The Implementation of Strategic Information Systems Planning ...

StrategicPlanning

The Implementation of Strategic Information Systems Planning Methodologies By:Albert L. Lederer JosephM. Katz GraduateSchoolof Business Universityof Pittsburgh Pittsburgh,PA15260 Vijay Sethi School of Management State Universityof NewYorkat Buffalo Buffalo, NY14260

Abstract Strategic informationsystems planning(SlSP) the processof decidingthe objectivesfor organ# z.ational computingand identifying potential computerappfications which the organization shouldimplement.This article gives a thorough definitionof SlSPandthenillustrates it withthree methodologies. A surveyof 80 organizationsexamined the problems faced by information systemsmanagers whenthey attemptto implementsuch a methodology.Thesubjects’overall satisfactionwith the methodology,its resourcerequirements,process,output,andfinal executionwerenot particularly high. Thetwo problemsrated mostsevere werethe difficulty in securingtop management commitment for implementingthe plan and the needfor substantialfurther analysisin order to carryout the plan. The survey also investigated somepotential causesof the problems.Surveyresults suggest that the SISPmethodologies mayoften produce satisfactoryplansbut that organizations lack the management commitmentand control mechanismsto ensurethat theyfollow the plans. Keywords:Planning,informationsystems,information management ACM Categories:K.6.0, K.6.4

Introduction Improvedstrategic informationsystemsplanning (SISP)is the mostcritical issuefacinginformation systems executives today (Brancheau and Wetherbe, 1987). Because the purposeof SISPis to identify the mostappropriatetargets for automationandto schedule their installation, SISP hasthe potential to makehugecontributions to businessesand other organizations(McFarlan, 1971). Effective SISPcanhelporganizations use information systemsto reachbusinessgoals, a majorobjective of senior IS executives(Hartog andHerbert,1986).It canalso enableorganizations to useinformationsystems to significantly impacttheir strategies. However, the failure to carefullycarryout SISPcanresult bothin lost opportunities and the waste of expensive IS resources. In orderto performeffective SISP,organizations conventionallyapplyone of several methodologies (Arthur Andersenand Co., 1986;Martin, 1982; Moskowitz,1986). However,recent research by Lederer and Mendelow(1986a) has shownthat implementing sucha methodology is a top problemfaced by systemsmanagers during SISP.Similarly, in a studyof sevencompanies, Sinclair (1986) foundthe implementationof planningtechniqueto be a majorproblem.The problemencompasses justifying the methodology,applyingit, andreviewing its output.Todate, however,therehasbeenno broadstudyto determinethe natureof this problem. Thisarticle definesSISPanddescribesthreepopular SISPmethodologies. It elucidatesthe relative severity of the problemsandexamines somefactors potentiallyrelatedto this severity.Finally, it considerssome similarities anddifferencesin the problems of the threepopulartechniques.

Background Thissectionfirst definesSISP.It thendiscusses frequently appliedSISPmethodologies. Next, it presents a categorization of common problems encountered duringthe SISPprocess.Finally, it discusses literature whichlays the groundwork for an investigationof somefactors potentially related to the SISPproblems.

SISP defined Theconceptof SISPhas evolvedover the last decade.In the late 1970s,accordingto McLean andSoden (1977), the primaryobjectivesof sys-

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tems planning were to improvecommunication with users, to increasetop management support, to better forecastresourcerequirements andallocate resources,to determinemoreopportunities for improvingthe MISdepartment, andto identify newand higher paybackcomputerapplications. Morerecently, Moskowitz (1986)observesthat additional objective of SISPhasbecome the development of an organization-wide data architecture. Simultaneously, bothVitale, et al. (1986)and IndexSystems (1986)suggestthat the identification of strategicapplicationshasarisenas another mainobjectiveof SISP. This article adoptsa broad,dichotomous viewof SISP.Hence,on oneside of the dichotomy,SISP refers to the process of identifyinga portfolio of computer-based applicationsthat will assist anorganization in executingits businessplans and consequentlyrealizing its businessgoals. SISP also entails the definition of databases andsystems to support those applications. SlSPmay mean the selectionof rather prosaicapplications, almostas if froma list, that wouldbestfit thecurrent andprojectedneedsof the organization.This assumes that information systemsplannersknow

their organization’sgoals, plansand strategy; suchan assumptionmaybe unfounded(Lederer and Mendelow, 1987). Onthe otherside of the dichotomy, SISPcanalso entail searchingfor applicationswith a highimpact andthe ability to createan advantage over competitors (Clemens,1986; Ives and Learmonth, 1984; McFarlan,1984; Parsons, 1983; Wiseman,1985). SISPcan help organizations use information systemsin innovative waysto build barriers against newentrants, changethe basis of competition, generatenewproducts, build in switchingcosts, or change the balanceof powerin supplierrelationships(McFarlan,1984). Assuch,SISPpromotes innovationandcreativity, and might employidea-generating techniques suchas brainstorming (Osborn,1957;Rackoff,et al., 1985),ValueChainAnalysis(Porter,1985), the Customer Resource Life Cycle(Ives andLearmonth,1984).Vitale, et al. (1986)recognized distinction betweenthe two approaches andreferred to the formeras attemptingto "align" MIS objectiveswithorganizational goalsandthe latter as attemptingto "impact"organizationalstrategies(p. 268).

Table1. Description of BSPStudySteps Gaining Executive Commitment

A top executivesponsorandvarious other interestedexecutivesare identified as the majorsources of informationto the study. A teamleader, perhaps the sponsor,is identified to spendfull timeleading the studyteamof 4 to 7 executives.

Preparingfor the Study

Teammembers are trained in BSP.Theycompile dataon the firm’s businessfunctionsandcurrentIS support,andproducea workplan, interview schedule, reviewschedule, andfinal reportoutline.

Starting the Study

Theexecutivesponsorreviewsthe study’s purpose with the team. Theteamleader reviewsthe compiled businessdata and the top IS executiveexplains recentIS activities andproblems to the team.

Defining BusinessProcesses

Thestudy teamidentifies the businessprocesses whichformthe basis for executiveinterviews, the definitionof thefuture informationarchitecture,and otherstudyactivities.

Defining Data Classes

Data are groupedinto categories called data classesbasedon their relationshipsto the business processes identified above.Chartsare built to reflect thoserelationships.

AnalyzingCurrent SystemsSupport

Thestudyteamidentifies howIS currently supports the organization.Theteamdevelopscharts showing organizational processes and the responsible departments.

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To carry out SISP(especially in the alignment mode),anorganizationusuallyselectsanexisting methodology andthen embarks on a major,intensive study. Theorganizationformscommittees of userswith IS specialistsas members or advisors. It mostlikely usesthe SISPvendor’seducational supportto train the committeemembers andthe vendor’sconsulting supportto guide the study andauditits results. A multi-stepprocedure is carried out over severalweeksor months.Theduration generallydepends on the scopeof the study. In additionto identifyingthe portfolio of applications, theorganization prioritizes them.It defines databases,data elements,and a networkof computers and communications equipment to support the applications.It also preparesa schedulefor development andinstallation.

Frequently appfied methodologies Organizations generallyapplyoneof a number of methodologiesin order to performthese SISP

studies. Threepopular methodologies include BusinessSystemsPlanning(IBM, 1975;Lederer and Putnam,1986), Strategic SystemsPlanning (HollandSystems,1986), andInformationEngineering(Martin,1982).Theyare described briefly as illustrative methodologies andwill bealludedto in the researchfindings. Thesethree wereselected because, together,theyaccounted for half of the responses to the survey. BusinessSystems Planning(BSP), developed by IBM,involves top-down planningwith bottomup implementation.In this methodology, a firm recognizesits businessmission,objectivesand functions, andhowthese determineits business processes.Theprocesses are analyzedfor their dataneeds,anddataclassesare then identified. Databasesare developedby combiningsimilar data classes. Thefinal BSPplan describesan overall informationsystemarchitectureas well as the installation schedule of individual systems. Table1 detailsthe stepsin thestudy.

Table1. (continued) Determiningthe ExecutivePerspective

Executiveinterviews gain the commitment of additional executivesandhelp the studyteamunderstan¢ the problemswhosesolutions will be representedb~ the future systems.

Defining FindingsandConclusions

Thestudy teamdevelopscategoriesof findings and conclusions andthen classifies previouslyidentifie¢ problems into the categories.

Definingthe InformationArchitecture

Thestudy teamusesthe businessprocessesand th~ data classesto designdatabases.Theteamprepare., charts relating the processes to the classesandth~ systemsto subsystems.

Determining ArchitecturalPriorities

Theteamsets systemsdevelopment priorities base¢ onpotentialfinancial andnon-financial benefits,th~ likelihood of success,andthe organization’sdeman¢ for eachsystem.

ReviewingInformation ResourceManagementThestudyteamevaluatesthe currentIS organization’., strengthsand weaknesses. A steering committeei., established to set policy andcontrolthe function. DevelopingRecommendations and Action Plan Theteampreparesan action plan with recommenda. tions abouthardware, software,adjustments to curren systems,and methodsof strengtheningIS manage. ment. ReportingResults

Thestudyteamgivesa talk alongwith a brief summan~ anda moredetailed(usuallyverythick) reportcoverin( the study’s purpose,methodology, conclusions,recommendations andprescribedactions.

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BSPplaces heavy emphasison top management commitment and executive involvement.Topexecutivesponsorship is perceived as critical. Informationsystemsanalystsmightserveprimarily in an advisorycapacity. Thestudy producessucha large volumeof information that IBMhas begun marketingan automated version called Information QualityAnalysis(Vacca,1984). Strategic Systems Planning(SSP), developed by RobertHolland, defines a businessfunction modelby analyzingmajorfunctionalareas.A data architectureis derivedfromthe businessfunction modelby combininginformation requirements into genericdataentities andsubjectdatabases. Aninformationsystemsarchitecturethen identifies newsystemsandtheir implementation schedule. Althoughthe language differs slightly, the stepsin the SSPprocedure are similar to thosein BSP.¯ A majordifference from BSPis SSP’sautomated storage, manipulation,and presentationof the data collected duringthe SISPprocess.Software producesreports in a wide rangeof formatsand with variouslevels of detail. Forexample, "affinity" reports showthe frequenciesof accesses to data, while"clustering"reportsgive guidance for databasedesign. Menus guide the user through online data collection and maintenance. A data dictionaryinterface facilitates sharingSSPdata with an existing data dictionary or other automateddesigntools. In addition to SSP,HollandSystems Corporation offers Tactical Systems Planning(TSP)andLogical DatabaseDesign(LDD). TSPis a methodology for guiding the implementation of the informationsystemarchitecture. LDDis usedto developdata structures for modulesfrom the studyor fromother systems,andthen is usedto mapthe structuresto the SSPdataarchitecture. InformationEngineering(IE), developedby JamesMartin, providestechniquesfor building enterprise models, data models, and process models.Theseform a comprehensive knowledge basewhichthen createsand maintainsinformation systems.IE is consideredby someto be a moretechnically oriented approachthan other SISPmethodologies. In conjunction with IE, Martinadvocates the useof Critical Success Factors(CSF)(Rockart,1979), techniquefor identifying issues consideredby business executives as the mostvital for the successof their organization.Martinsuggeststhat each general managershould use CSF.Theresulting factors will then guidethe SISPendeavor


by helping identify future management control systems.(Recentversionsof BSPalso useCSF.) IE providesseveralsoftwarepackages for facilitating the SISPeffortl However, IE differs from other methodologiesby providing automated tools to link its outputto subsequent systems development efforts. Anapplicationgeneratoris integrated with IE and producessystems with COBOL code.

Othermethodologies Besides BSP,SSPand IE, firms might choose Method/1 (Arthur Andersen andCo., 1982),InformationQuality Analysis(Vacca,1984), Business InformationAnalysisand Integration Technique (Carlson,1979),Business InformationCharacterization Study (Kerner, 1979), CSF(Rockart, 1979), Ends/MeansAnalysis (Wetherbe and Davis, 1982), Nolan Norton Methodology (Moskowitz,1986), Portfolio Management (McFarlan,1981),StrategySet Transformation (King, 1978),ValueChainAnalysis(Porter, 1985),orthe CustomerResourceLife Cycle (Ives and Learmonth,1984). Alternatively,firms often selectfeaturesof these methodologies and then, possibly with outside consulting assistance, developtheir owninhouseapproach(Arthur Andersenand Co, 1985; Sullivan,1987). Table2 presentsfour majordistinctions among somemethodologies. It classifies themas alignmentor impactapproaches. Thetable also distinguishesthemby their primaryfocus. Finally, it showswhetherthey define a data architecture, and whetherthey provideautomated support.

Problemswith the methodologies It haslongbeenrecognized that SISPis anintricate andcomplex activity fraught with problems (McFarlan, 1971). Several authors have described these problems.Their workis basedon field surveys,cases,andconceptual studies, and investigatesmostof the methodologies described previously.A reviewof themostsignificantof their articles servedas the basisto createa comprehensivelist of the problems (seeTable3). In order to organizeandsummarize the problems, this researchusedthree categories--resources, process,and output. Resource-related problems addressedthe issues of time-requirements, money,personnel, and top management support for the initiation of the study. Process-related

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Table2. Some Characteristicsof Different Methodologies Methodology BusinessSystems Planning Strategic Systems Planning Information Engineering Method/1 Critical Success Factors CustomerResource Life Cycle Value Chain Analysis

Impact or Alignment Primarily Alignment Primarily Alignment Primarily Alignment Alignment CanBe Both Impact Impact

problems involvedthe limitations of the analysis doneby the methodology. Finally, output-related problemsdealt with the comprehensiveness and appropriateness of the final planproduced by the methodology.This categorization wasderived froma similar scheme usedto definethe different components of IS planning(King, 1984). Table 3 showsthe problemsfrom the surveys, cases and conceptual studies. The problems have beenparaphrased,simplified and categorized into the framework.

Focus

Defines Data Architecture

Automated Support

Data

Yes

No

Data

Yes

Yes

Data Projects Decision Information

Yes No

Yes No

No

No

Customers Internal Operations

No

No

No

No

Mendelow, 1986b).Similarly, as businessplanning becomesmoresophisticated (and hence routine), organizationalgoalsandstrategiesare better defined,andthe IS plancanthus be more effectively aligned with businessgoals(King, 1978).Thus,less severeSISPproblems wouldbe expectedin firms with moresophisticatedbusinessplanning. McLean andSoden(1977)confirm that the absenceof formal businessplanning makes SISPmoredifficult.

Potentialcausalfactors

Participationby IS Department in Business Planning

Unfortunately,verylittle is known aboutthe managerialfactorsthat affect theseproblems in different organizations. Johnson(1984)refers to 1983study by the NewYork consulting firm of Cresap,McCormick, andPaget.It concludedthe following: "Althoughcompanies employa variety of techniquesand approaches, successin planningis surprisinglyunaffectedby suchfactors as industry, size of enterprise, methodology used, andorganizationalarrangement" (p. 97).

TopIS executiveswhoparticipate in strategic businessplanninghaveless difficulty understandingtop management’s objectives (Lederer and Mendelow,1987). Theyare moreexperiencedin planningand moreinformedabout the firm’s goals.Therefore, theyarelesslikely to have problemsguiding or participating in the SISP studyandin ensuringthat its outputsupportsorganizationalgoals¯ Hence,their SISPproblems shouldbe less severe,

However, there are somereasonsto believe that certain organizational and managerialfactors mightbe related to SISPproblems.Thefollowing variablesrepresenta selection(not intendedto be comprehensive) of suchfactors, andthe text explainsreasons for expecting their effects¯ Sophisticationin Business Planning Thecompletelack of a businessplan can be a severeimpedimentto IS planning (Ledererand

Reporting Relationship of the IS Executive McFarlan (1971)suggeststhat firms in whichthe top S executve reportsto a h~gherleve busness executiveplace moreemphas~s on planning, use IS resourcesmoreeffectively, andhavegreater planningability. These firms couldmoreeasily initiat~¢ . a study, acquireits resources,andimplementits output. Thus,they shouldencounter less severeSISPproblems.


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Table3. TheProblems Problem Code R1 R2 R3 R4 R5 R6 R7 R8 R9 R10 Rll R12 R13 R14 R15

P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 Pll P12 P13 P14

ProblemStatement

Source

Resources for Implementing the Methodology Thesize of the planningteamis verylarge. Vacca, 1983 Vacca, 1983 It is difficult to find a teamleaderwhomeets thecriteria specified by the methodology. It is difficult to find teammembers whomeetthe criteria specified Vacca, 1983 by the methodology. Thesuccessof the methodology is greatly dependent on the team Zachma~,1982 leader. Manysupportpersonnelare required for data gatheringand Rockart,1979 analysisduringthe study. Theplanningexercisetakesverylong. Bowman, et al., 1983 Theplanningexerciseis very expensive. Moskowitz,1986 Thedocumentation doesnot adequatelydescribethe stepsthat Zachman,1982 shouldbe followed for implementing the methodology, Themethodology lacks sufficient computer support. Zachman,1982 Zachman,1982 Adequate externalconsultantsupportis not availablefor implementingthe methodology. Themethodology is not basedon anytheoretical framework. Zachman,1982 Theplanninghorizonconsideredby the methodology is McLeanand Soden, 1977 inappropriate. It is difficult to convincetop management to approve the Vacca, 1983 methodology. Yadav,1983 Themethodology makesinappropriate assumptions about organizationstructure. Themethodology makesinappropriate assumptions about Yadav,1983 organizationsize. PlanningProcessSpecified by the Methodology King, 1978 Themethodology fails to take into accountorganizational goalsandstrategies, Schwartz,1970 Themethodology fails to assessthe current information systems applicationsportfolio. King, 1984 Themethodology fails to analyzethe currentstrengthsand weaknesses of the IS department. King, 1984 Themethodology fails to takeinto accountlegal and environmentalissues, King, 1984 Themethodology fails to assessthe external technological environment. King, 1984 Themethodology fails to assessthe organization’scompetitive environment. Zachman,1982 Themethodology fails to takeinto accountissuesrelated to plan implementation. Themethodology fails to takeinto accountchanges in the organizationduringSISP. Kay,et al., 1980 Themethodology doesnot sufficiently involveusers. Boyntonand Zmud, Managers find it difficult to answer questionsspecifiedby 1984 the methodology. The methodology requires too muchtop management Bowman, et al., 1983 involvement. Themethodology requires too muchuser involvement. Boyntonand Zmud, 1984 Zachman,1982 Theplanningprocedure is rigid. Themethodology doesnot sufficiently involvetop Kay, etal.,1980 management.

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O1 02 03 04 O5 O6 07 O8 09 O10 Oll O12 O13 O14 O15 O16 O17 O18 O19 020

Table3. (continued) Outputof the PlanningMethodology SISPoutputfails to providea statement of organizational objectivesfor the IS department. SISPoutputfails to designatespecific newsteeringcommittees. SISPoutputfails to identify specificnewprojects. SISPout ~utfails to determine a uniformbasisfor prioritizing projects. SISPout )ut falls to determine an overalldataarchitecture for theorganization. SISPout )ut fails to providepriorities for developing specific databases. SISPout ~utfails to sufficiently address theneedfor Data Administration in the organization. SISPout )ut fails to includeanoverall organizational hardware plan. SISPout )ut fails to includeanoverall organizational data communications plan. SISPoutputfails to outline changes in the reportingrelationships in the IS department. SISPoutputfails to includean overall personnel andtraining plan for the IS department. SISPoutputfalls to includeanoverallfinancialplanfor the IS department. SISPoutputfails to sufficiently address the role of a permanent IS planninggroup. Theoutputplansare not flexible enough to takeinto account unanticipate.dchanges in the organizationandits environment. Theoutputis not in accordance with the expectations of top management. Implementing the projectsandthe dataarchitectureidentified in the SISPoutputrequiressubstantialfurther analysis. It is difficult to securetop management commitment for implementing the plan. Theexperiencesfromimplementing the methodology are not sufficiently transferable acrossdivisions. Thefinal outputdocument is not veryuseful. TheSISPoutputdoesnot captureall the informationthat wasdeveloped duringthe study.

Initiator of the SlSPStudy Top management involvementin SISPhas been emphasized(IBM Corporation, 1975; Martin, 1982;Rockartand Crescenzi,1984). Thus,top management initiation of the studyshouldreflect the commitment and involvementthat IS executives seek,andless severeSISPproblemswould thenbe anticipated. Scopeof the SISPStudy Thescopeof the SISPstudyrefers to the organizational unit underinvestigation. A studymight coverthe entire organization, a division, or merely a particularfunctionalarea.SISPat the corporate level must addressadditional complexissues

McLeanand Soden, 1977 McLeanand Soden, 1977 King, 1978 Zachman,1982 Zachman,1982 Sullivan, 1985 McLeanand Soden, 1977 Sullivan, 1985

McLeanand Soden, 1977 McLeanand Soden, 1977 King, 1984 McLeanand Soden, 1977 Gi11,1981 Zachman,1982 Gill, 1981 Zachman,1982 King, 1984 Gi11,1981

suchas technologymanagement, the use of data communications, and data architecture (Kay, et al., 1980;Sullivan,1985).Thus,a broad,corporate scopemaybe associatedwith moresevere problems. PlanningHorizon Theplanninghorizonrefers to the planningperiod coveredby the study. Effective usersof information resourcesemploysuchhorizons(McFarlan, 1971). IS planninghorizonsvary dependingon businessplanninghorizons, management style, andother organizationalfactors (Martin, 1982). Because the useof a planninghorizonmightforce the studyteamto bemoredetailedin its analysis andto developa schedule,less severeproblems


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mayoccurin studiesthat considera specific planninghorizon.

problemsthat wereincorporatedinto the questionnaire. They appear in Table 3 without references.

OrganizationOwnership

Therevised questionnaire wasthen mailed to members of the StrategicDataPlanningInstitute andto thefirms in VaCca’s (1983)study.A total 251 organizationsreceivedthe questionnaire. Threeweeksafter the first mailing, reminders weresent to thosewhohadnot yet responded.

McLeanand Soden(1977) had expected but failed to find a relationshipin theSISPcharacteristics of publicly andprivately held companies. Their studyshowed that in publicly held firms, planning is moredependenton external constraints. Therefore,SISPproblems wouldlikely be moresevere. Methodology Thesurveyinstrumentwasa three-part questionnaire. In the first part, respondents identifiedthe methodology that theyhadused.Theyalso identified the extent to whichthey hadencountered the aforementionedproblems.Subjects rated each problem on a scaleof oneto five, where 1 = not a problem 2 = an insignificant problem 3 = a minor problem 4 = a major problem 5 = an extremeproblem Thisscalehasbeenusedin similar previousstudies (McLeanand Soden,1977). Thesecondpart of the instrumentincludedquestions relatedto the implementation of plans.In this section, respondents indicatedthe extentto which different outputsof the plan hadbeenaffected. This follows King’s (1984)recommendation that criterion for evaluatinga planningsystemis the extentto whichthe final plan actuallyguidesthe strategicdirectionof theIS function. In the secondpart, the subjects also answered scaledquestions abouttheir satisfactionwith variousaspectsof the SISPexperienceandaboutthe reasonsfor any deviation from the final SISP recommendations. Thethird part of the surveycontained a number of questionsrelated to respondentand organizational characteristics. Thesewereadaptedfrom Mcleanand Soden(1977). Twoexperiencedstrategic IS planners pilottested the questionnaire.Oneplanner, with 21 yearsof IS experience, is currentlyresponsible for SISPat a large regional grocery chain andwas previouslyoneof the top plannersat a Fortune50 international petroleumcorporation. Theother planner,with nearly30 yearsof IS experience, is currently an independent consultantin the SISP area.Thepilot test broughtout threeadditional


Results This sectioninitially discussessome characteristics of the respondents. It thenexamines the findings aboutthe problems of implementing an SISP methodology. Next, it focuseson a particular dimensionof the problemsandconsidersthe organizational and managerialfactors potentially related to the problems. Finally, it compares frequently usedmethodologies.

Characteristicsof the respondents Onehundredsixty-three firms returnedthe completed surveyfor a response rate of 65%.Eighty (or 32%)of thesefirms hadalreadyparticipated an SISPstudy and thus provided usable data. Thiswasa highrate considering that the questionnaire waseight pageslong andfairly complex. Therate attests to the fact that the respondents foundthis topic to be important. Although all of the 80SISPparticipantshadeither completedor were completingan ongoingSISP study,their demographic profiles differed. Table4 showsthat the respondentswere, in general, highly experiencedprofessionalswith exposure to morethanoneemployer andthat they currently workedfor medium andlarge firms. Table4 also showsthat BSP,SSPandIE accounted for 50%of the methodologies usedby the participants.

Extent of problemsof SlSP methodologies Table5 showsa rankingof the problems of adopting an SISPmethodology. In the questionnaire, subjectshadratedthe problems listed in Table3 as extreme,major,minor,insignificant, or not a problemat all. The"Extremeor MajorProblem" columnin the table shows the percentage of subjects rating the problem as such;the "MinorProblem" columndisplays the analogouspercentage. As Table5 shows,the mostsevereproblemis the failure to securetop management commitment for

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Table4. Characteristicsof Respondents Job Titles of Respondents President Vice President Director Manager Supervisor/GroupLeader Analyst/DataAdministrator Consultant Other IS Experienceof Respondents Lessthan 10 years 10 to 20years Over20 years Industries of Respondents Manufacturing Utilities Insurance Government Retail Other/NotAvailable Scopeof Studies Entire Enterprise Division FunctionalArea Not Available Numberof Employees Fewerthan 1,000 1,000to 10,000 Morethan 10,000 Not available Numberof IS Employees Fewerthan 100 100to 500 Morethan 500 Methodology BusinessSystemsPlanning Strategic Systems Planning InformationEngineering Method/1 Critical Success Factors NolanNorton In-house Others Not Available

6% 8% 14% 36% 6% 9% 6% 15%

sufficient resources. It mightalsopossiblybereasonedthat the requirementfor further analysis (rankedsecond)is a problemsimplybecause insufficient resourcesare allotted to complete an appropriately comprehensive study. Alternatively, it maybethat the methodologies make poor useof the resourcesallocatedto the study. Regardless,in the viewof the respondents, the lack of resourcesappearsto play a very significant role.

17% 63% 20%

Further evidenceof the resource problem

26% 13% 10% 8% 5% 38% 44% 40% 10% 6% 23% 42% 32% 3% 36% 55% 9% 21% 15% 14% 9% 4% 3% 14% 16% 5%

carrying out the final plan. The secondmost severeproblem is the requirement for substantial further analysisafter the completion of the SISP study. Furthermore,despitethe fact that those two problems are output-related,it is interesting to note that six of the eight remainingtop ten problems are resource-related.Thus,it mightbe arguedthat the difficulty of securingtop managementcommitmentto carry out the plan (rankedfirst) is associated withthe approval of in-

Ona scaleof zeroto six (wherezerorefers to extremelydissatisfied andsix refers to extremely satisfied), the respondents’ averagerating for overall satisfaction with the SISPmethodology was3.55, wherea neutral scorewouldhavebeen 3.00. Satisfactionscoresfor the different dimensionsof SISPwerealso slightly favorable.Satisfaction with the SISPprocesswas3.68, with the SISPoutputwas3.38, andwith the SISPresource requirements was3.02. Giventhe evidencein the previous subsection, it is notsurprisingthat satisfaction with the SISPresourcerequirementsis lessthansatisfactionwiththe process andoutput. However, satisfactionwith carryingout final SISP planswasmuch lower(2.53); in fact, only 32% the respondentsweresatisfied while 53%were dissatisfied. Table 6 summarizes the respondents’ satisfaction with these aspectsof the 1 SISP. Furtherevidencefocusingon the problemof effecting the planarises froma comparison of the elapsedplanninghorizonwith the degreeof completion of SISPoutputs. Theaverageplanning horizonof the SISPstudieswas3.73 years,while an averageof 2.1 years had passedsince the studies’ completion;thus, 56%of the planning horizonshadelapsed.However, out of an average of 23.4 projects recommended in the SISP studies,only 5.7 (24%)hadbeeninitiated. Therefore, it appears that firmsmayhavebeenfailing to initiate projectsas rapidlyas necessary in orderto complete themduringthe planninghorizon.It also appearsthat there mayhavebeeninsufficient projectstart-upsin orderto realizetheplan. 1, . abouttheabsolute Theauthors offer noassertions valuesof thesatisfaction ratings.However, after examining them,oneuniversityprofessor notedthat if his students’ ratingsof his classroom instructionremained consistently at theselevels, hewouldeventually be fired for incompetent teaching!


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Table5. Extentof Problems of SISPMethodologies AbbreviatedProblemStatement

Extreme or Major Problem

Minor Problem

Difficult to securetop management commitment Requires further analysis Successdependenton teamleader Difficult to find teamleadermeeting criteria Methodology lacks sufficient computer support Planningexercisetakeslong time Ignoresplan implementation issues Difficult to obtaintop management approval Notraining planfor IS department Difficult to find teammembers meetingcriteria Nofinancial plan for IS department Documentation is inadequate Nopriorities for developing databases Nooverall dataarchitectureis determined Very expensive NopermanentIS planninggroup Manysupportpersonnelrequired Nodata administrationneedaddressed Experiences not sufficiently transferable Noorganizationaldata communications plan Nochanges in IS reportingrelationships Nopdodtization scheme provided Outputbelies top management expectations Noanalysis of IS departmentstrengths/weaknesses Nohardwareplan Heavytop management involvement Resultingplansare inflexible Noanalysisof technologicalenvironment Toomuchuser involvement Final outputdocument not very useful Questions difficult for managers to answer Informationduringstudynot captured Methodology ignoreslegal/environmentalissues Badassumptions aboutorganizationstructure Ignoresorganizationchangesduring SISP Noobjectivesfor IS department are provided Insufficient user involvement Verylarge planningteamrequired Methodology ignorescompetitive environment Nonewprojectsidentified in final plans Outputfails to designatenewsteering committees Rigidity of planningprocedure Noassessment of currentapplicationsportfolio Lackof top management involvement Ignoresorganizationalgoalsandstrategies Inappropriateplanninghorizon Inadequate consultantsupport Inappropriatesize assumptions Notheoretical framework

52% 46% 41% 37% 36% 33% 33% 32% 30% 30% 29% 28% 27% 27% 26% 26% 26% 26% 24% 22% 22% 22% 22% 21% 20% 20% 20% 19% 18% 18% 17% 17% 14% 14% 13% 13% 13% 12% 12% 12% 11% 9% 9% 9% 8% 6% 5% 4% 3%

16% 31% 30% 17% 27% 30% 18% 36% 29% 24% 28% 33% 26% 22% 29% 24% 23% 16% 19% 38% 31% 19% 15% 32% 36% 21% 18% 20% 28% 20% 39% 25% 16% 14% 25% 21% 5% 21% 19% 13% 18% 17% 16% 13% 10% 7% 11% 8% 5%

Problem Code O17 O16 R4 R2 R9 R6 P7 R13 O11 R3 O12 R8 06 05 R7 O13 R5 07 O18 09 O10 04 O15 P3 08 P11 O14 P5 P12 O19 P10 020 P4 R14 P8 O1 P9 R1 P6 03 02 P13 P2 P14 P1 R12 RIO R15 R11


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Table6. OverallSatisfaction The Methodology The ResourcesRequired TheMethodology’sProcess TheMethodology’sOutput CarryingOutthe Plan

Average

Satisfied

3.55 3.02 3.68 3.38 2.53

54% 38% 48% 55% 32%

At the sametime, organizations had begun projects whichwerenot part of their SISPplan. Theseconstitutedabout38% of all projects initiated after the study. Finally, in organizations where the SISP had recommended changesin the IS department,only 50%of these changes hadbeencarried out. Thesedata suggestthat the respondents did not executetheir final plansvery scrupulously.They raise questionsaboutthe resemblance between the systemsenvisionedby the planninggroupand their final implementations. Onemightalso speculate that the methodologies havefailed to generate useful ideaswhichorganizationscouldthen translate into implementable computersystems. Giventheir great expense andtime consumption, suchfindingsseriouslychallenge theutility of the planning methodologiesrepresented in this study. However, the findingsare not necessarilysurprising. Theyconfirm the workof Runge(1985)who studiedsuccessfullyimplemented strategic informationsystems.In 80%of his cases,existing SISPprocedureswere either purposelycircumventedor ignored.Runge attributed the successful implementation of thesesystems,not to SISP methodologies, but largely to "productchampions," i.e., top generalbusinessexecutiveswho securedthe necessaryresources,overcameresistance to approval and development,and actively promoted the systems during implementation.

Potential causalfactors affecting extent of problems Table7 identifies the previouslydiscussed organizational andmanagerial factors potentially related to the severity of the SISPproblems.It showsthe mean ratings of the problems from the resources,process,andoutputcategoriesandfor all 49(i.e., overall) problems. For example, the 2.38 in row 1, column1 refers to the average severity of the 15 resourceproblems (in Table3) for subjectswhostatedthat their businessplan-

Neutral Dissatisfied 23% 24% 17% 17% 15%

23% 38% 25% 28% 53%

ningwasfinancial/tactical rather thanstrategic. Analysisof variancetestedthe differencein the mean scoresunderalternatives for eachfactor. Thus,Table7 shows the levelsof statistical significancefor the alternativewith moresevereproblems.(Therelatively lowmean scoresreflect that someof the problemsare considerably less severethanothers.) Thefollowing subsectionsdiscuss the problem factors. Theheadings reflect the study’sfindings basedstrictly on the alternative with the lower meanscore. Thesubsequentdiscussionfurther considers the strengthof the findings;cautious interpretationof the non-significantdifferencesis suggested. Factor1: Organizations with less sophistication in businessplanninghadmore severe problems than moresophisticated organizations, Organizations that characterizedtheir business planningas financial or tactical hadsignificantly moresevereproblemsthan organizations that characterizedtheir businessplanningas strategic. Theeffectwassignificantfor ratingsin all four categories.It is not surprisingthat a generalsophisticationin settinggoalsandobjectivespermeates the SlSPactivities. In suchsophisticated organizations,IS executiveshaveless trouble justifying resources, carryingout the process,and analyzingthe output. Factor2: Organizations with less participation by the IS department in business planning had more severe problemsthan organizationswith greaterparticipation. Although thedifferenceswerenot statistically significantin anycategory, this effectheldin all four. Thedirection of the effect suggeststhe importanceof suchparticipation.Participationin strategy formulation enablesthe IS departmentto better understandtop management’s objectives andthus, to ensurethat the SISPoutputssupport their goals.


StrategicPlanning

Factor3: Organizations wherethe top IS executivereportedto a controllerhad moresevereproblemsthan organizations wherethe top iS executive reported to a president or vice president, Thiseffect wasstatistically significantfor all four categories.It parallelsthefindingsof Benjamin, et al. (1985)whoobserved that chief informationofficers in leading-edge companies frequentlyreport to anareaother thanfinance.Morehighly placed IS executives canmoreeasily initiate, carry out, andanalyzeSISPexercises.Also,the primarilyfinancial orientation of the controller maynot enhancethe IS Department’s position or contribute to its SISPskills. Thereportingrelationshipmight merelyreflect morearchaicorganizations. Thisresult is particularlyimportantbecause top IS executives frequentlyreportto a controller.Arthur Andersen andCo. (1986)recently foundthat 32%

Category

of the top information executivessurveyedreportedto a senior-level financialofficer. Factor 4: Organizationswheretop managementinitiated the study hadmore severe problemsthan organizations where IS management initiatedit. This finding wassurprising. Althoughdifferences in ratingswerenotstatistically significant,theeffect wasuniformacrossall four categories.The finding suggeststhat althoughIS executivesseek top management involvement, they still prefer to maintaincontrol. Topmanagement-initiated SISP studiesmaylikely bethe result of displeasure with the performanceof IS management. IS management-initiated SISPstudies probablypermit IS management to exercisemoreinfluence over the SISPstudy. However, the finding mightsimplybe attributable to the fact that the respondents were IS executives. :

Table7. FactorsRelatedto $1SPProblems MeanSeverity of Problems Overall Resources Process ~ Output

1. OrganizationalUnit’s Degreeof Sophisticationin BusinessPlanning Financial/Tactical Strategic 2. Participation by IS Department in BusinessPlanning DoesNot Participate Participates 3. To Whom Doesthe Top IS ExecutiveReport Controller President/VP 4. Initiator of the SISPStudy Top Management IS/Other Management 5, Scopeof the SISPStudy Division/Function Enterprise 6. Consideration of Specific Planning HorizonBy the SISPStudy NoPlanningHorizon HorizonSpecified 7. Organization Ownership Publicly Owned Privately Owned * Refersto the .10level of significance. ** Refersto the .05level of significance.

456 MIS Quarterly~September 1988

2.38** 1.87

2.13"** 1.55

2.46*** 1.91

2.34*** 1.80

2.38 2.26

2.13 1.98

2.45 2.30

2.34 2.20

2.69*** 2.10

2.55*** 1.82

2.66** 2.28

2.59** 2.14

2.33 2.27

2.16 1.95

2.39 2.32

2.31 2.20

2.43* 2.09

2.04 1.94

2.33 2.35

2.28 2:16

2.58* 2.20

2.29 1.94

2.53 2.28

2.47* 2.16

2.39 2.08

2.20 1.87

2.40 2.21

2.31 2.07

*** Refersto the .01level of significance.

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Factor5: SISPstudieswitha divisionor function as their scopehadmoresevere problems than studieswith the entire enterpriseastheir scope. Again,the finding, althoughveryweak,is surprising. Studiesof divisionsandfunctionshadsignificantly moresevere resource problemsthan studiesof entire enterprises.Thesame effect, although notstatistically significant,wastruefor the processandoverall categories.For the output category,the ratings werenearly equal(although in the oppositedirectionas theothers).Theimplicationof this finding is that the broadandgeneral recommendations of the methodologiesmight simplybebettersuitedto the definitionof dataarchitecturesof broaderscopes. Factor6: When the SlSPstudyfailed to specify a planninghorizon, problems weremoresevere than whenit did specifya planninghorizon. Theeffect of this findingwasconsistent acrossall four categoriesandwassignificant for the resourcesandoverall categories.Its implicationis fairly straightforward-- a planninghorizonis a control mechanism. It demands that a schedule be drawnup andfollowed.It forcesplanningparticipants to confrontandresolveproblems in order to meettheir milestones.This finding suggests that the importance of a planninghorizonhasnot diminishedeventhoughincreasing environmental volatility hasmade its usemoredifficult (Lederer and Mendelow, 1986c;Sullivan, 1987). Factor 7: Publicly-owned organizationshad moresevere problemsthan privately-owned organizations. Although the effect wasconsistent for all four categories,noneof the differencesweresignificant, Still, the implicationmightbethat publicly-owned firms are generally morebureaucraticandmore subjectto externalpressuresthanprivately-held organizations,possibly because it is easier to controlplanningin a privately-heldfirm. Thus,IS departments in public companies wouldfind more difficulty in obtainingresources,executingthe process,andanalyzingthe output.

The problemsof specific SISP methodologies Thetop ten problems of the four mostfrequently usedS~SPmethodologies appearin Table8. Despite the common belief that oneof BSP’smajor strengthsis its detailed documentation (Bowman,

et al., 1983;Zachman, 1982), BSP’stop problem is that its documentation doesnot adequately describe the stepsto follow. Thetop problem of SSP andIE is the difficulty of obtainingtop managementcommitment for implementing the plan, perhaps becausethese methodologies(and their vendors)are less well-knownto top management thanIBM.It mayalso be dueto their morerecent origin. Themajorproblemof in-house-developed methodologies is their lack of sufficient computer support;this is not surprisingwhenoneconsiders the expenseof developingsuchsupportandthe likelihoodthat a firm woulddoso. Table8 also showssomeother potential differencesamong the methodologies. Lackof a training planandthe lengthydurationof the planning exerciseare two problemsin SSP’sandIE’stop ten that are not in BSP’s top ten. Inadequate documentation,lack of computer support, anddependenceon a teamleader are three problemsin BSP’stop ten that are not in SSP’sandIE’s top ten. Among the top ten problemsof the four methodologies, three are common to all four. Theseincludethe difficulty in obtainingtop management commitment for implementing the outputs,the requirement for substantialfurther analysis,andthe difficulty findinga goodteamleader.In fact, most of the top ten problems of eachmethodology are related to carryingout the plan andthe planning team;this finding accents the underlying similarities among the methodologies. Thesesimilarities and differences might offer somepreliminaryguidanceto firms selecting or developingan SISPmethodology.However,due to smallsample sizes(17, 11, 12, and11, respectively, for thefour methodologies in Table8), cautiousinterpretationof this table is suggested.

Summaryand Conclusion Improved SISPis a majorchallengefacing IS executivestoday.Effectiveplanningis essentialto therealizationof the potentialstrategicimpactof computer-based informationsystems.This article hasexamined the difficulties of implementing a methodology to performSISP. Theresults suggestthat IS planners are not particularly satisfied with their methodologies. Planningrequires too manyresources.Topmanagementcommitmentis not easily obtained. When the SISPexerciseis complete,further analysis is requiredbeforethe executionof the plan


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Table8. Extentof Problems of Different Methodologies Problem Code

AbbreviatedProblemStatement

BSP R8 Documentation is inadequate O17 Difficult to securetop management commitment R4 Successdependenton teamleader O16 Requires further analysis R9 Methodology lacks sufficient computersupport 06 Nopriorities for developing databases P7 Ignoresplan implementation issues R2 Difficult to find teamleadermeeting criteria R7 Very expensive P5 Noanalysisof technologicalenvironment IE O17 Difficult to securetop management commitment Difficult to find teamleadermeeting criteria R2 O16 Requires further analysis Oll Notraining plan for IS department 08 Nohardwareplan P12 Too muchuser involvement R6 Planningexercisetakeslong time Pll Heavytop management involvement O7 Nodata administrationneedaddressed O13 NopermanentIS planninggroup SSP O17 Difficult to securetop management commitment Oll Notraining plan for IS department O16 Requires further analysis R13 Difficult to obtain top management approval P3 Noanalysis of IS departmentstrengths/weaknesses R3 Difficult to find teammembers meeting criteria R6 Planningexercisetakeslong time Nofinancial planfor IS department O12 Experiences not sufficiently transferable O18 Difficult to find teamleadermeeting criteria R2 In-House Methodology lacks sufficient computer support R9 O16 Requires further analysis R4 Successdependenton teamleader Difficult to find teammembers meeting criteria R3 Difficult to securetop management commitment O17 Documentation is inadequate R8 P10 Questions difficult for managers to answer R2 ¯ Difficult to find teamleadermeeting criteria O18 Experiences not sufficiently transferable Difficult to obtain top management approval R13 can take place. Consequently, carrying out the planis oftennot veryextensive. Thefinal plan might be a goodplan. However, management commitmentto the plan might be missingor the means of controlling its execution mightbe ineffective.


Extreme or Major Problem

Minor Problem

58% 53% 53% 53% 47% 47% 44% 42% 37% 37%

16% 32% 26% 21% 26% 26%¯ 17% 26% 32% 21%

60% 46% 44% 40% 36% 36% 36% 36% 36% 30%

10% 9% 11% 10% 27% 27% 18% 18% 9% 20%

67% 58% 46% 46% 46% 46% 42% 42% 42% 38%

8% 17% 39% 39% 27% 15% 25% 25% 8% 31%

55% 50% 46% 46% 40% 36% 36% 36% 33% 30%

18% 30% 36% 36% 20% 46% 18% 9% 11% 20%

Therefore, if the objectiveof the SISPexerciseis to alignIS objectiveswithbusiness goals(as is the primaryobjective of mostof the methodologies usedby participantsin this study),thendetailed, lengthy and complexSISPmaybe of limited value. Alternatively,the objectiveof an SISPexercise can be to useinformation technologyto

StrategicPlanning

impacta businessstrategy; however, the methodologiesin this studymaynot generatethe useful ideasto fulfill that purpose.

several practitioner surveysandtherefore deservesthe attentionof IS researchers. Thisstudy lays thefoundation for furtherworkin the area.

Impfications for practitioners

This article has examined a numberof critical problems of SISPandhasidentified the mostimportant ones. In doing so, it haspreparedresearchersto studythe relationshipsbetween the problems. For example, under what circumstancesmightspecific resourceproblems lead to specific processproblems?Likewise,howmight specific resourceproblemsand processproblemsberelated to specific outputproblems?

Thisarticle providespractitionerswith a comprehensivelist of the potential problems of implementingan SISPmethodology. Practitioners can examinethe problemsand attemptto anticipate themwithin their ownorganizations.Practitioners can developstrategies for circumventingthe problems.Table3 can serveas a comprehensive checklistfor discussion anddebate.Table5 incorporatesevidenceaboutthe relative concernsof the variousproblems in other organizations. Practitionersmightalso considerthe managerial andorganizational issuesinvestigated in this article andtheir potentialeffectonSISPin their firms. Thetwo mostsignificant issuesare the top IS executive’sreportingrelationshipandthe organization’s businessplanning sophistication. The findingsrelatingto the first issueaddstrengthto the positionof anyIS directorswhoare attempting to convincemanagement that they shouldreport to a presidentrather thana controller. Thefindings relating to the second issuesuggest that the needfor effectiveIS planningmightpossiblystimulate the needfor effective businessplanning; such a notion was proposed in Lederer and Mendelow (1986b). Practitionersmightalsopayparticularattentionto methods of attenuatingthe potential, detrimental effects of some of the unavoidable factors (such as public ownership or top management initiation of the study). Specialconsiderationcouldbe directed to the IS management’s use of rewards andsanctions to controlthe execution of the final plans. Thusthe practitioner mightask: Howin mycompanywill I securegenuinetop management commitment? Howwill I developa plan that doesnot requireextensive furtheranalysis?Howwill I identify a teamleaderwith excellentbusinessskills andsufficient IS savvy?WhatcanI offer to management to convincethemto authorizesufficient SISPresources? Howwill I avoiddeveloping a thick anddetailed planthat ultimatelysits on myshelf andcollects dust?

Implications for researchers Researchers needto recognizethe importance of SISPandinvestigateit. It hasreached the top of

Theinvestigationof a smallnumber of factorspotentially associatedwith the problemsof SISP methodology implementation wasreportedin this article. Theresultssuggest that it mightbefruitful to developa comprehensive modeland test a widervarietyof suchfactors.Usingthis model,researchersmight ask: Underwhatcircumstances woulda firm best chooseonemethodology or another?How woulda firm cull featuresfromthe various techniquesin order to assembleits own in-house methodology? Thearticle promptsonefinal researchquestion: Whatare the alternatives to the methodologies describedin this study?Perhapsthese methodologiesrequiretoo muchdetail in their business analysisanddatabase design.It maybe too much to expectthat a committee chargedwith detailed businessanalysis and databasedesign could generatestrategicvisions aboutsystems for creating a competitiveadvantage. It maybetoo much to expectthat the combination of the strategicapplication identification phase andthe dataarchitecture development activity, without product champions for each, can producevaluable results. Perhapsbecausethey use extensiveresources, provide limited results, and raise expectationsfor projects that might neverbe implemented,the methodologiesare actually hazardousto their users’ health. Perhapsresearchersshouldsearchfor completelynewand innovativealternativesfor performing SISP.

Acknowledgement Theauthors acknowledge their appreciation to Premkumar Gopalaswamy and T.N. Menon,who contributedto the early phases of this research.

References Arthur Andersenand Co. Method/l: An Information SystemsMethodology, Subject File AA4665, Item 57, 1982.


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About the Authors Albert L. Ledereris anassistantprofessorat the JosephM. Katz GraduateSchoolof Businessat the Universityof Pittsburgh.Heearned his M.S.in computerand informationscienceand his Ph.D. in industrial andsystems engineering at the Ohio StateUniversity.Dr. Ledererspentoverten years in industryin the MISfield. His articles haveappearedin the MISQuarterly, SloanManagement Review,Information and Management, Journal of SystemsManagement, Business Horizons, andseveralotherjournals. Heis the consulting editor for a newjournal, Computers in Personnel. His researchinterests include the planningand implementation of management information systems. Vijay Sethiis anassistantprofessorat the School of Management at the State University of New Yorkat Buffalo. Heearnedhis M.B.A.fromOhio University.Heis currentlycompleting his doctoral dissertation at the JosephM. Katz Graduate Schoolof Business at the Universityof Pittsburgh on the measurement of the extentto whichan information technologyapplication providescompetitive advantage. His articles haveappeared or are forthcoming in INFOR, Interfaces,Information ManagementReview, and DATABASE. His other researchinterests are informationsystems planning, decision support systems,end-user computing,and expertsystems.

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