Strategic Information Systems Planning (literature Review)

Literature Review

on

Strategic Information Systems Planning

Contents

1. Introduction

2. Evolution of SISP

3. Stages of SISP

3.1 Inverted U- curve: Law of diminishing returns

3.2 Optimization of planning process

4. Factors influencing decision-making

4.1 Environmental factors

4.1.1 SISP Performance in an uncertain environment

4.1.2 Environmental assessment in strategic information systems planning

4.1.2.1 Hypotheses Testing

4.1.3 Uncertainty in SISP Due To Environmental Factors

4.2 SIS and Its Interface with the CEO

4.3 Alignment of SISP with Corporate Strategy

4.4 Flexibility in SISP v/s Returns For the Firm

5. Frameworks/Models for SISP

5.1 Web Information Systems Planning Framework

5.2 Fuzzy Cognitive Maps (FCMs) for SISP modeling

5.3 Output Driven IS Planning

5.4 System Dynamics approach to strategic IT planning

5.5 CIO-Top management support model

5.6 Portfolio model

6. Comparison of Models of SISP

7. Recent Researches

8. Future Scope of SISP

9. Conclusion

10. References

Abstract

Information has emerged as an agent of integration and the enabler of new competitiveness for today's enterprise in the global marketplace. However, has the paradigm of strategic planning changed sufficiently to support the new role of information systems and technology? We have attempted to review the literature to find the influence of SISP in evolving the strategies of any organization. The report explores stages that SISP evolves through and the factors which influence decision making in various stages, some of the factors being support from top management, understanding of the external and internal environment, coping with uncertainties of environment by effectively balancing between rationality-adaptability. The degree of effectiveness of planning process is however limited by the degree of comprehensiveness of planning involved.

Keywords: Strategic Information Systems Planning, EIS, corporate strategy, alignment with business planning, uncertainties

1. Introduction:

For a long time Information Systems were thought to be synonymous with corporate data processing and treated as some back-room operation. In the 80's and 90's, it was realized that much of companies potential could be utilized if IS is used strategically.

2. Evolution of SISP

SISP is the analysis of a corporation's information and processes using business information models together with the evaluation of risk, current needs and requirements. The result is an action plan showing the desired course of events necessary to align information use and needs with the strategic direction of the company. IS planning helps in achieving competitive advantage over rivals and pursuing opportunities.

In any organization two aspects which are of much significance are:

o Planning process or how planning is accomplished

o Planning evolution or how planning evolves as a learning system.

3. Stages of SISP

There are different stages of SISP each having different context, processes, patterns, outcome depending upon the experience the company has with the SISP besides the environmental factors like type of industry it is in, uncertainty of the environment. These phases are Preliminary stage, Evolving stage and Maturity stage as shown in figure 1.

The various stages are as follows:

Stage 1: Preliminary Stage

 These firms are just beginning to undertake SISP. Procedures are neither well defined, nor do managers have any significant experience, with planning tending to be ad hoc and opportunistic. Top management provides very little or no input into the process. IS managers form planning committees to deal with strategic issues.

Stage 2: Evolving Stage

 IT diffusion is higher and top management starts taking a more active interest in SISP, particularly in the context of higher uncertainty. In some cases, it could be a mandate that is issued to get corporate planners and IS planners together.

Stage 3: Mature Stage

 This is a steady state in which SISP works and can effectively adapt to change. This process works towards managing a highly pervasive and diffused IT as a resource that can improve organizational effectiveness in a highly uncertain environment.

3.1 Inverted-U: Law of Diminishing Returns

A study [5] suggests that too little SISP would result in insufficient understanding of the external and internal environment producing ill-conceived strategic alternatives and poor selections from them. Similarly too much SISP would require too much time causing opportunities to run by. Through the study it was established that the inverted -U exists for strategy implementation phase as shown in Figure2.

Figure 1: Inverted U curve

3.2 Optimization of Planning Process

 Through the use of Linear Goal Programming (LGP) mathematical approach to analyze IS investment projects a balance between strategic benefit (long term) and cost-benefit(short term) can be achieved[8]. An LGP model optimizes goals rather