CRITICAL SUCCESS FACTORS OF INFORMATION SYSTEM

PLANNING FOR SYSTEM DEVELOPMENT

Farahwahida Mohd1 Raja Haslinda Raja Mohd Ali 2 Suhizaz Sudin3

1
Faculty of Information Technology, Universiti Industri Selangor Tel: +603-32805121, Fax: +603-
32806011, E-mail: farahwahida@unisel.edu.my

2
College of Business, Universiti Utara Malaysia Tel: +604-928131, Fax: +604-9285726, E-mail:
rj.linda@uum.edu.my
3
School of Computer & Communication Engineering, Universiti Malaysia Perlis Tel: +604-9858873, Fax:
04-9798011, Email: suhizaz@unimap.edu.my



Abstract— Information system planning has been one of
the critical issues in an organization. Besides assisting the
organization to achieve its objective, information system
planning has been used by organization to identify its
higher payback towards implementing it. In achieving this,
organizations should clearly understand the factors that
critically importance in the system development for their
organizations. As a result from the above, we propose this
paper to discuss the critical success factors that have been
found in the literature to be significantly related to the
system development in an organization. These factors
include skills, cooperation from other departments,
financial investment evaluation, human resources,
facilities, IT infrasturucture, IT organzitional structure,
top management support and management commitment.
The paper has been organized as follows. First section will
discuss on the various definition of information system
planning by few scholars. Then, the theory of information
system planning will be introduced. The third section will
discuss on the benefits of IS planning. Next, we will discuss
the factors that have been found to be critically importance
in the information system planning for system
development. Lastly, we will conclude this paper by
discussing the possibility of integrating the culture in the
information system planning for system development as
many organizations has embraced internationalization.
Keywords: Critical Success Factor, Information System,
Information System Planning, System Development
1.0 INTRODUCTION
Strategic Information System Planning (SISP) is one
of the important management agenda. It helps
organization in various ways. It assists the organization
to identify the appropriate technology that should be
acquired, it also helps the organization to use its
technology competitively as well as help the
organization to identify its higher payback when
investing towards the technology. Lederer and Sethi
(1988) have defined SISP as a process where an
organization determines a portfolio of computer-based
applications to help achieve business objectives. It is
essential for organisations since the measurement of
organisations’ success is based on the money invested in
information processing (Remenyi, Money & Twite,
1991).
Realizing the importance of SISP, researchers have
proposed several models for the successful
implementation of SISP (e.g. King, 1978; Lederer &
Sethi, 1988; Earl, 1993; Smits & Poel, 1996; Lederer &
Salmela, 1996). These studies also reveal several
motivating and inhibiting factors that contribute to the
successful implementation of SISP in business
organisations, as well as benefits and problems facing
ISP implementation (e.g. Lederer & Sethi, 1988;
Doherty, Marples & Suhaimi, 1999; Hackney, 2002).
This article will be managed as follows. The various
roles of SISP will be presented in the next section. Later,
the advantanges and development of SISP will be
discussed, followed by the importance of SISP towards
the higher learning education institutions. Then, the
authors will discussed the critical success factors
towards SISP in the higher learning institutions context
as well as introducing the critical success factors model
towards the SISP. Lastly, the possibility to integrate the
culture in the SISP critical success factors model will be
discussed.
2.0 VARIOUS ROLES OF SISP
As have been mentioned above, 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. (Lederer and Sethi, 1988). In many
organizations, it includes the specification of databases
and systems to support those applications. Also, it might
embrace the selection of applications, from an existing
list of possibilities that would best fill the organisation’s
current and future needs (Carlson, 1979; Kerner, 1979).
Other scholars have suggested that it might also entail
the discovery of new applications with the potential to
create an advantage over competitors (Parsons, 1983;
Ives and Learmonth, 1984; McFarlan, 1984; Porter,
1985; Porter and Millar, 1985; Clemons, 1986; Boynton
and Zmud, 1987).
Although many organizations conduct such a formal
planning process, others do not. Instead, they practice a
more informal approach which continuous adaptation to
the availability of resources in the presence of
environmental threats and opportunities (Vitale, Ives &
Beath, 1986). This has been revealed by Ismail, Raja
Mohd Ali, Mat Saat and Hsbollah (2007) when
conducting a study on SISP in public higher learning
institutions in Malaysia. They found out that still there
are universities that do not develop their own SISP on
various reasons.
Whilst most of the definition focus on explicit
objectives and on applications and technologies (Lederer
and Sethi, 1988), Smits and Poel (1996) definition focus
on the use and the importance of information in an
organization starting with the planning of information.
They define IS planning strategy as a complex of
implicit and explicit goals, visions, guidelines and plans
with respect to the supply and demand of formal
information in an organization, sanctioned by
management, intended in the long run to support the
objectives of the organization and adjusted to the
environment.
Therefore, in this article, we define the SISP as a
process that helps the organization to achieve their
business mission and objectives via the organization
resources which include financial, time and human
resources.
3.0 ADVANTAGES OF ISP
As have been mentioned above that SISP could give
many advantages to the organization that implemented it
from helping an organization to operate their day-to-day
operations until defining the new business strategies.
Below are some of the advantages that ISP could give to
the organizations.
1. It can identify the most desirable information
systems applications in which to invest.
(Henderson and Sifonis, 1988).
2. It could help an organization use its information
systems to carry out its existing business
strategies (Hartog and Herbert, 1989).
3. It helps the organization to define new business
strategies, technology policies, and
architectures (Earl, 1993; Porter 1985).
4. It help the organizations to align its information
systems strategy with its business strategy
(King, 1988).
5. Various IS planning methodologies can help an
organization discover opportunities where IS
can support important business requirements.
(Dologite, Fang, Chen, Mockler & Chao, 1998).
4.0 SISP THEORY
Generally, theories can fulfill several purposes. They
focus observations by giving order to human
experiences. They sort observations into classes of
objects or events to help the observer give this order.
They also help the observer to understand and to predict.
Thus, the theory lies in the human behavior of wanting
to impose order or unordered experiences (Dubin, 1978).
Specifically, in studying the IS planning, the theory is
used to guide the researcher in planning their research
and present their findings in an organized,
comprehensive and meaningful manner.
Theory of strategic planning has been developed by
Lederer and Salmela in the year 1996 based on the
models before it. In the year 1978, King has proposed
the strategic planning of Management Information
System (MIS) which include the organizational strategy
set and MIS strategy set. The organizational strategy set
consists of element of organizational purpose and
direction. These include organization’s mission,
objective, strategy and other strategic organizational
attributes that relevance to MIS. Whereas, the elements
under MIS strategy set are the substance of strategic
planning for MIS, which comprise of system objectives,
system constraints and system design strategies. Based
on this direction, King (1978) described strategic ISP as
a system comprise of inputs, processing and outputs. The
planning process gets input from the environment and
result in output and outcome.
However, Fitzgerald (1993) criticized that the
dependencies in the King’s model are not validated, and
instruments to measure the constructs in the model are
vaguely described. Based on the criticism, Smits and
Poel (1996) proposed a more descriptive model to
describe strategic ISP which includes environment,
process, form and content and effects.
They defined environment as all those facts and
conditions that do not form part of the information
strategy process, but can or should influence it, while
process is the way in which the information strategy is
created or changed. Form refers to some formal
characteristic and the time span and lastly content
related to the following items, which are objectives or
target for the information function, architectures, rules
and plan. Meanwhile, the intended and unintended effect
of the information strategy refers to the definition of
effects. Further, the researchers suggest five
organizational phases which closely linked to the
environment, which are turbulence, orientation,
consolidation, exploitation and tension.
Both models, however, did not explain further how
implementation should take an action. According to
Min, Suh and Kim (1999), information system planning
is the process of creating a plan for the implementation
and use of IS to maximize the effectiveness of corporate
resources to achieve its goals.
Since both models did not detailed on how
implementation should take in action, Earl’s model
(1993) can be used to explain further the necessary
conditions for successful strategic ISP. According to
Earl (1993), ISP cannot be understood by considering
formal methods alone, but researchers should also
consider the process of planning and implementation of
the plans. Therefore, Earl (1993) proposed three
conditions for achieving successful strategic ISP, which
are method, process and implementation.
Method, according to Earl (1993) is related to
strategic ISP technique, procedure or methodology
employed. Management participation, IS-user
relationships, user awareness and education, and
management ownership of the philosophy and practice
of SISP is included in process. Meanwhile
implementation has been proposed into the model as a
measure of strategic ISP.
In 1996, Lederer and Salmela proposed a theory of
strategic information system planning to stimulate
research and assist practice of SISP. The proposed
theory was developed as a result of overall practical
contribution of individual studies over two decades; in
their opinion are more towards a collection of different,
and sometimes even conflicting, methods and
prescriptions for planning rather than an organized
understanding of it. The theory of SISP consists of seven
constructs, which are (1) the external environment, (2)
the internal environment, (3) planning resources, (4) the
planning process, (5) the information plan, (6) the
implementation of the information plan, and (7) the
alignment of the information plan with the
organization’s business plan.
The proposed theory is more comprehensive and
detailed, beginning with assessing environmental factors
that include internal environment and external
environment which is beyond the organization’s control.
The internal environment require the organization to
determine the corporate culture that can facilitate its
ISP, the organization size, organization structure as well
as the management style and objectives.
 External environment has been considered as another
factor that could effect the ISP. The external
environment includes the changes in supplier trends,
customer preferences, emerging technologies,
government legislation and competitor’s actions
(Lederer and Mendelow, 1990; Raghunathan and
Raghunathan, 1991).
In ISP, resources planning are vital as it is related
with the time and effort of managers and other
professionals who participate in the planning process
(Lederer & Salmela, 1996; Lederer & Gardiner, 1992),
software and organization’s business plan. Therefore,
resources planning will be useful in the development of
information plan process.
Information plan is the most critical phase in ISP
because without a formal planning, the information will
be very limited and resulting to a limited plan. The
contents of the plan may vary depending on the
processes carried out during the planning. A typical plan
includes technical, competitive, business and
organizational information about current information
systems and the recommended strategic IS strategy
(Lederer and Gardiner, 1992).
Lastly, is the alignment where it represents the
fulfillment of goals. It is a degree to which the
information systems plan reflects the business plan
(King, 1978). It can be measured as the number or
quality of the recommendations implemented from the
strategic information systems plan as well as in a
strategic business plan. Lederer and Salmela (1996)
pointed out that by implementing the projects
accordance to the IS planning, will thus achieve a better
alignment with the business planning.
5.0 SISP CRITICAL SUCCESS FACTORS
A. Skills
The success of an organization depends on many
factors and one of it is the human factors. In order to
make sure that the organization can increased their
competitiveness in regards to competitive environment,
skills worker or employee is needed. Papalexandris &
Nikandrou (2000) in their study found out that there are
four main categories of skills that is demand by the
organizations which are technical skills, human skills
and conceptual skills and one of the skills included in
the technical area is project planning. Further, Teo
(2003) concluded that a managerial IT skill is important
to provide a sustainable advantage of the IT. Therefore,
the authors suggest that the higher the human resource
skills, the more likely the information system planning
will be success.
B. Cooperation from other departments
For some organization, the information system
planning is prepared for the department which the
information system would like to be implemented.
Therefore, in order to make sure that the information
system could benefit to the other users in that
organization, it should get a full cooperation from other
departments in that organization so that the particular
departments could know the process of other
departments. Titthasiri (2000), in her study shows that
representatives from all constituencies are important to
prioritize the IT/IS objectives. Therefore, it has been
asserted that the higher the cooperation from other
departments in the organizations, the more likely the
success of information system planning.
C.Financial Investment evaluation
In order to success in information system planning, an
investment towards the information system technology
should be made same as the investment towards other
assets such as building, machinery, equipment and
others where it should be evaluated based on the
priorities. Lincoln and Shorrock (1990) found that many
successful strategic IS projects had bypassed the normal
justification process used in the organization. Overall,
organizations are far from satisfied with the techniques
and processes they have for IS/IT investment appraisal
where only 36% felt they were adequate in a survey of
major UK corporations. Realizing the importance of
financial investment evaluation, thus we hypothesize
that organizations that prepare a financial investment
evaluation are more likely to success in their
information system planning.
D.Human Resource
Allocation of human resource in information system
planning process should be made to make sure that it is
not underestimated. Underestimate of this resource could
lead the organization to miss their target dates and
budgets (Lederer & Gardiner, 1992). Thus, the assertion
is the better human resource allocation in preparing IS
planning, the more likely to success in information
system planning.
E. IT Infrastructure
In order to make sure that the implementation of the
information system planning is a success, it is therefore
much crucial to prepare all the infrastructures needed in
implementing the plan. Without the infrastructure, the
plan will remain a plan. In this article, we assume that
the better the IT organizational infrastructure of the
organization, the most likely to success in information
system planning.
F. Facilities
The facilities are also one of the important contents
that should be considered in the SISP process. According
to Titthasiri (2000), in a process of IS planning, facilities
strategy should be made available such as allocations of
the locations, buildings, rooms, security and furniture.
Therefore, the other hypothesis is the better facilities of
the organization to support the ISP, the more likely to
success in information system planning.
G.IT Organizational Structure
IT organizational structure is also an important
content in SISP process. According to Titthasiri (2000),
organizational structure is important to answer a
question on what IT structure to be organized, how to
developed policies and procedures, how to organized the
IT planning team, and how many should be included in a
team and others. With the above statement, we assert
that the better the IT organizational structure of the
organization, the more likely to success in information
system planning.
H.External Environment
The external environment such as changes in supplier
trends, customer preferences, emerging technology,
government legislation and competitors’ actions may
influence strategic information system planning by
making it more difficult ( Lederer and Mendelow, 1990;
Ragunathan and Ragunathan, 1991). The hypotheses that
can be derived from the above statement is the better
analysis on the external environment the more likely to
success in information system planning.
I. Top management support
Basis for SISP are the business goals, which fall
within the scope of top management. Besides, SISP, is
very expensive and has far-stretching consequences for
the organization (strategic impact, all kinds of business
functions are involved). For successful SISP, it is
necessary to have the support of the top management
(Galliers, 1992). Fail to get support from top
management will leads to fail of SISP. Therefore, our
last hypothesis is the better the top management support,
the more likely to success in information system
planning.
From the above discussion, we proposed the SISP
critical success factors model as in figure 1 below.
Cooperation from
other department
Financial Investment
Evaluation
Human Resources
IT Infrastructure
SISP
success
Facilities
Top management
support
IT Organizational
structure
External environment
Figure 1: SISP Critical Success Factors Model
6.0 THE IMPORTANCE TO INTEGRATE CULTURE IN THE
CRITICAL SUCCESS FACTORS MODELS
Another issue that could be raised in this modern era
that is related to the SISP is the integration of culture.
As has been known widely that organizations today have
embraced internationalization, therefore it is a need to
understand the culture which is not similar to the parent
organization culture to ensure that the organizations still
could benefit from the SISP. The importance to integrate
culture in the critical success factors model could be
seen from different perspectives. There are still few
studies that have been done regarding the impact of
culture in the SISP even though there are many
researchers studied on the comparison of IS planning
between countries. For example, Groznik and Kovacic
(2000) conducted a research on exploratory study
comparing IS planning implementation between
Singapore and Slovenia.. Later, Mohdzain and Ward
(2007) studied on the subsidiaries’ views towards the
information systems strategic planning of the
multinational organizations.
Realizing this, it is worth for organizations to consider
a cross-cultural issues since some of these organizations
have started operating at other countries. According to
Hunter and Beck (2000), a process that has been
developed at one location might not survive at other
location. So, this globalization issues suggests that more
cross-cultural research should be conducted since it does
not only benefit to the researchers but also valuable to
the practical implications .
REFERENCES
[1] Boynton, A.C. and Zmud, R.W., (1987),
Information technology planning in the 1990’s:
directions for planning and research, MIS Quarterly,
11, No. 1, 59-71.
[2] Carlson, W.M., (1979), Business information
analysis and integration technique (BIAIT): a new
horizon, Data Base, Spring, 3-9.
[3] Clemons, E.K., (1986), Information systems for
sustainable competitive advantage, Information and
Management, 11, No. 3, 131-136.
[4] Doherty, N.F., Marples, C.G., and Suhaimi, A.
(1999). The relative success of alternative
approaches to strategic information systems
planning: an empirical analysis. Journal of Strategic
Information Systems, Vol.8, 263-283.
[5] Dologite, D.G., Fang, M.Q., Chen, Y., Mockler,
R.J. and Chao, C., (1998), An information systems
view of Chinese state enterprises, Strategic
Information Systems, 7, 113-129
[6] Earl, M.J., (1993), Experiences in strategic
information systems planning, MIS Quarterly, 17,
No. 1, 1-24
[7] Galliers, R.D. (1992), Choosing information
systems research approaches, in Information
Systems Research – Issues, Methods and Practical
Guidelines, UK, Blackwell Scientific Publications.
[8] Groznik, A., & Kovacic, A. (2000). Comparative
Study of SISP Practices in Slovenia and Singapore.
ICMIT, 604-609.
[9] Hackney, R., and McBride, N. (2002), Non-
implementation of an IS strategy within a UK
hospital observations from a longitudinal case
analysis. Communication of the Association for
Information Systems, Vol.8, 130-140.
[10]Hartog, C. and Herbert, M., (1986), 1985 opinion
survey of MIS managers: key issues, MIS Quarterly,
December, 350-361
[11]Henderson, J.C. and Sifonis, J.G., (1988), The value
of strategic IS planning: understanding consistency,
validity, and IS markets, MIS Quarterly, 12, No. 2,
187-200.
[12]Hunter, M. G., & Beck, J. E. (2000). Using
Repertory Grids to Conduct Cross-Cultural
Information Systems Research. Information Systems
Research, 11(1), 93-101.
[13]Ismail, N. A., Raja Mohd Ali, R. H., Mat Saat, R.,
& Mohamad Hsbollah, H. (2007). Strategic
information systems planning in Malaysian public
universities. Campus-Wide Information Systems,
24(5), 331-341.
[14]Ives, B. and Learmonth, G., (1984), The
information system as a competitive weapon,
Communications of the ACM, 27, No. 12, 1193-
1201.
[15]Kerner, D.V., (1979), Business information
characterization study, Data Base, Spring, 10-17.
[16]King, W.R. (1978), Strategic Planning for
Management Information Systems, MIS Quarterly,
March, p. 27-37.
[17]King, W.R., (1988), How effective is your
information systems planning? Long Range
Planning, 21, No 5, 103-112.
[18]Lederer, A.L. and Gardiner, V.,(1992), The process
of strategic information planning, Journal of
Strategic Information Systems, Vol.1, No.2, 76-83.
[19]Lederer, A.L. and Mendelow, A.L., (1990), The
impact of the environment on the management of
information systems, Information System Research,
1, No. 2, 205-222
[20]Lederer, A.L. and Sethi, V., (1988), The
implementation of strategic information systems
planning methodologies, MIS Quarterly, 12, No. 3,
444-461.
[21]Lederer, A.L. and Salmela, H., (1996), Toward a
theory of strategic information systems planning,
Strategic Information Systems, 5, 237-253
[22]Mason, R. M., (1991), The Role of Metaphors in
Strategic Information Systems Planning,
Management Information Systems, 8, No. 2, 11-30
[23]McFarlan, F.W., (1984), Information technology
changes the way you compete, Harvard Business
Review, 62, No. 3, 98-103.
[24]Mohdzain, M. B., & Ward, J. M. (2007). A study of
subsidiaries' views of information systems strategic
planning in multinational organizations. Journal of
Strategic Information Systems, 16, 324-352.
[25]Min, S.K., Suh, E.H., and Kim, S.Y. (1999). An
integrated approach toward strategic information
system planning. Journal of Strategic Information
System, Vol .8, 373-394.
[26]Oh, W. and Pinsonneault, A., (2007), On The
Assessment Of The Strategic Value Of Information
Technologies:Conceptual And Analytical
Approaches, MIS Quarterly, 31, No. 2, 239-265.
[27]Papalexandris, N. and Nikandrou, I., (2000),
Benchmarking employee skills:results from best
practice firms in Greece, Journal of European
Industrial Training, 24, No. 7, 391 – 402
[28]Parsons, G.L., (1983), Information technology: a
new competitive weapon, Sloan Management
Review, 25, No. 1, 3-14.
[29]Porter, M.E., (1985), Competitive Advantage:
creating and sustaining superior performance, Free
Press, New York.
[30]Porter, M.E. and Millar, V.E., (1985), How
information gives you competitive advantage,
Harvard Business Review, July-August, 149-160.
[31]Pun, K.F. and Lee, M.K.O (1998), A Proposed
Management Model for Development of Strategic
Information Systems. Special Issue on the
Information System Technology on Operation
Management. Journal of Technolgy Management.
[32]Raghunathan, B. and Raghunathan, T.S., (1991),
Information systems planning and effectiveness: an
empirical analysis, Omega, 19, No. 2/3
[33]Remenyi, D.S.J., Money, A. and Twite, A. (1991) A
Guide To Measuring and Managing IT Benefits,
NCC Blackwell Limited, Oxford.
[34]Rowley, D. J., Lujan, H. D., and Dolence, M. G.
(1997). Strategic change in colleges and
universities, San Francisco, CL: Jossey-Bass
Publishers.
[35]Semiawan, T., and Middleton, M. (1999). Strategic
information planning and campus information
systems development in Indonesia, Campus-Wide
Information Systems,Vol.16, No.2, 70-76.
[36]Smits, M. T. and Poel, K.G., (1996), The practice of
information strategy in six information intensive
organizations in The Netherlands, Strategic
Information Systems, 5, 93-110.
[37]Titthasiri, W., (2000), Information Technology
Strategic Planning Process for Institutions of Higher
Education in Thailand, NECTEC Technical Journal,
3, No.11, 153-164
[38]Teo, T.S.H., Ang, J.S.K. and Pavri, F.N. (1997),
The State Of Strategic IS Planning Practices In
Singapore, Information and Management. Vol.33,
Issue 1.
[39]Tellis, W. (1997). Information technology in a
university: A case study, Campus-Wide Information
Systems, 14(3), p. 78-91.
[40]Wilson, T.D. (1989) The implementation of
information systems strategies in UK companies:
aims and barriers to success. International Journal
of Information Management, Vol.9.
[41]Vitale, M.R., Ives, B. and Beath, C.M., (1986),
Linking information technology and corporate
strategy: an organizational view, Proceedings of the
7th International Conference on Information
Systems, 15-17 December, 265 – 276.
[42]R. J. Vidmar. (1992, August). On the use of
atmospheric plasmas as electromagnetic reflectors.
IEEE Trans. Plasma Sci. [Online]. 21(3). pp. 876—
880. Available:
http://www.halcyon.com/pub/journals/21ps03-
vidmar