Introduction

Improved strategic IS planning is one of the

critical issues facing IS executives today.
Effective strategic IS planning can help
organisations use IT to reach business goals.
It can also enable organisations to use IT to
significantly impact their strategies.

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IS strategic planning
The essential requirement for effective IS
planning is that the needs of the business should
drive the planning for IS development and
deployment.
Business planning is the process of identifying
the goals, objectives and priorities for the firm
and of developing action plans for achieving
these goals, objectives and priorities.
IS planning is a part of business planning and
focuses on deploying the firms IT resources and
capabilities to facilitate the overall business
plans for the firm.
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 Nolans Stage Hypothesis
Stages of growth model: Nolan (and Gibson) presented a
way of understanding IT use and management. Nolans
hypothesis is that any organization will move through
various stages of maturity as identified by the use and
management of IT.
Nolans Initial growth model consisted of:
1. Initiation. When computers were first introduced to
business organizations to help with tedious work,
management saw IS as a means to make cost savings, but no
attention was given. Users were encouraged to use the
computers. Applications developed were simple. Data
Processing organization was centralized.

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2. Expansion or Contagion. IS enjoyed a sudden, uncontrolled
rise in many business functions. Users were superficially
enthusiastic about computers. DP wanted to expand to
keep up with demand for services. Budget rose.
Management of computer departments was lax. Little
planning was done and controls were lacking. Management
didnt see the problems of overambitious projects, thus
resulting in large IT expenditure.
3. Control. Concerned senior management wished to justify IT
spending. Benefits were not in accordance with the costs.
Budgets were either frozen or growth rate was reduced.
Staff was trimmed down. Planning and control systems were
installed. Emphasis was on documenting existing
applications and moving them more toward middle
management.
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4. Maturity. Senior management learned to leverage between
stability and innovation. IS development has reached a stage
of balance.
After stage 4, Nolan found that putting together all
growth experience as one stage was inadequate and he
divided this into three stages and added control level.
Initiation is renumbered as stage zero.
1. Integration. The control levels are lowered to encourage
innovation; reorganized to allow IS staff to become more
involved in the organization. Attempts were made to take
advantage of new technology. Existing systems were
integrated .DP function was set up as an utility to service
the users.

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2. Data administration. Database was put in place Users were
made accountable for their use of computer resources.
Emphasis was on the common integrated systems in which
data are shared by various functions in the organization.
Management identified the business value of crossfunction
database access. New IS strategies included IS architecture
that makes up intra and/or interorganizational Systems.
3. Maturity. When an organization reached maturity, they have
truly integrated the computer into their managerial process.
The data resource was meshed with strategic planning
process of the organization. Applications mirrored the
informational flows of the organization. Management aimed
at planning and developing IT in coordination with business
development

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Advantages of Nolans stage Model
It is simple.
It is easy to understand, to use, and to see
expected natural developments.
It is relevant to acknowledge the past in the
present.

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Points to consider Nolans stage Model

Modeling the development of IT is a very useful exercise,

whether the model is a simple or complex one.
Stagesofgrowth approach is a simple way of modeling IT
maturity as the basis for IS planning.
Nolans stage model was proposed at the time when there
was no Internet.

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McFarlans Strategic Grid

The strategic grid model is an IT specific model that can be

used to assess the nature of the projects that the IT
organization has in its portfolio with the aim of seeing how
well that portfolio supports the operational and strategic
interests of the firm.
The CIO plots projects and systems from the IT
organizations portfolio on a two dimensional graph. The X
axis represents impact of the project on IT strategy.

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 The Y axis represents the impact of the
project on IT operations. One way of
expressing this is to say that projects that are
high on this axis improve the efficiency or
quality of our existing systems and business
processes, or lower their costs.

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The graph is usually drawn as shown below:

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 McFarlan divides the grid made by these axes into four quadrants:
Support: low operational impact, low strategic impact. This quadrant
is about local process improvements for individual users.
Factory: high operational impact, low strategic impact. This quadrant
is about operational improvements that affect large portions of the
firm, and are aimed at improving performance or decreasing cost.
Turnaround: low operational impact, high strategic impact. This
quadrant is about exploiting new technologies to provide strategic
opportunities.
Strategic: high operational impact, high strategic impact. IT
organizations that have most projects in this quadrant understand
that IT can both improve core operations of the firm while
simultaneously generating strategic options.

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 Strategic grid use by CIO
The CIO can use the strategic grid to assess business/IT
alignment, to assign appropriate governance and oversight to
individual projects, and to select projects and systems for
outsourcing.
After plotting all projects in the portfolio on the grid, the CIO
assesses where the bulk of them lay: that is how IT is being used
in the organization. This will indicate how well aligned IT
strategy is to business strategy, and can be used as either a
confirmation that the IT org is doing what is expected of it by the
business organization, or as a wake up call. If the projects that
the IT organization is working on are not where the CIO expects
them to be, then they can see what kind of changes need to be
made.

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Secondly, different quadrants demand different kinds of
project governance: support quadrant projects can be
handled by IT specialists and individual end users; factory
quadrant projects should be handled by a business
executives and IT executives working together; turnaround
quadrant projects should be handled by business
executives, IT executives and emerging technologies
development groups; and strategic quadrant projects
should be initiated, defined and managed at the top levels
of the firm. The failure of many projects may come about
because the quadrant they lay in was misidentified and
inappropriate governance was applied to them.

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Critical Success Factor (CSF) analysis
Critical success factors are the limited number of areas
in which satisfactory results will ensure competitive
performance for the individual, department or
organisation.
CSFs include issues vital to an organisations current
operating activities and to its future success.
Can be applied to support both IS planning and
requirements analysis. Designed to provide a structured
method to help managers determine their CSFs and thus
identify their information needs.

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What is CSF?
Critical Success Factor (CSF) is the term for
an element that is necessary for an
organization or project to achieve its mission
It is a critical factor or activity required for
ensuring the success of your business.
The term was initially used in the world of
data analysis, and business analysis.
For example, a CSF for a successful IT project
is user involvement.

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Critical success factor analysis

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Importance of CSF
Critical success factors are those few things
that must go well to ensure success for a
manager or an organization, and, therefore,
they represent those managerial or enterprise
area, that must be given special and continual
attention to bring about high performance

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Characteristics of CSF
CSFs are quite different from Key performance
indicators which have been used in the past for
IS planning. They are not a standard set of
measures that can be applied to all organisations.
Rather, they are specific to a particular situation
at a particular time.
CSFs can also be categorised as monitoring and
building.
Monitoring CSFs involves the scrutiny of
existing situations, such as monitoring the
percentage of defective parts.
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 Building CSFs is related to changes in the
organisation for future planning.

Managers who spend most of their time in

control functions are concerned mostly with
monitoring CSFs, whereas those who are
concerned primarily with planning are
concerned mostly with building CSFs.

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Sources of CSF
Industry-based factors - Each industry has a
set of CSFs that are determined by the
characteristics of the industry itself. Each
organisation in the industry must pay attention to
these factors.
Competitive strategy, industry position, and
geographic location Each organisation in an
industry is in an individual situation, determined
by its history and current competitive strategy.
Differences in industry position, geographic
location and strategies can lead to different CSFs
from one company to another in an industry.
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Sources of CSF
Environmental factors - Environmental factors
are those areas over which an organisation has
little control.
Temporal factors - They are areas of activity
that are significant for an organisation because
they are below the threshold of acceptability at
that time. For example, inventory control is
generally not a CSF for a chief executive but
may become a very high level CSF under the
circumstances of either very little or too much
stock.
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Sources of CSF
Managerial position Each functional
managerial position has a generic set of CSFs
associated with it. For example, almost all
manufacturing managers are concerned with
product quality, inventory control and cash
control.

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Measuring CSF
To measure is to know. CSFs must be measured
in order to track the progress in achieving them.
Such measures are only rarely provided by the
traditional financial accounting systems; and
may be provided only sometimes by cost
accounting systems (often with some additional
improvements in them).
A small proportion of CSFs require subjective
assessment rather than being easily quantifiable.
Some CSFs can have only soft measures.

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CSF analysis
There are three major uses of the CSF concept :
To help an individual manager determine his
or her information needs.
To aid an organisation in its IS planning
process.
To aid an organisation in its organisational
strategic planning process.

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Extended CSF analysis
CSFs are time dependent. Thus, even if the appropriate
factors are identified, events may alter the criticality of
these factors.
This extended CSF analysis method uses the CSF
analysis to provide the planning context in three critical
domains: information, decision and assumption.
The Critical Information Set (CIS) defines those
measures and associated data necessary to monitor,
analyse and control the CSFs.
This is the traditional product of a CSF analysis

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Extended CSF analysis
The Critical Decision Set (CDS) defines those
decision processes that will most affect the
successful achievement of a CSF.
For example, if the CSF is to retain highly
skilled employees, the CDS might include the
hire, promotion, merit, raise, job assignment or
other decisions that directly affect a highly
skilled employees decision to remain with the
firm.

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Extended CSF analysis

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Earls multiple methodology

Earl (1989) proposed a very comprehensive

methodology that provides a basis for analyzing
IS planning.

Earls method is known as the Multiple

methodology or Three-pronged Methodology
as he tackles his three issues from different
angles top-down, bottom-up and inside-out.

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Earls multiple methodology

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Top down Classification: Four step Process
1. Identification of corporate objectives Objectives of all
business units should be solicited, agreed upon and clearly
stated;
2. Determination of critical success factors CSFs that are
needed to achieve the agreed business objectives are
suggested and determined after resolving conflicts among
different business units;
3. Decomposition to critical business processes The CSFs that
were identified are transformed into business processes that
can be improved by IS;
4. Identification of IS and IT Details of the IS to support those
business processes and the underlying IT infrastructure are
analyzed and a development plan is decided.

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Bottomup Evaluation:
Three step process
1. Find out the quality and capacity of the IS applications (legacy
systems) currently being used in the organization.
2. Demonstrate to top management (the strength and the
weakness of) the current IS status of the organization.
3. Identify components of the current IS that can be improved
for better strategic advantage by simple addons rather than a
total renovation.

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Inside-out innovation:
The final leg of Earls multiple methodology is inside-
out innovation. The purpose here is to identify
opportunities afforded by IT which may yield
competitive advantage or create new strategic
options.

The purpose of the whole threefold methodology is,

through an internal and external analysis of needs and
opportunities, to relate the development of IS applications
to business/organizational need and strategy.

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Ward and Peppard Strategic Planning Framework:
Ward and Peppard (2002) provided an in-depth analysis of
strategic planning in their proposed IT Strategy Formulation
and Planning Framework. The model, as shown in the figure
consists of three building blocksinputs, outputs, and
essential activities.
INPUTS:
The inputs to Ward and Peppards strategic planning framework
are as follows:
The internal business environment: current business strategy,
objectives, resources, processes, and the culture and values of
the business.
The external business environment: the economic, industrial,
and competitive climate in which the organization operates.

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 The internal IT environment: the current IT perspective in
the business, its maturity, business coverage, and contribution
to attainment of the organizations goals (e.g., cost reduction),
skills, resources, and the technological infrastructure. The
current application portfolio of existing systems and systems
under development, or budgeted but not yet under way, is
also part of the internal IT environment.

The external IT environment: technology trends and

opportunities and the use made of IT by others, especially
customers, competitors, and suppliers.

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OUTPUTS:
The outputs to Ward and Peppards strategic planning
framework are:
IT management strategy: the common elements of the
strategy that apply throughout the organization, ensuring
consistent policies where needed.
Business IS strategy: how each unit or function will deploy IT in
achieving its business objectives.
Application portfolios. Alongside each of the business
objectives are application portfolios to be developed for the
business unit and business models, describing the information
architectures of each unit. The portfolios may include how IT
will be used at some future date to help the units achieve
their objectives.
IT strategy: policies and strategies for the management of
technology and specialist resources. 38
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 Soft Systems Methodology
SSM
Soft System Methodology is a way of dealing
with any complex, organizational situations
where there is a high social, political and human
activity component.
SOFT problems: How good is current system?
How to improve health services delivery? How to
manage disaster planning? What to do about
homelessness amongst young people?
Developed primarily by Peter Checkland (UK).
Published in 1981.

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 SSM Seven Stages
situation 7 action to
1 considered improve the
problematic problem situation
6 changes:
systemically desirable,
culturally feasible

problem comparison of
2 situation models and
expressed real world 5

real world

systems thinking
about real world
3 conceptual models
root definition of systems described
of relevant systems in root definitions 4
 1. Situation Considered
Problematic
Problem owners (managers and/or
employees) recognize the problem
situation.
Problem owners initiate a review of tasks
and the way they are performed.
Problem solver (analyst) is called in.
2. Problem Situation Expressed
Analyst collects and sorts information.
Analyst express the problem situation through
RICH PICTURES.
RICH PICTURES:
Capture as much information as possible;
Show how we can look at and think about the system;
Represent structure, processes, issues, information
flows, and communication channels of the
organization relevant to the problematic situation;
Give an impression of the organizational climate.
Rich Picture Example
 3. Root Definitions of Relevant
Systems
Root Definition:'Naming the system'
1. Capturing the essence...
2. the point of view makes the activities and performance of the
system meaningful
Concise description of a human activity system.
Two step process:
1. Select an issue or task from a rich picture;
2. Define the system to carry out the task or address the issue.

Each root definition involves a certain view of the worlds

in order to see the problematic situation from different
perspective.
 Root Definition Example

a system to do X by (means of) Y in order to Z

what the system does - X

how it does it - Y
why its being done - Z

A university owned and operated system to award degrees

and diplomas to suitably qualified candidates (X), by
means of suitable assessment (Y), (in conformance with
national standards), in order to demonstrate the
capabilities of candidates to potential employers (Z).
 CATWOE Analysis
Customer
Actor
Transformation process
World view
Owner
Environmental constraints

C - candidate students
A - university staff
T - candidate studentsdegree holders
W - the belief that awarding degrees and diplomas is a good way of
demonstrating the qualities of candidates to potential employers
O - the University governing body
E - national educational and assessment standards
Customers
... any individual, group, organization or institution
that can affect, or be affected by, an individual's,
group's, organization's or institution's policies
and/or actions
... sometimes called "stakeholders"
... the beneficiaries or victims of the system's
activity
Actors
The agents who carry, or cause to be carried out,
the transformation processes (es)
Transformations
A transformation (T) is that process which turns:
'input' to 'output' 49
World view
The (often unquestioned and/or non-explicit)
outlook or assumption which makes the
transformation meaningful.
Owners
The person or wider system who sponsors or
controls the system - and who can stop it.
Environment
Elements outside the system which it takes as
given
External impositions and constraints other
those imposed by ownership
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 4. Conceptual Models
Conceptual model is a human activity
model that represents the minimum set of
activities necessary to conform the root
definition.
System Thinking is applied in the
development of this model.
Monitoring:
Measure of performance:
Efficacy - does it work
Efficiency - How much of work completed given
consumed resources
Conceptual Model Example
design
enrol students education
programmes

appreciate
educate allot
national
students resources
standards

award
design
degrees + diplomas
and carry out
to students reaching
assessment
acceptable levels
take control
action
monitor for
E1, E2, E3
 5. Conceptual Models v. Reality
4 ways of doing comparison:
1. Using conceptual models as a base for ordered
questions;
2. Comparing history with model prediction;
3. General overall comparison;
4. Model overlay.

activity is it done in the real situation? comments,

how is it done? recommendations

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3
 6. Feasible and Desirable
Changes
From the comparison of the conceptual
models with reality, logically desirable and
socially/politically feasible changes are
identify and debate.

Three types of changes:

Changes in structure;
Changes in procedure;
Changes in attitude.
7. Actions For Improvement

Develop an action plan to implement

changes and put them into action!
Benefits and Limitations of SSM
BENEFITS:
Structure to complex organizational and
political problem situations.
Solution that is more than technical.
Rigorous tool and specific techniques for
messy problems.
LIMITATIONAS:
Adaptation to the overall approach.
Narrow scope of the investigation.
Difficulties with the richest picture.
Interpretation of world in the loose way.
 Usage

SSM remains the most widely used and

practical application of systems thinking,
and other systems approaches such as
Critical Systems Thinking have
incorporated many of its ideas.
 Socio Technical Systems Approach
Open systems approach
An approach to the design of jobs focuses on the
individual job. There are some weaknesses to this
type of approach.
While the job redesign techniques were being
developed and implemented in the USA, progress
was being made, particularly in Europe and
Scandinavia, on the development of the socio-
technical systems approach where the focus of
attention is at the level of the working group and the
aim is to develop a match between the needs of the
group and the organization in relation to the
technology. 58
 Organization as an open system
This approach is based upon the concept of the
organization as an open system with the primary
work group as a subsystem of the total organization.
Organizations can be compared to other living
systems such as biological cells in that they are
engaged in active transactions with the environment

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 Raw materials or customers form the input to the
organizational system and finished goods or services
form the output. The environment through
competition, the influence of suppliers, and
customers and government legislation will all exert
pressure on the organization to comply with certain
rules and organize in certain ways. The changing
economic situation, changing values in society, new
alternative products or services, and many other
factors demand adaptation within the organization if
it is to survive.
Since these factors have an impact on the internal
design and functioning of an organization it is
important that the organization be aware of
environmental changes when seeking an optimal 60
Guiding Principles
A sociotechnical systems approach to designing organizations
is based upon a set of guiding propositions:
The design of the organization must fit its goals.
Employees must be actively involved in designing the
structure of the organization.
Control of variances in production or service must be
undertaken as close to their source as possible.
Subsystems must be designed around relatively self-contained
and recognizable units of work.
Support systems must fit in with the design of the
organization.
The design should allow for a high quality of working life.
Changes should continue to be made as necessary to meet
the changing environmental pressures.
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Motivation Factors
It has been suggested that four categories of job
characteristic are significant in terms of motivation
and performance:
responsible autonomy- the group's acceptance of
responsibility for the production cycle, output rate,
quality, and quantity of output;
adaptability;
variety;
participation.
Autonomous behavior includes the self-regulation by
the group of work content, critical self-evaluation of
work group performance, self-adjustment to cope
with changes, and participation in goal setting. 62
Limitations
The socio-technical systems approach is not without
its limitations. While many advantages can result
from focusing on the work group rather than the
individuals and their jobs, autonomous group
working does not seem to have widespread appeal.
Certainly the roles of both supervision and specialist
advisers are considerably affected and in some cases
eliminated.
Movement of personnel between work groups with
high levels of autonomy may be difficult, hence
removing some of management's flexibility.

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 Difficulties are often experienced in
implementation in existing work situations.
A participative design process is not
acceptable in many organizations and can be
very time-consuming.
Alternative ways of organizing work are not
always apparent where existing technology
has to be employed.
Management are often not prepared to take
the risk of introducing radically different
approaches to organizing work alongside
other changes which already have a high
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