluated their firm's successwith SISP. Success measures have beendiscussed elsewhere (Raghunathan and King.1988). Most have relied upon satisfaction scores(Galliers. 1987), absence of problems (Ledererand Sethi. 1988), or audit checklists (King, 1988).Respondents were given no criterion of successbut were given scale anchors to help them recorda score from 1 (low) to 5 (high) as shown inAppendix B,

Ten percent of all respondents claimed their SISPhad been "highly successful." 59 percentreported It had been "successful but there wasroom for improvement." and 69 percent ratedSISP as worthwhile or better. Thirty-one percentwere dissatisfied with their firm's SISP. Therewere differences between stakeholders; whereas76 percent of IS directors gave a score above 3,only 67 percent of general managers and 57 per-cent of user managers were as content. Becausethe mean score by company was 3.73. and themodal company score was 4, the typical ex-perience can be described as worthwhile but inneed ot some improvement.

A complementary question revealed a somewhatdifferent picture, interviewees were asked in whatways SISP had been unsuccessful. Sixty-five dif-ferent types of disappointment were recorded. Insuch a long list none were dominant. Never-

Table 1. Objectives of StSP

RankOrder

1

2

3

4

5

Objective

Aligning IS with Business Needs

Seek Competitive Advantage from IT

Gain Top Management Commitment

Forecast IS Resource Requirements

Establish Technology Path and Policies

RespondentsSelecting(n = 63)

59

45

36

36

30

PrimaryFrequency

44

8

6

1

2

Sum ofRanks

276

161

115

80

77

MeanRank

4.38

2.55

1.83

1.27

1.22

MIS Quarterly/March 1993 3


Table 2. SISP Benefits

RankOrder

1

2

3

4

5

6

Benefit

Aligning IS withBusiness Needs

Top Management Support

Better Priority Setting

Competitive AdvantageApplications

Top ManagementInvolvement

User/Line ManagementInvolvement

RespondentsSelecting(n = 63)

49

27

35

21

19

21

PrimaryFrequency

31

7

3

4

3

2

Sum ofRanks

208

94

75

67

60

56

MeanRank

3.30

1.49

1.19

1.06

0.95

0.92

theless. Table 3 summarizes the five most com-monly mentioned features contributing todissatisfaction. We will henceforth refer to theseas "concerns."It is apparent that concerns extend beyondtechnique or methodology, the focus of severalresearchers, and the horizon of most suppliers.Accordingly we examined the 65 different con-cerns looking for a pattern. This inductive andsubjective clustering produced an interestingclassification. The cited concerns could begrouped almost equally into three distinct

Tabie 3. Unsuccessful Features of SISP

Rank Order

1

2

3

4

5

Unsuccessful Features

Resource Constraints

Not Fully Implemented

Lack of Top ManagementAcceptance

Length of Time Involved

Poor User-IS Relationships

categories (assuming equal weighting to eachconcern): method, process, and implementation,as shown in Table 4. The full list of concerns isreproduced in Appendix C.

Method concerns centered on the SISP tech-nique, procedure, or methodology employed.Firms commonly had used proprietary methods,such as Method 1, BSP, or information engineer-ing, or applied generally available techniques,such as critical success factors or value chainanalysis. Others had invented their own methods,often customizing well-known techniques. Amongthe stated concerns were lack of strategic think-ing, excessive internal focus, too much or too littleattention to architecture, excessive time andresource requirements, and ineffective resourceallocation mechanisms. General managersespecially emphasized these concerns, perhapsbecause they have high expectations but find ISstrategy making difficult.

Implementation was a common concern. Evenwhere SISP was judged to have been successful,the resultant strategies or plans were not alwaysfollowed up or fully implemented. Even thoughclear directions might be set and commitmentsmade to develop new applications, projects oftenwere not initiated and systems development didnot proceed. This discovery supports the findings

4 MIS Quarterly/March 1993

tnformation Systems Planning

Table 4. SISP Concerns by Stakeholder

Method

Process

Implementation

TotalCitations

45

39

42

126

%

36

31

33

100

ISDirectors(n = 21)

Citations %

14 36

9 23

16 41

39 100

GeneralManagers(n = 21)

Citations %

18 44

11 27

12 29

41 100

UserManagers(n = 21)

Citations %

13 28

19 41

14 31

46 100

of earlier work (Lederer and Sethi, 1988).Evidence from the interviews suggests thattypically resources were not made available,management was hesitant, technological con-straints arose, or organizational resistanceemerged. Where plans were implemented, otherconcerns arose, including technical quality, thetime and cost involved, or the lack of benefitsrealized. Imptementation concerns were raisedmost by IS directors, perhaps because they arecharged with delivery or because they hopedSISP would provide hitherto elusive strategicdirection of their function. Of course, it can beclaimed that a strategy that is not implementedor poorly implemented is no strategy at all—atendency not unknown in business strategy mak-ing (Mintzberg, 1987). Indeed, implementationhas been proposed as a measure of success inSISP (Lederer and Sethi. 1988).

Process concerns included lack of line manage-ment participation, poor IS-user relationships, in-adequate user awareness and education, andlow management ownership of the philosophyand practice of SISP. Line managers were par-ticularly vocal about the management and enact-ment of StSP methods and procedures andwhether they fit the organizational context.

Analysis of the reported concerns therefore sug-gests that method, process, and implementationare all necessary conditions for successful SISP(see Figure 1). Indeed, when respondents volun-teered success factors for SISP based on theirorganizations' experience, they conveyed thismultiple perspective (see Table 5). The highest

ranked factors of "top management involve-ment," and "top management support" can beseen as process factors, while "business strategyavailable" and "study the business before tech-nology' ' have more to do with method. * 'Good tSmanagement" partly relates to impiementation.Past research has identified similar concerns(Lederer and Mendelow, 1987), and the moreprescriptive literature has suggested some ofthese success factors (Synott and Gruber, 1982).However, the experience of organizations in thisstudy indicates that no single factor is likely tolead to universal success in SISP. Instead,successful SISP is more probable when organiza-tions realize that method, process, and imple-mentation are all necessary issue sets to bemanaged.

In particuiar, consultants, managers, and re-searchers would seem weil advised to tookbeyond method alone in practicing StSP. Further-more, researchers cannot assume that SISP re-quires selection and use of just one method orone special planning exercise. Typically, it seemsthat firms use several methods over time. Anaverage of 2.3 methods (both proprietary and in-house) had been employed by the 21 companiesstudied. Nine of them had tried three or more.Retrospectively isolating and identifying the ef-fect of a method therefore becomes difficult forresearchers. It may also be misleading because,as discovered in these interviews, firms engagein a variety of strategic planning activities andbehavior. This became apparent when respon-dents were asked the open-ended question,"Please summarize the approach you haveadopted in developing your IS strategy (or iden-


tntormation Systems Planning

tifying which IT applications to develop in the longrun)." In reply they usually recounted a richhistory of initiatives, events, crises, techniques,organizational changes, successes, and failuresall interwoven in a context of how tS resourceshad been managed.

Prompted both by the list of concerns and nar-rative histories of planning-related events, thefocus of this study therefore shifted. The objectof analysis became the SISP approach. This weviewed as the interaction of method, process, and

implementation, as well as the variety of activitiesand behavior upon which the respondents hadreflected. The accounts of interviewees, the "un-tutored" responses to the semi-structured ques-tions, the documents supplied, and the "asides"followed up by the interviewer all produced de-scriptive data on each company's approach.Once the salient features of SISP were comparedacross the 21 companies, five distinct ap-proaches were identified. These were then usedretrospectively to classify the experiences of thesix case study firms.

Method Process

Implementation

Figure 1. Necessary Conditions for Successful SISP

Table 5. Success Factors in SISP

RankOrder

1

2

3

4

5

SuccessFactor

Top ManagementInvolvement

Top Management Support

Business Strategy Available

Study Business BeforeTechnology

Good IS Management

RespondentsSelecting

42

34

26

23

17

PrimaryFrequency

15

17

9

9

1

Sum ofRanks

160

140

99

87

41

MeanRank

2.55

2.22

1.57

1.38

0.65


tnfortnation Systems Planr}ing

SISP ApproachesAn approach is not a technique per se. Nor is itnecessarily an explicit study or formal, codifiedroutine so often implied in past accounts andstudies of SISP. As in most forms of businessplanning, it cannot often be captured by oneevent, a single procedure, or a particular tech-nique. An approach may comprise a mix of pro-cedures, techniques, user-IS interactions, specialanalyses, and random discoveries. There arelikely to be some formal activities and some in-formal behavior. Sometimes IS planning is aspecial endeavor and sometimes it is part ofbusiness planning at large. However, when mem-bers of the organization describe how decisionson IS strategy are initiated and made, a coherentpicture is gradually painted where the underpin-ning philosophy, emphasis, and influences standout. These are the principal distinguishing fea-

tures of an approach. The elements of an ap-proach can be seen as the nature and place ofmethod, the attention to and style of process, andthe focus on and probability of implementation.

The five approaches are labelled as Business-Led, Method-Driven, Administrative, Technolog-ical, and Organizational. They are delineated asideal types in Table 6. Several distinctors are ap-parent in each approach. Each represents a par-ticular philosophy (either explicit or implicit),displays its own dynamics, and has differentstrengths and weaknesses. Whereas some fac-tors for success are suggested by each ap-proach, not ali approaches seem to be equallyeffective.

Business-led approachThe Busiriess-Led Approach was adopted by fourcompanies and two of the case study firms. The

Table 6. SISP Approaches

Emphasis

Basis

Ends

Methods

Nature

Influencer

Relation toBusinessStrategy

PrioritySetting

iS Role

Metaphor

Business-Led

Business

Businessplans

Plan

Ours

Business

IS planner

Fix points

The board

Driver

It'scommonsense

Method-Driven

Technique

Bestmethod

Strategy

Best

Top-down

Consultants

Derive

Methodrecommends

Initiator

It's goodfor you

Administrative

Resources

Procedure

Portfolio

None

Bottom-up

Committees

Criteria

Centralcommittee

Bureaucrat

Survival ofthe fittest

Technological

Model

Rigor

Architecture

Engineering

Blueprints

Method

Objectives

Compromise

Architect

We nearlyaborted it

Organizational

Learning

Partnership

Themes

Any way

Interactive

Teams

Look atbusiness

Emerge

Team member

Thinking ISall the time

MIS Ouarterly/March 1993 7


underpinning "assuttiption" of this approach isthat current business direction or plans are theonly basis upon which IS plans can be built andthat, therefore, business planning should driveSISP. The emphasis is on the business leadingIS and not the other way around. Business plansor strategies are analyzed to identify where in-formation systems are most required. Often thislinkage is an annual endeavor and is the respon-sibility of the IS director or IS strategic planner(or team). The IS strategic plan is later presentedto the board for questioning, approvai, andpriority-setting.General managers see this approach as simple,"business-like." and a matter of common sense.IS executives often see this form of SISP as theirmost critical task and welcome the long overduemandate from senior management. However,they soon discover that business strategies areneither ciear nor detailed enough to specify ISneeds. Thus, interpretation and further analysisbecome necessary. Documents have to bestudied, managers interviewed, meetings con-vened, working papers written, and tentative pro-posals on the IS implications of business plansput forward. "Home-spun" procedures are de-veioped on a trial and error basis to discover andpropose the IT implications of business plans. Itmay be especially difficult to promote the notionthat IT itself may offer some new strategic op-tions. The IS planners often feel that they haveto "take the lead" to make any progress or in-deed to engage the business in the exercise.They also discover that some top executives maybe more forceful in their views and expectationsthan others.

Users and line managers are likely to be involvedvery little. The emphasis on top-level input andbusiness plans reduces the potential contributionof users and the visibility of locai requirements.Users, perceiving SISP as remote, complain ofinadequate involvement. Because the IS strategybecomes the product of the IS function, usersupport is not guaranteed. Top management,having substantially delegated SISP to thespecialists, may be unsure of the recommenda-tions and be hesitant to commit resources, thusimpairing implementation.

Nevertheless, some advantages can accrue. In-formation systems are seen as a strategic re-source, and the IS function receives greaterlegitimacy. Important strategic thrusts that re-

quire iT support can be identified, and if thebusiness strategy is cieariy and fuily presented,the iS strategy can be weii-ailgned. indeed, in oneof the prior case study companies that adoptedthis approach, a clear business pian for survivaiied to iT appiications that were admired by manyindustry watchers. However, despite this achieve-ment, the iS function is stili perceived by aii threesets of stakeholders as poorly integrated into thebusiness as a whole.

Method-driven approachThe Method-Driven Approach was present in twocompanies and two of the case study firms.Adherents of this approach appear to assumethat SISP is enhanced by, or depends on, useof a formai technique or method. The IS directormay beiieve that management wiii not think aboutiS needs and opportunities without the use of aformal method or the intervention of consuitants.Indeed, recognition or anticipation of some of thefrustrations typical of the Business-Led Approachmay prompt the desire for method. However, anymethod wili not do. There is typicaiiy a searchfor tbe "best method," or at ieast one better thanthe iast method adopted.

Once again, business strategies may be foundto be deficient for the purpose of SiSP. The in-troduction of a formai method rarely provides aremedy, however, because it is uniikeiy to be astrong enough business strategy technique. Aiso,the method's practitioners are uniikeiy to beskilied or credible at such work. Furthermore, asformal methods are usuaiiy sponsored by the iSdepartment, they may faii to win the support orinvoivement of fhe business at large. Thus, a sec-ond or third method may be attempted while theIS department tries to elicit or verify the businessstrategy and to encourage a wider set ofstakeholders to participate. Often, a vendor orconsultant plays a significant role. As the chal-lenges unfold, stakeholders determine the "best"method, often as a result of the qualities of theconsultants as much as the techniques them-selves. The consultants often become thedrivers of the SISP exercise and therefore havesubstantial infiuence on the recommendations.

Users may judge Method-Driven exercises as"unreal" and "high level" and as having exclud-ed the managers who matter, namely them-selves. Generai managers can see the studiesas "business strategy making in disguise" and



thus become somewhat resistant and not easiiypersuaded of the priorities or options suggestedby the appiication of the method. iS strategicplans may then iose their credibiiity and neverbe fully initiated. The exercises and recommen-dations may be forgotten. Often they are labeliedthe "xyz" strategy, where "xyz" is the name ofthe consuiting firm empioyed; in other words,these strategies are rareiy "owned" by thebusiness.

Formai methods do not always fall completely.Although a succession of methods achieved lit-tle in the companies studied, managers judgedthat each method had been good in some unan-ticipated way for the business or the IS depart-ment.^ For exampie. in one firm it siiowed theneed for business strategies, and in another itinformed IS management about business im-peratives. In the former firm, IS directors wereheard to say the experience had been "good forthe company, showing up the gaps in strategicthinking!" Nevertheless, formai strategy studiescould leave behind embryonic strategic thrusts,ideas waiting for the right time, or new thinkingthat could be exploited or built upon iater inunforeseen ways.

Administrative approachThe Adtninistrative Approach was found in fivecompanies. The emphasis here is on resourcepianning. The wider management pianning andcontroi procedures were expected to achieve theaims of SiSP through formal procedures foraliocating iS resources. Typically. IS deveiop-ment proposals were submitted by business unitsor departments to committees who examinedproject viability, common system possibilities,and resource consequences, in some cases, re-source pianners did the staff work as proposaisascended the annuai hierarchicai approvai pro-cedure. The Administrative Approach was theparaiiei of. or couid be attached to. the firm's nor-mal financiai pianning or capitai budgetingroutine. The outcome of the approach was a one-year or muiti-year deveiopment portfolio ofapproved projects. Typicaiiy no appiication isdeveioped untii it is on the pian. A pianning in-vestment or steering committee makes alldecisions and agrees on any changes.

Respondents identified significant down sides tothe Administrative Approach, it was seen as not

strategic, as being "bottom-up" rather than "top-down." ideas for radicai change were not iden-tified, strategic thinking was absent, inertia and"business as usuai" dominated, and enterprise-ievei applications remained in the background,More emotionai were the claims about conflicts,dramas, and game playing—ali perhaps inevit-able in an essentiaily resource allocation pro-cedure. The emphasis on resource pianningsometimes led to a resource-constrained out-come. For exampie. spending iimits were oftenappiied. and boards and CEOs were accused ofapplying cuts to the iS budget, assuming thatin doing so no damage was being done to thebusiness as a whoie.

Some benefits of this approach were identified.Everybody knew about the procedure; it was visi-ble, and aii users and units had the opportunityto submit proposais. indeed, an SISP procedureand timetable for SiSP were commoniy pubiishedas part of the company poiicy and proceduresmanual. Users, who were encouraged to makeapplication deveiopment requests, did producesome ideas for buiiding competitive advantage.Also, it seemed that radicai. transformationai ITapptications could arise in these companiesdespite the apparently bottom-up, cautious pro-cedure. The most radical appiications emergedwhen the OEO or finance director broke the ad-ministrative ruies and informaily proposed andsanctioned an IS investment.

By emphasizing viability, project approval, andresource pianning. the administrative approachproduced appiication deveiopment portfoiios thatwere eventual iy implemented. Not oniy financiaicriteria guided these choices. New strategicguideiines. such as customer service or qualityimprovement, were atso infiuentiai. Finaiiy, theAdministrative Approach often fitted the plan-ning and controi style of the company. iS wasmanaged in congruence with other activities.which permitted complementary resources to beailocated in paraiiei. indeed, uniess the iS func-tion compiied with procedures, no resourceswere forthcoming.

Technological approachThe Technological Approach was adopted by fourcompanies and two of the case study firms. Thisapproach is based on the assumption that an in-formation systems-oriented modei of the

MtS Quarterly/March 1993 9


business is a necessaty outcome of SISP and.therefore, that analytical modelling methods areappropriate. This approach is different from theMethod-Driven Approach in two principal char-acteristics. First, the end product is a businessmodel (or series of models). Second, a formalmethod is applied based on mapping the activ-ities, processes, and data flows of the business.The emphasis is on deriving architectures orblueprints for IT and IS, and often informationengineering terminology is used. Architecturesfor data, computing, communications, and appli-cations might be produced, and computer-aidedsoftware engineering (CASE) might be among thetools employed. A proprietary technology-orient-ed method might be used or adapted in-house.Both IS directors and general managers tend toemphasize the objectives of rigorous analysis andof building a robust infrastructure.

This approach is demanding in terms of both ef-fort and resource requirements. These also tendto be high-profile activities. Stakeholders com-mented on the length of time involved in theanalysis and/or the implementation. User man-agers reacted negatively to the complexity of theanalysis and the outputs and reported a tenden-cy for technical dependencies to displace busi-ness priorities. In one case, management wasunsure of the validity and meaning of theblueprints generated and could not determinewhat proposals mattered most. A second studyof the same type, but using a different tech-nological method, was commissioned. This pro-duced a different but equally unconvincing setof blueprints.

These characteristics could lead to declining topmanagement support or even user rebellion. Inone firm, the users called for an enterprisemodelling exercise to be aborted. In one of thecase study firms, development of the blueprintapplications was axed by top management threeand a half years after initiation. In another, twogenerations of IS management departed after or-ganizational conflict concerning the validity of thetechnological model proposed.

Some success was claimed for the Technologi-cal Approach. Benefits were salvaged by factor-ing down the approach into smaller exercises. Inone case this produced a database definition,and in another it led to an IT architecture for thefinance function. Some IS directors claimed these

outcomes were valuable in building better ITinfrastructures.

Organizational approachThe Organizational Approach was used in sixcompanies and one of the case study firms. Theunderpinning assumption here is quite different.It is that SISP is not a special or neat and tidyendeavor but is based on IS decisions beingmade through continuous Integration betweenthe IS function and the organization. The way ITapplications are identified and selected isdescribed in much more multi-dimensional andsubtle language. The approach is not withoutmethod, but methods are employed as requiredand to fit a particular purpose. For example, valueanalysis may f̂ e used, workshops arranged, busi-ness investigation projects set up, and vendorvisits organized. The emphasis, however, is onprocess, especially management understandingand involvement. For some of these companies,a major SISP method had been applied in thepast, but in retrospect it was seen to have beenas much a process enabler as an analytical in-vestigation. Executive teamwork and an under-standing of how IT might contribute to thebusiness were often left behind by the methodrather than specific recommendations for IS in-vestment. Organizational learning was importantand evident in at least three ways.

First, IS development concentrated on only oneor two themes growing in scope over severalyears as the organization began to appreciate thepotential benefits. Examples of such themes in-cluded a food company concentrating on pro-viding high service levels to customers, aninsurance company concentrating on low-costadministration, and a chemical company concen-trating on product development performance.Second, special studies were important. Oftenmultidisciplinary senior executive project teamsor full-time task forces were assigned to tacklea business problem from which a major IS in-itiative would later emerge. The presence of anIS executive in the multidisciplinary team was feltto be important to the emergence of a strategictheme because this person could suggest why,where, and how IT could help. Teamwork was theprincipal influence in IS strategy making. Third,there was a focus on implementation. Themeswere broken down into identifiable and frequent



deliverables. Conversely, occasional project costand time overruns were acceptable if they al-lowed evolving ideas to be incorporated. In someways, IS strategies were discovered through im-plementation. These three learning characteris-tics can be seen collectively as a preference forincremental strategy making.The approach is therefore organizationalbecause:

1. Collective learning across the organization isevident.

2. Organizational devices or instruments (teams,task forces, workshops, etc.) are used totackle business problems or pursue initiatives.

3. The IS function works in close partnershipwith the rest of the organization, especiallythrough having IS managers on managementteams 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 norabnormal. It is part of the normal businessplanning of the organization.

6. IS strategies often emerge from ongoingorganizational activities, such as trial and errorchanges to business practices, continuousand incremental enhancement of existing ap-plications, and occasional system initiativesand experiments within the business.

In one of the companies, planning was "counter-cultural." Nevertheless, in the character de-scribed above, planning still happened. In an-other company there were no IS plans, justbusiness plans. In another. IS was enjoying ayear or more of low profile until the companydiscovered the next theme. In most of thesefirms, IS decisions were being made all the timeand at any time.

Respondents reported some disadvantages ofthis approach. Some IS directors worried abouthow the next theme would be generated. Atso,because the approach is somewhat fuzzy or soft,they were not always confident that it could betransplanted to another part of the business. In-deed, a new CEO, management team, or man-agement style could erode the process withoutthe effect being apparent for some time. One IS

director believed the incrementalism of the Or-ganizational Approach led to creation of inferiorinfrastructures.

The five approaches appear to be different inscope, character, and outcome. Table 7 differen-tiates them using the three characteristics thatseem to help other organizations position them-selves. Also, slogans are offered to capture theessence of each approach. Strengths and weak-nesses of each approach are contained inTable 8.

It is also possible to indicate the apparent dif-ferences of each approach in terms of the threefactors suggested in Figure 1 as necessary forsuccess: method, process, and Implementation.Table 9 attempts a summary.

In the Business-Led Approach, method scoreslow because no formal technique is used; pro-cess is rated low because the exercise is com-monly IS dominated; but implementation ismedium because the boards tend fo at least ap-prove some projects. In the Method-Driven Ap-proach, method is high by definition, but processis largely ignored and implementation barely orrarely initiated. In the Administrative Approach,only a procedure exists as method. However, itsdependence on user inputs suggests a mediumrating on process. Because of its resource alloca-tion emphasis, approved projects are generallyimplemented. The Technological Approach isgenerally method-intensive and insensitive toprocess. It can, however, lead to some specificimplementation of an infrastructure. The Orga-nizational Approach uses any method or devicesthat fit the need; it explicitly invests in processand emphasizes implementation.

Preliminary EvaluationsThe five approaches were identified by compar-ing the events, experiences, and lessons de-scribed by the interviewees. As the investigationproved to be exploratory, the classification ofapproaches is descriptive and was derived by in-ductive interpretation of organizational experi-ences. Table 6. therefore, should be seen as anideal model that caricatures the approaches inorder to aid theory development. One way of "val-idating" the model is to compare it with priorresearch in both IS and genera! management toassess whether the approaches "ring true."


tntormation Systems Planning

Table 7. Five Approaches Summarized

UnderpinningAssumption

Emphasis ofApproach

MajorInfluence ofOutcomes

Slogan

Business-Led

Business plansand needsshould driveIS plans

Businessleads IS andnot vice-versa

IS planners

BusinessDrives IS

Method-Driven

IS strategieswill beenhanced byuse of aforma! SISPmethod

Selection ofthe bestmethod

Practitionersofthemethod

StrategyNeedsfVIethocI

Administrative

S!SP Shouldfo!low andconform withthe firm'smanagementp!anning andcontrolprocedures

identificationand allocationof !Sresources tomeet agreedneeds

Resourcep!anning andsteeringcommittees

Fo!!ow fheRu!es

Technoiogicai

SISP is anexercise inbusiness andinformationmode!!ing

Production ofmode!s andb!ueprints

f^ode!!ingmethodemp!oyed

!S NeedsBlueprints

Organizational

S!SP is acontinuousdecision-makingactivity sharedby the businessand !S

Organizationa!learning aboutbusinessprob!ems andopportunities andthe ITcontribution

Permanent andad hoc teams ofkey managers.inc!uding !S

Themes withTeams

Related theoriesDifficulties encountered in the Business-Led Ap-proach have been noted by others. The availabi!i-ty of forma! business strategies for SISP cannotbe assumed (Bowman, etal.. 1983; Lederer andMendelow, 1986). Nor can we assume that busi-ness strategies are communicated to the orga-nization at large, are clear and stable, or arevaluable in identifying !S needs (Earl, 1989;Lederer and Mende!ow. 1989). Indeed, the qualityof fhe process of business planning itself mayoften be suspect (Lederer and Sethi. 1988). Inother words, while the Business-Led Approachmay be especially appealing to generai man-agers, the chaHenges are !ike!y to be significant.

There is considerable iiterature on the top-down,more business-strategy oriented SiSP methodsimplied by the Ivlethod-Driven Approach, but mostof it is conjectura! or normative. Vendors can bevery persuasive about the need for a methodoi-ogy that exp!icit!y connects IS to business think-

ing (Bowman, et al., 1983). Other researchershave argued that sometimes the businessstrategy must be explicated first (King, 1978;Lederer and Mendelow. 1987). This was a befiefof the !S directors in the fvtethod-Driven com-panies, but one general manager complainedthat this was "business strategy making indisguise."The Administrative Approach reflects theprescriptions and practices of bureaucraticmodels of p!anning and control. We must turn tothe general management !iterature for insightsinto this approach. Quinn (1977) has pointed outthe strategy-making !imitations of bottom-up plan-ning procedures. He argues that big change rare-iy originates in this way and that, furthermore,annua! planning processes rarely foster innova-tion. Both the political behavior stimulated byhierarchicai resource allocation mechanisms andthe business-as-usual inertia of budgetary plan-ning have been we!!-documented e!sewhere(Bower, 1970; Danziger 1978).



Table 6. Strengths and Weaknesses of SISP Approaches

Business-Led

StrengthsSimple

Businessfirst

Raises ISstatus

WeaknessesAd hocmethod

Lacksmanagementcommitment

Depends onquality ofbusinessstrategy

Method-Driven

Provides amethodology

Plugs strategygaps

Raises strategyprofile

Userinvolvement

Too inf!uencedby method

!mp!ementationun!ike!y

Administrative

Systemviabi!ity

Systemsynergies

Encouragesuser input

Non-strategic

Bureaucratic

Resource-constrained

Technological

Rigor

Focus oninfrastructure

Favorsintegrated tools

Lacksmanagementsupport

On!y partia!imptementation

Complexity

Organizational

Becomesnormal

Emphasis onimplementation

Promotes!S-userpartnership

Generation ofnew themes

Softmethodology

Architecturebecomesdifficult

Table 9. SISP Approaches vs. Three Conditions for Success

Method

Process

Implementation

Business-Led

Low

Low

Medium

Method-Driven

High

Low

Low

Administrative

Low

Medium

High

Technoiogicai

High

Low

Medium

Organizationai

Medium

High

High

The Technological Approach may be the extremecase of how the IT industry and its professionalstend to apply computer science thinking to plan-ning. The deficiencies of these methods havebeen noted in accounts of the more extensive ISplanning methods and, in particular, of informa-tion engineering techniques. For instance, man-agers are often unhappy with the time and costinvolved (Goodhue, et al., 1988; Moynihan. 1990).Others note that IS priorities are by definition

dependent on the sequence required for architec-ture building {Hackathorn and Karimi. 1988; In-mon. 1986). The vo!uminous data generated bythis class of method has also been reported(Bowman, et al., 1983: Inmon. 1986).The Organizational Approach does not fit easilywith the technical and prescriptive !S literature,but simi!ar patterns have been observed by themore behaviora! studies of business strategymaking. It is now known that organizations rare-



!y use the rationai-ana!yticai approaches toutedin the pianning literature when they make signifi-cant changes in strategy (Quinn. 1978). Rather,strategies often evolve from fragmented, incre-mental, and largely intuitive processes. Ouinnbelieved this was the quite natura!, proper wayto cope with the unknowabie—proceeding f!ex-ibly and experimentally from broad concepts tospecific commitments.

Mintzberg's (1983) view of strategy making issimilar. It emphasizes small project-based multi-ski!!ed teams, cross-functionat liaison devices,and se!ective decentralization. Indeed. Mintz-berg's view succinctly summarizes the Organiza-tional Approach. He argues that often strategyis formed, rather than formulated, as actions con-verge into patterns and as analysis and im-plementation merge into a fluid process oflearning. Furthermore. Mintzberg sees strategymaking in reality as a mixture of the formal andinformal and the analytical and emergent. Topmanagers, he argues, should create a context inwhich strategic thinking and discovery mingle,and then they shouid intervene where necessaryto shape and support new ways forward.

!n !S research, Henderson (1989) may have im-plicitly argued for the Organizationa! Approachwhen he called for an iterative, ongoing IS plan-ning process to build and sustain partnership. Hesuggested partnership mechanisms such as taskforces, cross-functional teams, mu!ti-tiered and

cross-functiona! networks, and collaborative plan-ning without planners. Henderson and Sifonis(1988) identify the importance of learning in SISP.and de Geus (1988) sees a!! p!anning as learn-ing and teamwork as central to organizationa!!earning. Goodhue, et a!. (1988) and Moynihan(1990) argue that SISP needs to deliver goodenough app!ications rather than optimal mode!s.These propositions cou!d be seen as recogni-tion of the need to !earn by doing and to de!iv-er benefits. There is therefore a literature tosupport the Organizational Approach.

Data assessmentThe field data itself can be used to assess thesuggested taxonomy of approaches, Questionsthat arise are: do the approaches actually exist,and is it possible to clearly differentiate betweenthem? Analysis of variance tests on reported suc-cess scores indicated that differences betweenapproaches are significant, but differences be-tween stakeholder sets are not.^ This is one in-dication that approach is a distinct andmeaningfu! way of ana!yzing S!SP in action.

A second obvious question is whether any ap-proaches are more effective than others. !t isperhaps premature to ask this question of a tax-onomy suggested by the data. Caution wouid ad-vise further va!idation of the framework first,followed by carefuiiy designed measurement

Table 10. Means Success Scores by Approach

Totaf Means

iS Directors

GeneraiManagers

LineManagers

Number ofFirms

Business-Led

3.25

3.50

3.00

3.25

4

Method-Driven

3J&

4.50

4.00

3.00

2

Administrative

3.60

3.60

3.40

3.80

5

Technoiogicai

4.00

4.25

4.00

3.75

4

Organizationai

3.94

4.00

4.17

3.66

6

Note: 5 = high; 1 = !ow.



tests. However, this study provides an opportuni-ty tor an early, if tentative, evaluation of this sort.For example, as shown in Table 10, successscores can be correlated with SISP approach.Overall mean scores are shown, as well as scoresfor each stakeholder set. No approach differedwidely from the mean score (3.73) across ali com-panies. However, the most intensive approachin terms of technique (Technological) earned thehighest score, perhaps because it representswhat respondents thought an IS pianningmethodology should look like. Converseiy. theBusiness-Led Approach, which lacks formalmethodologies, earned the lowest scores. Thereare, of course, legitimate doubts about themeaning or reliability of these success scoresbecause respondents were so keen to discussthe unsuccessful features.

Accordingly, another available measure is toanalyze the frequency of concerns reported byfirm, assuming each carries equal weight. Table11 breaks out these data by method, process,and implementation concerns. The Organiza-tional Approach has the least concerns attributedto it in total. The Business-Led Approach wascharacterized by high dissatisfaction with methodand implementation. The Method-Driven Ap-proach was perceived to be unsuccessful on pro-cess and, ironically, on method, while opinionwas less harsh on implementation, perhaps be-cause implementation experience itself is low.The Administrative Approach, as might be pre-dicted, is not well-regarded on method. Thesedata are not widely divergent from the qualitativeanalysis in Table 9.

Another measure is the potential of each ap-proach for generating competitive advantage ap-plications. Respondents were asked to identifyand describe such applications and trace theirhistories. No attempt was made by the research-er to check the competitive advantage claimedor to assess whether the applications deservedthe label. Although only 14 percent of all suchapplications were reported to have been gener-ated by a formal StSP study, it is interesting tocompare achievement rates of the firms in eachapproach (Table 12). Method-Driven and Tech-nological Approaches do not appear promising.Little is ever initiated in the Method-Driven Ap-proach, while competitiveness is rarely the focusof the Technological Approach. The Administra-tive Approach appears to be more conducive,perhaps because user ideas receive a hearing.Forty-two percent of competitive advantage ap-plications discovered in all the firms originatedfrom user requests. In the Business-Led Ap-proach, some obviously necessary applicationsare actioned. In the Organizational Approach,most of the themes pursued were perceived tohave produced a competitive advantage.

These three qualitative measures can be com-bined to produce a multi-dimensional score.Other scholars have suggested that a number ofperformance measures are required to measurethe effectiveness of SISP (Raghunathan andKing, 1988). Table 13 ranks each approach ac-cording to the three measures discussed above(where 1 = top and 5 = bottom). In summingthe ranks, the Organizational Approach appears

Table 11. SISP Concerns Per Firm

Method

Process

Implementation

Total

Number of Firms

Business-Led

2.75

0.75

2.75

6 . ^

4

Method-Driven

2.50

3.00

1.00

6.50

2

Administrative

2.80

1.60

1.60

6.00

5

Technological

1.75

2.50

3.00

7.25

4

Organizational

1.33

2.16

1.83

5.32

6



Table 12. Competitive Advantage Propensity

Approach

Business-Led

Met hod-Driven

Administrative

Technological

Organizational

Competitive Advantage Appiication Frequency

4.0 applications per firm





Tabie 13. Muitidimensionai Ranking of SiSP Approaches

SuccessScoreRanking

LeastConcernsRanking

CompetitiveAdvantagePotentiaiRanl(ing

Sum ofRanks

OveraiiRanking

Business-Led

5

2

2

9

2

Method-Driven

3

3

5

11

4

Administrative

4

4

3

11

4

Technoiogicai

1

5

4

10

3

Organizationai

2

1

1

4

1

to be substantially superior. Furthermore, all theother approaches score relatively tow on thisbasis.

Thus, both qualitative and quantitative evidencesuggest that the Organizational Approach is likelyto be the best SISP approach to use and, thus,a candidate for further study. The OrganizationalApproach is perhaps the least formal and struc-tured. It also differs significantly from conven-tional prescriptions in the literature and practice.

Implications for ResearchMany prior studies of SISP have been based onthe views of IS managers alone. A novel aspectof this study was that the attitudes and experi-ences of general managers and users were alsoexamined. In reporting back the results to therespondents in the survey companies, an inter-esting reaction occurred. The stakeholders wereasked to select which approach best describedtheir experience with SISP. If only IS profes-


Intormation Systems Plar^ning

sionais were present, their conclusions often dif-fered from the final interpretative results.However, when all three stakeholders were pre-sent, a lively discussion ensued and, eventual-ly, unprompted, the group's views moved towardan interpretation consistent with both the datapresented and the approach attributed to the firm.This is another soft form of validation. More im-portant, it indicates that approach is not only amulti-dimensional construct but atso captures amulti-stakeholder perspective. This suggests thatstudies of IS management practice can be en-riched if they look beyond the boundaries of theIS department.

Another characteristic of prior work on SISP isthe assumption that fotmal methods are used andin principle are appropriate (Lederer and Sethi,1988; 1991). A systematic linkage to the organiza-tion's business planning procedures is also com-monly assumed (Boynton and Zmud, 1987;Karimi, 1988). The findings of this study suggestthat these may be false assumptions and that,besides studying formal methods, researchersshould continue to investigate matters of processwhile also paying attention to implementation. In-deed, in the field of business strategy, it wasstudies of the process of strategy making that ledto the "alternative" theories of the strategicmanagement of the firm developed by Quinn(1978) and Mintzberg (1987).

The Organizational Approach to SISP suggestedby this study might also be seen as an "alter-native" school of thought. This particular ap-proach, therefore, should be investigated furtherto understand it in more detail, to assess its ef-fectiveness more rigorously, and to discover howto make it work.

Pinally, additional studies are required to furthervalidate and then perhaps develop these find-ings. Some of the parameters suggested here todistinguish the approaches could be taken asvariables and investigated on larger samples toverify the classification. Researchers could alsoexplore whether different approaches fit, or workbetter in, different contexts. Candidate situationalfactors include information intensity of the sec-tor, environmental uncertainty, the organization'smanagement planning and control style, and thematurity of the organization's IS managementexperience.

impiications for PracticeFor practitioners, this study provides two generallessons. First, SISP requires a holistic or in-terdependent view. Methods may be necessary,but they could fail if the process factors receiveno attention. It is also important to explicitly andpositively incorporate implementation plans anddecisions in the strategic planning cycle.

Second, successful SISP seems to require usersand line managers working in partnership withthe ts function. This may not only generate rele-vant application ideas, but it will tend to createownership of both process and outcomes.

The taxonomy of SISP approaches emergingfrom this study might be interpreted for practicein at least four different ways. First, it can be usedas a diagnostic tool to position a firm's currentSISP efforts. The strengths and weaknessesidentified in the research then could suggesthow the current approach could be improved. Wehave found that frameworks used in this wayare likely to be more helpful if users and gen-eral managers as well as IS professionals jointogether in the diagnosis.

Second, the taxonomy can be used to design asituation-specific (customized) approach on a"mix-and-match" basis. It may be possible todesign a potentially more effective hybrid. Theauthor is aware of one company experimentingat building a combination of the Organizationaland Technological Approaches. One of the studycompanies that had adopted the OrganizationalApproach to derive its IS strategy also soughtsome of the espoused benefits of the Technolog-ical Approach by continuously formulating ashadow blueprint for IT architecture. This may beone way of reconciling the apparent contradic-tions of the Organizational and TechnologicalApproaches.

Third, based on our current understanding it ap-pears that the Organizational Approach is moreeffective than others. Therefore, firms mightseriously consider adopting it. This could involvesetting up mechanisms and responsibility struc-tures to encourage IS-user partnerships, devolv-ing IS planning and development capability,ensuring IS managers are members of all per-manent and ad hoc teams, recognizing ISstrategic thinking as a continuous and periodicactivity, identifying and pursuing business



themes, and accepting "good enough" solu-tions and building on them. Above all, firmsmight encourage any mechanisms that promoteorganizational learning about the scope of IT.

Another interpretation is that the OrganizationalApproach describes how most IS strategies ac-tually are developed, despite the more formal andrational endeavors of IS managers or manage-ment at large. The reality may be a continuousinteraction of formal methods and informal be-havior and of intended and unintended strategies.If so, SISP in practice should be eclectic, selec-ting and trying methods and process initiativesto fit the needs of the time. One consequence ofthis view might be recognition and acceptancethat planning need not always generate plansand that plans may arise without a formalplanning process.

Finally, it can be revealing for an organization torecall the period when IS appeared to be con-tributing most effectively to the business and todescribe the SISP approach in use {whether bydesign or not) at the time. This may then indicatewhich approach is most likely to succeed for thatorganization. Often when a particularly suc-cessful IS project is recalled, its history is seento resemble the Organizational Approach.

ConclusionsThis study evolved into a broad, behavioral ex-ploration of experiences in iarge organizations.The breadth of perspective led to the propositionthat SISP is more than method or techniquealone. In addition, process issues and the ques-tion of implementation appear to be important.These interdependent elements combine to forman approach. Five different SISP approacheswere identified, and one, the OrganizationalApproach, appears superior.

For practitioners, the taxonomy of SISP ap-proaches provides a diagnostic tool to use inevaluating the effectiveness of their SISP effortsand in learning from their own experiences.Whether rethinking SISP or introducing it for thefirst time, firms may want to consider adoptingthe Organizational Approach. Two reasons leadto this recommendation. First, among the com-panies explored, it seemed the most effective ap-proach. Second, this study casts doubt on several

of the by now "traditional" SISP practices thathave been advocated and developed in recentyears.The "approach" construct presented in this ar-ticle, the taxonomy of SISP approaches derived,and the indication that the least formal and leastanalytical approach seems to be most effectiveall offer new directions for SISP research andtheory development.

Endnotes

'See, for example, surveys by Oickson, el al. (1984), Hartogand Herbert (1986), Brancheau and Wetfierbe (1987), andNIederman, et al. (1991).

'Propositions and methods include Zani's (1970) oafly top-down proposal. King's (1976) more sophisticated linkage ofthe organization's IS strategy set lo the business strategy set.and focused techniques such as critical success faciors(Bullen and Rockart, 19B1) and value chain analysis (Porterand Millar, 1985). These are supplemented by productliterature such as Andersen's (1983) Method 1 or IBM's (1975)Business System Planning, The models and frameworks fordeveloping a theory of SISP include Boynton and Zmud(1987). Henderson and Sifonis (1988), and Henderson andVenkatraman (1989). Empirical works include a survey of prac-tice by Galliers (1987), analysis of methods by Sullivan (1985).investigation of problems by Lederer and Sethi (1988). assess-ment of success by Lederer and Uandelow (1987) andRaghunathan and King (1988), and evaluation ot particulartechniques such as strategic dala planning (Goodhue, et al..1992).

^ Prior work has tended to use mail questionnaires targeted atIS executives. However, researchers have called for broaderstudies and for surveys ot the experiences and perspectivesof top managers, corporate planners, and usars (Lederer andMendelow, 1989; Lederer and Sethi, 1988; Raghunathan andKing, 1988).

'Characteristics of the sample companies are summarized inAppendix A.

^Extracts from lhe interview questionnaires are shown mAppendix B.

"This exploration through field studies was in the spirit of'grounded theory" (Glaser and Strauss, 1967).

' Fuller descriptive statistics can be seen in an early researchreport (Earl, 1990).

'Methods employed included proprietary, generic, andcustomized techniques.

* Differences between approaches are significant at Ihe 10 per-cent level (f = 0.056). Differences between stakeholder selsare not significant (f => 0.126). No inleractionwasdiscoveredbetween the two classiiications.



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About the AuthorMichael J. Earl is Andersen Consulting Professorof Information Management at London BusinessSchool. Previously, he was founder and directorof the Oxford Institute of Information Manage-ment at Tempieton College, Oxford. Past appoint-ments include lecturer at Manchester BusinessSchool and group systems manager at GECTelecommunications. He consults for severalmultinational companies and is active in nationaland international debates on business informa-tion technology. His current research is on ISstrategic planning, the contribution of IT to globalbusiness strategies, and the role of the CIO. Pro-fessor Earl has published widely on informationsystems, accounting, and control. He is theauthor or editor of six books, and his latest book,Management Strategies for tnformationTechnotogy, has become a best seller.

20 MIS Ouarterly/March 1993

Intormation Systems Plar}ning

Appendix AField Study Companies

Table A1. Descriptive Statistics for Fieid Study Companies

1.2,3.4.5.6.7.8.9.

10.11.12.13.14.15.16.17.18.19.

20.21.

Company

BankingBankingRetailingRetailingInsuranceInsuranceTravelElectronicsAerospaceAerospaceITITTelecommunicationsAutomobileFoodOilChemicalsFoodAccountancy/ConsultancyBrewingFood/Consumer

AnnualRevenue (£B)

1.7'1.9*4.20.562.81"0.9t0.751.354.12.13.90.60.90.54.5

55.02.181.4

0.551.72.5

Annuai ISExpenditure (£M)

450275

808

30158

25120547718^1440

1.0005

20

12327

Years of SiSPExperience

4'244

111543

172021116916

108

591

'Operating costs,^'premium income.



Appendix BInterview Questionnaire

Structured (Closed) QuestionsI. What prompted you to develop an IS/IT strategy? (RO)3. What were the objectives in developing an IS/IT strategy? (RO)4a. What are the outputs of your IS/IT strategy development? (MC)4b. What are the content headings of your IS strategic plan or strategy? (MC)5. What methods have you used in developing your IS strategy; when; why? (MC)7. What have been the benefits of strategic information systems planning? (RO)8. How successful has SISP been? (LS)9. What have you found to be key success factors in SISP? (RO)10. How is your SISP connected to other business planning processes? (MC)I 1 . How do you review your IS strategies? (MC)12. What are the major problems you have encountered in SISP? (RO)All these questions were asked using multiple-choice lists (MC), Likert-Type Scale (LS), or rank-orderlists (RO).

Example Rank-Order Questions3. What were the objectives in developing an IS/IT strategy?

Tick Rank

Align IS development with business needsRevamp the IS/IT functionSeek competitive advantage from ITEstablish technology path and policies .«.4..Forecast IS requirementsGain top management commitmentOther (specify)

Example Multiple-Choice Questions5. What methods have you used in developing your IS strategy; when, why?

When Method Why

Critical success factorsStages of growthBusiness systems planning •Enterprise modellingInformation engineeringMethod 1Other proprietary (specify)In-house tS strategy »In-house business strategyIn-house application search techniquesInformalOther (specify)

22 MIS Ouanerty/March 1993

Inlormation Systems Planning

Example Likert-Type Scale Question8a. How successful has SISP been on the following scale?

1 2 3 4

Failure Some BenefftsBut Didn'tNeed SISPto AchieveThem

Been Betterthan notDoing It

Successfulbut CanImprove

HighlySuccessful

Semi-Structured (Qpen) Questions2a. Please summarize the approach you have adopted in developing your IS strategy (or in identify-

ing and deciding which IT applications to develop in the long run).2b. What are the key elements of your IS strategy?6a. Have you developed any applications that have given competitive advantage in recent years? If

so, what?6b. How was each of these applications identified and deveioped?8b. In what ways has SISP been unsuccessful?13. Can you describe any key turning points in your SISP experience, such as changes in aims, ap-

proach, method, benefits, success factors or problems?

Appendix CConcerns or Unsuccessful Features of SISP

Method Concerns1. It did not lead to management identifying applications supportable at a cost2. No regeneration or review3. Failed to discover our competitors' moves or understand their improvements4. Not enough planning; too much emphasis on development and projects5. It was not connected to business planning6. It was too internally focused7. Sensibly allocating resources to needs was a problem8. Business needs were ignored or not identified9. Not flexible or reactive enough10. Not coordinated11. Not enough consideration of architecture12. Priority-setting and resource allocation were questionable13. The plans were soon out of date14. Business direction and plans were inadequate15. Not enough strategic thinking16. The thinking was too functional and applications-oriented and not process-based17. It was too technical and not business-based18. It was overtheoretical and too complicated



19. It could have been done quicker; it took too long20. It developed a bureaucracy of its own21. We have not solved identification of corporate-wide needs22. The architecture was questionable; people were not convinced by it23- We still don't know how to incorporate and meet short-term needs24. We did not complete the company-entity model25. We found it difficult justifying the benefits26. It was too much about automating today's operations27. It was too ad hoc; insufficient method28. Many of the recommendations did not meet user aspirations

Process Concerns1. Some businesses were less good at, and less committed to, planning than others2. The exercise was abrogated to the IS department3. Inadequate understanding across all management4. Line management involvement was unsatisfactory5. Lack of senior management involvement6. No top management buy-in7. The strategy was not sold or communicated enough8. We still have poor user-IS relationships9. Too many IS people have not worked outside of IS10. Poor IT understanding of customer and business needs11. Line management buy-in was low12. Little cross-divisional learning13. IS management quality was below par14. Senior executives were not made aware of the scale of change required15. Users lacked understanding of IT and its methods16. It was too user-driven in one period17. We are still learning how to do planning studies18. Planning almost never works; there are too many "dramas"19. The culture has not changed enough20. We oversold the plan21. Too much conflict between organizational units

Implementation Concerns1. We have not broken the resource constraints2. We have not implemented as much as we should3. It was not carried through into resource planning4. The necessary technology ptanning was not done5. We have not achieved the system benefits6. We made technical mistakes7. Some of the needs are still unsatisfied8. Appropriate hardware or software was not available9. Cost and time budget returns10. We were not good at specifying the detailed requirements11. Defining staffing needs was a problem12. We have not gotten anything off the ground yet13. We had insufficient skilled development resources14. Regulatory impediments15. We were overambitious and tried to change too much16. We still have to catch up technically

24 MIS Ouarterly/March 1993