Information & Management 42 (2005) 761779

www.elsevier.com/locate/dsw

An empirical evaluation of stages of strategic information

systems planning: patterns of process
design and effectiveness
Varun Grovera,*, Albert H. Segarsb
a

Department of Management, Clemson University, 101 Sirrine Hall, Clemson, SC 29634-1305, USA
Department of Management, The KenanFlagler Business School, The University of North Carolina at Chapel Hill,
Chapel Hill, NC 27599-3490, USA
Received 6 October 2003; received in revised form 11 May 2004; accepted 19 August 2004
Available online 30 September 2004

Abstract
While much has been written about strategic information systems planning (SISP), two important aspects have been underemphasized. The first is the planning process or how planning is accomplished. The second is planning evolution or how
planning evolves as a learning system. Both perspectives can provide practical guidance on how organizations will change their
planning process over time in an attempt to improve their effectiveness as well as leverage their investment in SISP. This paper
draws on prior literature to identify key dimensions of SISP and its effectiveness. The evolution of these dimensions is studied as
a three-stage model. The results provide an interesting insight into how planning evolves as organizations reconcile seemingly
contradictory rational and adaptive dimensions of planning. This balanced approach to planning is shown to be more
effective, providing strong implications for both research and practice.
# 2004 Elsevier B.V. All rights reserved.
Keywords: Strategic information systems planning; Planning stages; Planning effectiveness; Empirical study; Planning maturity

1. Introduction
Strategic information systems planning (SISP) has
been the subject of much attention over the past
* Corresponding author. Tel.: +1 864 656 3773;
fax: +1 864 656 6768.
E-mail address: vgrover@clemson.edu (V. Grover),
Al_Segars@unc.edu (A.H. Segars).

decade. While it has evolved in method and style, the

thesis that SISP is important because it emphasizes the
need to bring IT to bear on and sometimes influence
strategic direction of the corporation is widely
accepted by researchers. This is particularly true in
contemporary environments where harnessing the
power of technology resources could be critical for
competitiveness [58]. However, while there have been
studies that examine the what questions of SISP,

0378-7206/$ see front matter # 2004 Elsevier B.V. All rights reserved.
doi:10.1016/j.im.2004.08.002

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V. Grover, A.H. Segars / Information & Management 42 (2005) 761779

particularly concerning the issue of ISBusiness

alignment, there has been little on the how
questions, which include the process of planning
and whether this yields effective outcomes. Furthermore, is it reasonable to presume that organizations
will change their planning processes over time in an
attempt to improve their effectiveness as well as
leverage their investment in SISP? Or, as planning
matures and processes are better defined, does it
become less effective?
It is useful to examine evolution and maturing of
planning processes as companies strive toward
achieving more effective planning systems. This can
serve the purpose of delineating changes in process
characteristics that can lead to greater (or less)
planning effectiveness over time. We therefore
examined the fundamental questions: How does SISP
evolve? Is it then more effective? If yes, can
organizations facilitate the maturity of these systemsparticularly in a dynamic IT context? What
adaptations do firms make in order to improve
planning in a rational context? If the process is not
more effective, why do firms invest in planning?

2. Process characteristics of strategic planning

The SISP concept has undergone significant
evolution since the initial discussions of the 1970s
[26,40,41]. The changing technology and the recognition of its importance as a corporate resource drove
this evolution. Specifically, the proliferation of
Internet based computing, outsourcing, personal
computers, and user applications tended to push
developmental activities outside the exclusive domain
of professional IS groups, creating challenges that did
not exist when SISP was first conceived. Also, firms
are aggressively searching for new ways to leverage
information, knowledge, and IT in supporting strategic
goals and competitiveness. Hence, SISP in many firms
refers to both a proactive search for competitive and
value-adding opportunities, as well as the development of broad policies and procedures for integrating,
coordinating, controlling and implementing the IT
resource.
The study of SISP has been primarily conducted
through exploratory analysis. Most studies focus on
planning content, with particular interest in the

methods and measurement of alignment between

business and IS strategies [8,13,36,38,65]. However,
these studies shed little light on the organizational
aspects of planning. Das et al. [15] distinguished
between content and process aspects of planning. On
the process side, some studies have attempted to
identify institutionalized planning dimensions,
actions, and behaviors by observing patterns through
field study [9,18,59,71,74]. For instance, in an earlier
study Pyburn noted the existence of planning patterns
among his case firms. Specifically, within a writtenformal system, a rational (structured) process of
written rules and procedures, topdown planning flow,
budgetary focus, and narrow participation profiles are
present. In contrast, he found evidence of a personalinformal system reflecting a more adaptable approach
based on few guidelines or policies, bottomup
planning flow, creativity focus, and wide participation
profiles. Similarly, Earl distinguished SISP
approaches based on degree of rationality and
adaptability built into the planning system. Specifically, his organizational approach reflected IS
strategies that seemed to emerge from ongoing
organizational activities, such as trial and error
changes to business practices, continuous enhancement of existing applications, and system experiments
within the business. In essence, organizational themes
as well as polices, participation, and consistent
planning exercises were used to formulate IS strategy.
In contrast, his administrative approach exhibited
completely rational characteristics of rules and
procedures, budgetary control, narrow participation
profiles, and annual or semiannual planning activities.
Other approaches (method, business, and technological) also tended to follow a rational profile. Consistent
with observations by Pyburn, Earl noted that the
hybrid organizational system of planning seemed to
be a more effective form than the highly structured and
less-adaptable rational approaches. Studies by Sullivan, and Sabherwal and King [66], also suggested that
planning systems vary along a continuum from
completely rational to completely adaptive, while
others (e.g., Wang and Tai [77]) found that the
organizational context might play a role in determining planning characteristics. More recently, Segars
and Grover [69,70] described and measured planning
process dimensions and found that systems that
exhibit process characteristics of both rationality

V. Grover, A.H. Segars / Information & Management 42 (2005) 761779

and adaptability tended to be more successful. Their

results seemed to be generalizable to a variety of
industries.
As noted, the variety of planning profiles uncovered
reflected structures of process characteristics that
described how the task was accomplished. For
instance, Pyburns study reflected the extent of
formalization. Earls typologies varied in the extent
of participation, frequency, and control. Similar
studies describe these structures as planning systems [11,16,22,23,43,44] with more fully developed
theoretical and operational dimensions that reveal
distinct profiles in planning. Through extensive
analysis of both the strategic management and SISP
research streams Segars et al. [72] identified six
important process dimensions of SISP; these are
robust in describing SISP designextending far
beyond methodologically-based and less-generaliz-

763

able descriptions of planning while complementing

and further structuring general approach based
descriptions. The dimensions are: comprehensiveness,
formalization, focus, flow, participation, and consistency. They are summarized in Table 1.

3. Planning effectiveness
While many advocate strategic planning, the link
between performance and planning has been found to
be inconsistent across organizations and studies [46].
Even in the SISP literature, the results at best suggest a
contingent relationship between them. For instance,
Raghunathan and Raghunathan [61] found no correlation between SISP and user satisfaction. Premkumar
and King [55,56] on the other hand found that firms in
which IS plays a critical role have higher levels of

Table 1
Process dimensions of SISP
Dimension

Description

Strategic management literature

SISP literature

Comprehensiveness

The extent to which an organization

attempts to be exhaustive or inclusive
in making and integrating strategic
decisions (comprehensive vs. limited)

Fredrickson [21];
Fredrickson [22];
Fredrickson and Mitchell [23];
Janis and Mann [32]

Formalization

The existence of structures, techniques,

written procedures, and policies which
guide the planning process (formal vs. informal)

Quinn [60]; Camillus [10];

Dutton and Duncan [16]

Focus

Focus refers to the balance between

creativity and control orientations
inherent within the strategic planning
system (creative vs. control oriented)
Planning flow refers to the locus of
authority or devolution of responsibilities
for strategic planning; in other words, the
roles played by corporate and divisional
managers in the initiation of the planning
process (topdown vs. bottomup)
Participation captures the breadth of
involvement in strategic planning
(broad vs. narrow participation profile)
Consistency is concerned with the
frequency of planning activities or
cycles, and relatedly, the frequency of
evaluation/revision of strategic choices
(high vs. low)

Chakravarthy [11];
Lorange and Vancil [43]

Lederer and Sethi [42];

Sabherwal and King [66];
Sambamurthy et al. [68];
Sambamurthy et al. [67];
Das et al. [15]
Lederer and Sethi [42];
Sabherwal and King [66];
Premkumar and King [56];
Earl [18]; Das et al. [15];
Pyburn [59]
Lederer and Sethi [42];
Sabherwal and King [66];
Byrd et al. [9]

Flow

Participation

Consistency

Chakravarthy [11];
Earl [18];
Dutton and Duncan [16]

Byrd et al. [9]; Pyburn [59]

Dyson and Foster [17];

Eisenhardt [20]

Lederer and Sethi [42];

Sabherwal and King [66];
Byrd et al. [9]; Das et al. [15]
Lederer and Sethi [42];
Sabherwal and King [66];
Byrd et al. [9]

Kuicalis [39];
Judge and Miller [35];
Chakravarthy [11];
Eisenhardt [20]

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V. Grover, A.H. Segars / Information & Management 42 (2005) 761779

planning resources and are more effective. Lederer

and Sethi explain this relationship by identifying a
variety of inhibitors from failure to consider business
strategy to time span and resources.
However, the measurement of effectiveness has
been too far downstream (e.g., financial ratios),
measured on a single item scale [62,63] or focused
on limited aspects of planning, such as alignment with
business strategy. It is our belief that a broad
multidimensional conceptualization is required to
capture SISP Effectiveness, consistent with that of
Segars and Grover. Table 2 summarizes the definition
and source of five key dimensions of SISP effectiveness; it recognizes that (a) there are outcomes that can
be directly expected from a good planning system; (b)
SISP is a complex activity with a variety of benefits;
and (c) capturing the contribution of SISP in terms of
bottom line figures such as ROI, ROE, etc. may be
significantly confounded by many uncontrollable
business, economic, and environmental factors.
We argue that successful SISP should help achieve
alignment between IS and business strategies, analyze
and understand the business and its associated

technologies, foster cooperation and partnership

among functional managers and user groups, anticipate relevant events and issues within the competitive
environment, and adapt to unexpected organizational
and environmental change.

4. Planning stages
Stages of growth or evolution models are popular
in organizational research and IS. These approaches
have been applied to industry growth [54], business
growth [25], IS budgets [52], information centers,
end-user computing [29], and technology assimilation [3].
Perhaps the best known model in IS is Nolans
stages of growth, in which he proposed that the growth
of computing follows an S-shaped curve. Shifting the
emphasis from descriptive to prescriptive
suggests that firms can more effectively plan for
and organize the computing resource based on
predictable stages. While his hypothesis has been
controversial and is dated for todays technological

Table 2
Dimensions of SISP effectiveness
Dimension

Description

References

Alignment

One of the key factors for successful IS planning

is the close linkage of the IS strategy and business
strategy. Such a linkage or alignment helps facilitate
acquisition and deployment of information technology
that is congruent with the organizations competitive
needs rather than existing patterns of usage within
the organization
When IS planners make a concerted effort to better
understand the internal operations of the organization
in terms of its processes, procedures, and technologies,
a degree of analysis is realized
When general agreement concerning development
priorities, implementation schedules, and managerial
responsibilities is reached, a degree of cooperation is
attained. This level of cooperation is important in order
to reduce potential conflict which may jeopardize the
implementation of strategic IS plans
An effective planning system should improve over time
(i.e., learn) in its basic capabilities to support the organization
An effective SISP should contribute to the overall effectiveness
of the organization. Beyond the vagaries of financial ratios,
effective SISP should have a high perceived level of
contribution to various aspects of organizational
effectiveness (e.g., profitability, decision making, etc.)

Baets [4];
Henderson and Venkatraman [30];
Das et al. [15];
Lederer and Sethi [41];
Henderson et al. [28];
Bowman et al. [5]; King [36];
Chan et al. [13]
Lederer and Sethi [41];
Boynton and Zmud [7];
Henderson and Venkatraman [30]

Analysis

Cooperation

Improvement in
capabilities
Contribution

Henderson [27]

Ramanujam and Venkatraman [63]

Lederer and Sethi [42];
Chan and Huff [12];
King [36]; Chan et al. [13]

V. Grover, A.H. Segars / Information & Management 42 (2005) 761779

context, there is a key implication that should be

noted. Nolan suggested that the model can be viewed
as a learning model where movement through the
stages is influenced by the environment (i.e.,
changing technology) and the adaptation to that
environment by internal adjustments. Ultimately, in
the stage of maturity, systems naturally mirror
their context.
Interestingly, the same lesson emerges from other
stage models. Porter used the life cycle concept to
illustrate how industries developed and how businesses adapted to pressure. Greiner described a
model in which firms grew based on learning from
crises. Applegate et al. described technology
assimilation in firms that evolved through stages
of slack and control to learn how to use new
technologies more effectively. Magal et al. indicated
that Information Centers evolved by adapting and
learning from their client base, ultimately being
treated as a major corporate resource. Henderson et
al. also described their stages of end-user computing
as a learning curve.
We argue that the concepts of adaptation and
learning are invariant across phenomena, and therefore that it is possible to observe stages of evolution in
the SISP. We propose that SISP systems are very much
like the processes and structures described above, in
that they go through a number of stages of rational
evolution based on learning. In other words, SISP
systems will respond to changes in the environment
and changes in the technology base. This response will
facilitate improved SISP in organizations through
learning over time and in doing so SISP will adapt its
process characteristics in order to be more effective.
While the empirical evidence for such a proposition in
the planning context is sparse, King and Teo [37] did
find that as IS planning systems evolved, their
effectiveness in terms of alignment of IS and business
strategies improved.

5. Propositions
Our fundamental proposition is that:
(a) SISP will adapt over time through redesign of its
process dimensions, and
(b) this redesign will result in more effective SISP.

765

To gain insight into which process dimensions tended to be more effective, we can consider the roots
of adaptability and rationality. There have been many
debates on the relative advantages of the synopticformal (comprehensive, formal, rational planning)
versus logical-incrementalism (adaptive, participative
planning). While they have not resolved the question,
the evidence suggests that elements of both rational
and adaptive approaches might be better [49,50,76]. As organizations become technologically and
geographically complex, the importance of planning
activities rises. Accordingly, a planning culture often
emerges in the form of highly structured systems.
Rationality may be built into strategic planning systems through higher levels of comprehensiveness [21,67], higher levels of formalization [42], a focus on
control [7] and top-down planning flow. Adaptability
refers to the capability of the planning system to learn [64]. The planning system should contain design characteristics that will alert managers to
changing organizational and environmental conditions
that may require change in strategy. Adaptability may
be designed into a system through wide participation
profiles [4,17,68] and through higher levels of planning consistency [20,35]. Such characteristics reflect
the importance of gathering information from a number of sources and the importance of constantly reconciling strategic decisions with environmental
conditions. As implied in field studies, high performing systems for SISP seem to contain aspects of both
adaptation and rationality. Research by Boynton and
Zmud, Zmud et al. [78], as well as Lederer and Sethi
also implied that such systems may be necessary in
order to manage increasingly diverse and dispersed
technologies across the organization. Specifically,
Zmud et al. developed a system of planning similar to
that of the federal government. This information economy relied on an overall structure of control and
coordination while dispersing many planning and
managerial activities to organizational units close to
business and environmental activity. Hence, the system was rational with respect to a structure of overall
control but adaptable with respect to the participation
of numerous entities in the planning process.
Regarding planning evolution, Ginsberg [24]
argued that strategy development processes could
be characterized by an emphasis on comprehension
(accuracy of judgments and predictions), creativity

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V. Grover, A.H. Segars / Information & Management 42 (2005) 761779

(novelty or uniqueness of ideas and solutions), and

consensus (harmony and shared commitment):
Although each one of these attributes is required at
one stage or the other to achieve successful strategic
planning, organizations might emphasize one at the
expense of the other. Research suggests that it is the
ability to balance all three attributes that leads to
superior performance. For example, studies examining
firm performance in mature businesses, have found
that firms that are able to successfully reinvent and
rejuvenate themselves are those that sought to
maintain a judicious and delicate balance among
competitive priorities.
The six dimensions of the SISP process exhibit
elements of both rationality (high comprehensiveness,
high formalization, topdown flow, control focus) and
adaptability (wide participation, high consistency).
We believe that the evolution of planning systems
follows a learning model where firms adapt their
processes as they gain more experience, pushed by the
changing environment. Most planning systems are
initially devoid of structure; lack of experience results
in limited and possibly biased inputs. For instance,
discovery of new strategic systems might involve
informal idea generation sessions using multiple
organization groups. Initial planning might be
relegated to a few drivers and a handpicked team
but does not reflect broad organizational participation.
Planning activities are discrete events with constricted
agendas and no continuous evaluation and feedback
systems in place.
As planning evolves, we expect companies to
realize that formal structures can make planning
processes more efficient. Experience in dealing with
uncertain technological options can yield more
comprehensive decision processes. The needs for
budgetary realism increases the number of control
mechanisms. However, along with this, we believe
that firms will realize that this can rapidly lead to
rigidity that is incongruent with the need to change due
to the environment and diffusion of IT throughout the
organization. Therefore, elements of adaptability must
be incorporated into the process, including broader
participation, with inputs from a variety of stakeholders. It also includes faster evaluation cycles and
adjustments of strategic plans:

Proposition 1. As planning systems evolve they will

increase their level of formalization, comprehensiveness, top-down flow, control focus, participation, and
consistency.
As a learning system, we expect that the changes
made through learning improves planning outcomes.
This leads to:
Proposition 2. As planning systems evolve they will
increase their level of planning effectiveness.
Proposition 1 is descriptive, while Proposition 2
has prescriptive implications. In addition to these,
learning models exhibit adaptation to contextual
changes. Therefore, we expect that more mature
systems exist due to their response to contextual
changes in (a) the environment, and (b) the technology
context. The environment can be characterized by the
widely used variable, environmental uncertainty [41]
that describes the perception of complexity and
dynamism present in the environment. The technological context can be defined in terms of its diffusion or
the spread of IT throughout the organization [6]. Both
these variables are exogenous and we would expect
that they act as catalysts to stimulate evolution of
planning. We propose:
Proposition 3. More mature planning systems are
characterized by higher levels of environmental uncertainty and IT diffusion.
Fig. 1 illustrates the basic premise of the study
(stages of planning).

6. Methodology
The use of key informants has been a popular
approach within empirical IS studies. Huber and
Power [31] proposed several guidelines for improving
the accuracy of reports gathered from key respondents.
All tactics were considered in the development of
our survey instrument, selection of respondents, and
its administration, including its careful pre-testing,
targeting senior IS executives emotionally involved in
SISP, provision of a monetary incentive and a tailored
research report, and the promise of anonymity.

V. Grover, A.H. Segars / Information & Management 42 (2005) 761779

767

Fig. 1. Strategic IS planning stages.

Purposive sampling was employed. This approach

obtained an overall frame of potential respondents and
then created a sub-frame of respondents with desired
characteristics. Such designs are considered entirely
appropriate in explanatory studies that examine
unique or complex phenomena [53]. The sampling
frame adopted was the East Edition of The Directory
of Top Computer Executives [1]. This contains the
names, titles, addresses, and phone numbers of top
computer executives in the Eastern half of the United
States. The entities within the directory include
Fortune 2000 firms (manufacturing and service),
educational institutions, hospitals, and governmental
agencies. In developing the desired sub-frame, all
hospitals, educational institutions, and governmental
agencies were eliminated because they have entirely
different success factors. Next, the job titles of

respondents remaining in the frame were examined to

determine their level of planning activity. Firms whose
senior IS manager had the job title of: Chief
Information Officer, Vice President, Director of
Strategic Planning, or Director of MIS were retained.
The resultant sub-frame consisted of 1100 business
entities. From this, 600 firms were chosen at random.
6.1. Measurement methods
Here, six planning process variables and five
effectiveness dimensions of SISP were assessed. As
noted by Churchill [14], the researcher should use or
adapt existing measurement scales, and when scales
have yet to be developed, literature may be used to
determine how the variable has been defined and how
many dimensions or components it contains. Then, a

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V. Grover, A.H. Segars / Information & Management 42 (2005) 761779

panel of experts (i.e., those knowledgeable in the area)

should offer valuable ideas and insights into the
phenomenon. Within our study, each of these
mechanisms was employed in developing construct
measures. In addition, the Q-sort technique [51], in
which experts and typical respondents group items
according to their similarity, was used to establish
construct validity. It was conducted among a panel of
senior IS executives and academics as a means of item
purification. Correct classification rates of over 90%
were realized for 80% of the initial items; these were
retained for further analysis.
6.2. Variable measurement
Measurement of planning stages was performed by
using a nominal variable that captured the firms
experience with SISP, the experience of the participating managers, and the extent to which procedures for
planning were well defined. Three stages were
constructed in a way to be consistent with prior
studies: a Preliminary Stage, where planning procedures were beginning to be defined and participants
had little experience; an Evolving Stage, where
planning activities had been tested but the process
was still being refined and the participants had some
experience; and a Mature Stage, where the firm had a
history of planning activities, participants had much
experience, and the procedures were in place. No
attributes of the specific planning process were
reflected in this measure.
Measures for planning process dimensions of
comprehensiveness, formalization, focus, flow, participation, and consistency were operationalized as
described by Segars et al. Also, planning effectiveness
used the four dimensions operationalized by Segars
and Grover. Three of these represented goal
fulfillment factors and the fourth improvement in
capabilities reflected the ability of the planning
system to improve in its support of organizational
functioning. Raghunathan and Raghunathan empirically validated measures of this planning success
measure within the context of general planning.
Finally, planning contribution represented the overall
contribution to the organization. Representations from
this criterion domain were adopted from the works of
Lederer and Sethi, King, Premkumar and King [57],
McLean and Soden [45], as well as King and Zmud.

These criteria are not tied to the fluctuations in

financial ratios but they provide a foundation for
determining SISPs relative contribution to organizational effectiveness.
Finally, the contextual variables of environmental
uncertainty and IT diffusion were measured using
guidelines from the literature. Environmental uncertainty involved five sub-scales [47,48] that captured
elements of both the number of factors (complexity)
and their rate of change (dynamism). These scales
have been widely validated in empirical studies in both
strategic management and IS. IT diffusion represents
the dispersion of technology and it has been used in
studies relating it to organizational structure [19] and
strategy [75]. Indicators drawn from these sources
were used in the measure.
6.3. Pre-testing and validation of measures
All items and the survey instrument were pre-tested
with the help of 23 senior IS executives. Each of these
managers was actively involved in strategic IS
planning and each had significant experience in IS
management. All organizations were visited by one of
the researchers and face-to-face interviews conducted
with each manager. Assessments were made of the
items, constructs, and completeness of the instrument.
Some items were slightly refined and a preliminary
assessment indicated that there was a high degree of
internal consistency.
The complete set of measures for the six SISP
variables, the four effectiveness dimensions, and the
two contextual variables is described in Appendix A
with a description of the confirmatory procedures and
results of testing the psychometric properties. In
general, the high factor loadings and resulting strength
in measures of factor reliability suggested that each
scale exhibited strong characteristics of unidimensionality. Further evidence of unidimensional measurement was found in the significance of chi-square
values obtained in paired testing among constructs.
Items dropped due to large errors or equivocality were
noted. As shown, only single items from the scales of
flow, focus, and consistency were lost due to error.
Upon establishing the measurement efficacy, the
resultant factor loadings of each construct were used
to compute a factor score that represented a composite
measure free from random sources of error.

V. Grover, A.H. Segars / Information & Management 42 (2005) 761779

6.4. Response profile

The response rate of the sampled firms was 43.5%.
Of the returned responses, nine contained incomplete
data or were otherwise unsuitable for analysis; these
surveys were dropped from further consideration
yielding an effective response rate of 42.1% and a
sample size of 253. The majority of respondents
were from manufacturers; representing 48.2% of the
sample. The next highest were from finance and
insurance entities, representing 17.4% of the sample.
The remaining categories exhibit a modest range of
representation from a minimum of 0.8% (agriculture)
to a maximum of 7.5% (wholesale). The sample was
almost evenly split between sales levels of 0500
million dollars (45.3%) and greater than 501 million
dollars (53.70%). The overwhelming majority of
respondents (72.20%) were either one or two levels
below the Chief Executive Officer (CEO). Therefore,
it seems that the collected data was provided by
respondents of larger business entities knowledgeable
about the issues of interest here.

7. Results
A significant number of respondents classified their
SISP system as being in one of the three stages: 37% (n
= 93) in the Preliminary Stage, 42% in the Evolving
Stage, and the rest in the Mature Stage. This indicated
that the majority of the organizations are still refining
the processes and only one-fifth consider themselves
mature.
Tables 3 and 4 provide the means and standard
deviations for each of the six planning process
variables and the five effectiveness dimensions across
the three stages. These illustrate a clear pattern for
both sets of variables consistent with the propositions.
As planning evolves it tends to become more
comprehensive, more formal, have a greater emphasis
on control rather than creativity, and greater emphasis
on topdown flow. These are complemented by an
increase in participation and greater consistency
(frequency) of planning activities. Table 5 shows
the statistical significance of these results over the
three stages. The unambiguous monotonically
increasing trend provides what we believe to be
substantial support for Proposition 1.

769

Table 3
Three stages of SISP evolution: means and standard deviations of
planning process dimensions
Preliminary
(n = 93)

Evolving
(n = 108)

Mature
(n = 52)

Comprehensiveness
Mean
7.93
S.D.
3.79

10.16
3.11

13.85
3.12

Formalization
Mean
S.D.

11.17
4.89

14.94
3.62

18.17
3.13

Focus
Mean
S.D.

7.43
2.21

9.02
2.37

10.54
2.35

Flow
Mean
S.D.

7.31
2.14

7.56
2.17

10.05
2.32

Participation
Mean
S.D.

8.56
2.49

11.44
3.31

15.42
3.93

Consistency
Mean
S.D.

7.99
3.32

10.32
3.66

14.74
4.83

Table 4 illustrates the effectiveness. Here too, firms

with more mature SISP tend to have greater alignment
between IS and business strategy, better analysis of
the processes, procedures, and technologies of the
Table 4
Three stages of SISP evolution: means and standard deviations of
planning effectiveness dimensions
Preliminary
(n = 93)

Evolving
(n = 108)

Mature
(n = 52)

Alignment
Mean
S.D.

19.14
5.26

24.75
5.76

28.37
4.41

Analysis
Mean
S.D.

17.51
5.08

23.42
4.29

26.24
3.91

Cooperation
Mean
S.D.

22.57
6.73

23.39
5.75

27.85
5.40

Improvement
Mean
S.D.

23.39
2.08

26.06
4.27

29.82
5.07

Contribution
Mean
Std. Dev

11.97
5.29

16.54
4.83

22.57
5.61

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V. Grover, A.H. Segars / Information & Management 42 (2005) 761779

Table 5
Multiple analysis of variance SISP design dimensions across stages
of planning maturity

Table 6
Multiple analysis of variance SISP effectiveness measures across
stages of planning maturity

Sum of
squares

Mean
square

F value

R2

Source

Comprehensiveness
Stage
2
606.80
Error
250
2578.63

303.40
10.31

29.41 (0.0001)

0.19

Source

d.f.

252

3185.43

Formalization
Stage
2
Error
250

1086.72
3277.46

252
Focus
Stage
Error

Flow
Stage
Error

Sum of
squares

Mean
square

F value

R2

Alignment
Stage
2
Error
250

1677.78
5732.79

838.89
22.92

36.60 (0.0001)

0.22

252

7410.58

2
250

1339.05
3524.71

669.52
14.09

47.51 (0.0001)

0.27

847.12
29.06

29.15 (0.0001)

0.19

419.33
20.04

20.92 (0.0001)

0.14

860.84
27.27

31.56 (0.0001)

0.20

d.f.

0.25

Analysis
Stage
Error

4364.18

252

4863.77

2
250

273.63
1379.84

0.17

Cooperation
Stage
2
Error
250

1694.25
7266.75

252

1653.48

252

8961.00

2
250

174.30
1149.14

0.15

Improvement
Stage
2
Error
250

838.67
5010.39

252

0.17

543.36
13.10

136.81
5.51

87.15
4.59

41.45 (0.0001)

24.79 (0.0001)

18.98 (0.0001)

1323.44

252

5849.06

Participation
Stage
2
Error
250

620.64
3059.64

Contribution
Stage
2
Error
250

1721.68
6819.96

252

3680.29

252

8541.64

Consistency
Stage
2
Error
250

654.09
4293.48

252

4947.57

310.32
12.23

327.04
17.17

25.36 (0.0001)

19.04 (0.0001)

0.13

organization, improved cooperation between stakeholders regarding development and implementation

priorities, a capacity to improve over time, and a
contribution to the overall effectiveness of the
organization. Table 6 provides strong statistical
support for the significance of these differences
thereby supporting Proposition 2. It should be noted,
however, that the standardized variances in the
dimensions of effectiveness are higher than those in
the process dimensions. This could reflect various
organizational contingencies that inhibit or facilitate
planning effectiveness.
Tables 7 and 8 use Tukeys Studentized range to test
for the differences in individual stages. With respect to
the SISP process (Table 7), significant differences (at p
< 0.05) were obtained for all the variables between the
Preliminary and Mature stages. Results for adjacent

stages however were mixed. Focus did not exhibit

differences between adjacent stages, while flow did
not exhibit differences between the Preliminary and
Evolving Stages. While it is difficult to interpret these
findings, we think that the changes in focus (from
creativity to control) are more gradual as planning
evolves through the stages. This might be because of
the importance of keeping a good balance between the
orientations. Creative use of IT is very important in
an era where the technology itself can be a source of
competitive advantage. At the same time the
proliferation of technological alternatives and mandates to keep IT costs in check can create a strong need
for a control/budgetary orientation.
Table 8 illustrates the results related to the Planning
Effectiveness dimensions. These clearly indicate that,
even across temporally adjacent stages, planning
effectiveness statistically improves. The only exception is cooperation where the improvement seems to
manifest itself during the latter stages. In general,

V. Grover, A.H. Segars / Information & Management 42 (2005) 761779

771

Table 7
Three stages of SISP evolution: Tukeys Studentized range (HSD) tests for planning process dimensions
Dimension

Mean differences between stages

Preliminary

Comprehensiveness
Formalization
Focus
Flow
Participation
Consistency
***

Evolving

***

Preliminary

Mature

***

Mature

***

5.92
7.0***
3.11***
2.74***
6.86***
6.75***

2.23
3.77***
1.59
0.25
2.88***
2.33***

Evolving
3.69
3.23***
1.52
2.49***
3.98***
4.42***

Significant at the 0.05 level.

The results support all three of our propositions.

Given the care taken in variable measurement and
validation, this would imply that the theoretical basis
of the propositions is sound. The major findings can be
summarized as:

their SISP system into the three categories, the

significant numbers of firms within each of the
three stages, and the qualitative differences in
process, outcome, and context in each of the three
stages.
2. Firms have different processes in each SISP stage.
While we cannot assert that every firm evolves
through the stages, given the cross sectional nature
of the sample, we found that firms in each of the
stages followed a certain (predictable) pattern with
respect to the SISP process dimensions.
3. Firms have different outcomes in each SISP stage.
Here, the trend was clear. Firms that had greater
experience with SISP and in a more mature stage
had better outcomes.
4. Firms in each SISP stage had a different context.
The perceived environmental uncertainty and the
IT diffusion variables strongly suggested that
firms that were in more mature stages of SISP
experienced both greater uncertainty and higher
levels of diffusion.

1. There are stages of SISP. Confidence in this

assertion is enhanced by the ease at which
respondents in the pilot study were able to classify

These stages reflect a learning model of SISP. Most

prior models suggest learning implications as firms
evolve and adapt to changes in their context. Indeed,

however, a clear pattern of improvement in effectiveness exists.

Table 9 illustrates the differences in contextual
variables across the three stages. Both environmental
uncertainty and IT diffusion are significantly different
across the three stages. This supports Proposition 3. It
also supports our contention that SISP should be an
adaptive system that responds to increasing environmental uncertainty and increasing IT diffusion. Both
these contextual stimuli require process adaptation.
This adds credence to the thesis of SISP stages as a
model of organizational learning.

8. Discussion

Table 8
Three stages of SISP evolution: Tukeys Studentized range (HSD) tests for planning effectiveness dimensions
Dimension

Mean differences between stages

Alignment
Analysis
Cooperation
Improvement

5.61***
5.91***
0.72
2.67***

Preliminary

***

Significant at the 0.05 level.

Evolving

Preliminary
9.23***
8.73***
5.28***
6.43***

Mature

Evolving
3.62***
2.82***
4.46***
3.76***

Mature

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V. Grover, A.H. Segars / Information & Management 42 (2005) 761779

Table 9
Three stages of SISP evolution: contextual variables across stages of SISP
Evolving (n = 108)

Mature (n = 52)

Multiple analysis of variance

Environmental uncertainty
Mean
10.94
S.D.
3.12

Preliminary (n = 93)

12.23
2.57

14.42
2.49

F(2,250) = 40.73, P = 0.0001, R2 = 0.25

IT Diffusion
Mean
S.D.

11.86
4.46

13.39
4.42

F(2,250) = 19.04, P = 0.0001, R2 = 0.26

8.83
4.13

the changes were based on expectations and prior

theory. Below, we describe possible manifestations of
these three stages.

pressure to change, bring new technologies, and

provide better information.
8.2. Stage 2: Evolving Stage

8.1. 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
allows SISP but provides little or no input into the
process. IS managers form planning committees to
deal with strategic issues. There is limited information
gathering since formal planning roles are not yet
defined and people are involved in planning while still
actively pursuing their original job. Occasionally
formal methods are brought into the process, but they
are usually partially adopted or fail to gather
integrated support from the committees. The process
is more creative than control oriented, as one of the
objectives is to build strategic thinking and new ideas
in an area that has typically had only tactical thinking.
Meetings occur relatively infrequently since the IS
group is not fully vested in the idea of strategic
planning, given the day-to-day fire fighting that gets
top priority due to immediacy effects. IS-centric
thinking often predominates the strategic context. No
formal evaluation of planning takes place. The process
yields limited alignment since business goals are not
well understood. This leads to frustration among the
planners. There are some benefits in terms of building
a culture of analysis and cooperation, but contribution
of the process to organizational effectiveness is
ambivalent at best. Most firms in this stage experience
uncertainty in product, market, and technological
environments, which stimulates the need for planning.
The IT base of these firms is usually stable but there is

A level of frustration has set in that provides the

internal impetus for change. Often the source of this
frustration includes questions like: What are we
accomplishing? Is anyone listening to us?
Dont I need to get back to real work? What
does top management really want? Externally, IT
diffusion is higher and top management starts taking
a more active interest (and involvement) 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. Participants are formally defined in SISP roles (e.g.,
Strategic Planning for Technology). The frequency
of planning is tested and refined. More organizational participation in SISP is nurtured, as firms try
to incorporate SISP as a corporate-wide activity. In
some cases, SISP is elevated to the level of Corporate
Planning and functions as a sub-process of that
endeavor. Elements of keeping control of the process
start entering the picture in order to get something
accomplished. Formal procedures for planning are
put into place and documented. In some cases,
formal methodologies are adopted or adapted.
However, these processes have to be refined to fit
the culture of the organization. SISP is taken much
more seriously among a wider group of IS and
organizational personnel. Top management also
expects a deliverable from the process. Organizational analysis is more complex and detailed as the
process attempts to fully incorporate the improvement of organizational processes and structures. The
IS-centric thinking prevalent earlier slowly gives

V. Grover, A.H. Segars / Information & Management 42 (2005) 761779

way to organizational thinking as cooperation

between various units is achieved. As the process
is improved it does a better job of identifying
problems and opportunities, and evaluating organizational needs.
8.3. 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. There
is a realization that to be effective contradictory forces
will have to be balanced. The planning process has
elements of rationalityit is comprehensive in its
search for strengths, weaknesses, threats and opportunities, problems and solutions. It is formal in its
definition of procedures and methods. It gradually
reverts to elements of control. And it is very much
integrated with the business planning to promote a
two-way flow of information and involvement.
However, it does not go to the point where rationality
stagnates the process or even institutionalizes it in
stone. A delicate balance is achieved between this
rationality and adaptabilityor the ability to work in
smaller steps rather than one large rational plan. This
requires widespread participation of all stakeholders
either directly or through their representatives.
Problems are viewed from various vantage points
and frequently, through mechanisms that allow the
process can adapt to change. Everyone is encouraged
to be involved in strategic thinking.

9. Implications
With the pervasiveness of IT and increasing
pressure on firms to leverage their IT assets, the
importance of SISP has never been stronger. SISP is
more than a narrow methodology or sequence of steps.
It is complex set of organizational activities that can be
characterized by a number of process characteristics,
which form an evolutionary pattern as they change as a
firms experience grows in adapting to a changing
environment and technological base.
The results of our analysis suggest that stages of
evolution are clearly distinguishable across dimen-

773

sions of process and dimensions of effectiveness.

The evolution of SISP leads firms to a desirable
(more effective) state that has attributes of rationality and adaptability. Therefore, firms that can
assess their current state of SISP can gain insight into
the direction of change needed. The most effective
SISP requires rational elements of comprehensiveness and formalization, focus on control and top
down planning flow. Exhaustive information gathering and consideration of alternatives, structured
methods and procedures, written guidelines, extensive budgeting, tight integration with financial
systems, top management initiation and top management involvements are characteristics of such
systems. However, SISP also requires adaptable
elements of participation and consistency. Diverse
participation across hierarchical levels and functions, large numbers of participants, frequent
assessment and adjustment of plans, open feedback
systems, and frequent SISP related meetings are
attributes of adaptability. Forward thinking firms can
assess their stage of evolution and work toward
adjusting the culture of the firm so that the desirable
systems can be accepted. Doing so would catalyze
the evolutionary trend toward maturity.
It should be noted that the degree of rational
versus adaptive elements in planning systems might
vary with the organization and environmental
context. For instance, firms in hypercompetitive
and information intensive environments where IT
has high visibility and importance might require
more of the adaptive elements. On the other hand,
stable industries where IT is playing an important but
utilitarian role might tend to emphasize rationality.
The path taken from preliminary to mature
could be influenced by the environment. In some
firms, adaptive elements might dominate before
rational elements are inculcated, while in others the
opposite might be true. The balance between
rationality and adaptability allows the process to
be effective in its ability to both manage todays
business while simultaneously creating tomorrows
technology and markets. Such ambidexterous
firms, also protect internal organizational skills/
capabilities while simultaneously infusing new
knowledge from the outside. Of course, as discussed
above, the balance points might vary with the nature
of organization or industry. However, companies like

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V. Grover, A.H. Segars / Information & Management 42 (2005) 761779

IBM, British Petroleum, Intel, Microsoft, Sonoco,

Dupont, Pfizer, and Delta Airlines have had a long
tradition of SISP and are fairly mature in effectively
balancing these needs.
A good example of effective planning is the case of
medical device maker Medtronica $5.5 billion
global company based in Minneapolis [73]. The CIO,
Jeff Balagna, indicates, The strategic plan is a highlevel document. It has the business imperatives, the
problems were trying to solve. That plan involves
widespread participation and goes into a summit
meeting of business unit IT leaders, who break the
plan into projects with owners, teams and deadlines.
The plan reflects a comprehensive and formal process,
but also incorporates the ability to respond quickly to
changes of fortune such as mergers or industry
upheaval. The organizational model includes a global
technology council, made up of the IT leaders from
each of Medtronics business units around the world.
The council meets roughly every two months to review
the appropriateness of the companys ongoing
strategy, make adjustments if necessary and make
sure current projects are being executed as planned.
Balagna can also call emergency meetings if
necessary. Balagna says that plans cannot be changed
instantaneously, but we can reprioritize very quickly
with this model, he says.

10. Study limitations

The quality of our work was predicated on the
quality of the data and the measures. We attempted to
bring a theoretical and operational definition to a
complex concept. Such endeavors are ambitious and
therefore contain some inherent limitations. Perhaps
the most significant is the range of developed
constructs for the process of SISP. In general, no
claim is (or can be) made to have captured every
aspect of this complex phenomenon. Therefore, it is
possible that other process dimensions exist that were
not considered here.
A second potential limitation concerns the sample.
The survey was targeted at organizations likely to have
defined processes for SISP and the senior executives
with vested interest in its outcomes. Although the
utilized sampling frame has been widely used in
similar studies, no general claim of external validity

can be made. Instead, these findings can only be

generalized to the population of firms within the
sampling frame.
Other potential limitations are response bias
associated with a single informant and lack of
model refinement through independent sample testing.
Multiple informants and structured methods of
triangulation are a better method of obtaining accurate
data regarding organizational properties.

11. Conclusion
This strength of support for the three propositions
adds credence to the theoretical basis of our study.
We believe that it strongly supports the contention of
an SISP learning model in which firms evolve
through stages and adapt to contextual changes by
changing the SISP process so that it is more
effective. Our results suggest that organizations
evolve in a direction of increasing rational-adaptively in their strategic planning processes. This
allows them to cope with increasing uncertainty and
complexity of the IT resource. The parallel relationship between this evolution and all aspects of
planning effectiveness suggests that rational-adaptively represents a best practice for which
organizations should strive. While firms might take
different paths to get there, successful planning
systems have aspects of both.

Appendix A. Construct operationalization and

validation
A general procedure for assessing the efficacy of
measurement within the realm of confirmatory
analysis is suggested by Jo reskog [33] as well as
Anderson and Gerbing [2]. In essence, each of the
item scales represents an a priori measurement
model of the theoretical construct space. To test their
efficacy with respect to strength of measurement and
solution stability, each of these models was
estimated in isolation, in pairs, and as a collective
network for evidence of validity and reliability
[2,33]. This analysis was accomplished through the
analytic framework of LISREL [34]. Two underlying
assumptions of confirmatory factor modeling within

V. Grover, A.H. Segars / Information & Management 42 (2005) 761779

LISREL are model determinacy (or identification)

and multivariate normality. Checks of these statistics
for the variables of this study revealed no serious
departures from multivariate normality or excessive
kurtosis. If the model is identified, the solution of
each model should converge at the same point each
time. Such an approach was undertaken in each of
the estimated models of this analysis. In all cases,
solutions converged at the same point and were
identical; providing strong evidence of model
identification [34]. Model fit measures, in particular
x2, provide direct statistical evidence of unidimensionality and convergent validity. Further evidence
of these properties is gained through high and
significant factor loadings as well as low residuals
between the observed and implied covariance
matrices.
Discriminant validity is achieved when the
correlations between any two dimensions are significantly different from unity [2,69]. Empirically,
this property can be established through the comparison of an unconstrained model, which estimates (or
frees) the correlation (f) between a pair of
constructs and a constrained model, which fixes the
value of the construct correlation to unity. The
difference in x2 between these models is also a x2
with degrees of freedom equal to one. A significant x2
difference implies that the unconstrained model is a
better fit for the data thereby supporting the existence
of discriminant validity [2,69]. Such tests were
conducted between all possible pairs of constructs
within the theoretical system. A more refined
indication of the extent of discrimination between
construct pairs can be gained through comparison of
the AVE for each construct with the estimated
correlation between constructs. Discriminant validity
is strongly inferred when AVE for each construct
is greater than the squared correlation between
constructs.
A.1. Planning system measures and analysis
(on a 7-point Likert type scale ranging from
strongly disagree to strongly agree)
Planning comprehensiveness: We attempt to be
exhaustive in gathering information relevant for IS
planning; Before a decision is made, each possible
course of action is thoroughly evaluated; We attempt

775

to determine optimal courses of action from identified

alternatives; There is little trial-and-error in our
strategic decision process; We will delay decisions
until we are sure that all alternatives have been
evaluated. ML estimates for items were 0.64, 0.89,
0.65, 0.43, and 0.60, all significant at p < 0.001.
Model estimates: x2 (5) = 9.97 (p = 0.08); GF = 0.97;
AGF = 0.92; Factor Reliability = 0.78.
Planning formalization: Policies and procedures
greatly influence the process of SISP within our firm;
We utilize formalized planning techniques (e.g., BSP)
in our SISP process; Our process for strategic planning
is very structured; Written guidelines exist to structure
strategic IS planning in our organization; The process
and outputs of strategic IS planning are formally
documented. ML estimates were 0.42, 0.83, 0.87,
0.68, and 0.59 all significant at p < 0.001. Model
estimates: x2 (5) = 9.22 (p = 0.10); GF = 0.96; AGF =
0.88; Factor Reliability = 0.82.
Planning focus: The primary focus of IS planning is
controlling cost through extensive budgeting; In our
IS planning process we encourage creativity and idea
generation over control; Strategic IS planning is
viewed as a means of controlling the growth of
technology; Control systems are used to monitor
variances between planned actions and outcomes;
Our IS planning process is tightly integrated with
the firms normal financial planning or capital
budgeting routine. ML estimates are 0.51, 0.71,
0.75, 0.48, 0.16. All but the last item were significant
at p < 0.001. This item was dropped and the fouritem model was estimated. Model estimates: x2 (2) =
4.22 (p = 0.07); GF = 0.92; AGF = 0.80; Factor
Reliability = 0.71.
Planning flow: Strategic planning for IS is initiated at
the highest levels of the organization; The planning
flow within our organization can be characterized as
topdown; Planning for IS is initiated by
requests/proposals from operational/functional managers; Those who formulate strategic IS plans are
most responsible for their implementation; The
primary role of upper management is to endorse
rather than formulate IS plans. ML estimates were
0.83, 0.49, 0.52, 0.17, and 0.59. All but the fourth
item were significant at p < 0.001. The respecified
four-item model had estimates of x2 (2) = 5.85
(p = 0.07); GF = 0.98; AGF = 0.89; Factor Reliability
= 0.71.

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V. Grover, A.H. Segars / Information & Management 42 (2005) 761779

Planning participation: Top-management is actively

involved in strategic IS planning; A variety of
functional area managers participate in the process
of IS planning; Our process for strategic IS planning
includes numerous participants; Strategic IS planning
is a relatively isolated organizational activity; The
level of participation in SISP by diverse interests of the
organization is high. ML estimates were 0.74, 0.87,
0.85, 0.66, and 0.75 all significant at p < 0.001.
Model estimates: x2 (5) = 9.66 (p = 0.10); GF = 0.96;
AGF = 0.88; Factor Reliability = 0.88.
Planning consistency: We constantly evaluate and
review conformance to strategic plans; We frequently adjust strategic plans to better adapt them to
changing conditions; Strategic IS planning is a
continuous process; We frequently schedule face-toface meetings to discuss strategic planning issues;
We formally plan for information systems as the
need arises. ML estimates were 0.58, 0.81, 0.85,
0.83, and 0.14, all but the last item significant at
p < 0.001. The reduced four item model had
estimates of x2 (2) = 4.73 (p = 0.07); GF = 0.98;
AGF = 0.89; Factor Reliability = 0.86.
A.2. Measures and analysis for SISP
effectiveness
Planning alignment (7-point scale anchored by
entirely unfulfilled and entirely fulfilled):
Understanding the strategic priorities of top-management (X); Aligning IS strategies with the strategic plan
of the organization (X); Adapting the goals/objectives
of IS to changing goals/objectives of the organization;
Maintaining a mutual understanding with top-management on the role of IS in supporting strategy;
Identifying IT-related opportunities to support the
strategic direction of the firm; Educating top-management on the importance of IT; Adapting technology to
strategic change; Assessing the strategic importance
of emerging technologies. Model estimates: x2 (9) =
16.90 (p = 0.05); GF = 0.92; AGF = 0.83; Factor
Reliability = 0.91. X deleted due to inadequate
reliability.
Planning analysis (7-point scale anchored by
entirely unfulfilled and entirely fulfilled):
Understanding the information needs of organizational sub-units; Identifying opportunities for
internal improvement in business processes through

IT (X1); Improved understanding of how the

organization actually operates; Development of a
blueprint which structures organizational processes; Monitoring of internal business needs and the
capability of IS to meet those needs (X5); Maintaining an understanding of changing organizational
processes and procedures; Generating new ideas to
reengineer business processes through IT; Understanding the dispersion of data, applications, and
other technologies throughout the firm. Model
estimates: x2 (9) = 15.68 (p = 0.09); GF = 0.94;
AGF = 0.88; Factor Reliability = 0.86. X1 deleted
due to inadequate reliability. X5 deleted due to
significant cross loading with alignment.
Planning cooperation (7-point scale anchored by
entirely unfulfilled and entirely fulfilled):
Avoiding the overlapping development of major
systems; Achieve a general level of agreement
regarding the risks/tradeoffs among system projects;
Establish a uniform basis for prioritizing projects;
Maintaining open lines of communication with other
departments; Coordinating the development efforts of
various organizational sub-units; Identifying and
resolving potential sources of resistance to IS plans;
Developing clear guidelines of managerial responsibility for plan implementation. Model estimates: x2
(14) = 23.25 (p = 0.05); GF = 0.96; AGF = 0.92; Factor
Reliability = 0.91.
Planning capabilities (7-point scale anchored by
much deterioration and much improvement):
Ability to identify key problem areas; Ability to identify
new business opportunities; Ability to align IS strategy
with organizational strategy; Ability to anticipate
surprises and crises; Ability to understand the business
and its information needs; Flexibility to adapt to
unanticipated changes; Ability to gain cooperation
among user groups for IS plans. Model estimates: x2 (14)
= 23.40 (p = 0.10); GF = 0.94; AGF = 0.88; Factor
Reliability = 0.90.
Planning contribution (7-point scale anchored by
strongly disagree to strongly agree): SISP
contributes significantly to the financial performance
of the firm; SISP enables us to make better managerial
decisions; We are able to identify new IT-based
opportunities before our competition; The time,
money, and effort devoted to SISP is more than
justified by its benefits; SISP provides valuable input
into the planning process of top-management; SISP

V. Grover, A.H. Segars / Information & Management 42 (2005) 761779

allows us to generate new and novel ideas; The plans

generated through our SISP process have almost
always been implemented. Model estimates: x2 (14) =
38.40 (p = 0.001); GF = 0.93; AGF = 0.86; Factor
Reliability = 0.89.
A.3. Measures and analysis for contextual
variables
Environmental uncertainty (7-point scale anchored
by strongly disagree to strongly agree): High
levels of product/service obsolescence characterize
our industry; Our firm must rarely change its
competitive practices to keep up with the market;
Actions of competitors are quite easy to predict;
Demand and consumer tastes are fairly easy to
forecast; The rate of technological change within
our industry is low. Model estimates: x2 (2) = 3.21
(p = 0.25); GF = 0.97; AGF = 0.87; Factor
Reliability = 0.82.
IT diffusion (7-point scale anchored by strongly
disagree to strongly agree): Our divisions/strategic business units are not dependent on centralized
hardware; Our major databases are in one geographic
region; Most major data processing is centralized in
one location; Storage and processing technologies are
widely distributed throughout our firm. Model
estimates: x2 (5) = 8.41 (p = 0.15); GF = 0.96;
AGF = 0.87; Factor Reliability = 0.86.

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Research (ACR), 1994.
[2] J.C. Anderson, D.W. Gerbing, Structural equation modeling in
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Varun Grover is the William S. Lee
(Duke Energy) Distinguished Professor
of IS at the College of Business and
Behavioral Sciences, Clemson University. Previously he was a Business Partnership Foundation Fellow and Professor
of Information Systems at the University
of South Carolina. Dr. Grover has published extensively in the information systems field, with three books and over 150
publications in refereed journals. His current research focuses on the
impact and effectiveness of IS at the organizational and market level.
A number of recent articles have ranked him among the top five
researchers based on publications in top IS journals over the past
decade. His work has appeared in journals such as ISR, MISQ, JMIS,
CACM, Decision Sciences, IEEE Transactions, California Management Review, among others. He is currently an AE for a number of
journals, including MISQ, JMIS, JOM, Database, and IJEC and on
the Board of Editors of numerous others. Dr. Grover has also
received recognitions for his research from the Decision Sciences
Institute, PriceWaterhouse Coopers, AIS and Anbar Intelligence and
has been the recipient of a number of teaching awards.
Albert Segars is the RBC Centura Distinguished Professor and chair of the
information and technology management
area at the KenanFlagler Business
School, University of North Carolina,
Chapel Hill. He also is a Sarah Graham
Kenan Distinguished Scholar. He
received his Ph.D. from the University
of South Carolina in the area of IT management Dr. Segars has published extensively in the areas of E-business, IT strategy and knowledge
management in journals such as MIS Quarterly, Information Systems
Research, Decision Sciences, JMIS and Information & Management. He is an active consultant with numerous organizations
including IBM, Sprint, Andersen Consulting, Merrill Lynch, and
Ford and serves on the board of several high-tech firms.