STRATEGIC INFORMATION SYSTEM

PLANNING

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Strategic information systems planning (SISP) has been

defined as the process of identifying a portfolio of
computer-based applications that will assist an organization
in executing its business plans and realizing its business
goals. SISP is an important activity for helping information
executives and top management identify strategic
applications and align IT with business needs. Previous
researchers and practitioner observers have identified
measures of successful SISP and have recommended many
prescriptions for achieving success.
 Strategic information systems planning
is based on two core arguments:

2 The first is that, at a minimum, a firm¶s information systems

investments should be aligned with the overall business
strategy, and in some cases may even become an emerging
source of competitive advantage.
2 The second core argument behind SISP is that companies can
best achieve IS-based alignment or competitive advantage by
following a proactive, formal and comprehensive process that
includes the development of broad organizational information
requirements
ackground
2 _ong back IS and corporate strategy were two strange
entities i.e. not at all in tandem. IS was typically thought to
be synonymous with data entry and back door operation.

2 Recognition of need to make Information system of

strategic importance in organizations aroused in late 80¶s
and 90¶s.

2 Several industry surveys have stated the improved SISP as

the most serious challenge.
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Six dimensions that define an excellent SISP are:

2 pomprehensiveness
2 Formalization
2 Focus
2 Top Down flow
2 Broad Participation
2 High ponsistency
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2 Development of any type of computer-based system should be

a response to need
2 Objectives, priorities, and authorization for information
systems projects should to be formalized
2 The plan must be specific enough to enable understanding of
each application and to know where it stands in the order of
development
2 Strategic capabilities architecture should be continuously
updated and improved
 Kerspective of Strategic Information
System Klanning

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!pplication can be divided into 4
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2 Oain task: strategic/competitive advantage, linkage to business

strategy.
2 Key objective: pursuing opportunities, integrating IS and
business strategies
2 Direction from: executives/senior management and users,
coalition of users/management and information systems.
2 Oain approach: entrepreneurial (user innovation), multiple
(bottom-up development, top down analysis, etc.) at the same
time

  
  
 
   
2 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.

2 Increase in the time horizon is a factor which results in poor

response from the top management to the strategic information

systems planning process.

2 Impact methodologies help create and justify new uses of IT.

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The concept of value chain is considered at length by Oichael
Porter. According to him, every firm is a collection of activities
that are performed to design, produce, market, deliver, and
support its product.
2 Information systems technology is particularly pervasive in the
value chain, since every value activity creates and uses
information.
2 Information systems is having a profound impact on competition.

2 A firm that can discover a better technology for performing an

activity than its competitors thus gains competitive advantage.
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Once the value chain is charted, executives can rank order the
steps in importance to determine which departments are central
to the strategic objectives of the organization.
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2 is a form of business activity analysis which decomposes an
enterprise into its parts. Information systems are derived from
this analysis.
2 helps in devising information systems which increase the
overall profit available to a firm.
2 helps in identifying the potential for mutual business
advantages of component businesses, in the same or related
industries, available from information interchange.
2 concentrates on value-adding business activities and is
independent of organizational structure.

 
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.
 

Value chain analysis suffers from a few weaknesses, namely,

Ú it only provides a higher level information model for a firm and fails
to address the developmental and implementation issues.
Ú because of its focus on internal operations instead of data, it fails to
define a data structure for the firm.
Ú it does not provide an automated support for carrying out analysis.
 

 
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pritical success factors analysis can be considered to be both an impact
as well as an alignment methodology.
2 Rockart (1979) defines critical success factors as being µfor any
business the limited number of areas in which results, if they are
satisfactory, will ensure successful competitive performance for the
organization.¶
2 Rockart originally developed the pSF approach as a means to
understanding the information needs of p Os.
2 pSFs can exist at a number of levels, i.e., industry, organizational,
business unit, or manager¶s. pSFs at a lower level are derived from
those at the preceding higher level.

 
pSF analysis provides a very powerful method for concentrating on key
information requirements of an organization, a business unit, or of a
manager.
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Ú pSF analysis by itself is not enough to perform comprehensive SISP - it

does not define a data architecture or provides automated support for
analysis.
Ú It has been the experience of the people using this technique that

generally it loses its value when used below the third level in an
organizational hierarchy.
Ú pSFs focus primarily on management control
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2 This methodology, developed by IBO, combines top down

planning with bottom up implementation.
2 The methodology focuses on business processes which in
turn are derived from an organization¶s business mission,
objectives and goals.
2 Business processes are analyzed to determine data needs
and, then, data classes.
2 The final BSP plan describes an overall informatio
systems architecture as well as installation schedule of
individual systems.
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r Because BSP combines a top down business analysis approach with
a bottom up implementation strategy,
r it represents an integrated methodology.

r In its top down strategy, it develops an overall understanding of

business plans and supporting
 
2 BSP requires a firm commitment from the top management and
their substantial involvement.
2 it requires a high degree of IT experience within the BSP planning
team.
2 there is a problem of bridging the gap between top down planning
and bottom up implementation.
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2 Provides techniques for building enterprise, data and process models

2 It uses of structured techniques in all the tasks.

2 It relies on an information systems pyramid for an enterprise

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This methodology has five distinct objectives
r To identify the organization¶s information needs.

r To find new opportunities for using information to achieve

competitive advantage.
r To define an overall IT strategy for satisfying the

organization¶s IT objectives.

r To define data, applications, technology and organizational

requirements for supporting the overall IT strategy.

r To define the activities needed to meet the above

requirements and thereby implement the overall

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2 Problems faced by information systems managers when they attempt
to implement one of three alignment methodologies, BSP, SSP or I .
2 The most severe problem is failure to secure top management
commitment.
2 Requirement for substantial further analysis.

2 Resources required to carry out the strategic information systems

planning.
2 Difficulty in finding a good team leader.

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2 Although strategic information systems planning is a major concern,

most organizations find it difficult to undertake it.
2 The overall success of an integrated business/technology architecture
depends upon the organizational structure.
2 A comprehensive methodology for SISP will need to incorporate
both the µimpact¶ and the µalign¶ views.
2 It is difficult to find a team leader, it is proposed that detailed
guidelines on how to perform a SISP study by way of an automated
tool will help.
  
Information-based enterprises must be planned in an
integrated way whereby all stages of the life cycle are
engaged to bring about agility, quality, and productivity.
This integration is similar in nature to the integration of
product life cycle for an enterprise.

A needed new approach would tap into these resources

which capture and characterize the enterprise to allow for
integration of the planning stage with information systems
development stages and support a shortened and adaptive
cycle