IMPORTANT NOTICE:
THIS ARTICLE IS AN EXTRACT OF LINES FROM A REPORT SUBMITTED BY MUKESH PARTHASARATHY TO UNITEC NEW ZEALAND. PLAGIARISM IS A SEVERE OFFENCE. KINDLY USE CITATIONS IF YOU ARE REFERRING TO THIS ARTICLE IN YOUR PAPERS OR WEBSITES.
—
Planning is an important aspect when the management concerns itself with in what direction the company is moving. Planning gives a map to this direction. This map need not necessarily be a blueprint. In some cases the plan may not even be followed due to the circumstances that may happen then, but certainly the beauty of having a plan lies in the fact that it can influence the performance of the company in the future. Hence the need for planning. In particular it is important to have a strategic plan for information systems as in our case with Raffles Design Institute. SISP provides a backbone or a support to the way in which the organization will move and grow in the future.
Strategic Information Systems Planning or SISP can be defined as follows:
“SISP is the process of establishing a programme for the implementation and use of IS in such a way that it will optimize the effectiveness of the firm′s information resources and use them to support the objectives of the whole enterprise as much as possible.” (emeraldinsight.com, 2006)
Hence it is important to understand that the usage of SISP should benefit the organization by leveraging its business prospects and not impede them. If a SISP plan does impede the performance of the company then it is a sheer wastage of money and time. Hence it is imperative to have a suitable framework and methodology for the organization.
Many different SISP frameworks and methodologies are available but an organization must be careful in choosing the correct option based on what suits their business needs.
“The task of strategic information systems planning is difficult and often time organizations
do not know how to do it. Strategic information systems planning is a major change for organizations, from planning for information systems based on users’ demands to those based on business strategy. Also strategic information systems planning changes the planning characteristics in major ways. For example, the time horizon for planning changes from 1 year to 3 years or more and development plans are driven by current and future business needs rather than incremental user needs. Increase in the time horizon is a factor which results in poor response from the top management to the strategic information systems planning process as it is difficult to hold their attention for such a long period. Other questions associated with strategic information systems planning are related to the scope of the planning study, the focus of the planning exercise – corporate organization vs. strategic business unit, number of studies and their sequence, choosing a strategic information systems planning methodology or developing one if none is suitable, targets of planning
process and deliverables. Because of the complexity of the strategic information systems planning process and uniqueness of each organization, there is no one best way to tackle it. Vitale, et al. (1986) classify SISP methodologies into two categories: impact and alignment. Impact methodologies help create and justify new uses of IT, while the methodologies in the “alignment” category align IS objectives with organizational goals.” (viu.eng.rpi.edu, 2006)
This classification of SISP methodologies into impact methods and alignment methods can be represented by the figure below:
Figure1: Two views of SISP methodologies (viu.eng.rpi.edu, 2006)
Thus we can see that the SISP methodologies can be classified as impact or alignment. The impact methods use IT for gaining competitive advantage and the alignment method aligns IS objectives with organizational goals.
It is of immense concern as to which methodology will be suitable to our organization.
Now let us list the some of the popular methods under these categories…
Examples of Impact methodologies are:
1) Value Chain Analysis developed by Porter
2) Critical Success Factor Analysis
3) Strategic Thrust Methodology developed by Wiseman
Examples of Alignment methodologies are:
1) Business Systems Planning (BSP) developed by IBM
2) Strategic Systems Planning (SSP)
3) Information Engineering (IE) developed by James Martin
4) Method/1 developed by Arthur Anderson
Other popular SISP methodologies are:
1) Enterprise Modelling(Zachman Framework)
2) SSM developed by Peter Checkland
3) SPIS developed by Cranfield
4) The KPMG approach developed by KPMG Management Consulting
To find out which is better out of alignment and impact methods, a survey carried out by Earl showed the following results:
Figure2: Ranking of approaches (teaching.fec.anu.edu.au, 2006)
Thus we can see from the above table that the top two ranks as a result of this survey goes to Alignment methodology(Aligning IS with business needs) and Impact methodology(Seek Competitive Advantage from IT).
Thus we can see that Alignment method is more superior to the impact method and hence it is only rational to choose one of the alignment approaches for our company.
But at the same time it is also of advantage to us if we can take a combination of both these methods. In this context it is worthwhile to ponder at the following observation given below:
“Although strategic information systems planning is a major concern, most organizations find it difficult to undertake it. Besides their lack of experience with SISP, absence of a comprehensive, structured, easy to use methodology may also be a main reason for it. It is
possible that the advances in Information Technology and their applicability in organizations has outpaced all formal methodologies evolved in the 70s and 80s or evolved in 90s as marginally modified versions of the earlier methodologies, which were largely dominated by IBM’s Business Systems Planning.
Further, as pointed out by Barlow (1990) also, the overall success of an integrated
business/technology architecture depends upon the organizational structure, the level of IT
experience within the company and the availability of information resources. Since these factors differ between firms, there may not be a single best way to view IT planning.
A comprehensive methodology for SISP will need to incorporate both the ‘impact’ and the ‘align’ views. Method/1 incorporates Value Chain Analysis. IE supports Critical Success Factors Analysis. Even BSP is now incorporating CSFs.” (viu.eng.rpi.edu, 2006)
Thus we can see that a combination of alignment and impact methods will be more beneficial to our organization.
Hence it is better if we use Method/1 or IE for our purpose and we have chosen Method/1 over IE as it is more powerful and effective in comparison to IE.
Method/1 is essentially an alignment method but it includes Porter’s Value Chain Analysis methodology which is an impact method. The rationale for choosing Method/ 1 over IE is the fact that the CSF methodology has lots of weaknesses when compared with Value chain analysis method.
One major weakness of CSF methodology is that it does not tell the value of information systems as is the case with Value Chain Analysis Methodology although it is able to identify the information systems.
“CSFs do not draw attention to the value-added aspect of information systems. While CSF analysis facilitates identification of information systems which meet the key information needs of an organization/business unit, the value derived from these systems is not assessed. The main strength of value chain analysis is that it concentrates on direct value adding activities of a firm and thus pitches information systems right into the realm of value adding rather than cost cutting.” (viu.eng.rpi.edu, 2006)
Since we want our information systems to add value to leverage our business prospects, we choose Method/1.
Now let us take a close look at Method/1…
Method/ 1 is the brain child of Arthur Anderson of Anderson Consulting. It can be formally defined as follows:
“Method/1 (Arthur Anderson and Co., 1982) is a layered approach for SISP. The top layer is the methodology itself, the middle layer of techniques supports the methodology, and a bottom layer of tools supports the techniques. Techniques supported by this methodology include data flow diagramming, matrix analysis, functional decomposition, focus groups and Delphi studies. Andersen Consulting’s CASE tool set FOUNDATION includes computer programs that support Method/1.” (viu.eng.rpi.edu, 2006)
Thus this method is cushioned by strong techniques which in turn are supported by tools at the bottom of the layer. Method/1 incorporates Value Chain Analysis and hence one of its aims would be to get value from the information systems identified.
This helps in generating a competitive advantage in the industry when we take into consideration Porters five forces.
The main objectives of this approach are:
“
• To identify the organization’s information needs.
• To find new opportunities for using information to achieve competitive advantage.
• To define an overall IT strategy for satisfying the organization’s IT objectives.
• To define data, applications, technology and organizational requirements for supporting the overall IT strategy.
• To define the activities needed to meet the above requirements and thereby implement the overall IT strategy.” (viu.eng.rpi.edu, 2006)
In order to achieve these objectives, it follows 10 stages. These stages are:
“
1. Scope definition and organization
2. Business and competitive assessment
3. Present state assessment
4. Information technology opportunities
5. Information technology strategies
6. Organization plan
7. Data and applications plan
8. Technology plan
9. Information action plan
10. Project definition and planning” (ccsr.cse.dmu.ac.uk, 2006)
In the first stage of scope definition and organization the scope of the project is well defined and you “organize project team” (viu.eng.rpi.edu, 2006)
This helps to formally kick start the SISP process.
In the second stage of business and competitive assessment the environment under which the company is operating is understood using the Porter’s five forces model. This helps in assessing the strengths and weaknesses of the competitors.
In the third stage of present state assessment the current positioning of the organization is understood. By this we mean how well it is ranked among its competitors and how well it pitches itself in the market.
In the fourth stage of information technology opportunities we analyse “information technology trends defining management practices and information requirements defining major technology objectives identifying opportunities for improvement” (ccsr.cse.dmu.ac.uk, 2006)
In the fifth stage of information technology strategies we “develop high level IT strategies, define conceptual architecture of required information systems, and identify high priority projects” (ccsr.cse.dmu.ac.uk, 2006)
In the sixth stage of organizational plan the approach to change management is defined and a plan for HR is also evolved. This is for the benefit of the organization structure and for the betterment of organization behaviour.
In the seventh stage of data and applications plan we come up with a plan for choosing the right kind of applications. This is possible once we come to know the type of data we will be using. This could also imply developing back up plan for data recovery and defining means for disaster recovery.
In the eighth stage of technology plan we plan for technology by coming up with an architecture for the technology we are going to use. This helps in faster implementation of the technology.
In the ninth stage of information action plan we develop plans for the information we have. This is also known as coming up with information architecture.
In the tenth and final stage of project definition and planning we define the requirements for the project and we come up with a report on the project definition.
Method/ 1 is essentially an alignment methodology but includes the aspects of Porter’s Value Chain Analysis method which is an impact method. This proved to be advantageous over IE as CSF does not consider the value associated with the information systems although it is able to identify them. The plan for Raffles Design Institute gets developed by focussing on the five objectives of Method/ 1.
