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Strategic Information Systems Planning

Strategic Information Systems Planning

6CC011

Assessment 1

Module leader:

Student Tim Hipkiss

Word Count

1.0 The History of SISP

Information system strategy began being a field of interest from around the information age. Information age was the period that began around 1970 and was noted for the ample manipulation, consumption and publication of information, especially by computers and computer networking. Until the 1960s in the time that was known as the data processing era, practical IS planning was predominated by technical problems and search for their solutions as stated byTeubner (2013). In this era, information technology (IT) was mainly used in the automating standardized processing of mass data. The primary aim of the IS planning was to design effective systems for this purpose (Teubner, 2013). IS was independent of business planning during this time and did not have any relationship to strategic business planning.

In the 1970s, IT increased its interaction and became more powerful and cheap to access. As a result, there was tremendous growth in worthwhile IS areas of deployment as coined by Rockart (1979). Management was found to be a valuable domain of IS application such that 1970s became to be known as time of Management Information System (MIS) according to Gibson and Nolan (1974). The major function of the MIS was providing management with a lot of information needed for controlling and planning. Due to the rising demands for this information, there was development and application of several new methods of IS planning (Rockart, 1979). These methods included Business System Planning and Critical Factor Analysis, and they served as a link between IS planning and business tasks and problems. According to Teubner (2013) there was also the development of complex methods such as Information Engineering, which served to increase the efficiency in, IS planning.

Rapid advancement of technology in the processing of data, particularly in the area of telecommunication around 1980s forced IT to develop a competitive dimension as stated by Chen et al. (2010). Individual companies began realizing strategic advantages from the use of information and technology in a more effective way than their competitors did. According to Wiseman (1985), this competition led to the development of the term “Strategic Information System” to describe this competition in information systems. For many years, the notion that IT was effective in developing and maintaining a superior competition became so popular even among the academicians (Wiseman, 1985). This popularity led to the identification of a new era called Strategic Information System (SIS). At the beginning of 1990s, the systematic planning of SIS started showing its first signs of weaknesses (Gibson and Nolan, 1974). Research proved that the success of SIS was just because of fortunate circumstances, but not because of its effectiveness.

In the 1990s, there developed a need for a call of mutual alignment of business and IS strategy that aimed at good interaction between the two. This paradigm became to be known as “Strategic Alignment” according to Teubner (2013). The strategic alignment idea was very influential in the development of the IT in the late 1990s, which marked the transition to the era of E- Business. The Era of E-Business made IT play an integral role in all processes and areas of business operations. The increased degree of integration made the strategic alignment idea even more meaningful according to Chen et al. (2010). This concept was highly applied in businesses around this period and helped in the development of many organizations.

The extent of growth in which IT became a significant part of the business was accompanied by a lot of effort of integrating IS in the company boundaries. According to Rockart (1979), Companies found it hard to maintain a competitive advantage with intelligent IT. First, the market of IT had matured and its products and services were readily available and they were just like any other commodity in the market. Second, internet based IT solutions were very visible and thus could be more easily and quickly imitated by other companies. As a result, the late 1990s was marked by increasing ferocity and the pace of companies’ competition (Chen et al., 2010). The potential of organizations to maintain a sharp competitive edge acquired by IS innovation became difficult.

The IS planning discussion detected this change in circumstances and directed its resources to Resource Based View (RBV). Many methods of SIS age are in line with the Market Based View as stated byTeubner (2013). The RBV believes that maintenance of a sustainable competitive advantage does not result from the utilization of a particular technology or even individual IS but the capabilities of the company. These capabilities include in specific the know how to design and operate an advantageous SI. gy and competency in management (Gibson and Nolan, 1974). The SIS has evolved from a simple form characterized by many problems and the search for their solutions to the current sophisticated and complex form that has made IT more efficient in its application.

2.0 Concepts of an Information Systems Strategy

Beyond the normal understanding of the SI, application portfolio comprises the essential part of the IS strategy. There is specific diversity in the interpretations of the IS strategy and its contents according to Bakos, J and Treacy, M (1986). This concept is already confirmed by the variety of labels that the IS strategy findings have been given. Some authors call it “IS Strategy,” others call it “IT Strategy” while still some use the combination of both “IS/IT Strategy” according to Teubner, R (2013). Still there is another application of denomination such as the “Strategic Information Plan” according to Benbasat, I., Goldenstein, D and Mead, M (1987).

A critical analysis of the common ideas and conceptions that researchers relate to the term IS strategy confirms additional differences in the understanding of the term. In various academic literature concerning IS strategy studies, researchers were able to identify four different mental conceptions (Teubner, R 2013). First, IS strategy is conceptualized as the common tendency towards IT or else the general accepted role that IT plays in a company. Second, IS strategy is viewed as important in the extended arm of the business strategy. Its main function is to define the main support of the IT required in the initiatives of certain business strategy. Third, IS strategy is seen as the master plan for the laying of the information system of the whole company as stated by Bakos, J and Treacy, M (1986). The fourth understanding of the IS strategy is its view as the departmental plan of the whole IT department in a company.

The concept of the common tendency toward IT that is the assigned role of the IT in a company is closely linked to the significance of IT in an organization. In general, the notion of IS strategy does not concern the specific planning issues or decisions but involve itself with the form such as the mission statement as stated by Teubner, R (2013). Even though people believe that these dispositions are merely abstract, however, they play an integral role in the strategic decisions as stated by Benbasat, I., Goldenstein, D and Mead, M (1987). A basic disposition, for instance, can shape the direction of the IS/IT investment decisions. These decisions will vary according to whether people view IT as a strategic factor or a competitive weapon or a cost factor or even a supportive tool in an organization.

Contrary to the first conceptualization, the view of IT as a departmental plan make utilization of IS in a more concrete and detailed form. The focus is on short or midterm IT projects whose upon implementation comprises much of the expected work of the IT department (Teubner, R 2013). More duties include the operational tasks and the organization of the functions of the IT. Additionally, the strategies of the IS as the departmental plans availing the necessary IT resources such as personnel and financial resources in order to meet these obligations (Bakos, J and Treacy, M 1986). Regarding IS strategy as the extended arm of the strategy of the business makes it be comprised directly in the goals and objectives set for the business strategy. The main purpose of the IS strategy, in this case, is providing the necessary technical assistance for applying the business strategy (Teubner, R 2013). A very significant element is the projects that support the strategic initiatives. These projects are known as strategic projects in order to differentiate them from operational projects that are brought by maintenance needs. Special attention is paid to the project that is directly related to the competitive company’s strategy.

DO Bakos, J and Treacy, M (1986), state strategy as a master plan is unique in that it forms the blueprints for developing a company’s infrastructure for processing of the information as. Thus, they are comprehensive as well as concrete. They are believed to be comprehensive as they involve the whole organization and pay consideration to technical questions, as well as the application and use of contexts. They are referred to as concrete as they are used in the determination of principles and concepts and set the course for building a corporate IT-based infrastructure. Factors of central importance, in this case, include the application system and the development portfolio. Development plans, information needs and the technical infrastructure act as their supplements and are the necessary resources to be availed. The various strategist conceptions of IS strategy is well expressed in the content of the IS strategy.

3.0 Contents of the ISSApproaches that are used for investigating the contents of IS strategy are divided into two categories namely the issue lists and the conceptual model. Issue lists consist of questions and problems that are dealt with by the IS strategy as stated by Levy, M and Powell, P (2000). They are related to the study of literatures, questionnaire research and case study or the analysis of the SISP methods and their requirement for documentation. Issue list covers a broad variety of topics as stated by Teubner, R (2013). However, the terminologies used in these topics are not universally defined, and this pose a big problem when one want to do a comparison. There still exists another major problem in the issue list in that they do not contain a little or no internal structure.

Contrary to the issue list, the conceptual models try to do exploration of the IS strategy field in a logical deductive way. The most influential and prominent of these models is one that Earl introduced in 1989 according to Levy, M., Powell, P and Galliards, R (1999). Since its introduction, the model has undergone through various extensions and updates and has served as inspiration for many authors to embark on the development of their models. Three central questions guided Earl in developing his model (Teubner, R 2013). The first question was which business tasks the IT were supposed to support. The second question was how the IT was supposed to be used in order to support these tasks. The last question was who was responsible for providing IT-based solutions and services to the organizations (Levy, M., Powell, P and Galliers, R 1999). This last question also included the decisions on to which tasks were to be performed in-house or else provided by an external supplier.

In response to the Earl’s three questions, three different dimensions of the IS strategy resulted. These dimensions included technology strategy, system strategy, and the management strategy (Levy, M and Powell, P 2000). These systems strategy refers to the areas of the business that IT support. It comprises of the planned IS projects and the application portfolio. Earl characterized system strategy as directed towards the goals of the business and demands. The technology strategy gives the definition of the essential technologies and the guiding principles used in the governing and supporting the applications implementation (Teubner, R 2013). He explained it as implementation-focused and technology-oriented as stated by Southern, A and Tilley, F (2000). The management strategy describes the function of the IT in the company and the responsibilities in the accomplishment of its tasks. It explains the importance of the IT use and the functions of the human resources in an organization.

Earl sees the system strategy as the core of the IS strategy as it play an integral role in the business and its processes. The system strategy ensures that companies IT is in line with its set goals and the needs (Southern, A and Tilley, F 2000). Furthermore, it makes sure that the application of IT is efficient by prioritizing and evaluating its projects. However, in Earl’s latest version, he has added a fourth dimension that according to him has taken a primary role in the creation of the success of the business in the information age. This dimension answers the question where that is where there is the addition of value and where there exist potential for further development (Teubner, R 2013). This dimension makes Earl acknowledge the informational role as the resource of an organization.

Strategy models like that of Earl can contribute importantly to the structural understanding of the IS strategies in practice. However, many of these models applies IS strategy contents only as far as they are essential for illustration needs (Levy, M., Powell, P and Galliers, R 1999). A comprehensive presentation of the decisions and topics in the different strategy area is limited. Issue lists on the other hand shed lights on the idea of the concrete issue to be discussed in the IS strategies whereas they to systematize this or set priorities. Therefore, a benefit that is concrete for practice can only be achieved through a combination of theoretical models and empirical issue lists. The issue lists can be used in filling the dimension specified by the strategy models with content so that practitioners can apply them efficiently.

4.0 New Perspectives on ISS

The strategizing framework denotes a fundamental shift in how companies view IS strategies. Whereas the original frameworks concentrated in organizing strategy contents the new strategizing framework concentrate in modeling concerned areas in strategy formation. The earlier frameworks of Galliers are drawn on the three-part division of Earl’s original model. In contrast to Earl’s who differentiated between the three separate IS strategy, Galliers’ IS strategy is made of technology (how), information (what) and service strategy (who) and their relation. According McFarlane, F (1984) the implementation strategy compliment these three strategies and coordinate the achievement of the three former strategies. This reason makes Galliers prefer the term “Change Management Implementation Strategy” instead of speaking of a simple implementation strategy.

Galliers’ new framework rejects the separation between the IS strategy and the business strategy. The IS strategy is now no longer independent from the business strategy as stated by McFarlane, F (1984). Instead, this strategy has become a significant part of the business strategy. The earlier need for strategic alignment is as a result eliminated. This new strategy also does away with the clear distinction between the technology, information, and service strategy according to (Teubner, R 2013). to the concerned areas and tendency of strategizing. Galliers still differentiate three problematic areas that need to be addressed as stated by Benjamin, R (1983). These areas include exploration, exploitation and change management strategy. The exploitation strategy specializes in the IT application for predetermined purposes of operations. The exploration strategy, on the other hand, is charged with the responsibility of exploring new business opportunities. The change management strategy deals more with the change in the organization that is IT induced.

Borrowing from Mintzberg (1994) Galliers characterized the exploitation strategy as a deliberate strategy and views exploration strategy as emergent strategy (Ives, B and Learmonth, G 1984). He assumes that emergent planning processes and change management gain more relevance as the dynamism and complexity of the environment increases. IS strategy should as a result in addition to the more designed, deliberate and IT codified solutions should be viewed as ongoing and processual. It should also significantly dependent, improvised and ready to learn from and prompt response to the new emergent and unanticipated consequences of the strategic decisions (McFarlane, F 1984). Galliers also asserts the significance of exchanging and generating knowledge aimed at the support of strategy related collaboration, communication and learning processes.

The observed shift of perspective from strategy to strategizing that Galliers proposed was induced by the fact that IS strategies coded in the strategy documents are rarely implemented completely (Teubner, R 2013). The reasons that give explanation for this shift are complicated, and they range from mismanagement, political influences to organizational resistance according to Benjamin, R (1983). Researchers have also identified planning risks and discontinuities as major source of challenge. Especially in this information age, which is marked by rapid globalization, market fragmentations, stiff competition, fundamental change in society, IS strategy once designed tent to very short life spans.

Galliers does no fully doubt the possibility of strategic planning of IS. His proposition is rather based against the typical comprehending of planning based on the planning research of the 1960s and 1970s (McFarlane, F 1984). In relation to this understanding that has persisted in the SISP research for many years, planning is simply predetermining the actions to take in the future (Clark et al. 2000). Thus, the main outcome of this planning is the set of decisions involving the future actions and resources needed for implementing these actions, which are documented in formal plans (Teubner, R 2013). As a result, useful and accurate plans require specific predictions of the possible environmental developments. The assessment of these developments requires careful analysis, which in turn requires support from dedicated planning techniques.

Galliers is applauded for his turn towards the emergent planning as a satisfactory answer to the discontinuous environments. His stand to acknowledge the noted increase in provisional and temporary characters of IS strategy is conclusive (Benjamin, R 1983). In addition, the distinction between the exploration and exploitation as different areas of IS strategy formation has contributed to the development of organizational ambidexterity. This organizational ambidexterity has been identified as a useful answer to two conflicting problems affecting the information age organizations (Teubner, R 2013; Clark et al. 2000). On the other hand, organizations need to come up with an efficient and stable structure for the current operations. Still, companies also need to embark on continuous challenge to these structures in the light of unpredictable and discontinuous environmental problems. This view gives an implication that companies need to use SI strategy in the application of IT services effectively so that they can identify new business potentials.

There was observed backdrop in the current affairs and the shortcomings of the SI strategy. Galliers’ propositions need to be challenged in three core points. The process part of the strategy development is stressed in a disproportionally way (McFarlane, F 1984). It is clear that IS strategy research has paid a lot of attention to the process of strategic development than to the IS itself as the last outcome of this process. This marked disproportionality is stressed in the Galliers’ framework. In many people’s opinion, the IS strategy has been largely ignored yet it plays a significant role in the development of the current models as suggested by (Teubner, R 2013). For logical matters, the question of what constitute SI strategy and its definition should precede any other question on how it should be developed. This aspect is true not only for the systematic and deliberate planning processes but also to the emerging strategizing processes that were identified by Galliers (Benjamin, R 1983). On the other hand, without an explicit understanding of the contents of SI strategy, identification of the emergent planning processes can prove to be difficult. It is very clear that an understanding of the SI strategy is a necessity for the development of a practical advice for the proper moderating, animating and structuring of the communication processes.

Secondly, the significance of change and exploitation strategy is underestimated. The problem-focused division of Galliers’ IS strategy into exploration, exploitation and change management strategies is a vital contributor of the current comprehending of the SI strategy (Teubner, R 2013). This partition of the strategy into three does not only help in a more distinct understanding of the SI strategy itself but also the understanding of its underlying processes. This understanding is because of individual contribution to the development of SI strategy by the three divisions (Clark et al. 2000). In the exploitation strategies, goal-focused and deliberate analysis and decision processes contribute to the strategy development. In the change management strategies, strategy development is facilitated by the implementation of technical processes (Benjamin, R 1983). The creative and informal processes dominate in the case of exploitation strategies.

Third, the potential of planning systematically is addressed in a too restrictive manner. The significance accorded to the exploitation strategy in relation to the today’s discontinuous environmental conditions has direct implications of the limits of systematic planning (Teubner, R 2013). Empirical studies, however, portray the possibilities and limits of planning systematically in a very different way. Some researchers have proved that planning systematically can be effective even in highly changing environmental conditions and uncertainty (Ives, B and Learmonth, G 1984). These findings reveal that SI strategy are not viewed as unchangeable entities but are subject to constant revision. Other researchers have also shown the effectiveness of the planning systems based on rational decision-making process even in turbulent environmental conditions.

References

Bakos, J. Y., & Treacy, M. E (1986). Information technology and corporate strategy: a research perspective. MIS quarterly, 107-119.

Benbasat, I., Goldstein, D. K., & Mead, M (1987). The case research strategy in studies of information systems. MIS quarterly, 369-386.

Benjamin, R. I. (1983). Information technology: a strategic opportunity.

Chen, D. Q., Mocker, M., Preston, D. S., &Teubner, A (2010) Information systems strategy: reconceptualization, measurement, and implications. MIS quarterly, 34 (2), 233-259.

Clark C, Clark J, Gambill S, Fielder B (2000) Strategic information systems planning paradoxes. Information Strategy: The Executive’s Journal 17(1):27–31

Gibson, C.F., &Nolan, R.L (1974) Managing the four stages of EDP growth. Harvard Business Review 52 (1): 115–126

Ives, B., & Learmonth, G. P. (1984). The information system as a competitive weapon. Communications of the ACM, 27(12), 1193-1201.

Levy, M., & Powell, P (2000). Information systems strategy for small and medium sized enterprises: an organizational perspective. The Journal of Strategic Information Systems, 9(1), 63-84.

Levy, M., Powell, P., & Galliers, R. (1999). Assessing information systems strategy development frameworks in SMEs. Information & Management, 36(5), 247-261.

McFarlane, F. W. (1984). Information technology changes the way you compete (pp. 98-109). Harvard Business Review, Reprint Service.

Rockart, J (1979) Chief executives define their own information needs. Harvard Business Review 57 (2): 81–92.

Southern, A., & Tilley, F. (2000). Small firms and information and communication technologies (ICTs): toward a typology of ICTs usage. New technology, work and employment, 15(2), 138-154.

Teubner, R.A (2013). Informationssystem-Strategie.Theorie, Praxis und Herausforderungen an die Forschung.WIRTSCHAFTSINFORMATIK.doi: 10.1007/s11576-013-0374-2.

Wiseman, C (1985). Strategy and computers: information systems as competitive weapons. Dow Jones-Irwin, Homewood.


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