Strategic Planning

The Implementation of Strategic Information Systems Planning Methodologies
By:Albert L. Lederer Joseph Katz Graduate M. School of Business University Pittsburgh of Pittsburgh,PA15260 Vijay Sethi School of Management State University New of Yorkat Buffalo Buffalo, NY14260

Introduction
Improved strategic informationsystems planning (SISP) the most is critical issuefacinginformation systems executives today (Brancheau and Wetherbe, 1987). Because purpose SISP the of is to identify the mostappropriate targets for automation to schedule and their installation, SISP hasthe potential to make huge contributions to businesses other organizations(McFarlan, and 1971 Effective SISP helporganizations ). can use information systems reachbusiness to goals, a majorobjective of senior IS executives (Hartog andHerbert,1986).It canalso enable organizations to useinformation systems significantly to impacttheir strategies. However, failure to the carefullycarryout SISP result bothin lost opcan portunities and the waste of expensive IS resources. In orderto perform effective SISP, organizations conventionallyapplyone of several methodologies (Arthur Andersen Co., 1986;Martin, and 1982; Moskowitz,1986). However, recent research by Lederer and Mendelow (1986a) has shown that implementing a methodology a such is top problemfaced by systemsmanagers during SISP.Similarly, in a studyof seven companies, Sinclair (1986) foundthe implementation of planningtechniqueto be a majorproblem.The problemencompasses justifying the methodology,applying andreviewing output.Todate, it, its however, therehasbeen broad no studyto determine natureof this problem. the Thisarticle definesSISP describes and threepopular SISP methodologies.elucidates relative It the severity of the problems examines facand some tors potentially relatedto this severity. Finally, it considers similarities anddifferences the some in problems the threepopulartechniques. of

Abstract
Strategic informationsystems planning(SlSP) the process deciding objectivesfor organ# of the z.ational computing identifying potential and computer appfications which the organization shouldimplement. This article gives a thorough definitionof SlSP thenillustrates it withthree and methodologies. A surveyof 80 organizations examined probthe lems faced by information systemsmanagers whenthey attemptto implement such a methodology.Thesubjects’overall satisfactionwith the methodology, resourcerequirements,proits cess,output,andfinal execution werenot particularly high. Thetwo problems rated mostsevere werethe difficulty in securingtop management commitment implementing plan and the for the need substantialfurther analysisin order to for carryout the plan. The survey also investigated some potential causes the problems.Survey of results suggest that the SISPmethodologies often produce may satisfactoryplansbut that organizations the lack management commitmentand control mechanisms ensure theyfollow the plans. to that Keywords:Planning, information systems, information management ACM Categories:K.6.0, K.6.4

Background
Thissectionfirst defines SISP. thendiscusses It frequently appliedSISPmethodologies. Next, it presents a categorization of common problems encountered duringthe SISP process. Finally, it discusses literature which lays the groundwork for an investigationof some factors potentially related to the SISP problems.

SISP defined
Theconceptof SISPhas evolvedover the last decade. the late 1970s,according McLean In to andSoden (1977), the primaryobjectivesof sys-

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Strategic Planning

tems planning were to improvecommunication with users, to increasetop management support, to better forecastresource requirements alloand cate resources,to determine more opportunities for improving MISdepartment, to identify the and newand higher payback computer applications. More recently, Moskowitz (1986)observes that additional objective of SISPhasbecome dethe velopment an organization-wide architecof data ture. Simultaneously, Vitale, et al. (1986) both and IndexSystems (1986)suggest that the identification of strategicapplications arisenas another has mainobjectiveof SISP. This article adopts broad,dichotomous of a view SISP.Hence, oneside of the dichotomy, on SISP refers to the process identifyinga portfolio of of computer-based applications that will assist anorganization in executingits businessplans and consequently realizing its business goals. SISP also entails the definition of databases sysand tems to support those applications. SlSPmay mean selectionof rather prosaic the applications, almost if froma list, that would fit thecuras best rent andprojected needs the organization. of This assumes information systems that plannersknow

their organization’sgoals, plansand strategy; suchan assumption be unfounded may (Lederer and Mendelow, 1987). On otherside of the dichotomy, canalso the SISP entail searching applicationswith a highimfor pact andthe ability to createan advantage over competitors (Clemens,1986; Ives and Learmonth, 1984; McFarlan,1984; Parsons, 1983; Wiseman, 1985). SISPcan help organizations use information systems innovative waysto in build barriers against new entrants, change the basis of competition, generatenewproducts, build in switching costs, or change balance the of power supplierrelationships in (McFarlan, 1984). Assuch,SISP promotes innovation creativity, and and might employidea-generating techniques suchas brainstorming (Osborn, 1957;Rackoff,et al., 1985), Value Chain Analysis (Porter,1985), the Customer Resource Cycle(Ives andLearLife month, 1984). Vitale, et al. (1986) recognized distinction between two approaches rethe and ferred to the formeras attempting "align" MIS to objectives withorganizational goalsandthe latter as attempting "impact"organizational to strategies(p. 268).

Table Description BSPStudySteps 1. of Gaining Executive Commitment A top executivesponsor various other interand estedexecutives identified as the majorsources are of information the study. A team to leader, perhaps the sponsor, identified to spend timeleading is full the studyteam 4 to 7 executives. of Team members trained in BSP.Theycompile are dataon the firm’s business functions currentIS and support,andproduce workplan, interview scheda ule, review schedule, final reportoutline. and Theexecutivesponsor reviewsthe study’s purpose with the team. Theteamleader reviewsthe compiled businessdata and the top IS executiveexplains recentIS activities andproblems the team. to Thestudy teamidentifies the businessprocesses whichformthe basis for executive interviews, the definitionof thefuture information architecture, and otherstudy activities. Data are groupedinto categories called data classes based their relationships the business on to processes identified above. Chartsare built to reflect those relationships. Thestudyteam identifies how currently supports IS the organization.Theteam develops charts showing organizational processes and the responsible departments.

Preparing the Study for

Starting the Study

Defining BusinessProcesses

Defining Data Classes

AnalyzingCurrent Systems Support

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To carry out SISP (especially in the alignment mode), organization an usuallyselectsanexisting methodology then embarks a major,intenand on sive study. Theorganization formscommittees of userswith IS specialistsas members advisors. or It most likely uses SISP the vendor’s educational supportto train the committee members the and vendor’sconsulting supportto guide the study andauditits results. A multi-step procedure caris ried out over severalweeks months. duraor The tion generallydepends the scope the study. on of In addition identifying portfolio of applicato the tions, theorganization prioritizes them. defines It databases, data elements, a network comand of puters and communications equipment support to the applications.It also prepares schedule a for development installation. and

studies. Threepopular methodologies include Business Systems Planning(IBM, 1975;Lederer and Putnam, 1986), Strategic Systems Planning (HollandSystems, 1986), andInformationEngineering (Martin,1982).They described are briefly as illustrative methodologies will bealluded and to in the researchfindings. These three wereselected because, together,theyaccounted half for of the responses the survey. to Business Systems Planning (BSP), developed by IBM,involves top-down planningwith bottomup implementation. this methodology, firm In a recognizes business its mission,objectivesand functions, andhow these determine business its processes. processes analyzed their The are for dataneeds, dataclasses then identified. and are Databases developed combining are by similar data classes. Thefinal BSP plan describesan overall information system architecture well as as the installation schedule individual systems. of Table detailsthe stepsin thestudy. 1

Frequently appfied methodologies
Organizations generallyapplyoneof a number of methodologies order to performthese SISP in

Table1. (continued) Determining ExecutivePerspective the Executive interviews gain the commitment addiof tional executives help the studyteam and understan¢ the problems whose solutions will be represented b~ the future systems. Thestudy teamdevelops categoriesof findings and conclusions then classifies previously and identifie¢ problems the categories. into Thestudy teamusesthe business processes th~ and data classesto designdatabases. team The prepare., charts relating the processes the classes th~ to and systems subsystems. to Theteamsets systems development priorities base¢ onpotentialfinancial andnon-financial benefits,th~ likelihood of success, the organization’s and deman¢ for eachsystem.

Defining FindingsandConclusions

Definingthe Information Architecture

Determining Architectural Priorities

ReviewingInformation Resource Management studyteam The evaluates currentIS organization’., the strengthsand weaknesses.steering committee A i., established set policy andcontrolthe function. to Developing Recommendations Action Plan Theteampreparesan action plan with recommenda. and tions abouthardware, software,adjustments curren to systems,and methods strengtheningIS manage. of ment. ReportingResults The studyteam givesa talk alongwith a brief summan~ anda more detailed (usuallyverythick) reportcoverin( the study’s purpose,methodology, conclusions, recommendations prescribedactions. and

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BSP places heavy emphasis top management on commitment executive involvement.Topexand ecutivesponsorship perceived critical. Inforis as mation systems analystsmightserveprimarily in an advisorycapacity. Thestudy produces sucha large volume information that IBMhas begun of marketingan automated version called Information QualityAnalysis (Vacca, 1984). Strategic Systems Planning (SSP), developed by RobertHolland, defines a business function model analyzing by majorfunctionalareas.A data architecture derivedfromthe business is function modelby combininginformation requirements into genericdataentities andsubjectdatabases. Aninformationsystems architecturethen identifies newsystems their implementation and schedule. Although language the differs slightly, the stepsin the SSP procedure similar to thosein are BSP.¯ A majordifference from BSP SSP’s is automated storage, manipulation,and presentationof the data collected duringthe SISP process.Software produces reports in a wide rangeof formatsand with various levels of detail. Forexample, "affinity" reports show frequencies accesses the of to data, while"clustering"reportsgive guidance for database design. Menus guide the user through online data collection and maintenance. data A dictionaryinterface facilitates sharingSSP data with an existing data dictionary or other automated designtools. In addition to SSP, HollandSystems Corporation offers Tactical Systems Planning (TSP) Logiand cal Database Design(LDD). TSP a methodolis ogy for guiding the implementation of the informationsystem architecture. LDD usedto is developdata structures for modules from the studyor fromother systems, then is usedto and map structuresto the SSP architecture. the data InformationEngineering (IE), developedby James Martin, providestechniques building for enterprise models, data models, and process models.Theseform a comprehensive knowledge basewhichthen createsand maintainsinformation systems. is considered some be a IE by to moretechnically oriented approach than other SISPmethodologies. In conjunction IE, Martinadvocates useof with the Critical Success Factors(CSF) (Rockart,1979), techniquefor identifying issues considered by business executives the most as vital for the successof their organization.Martinsuggests that each general manager should use CSF.Theresulting factors will then guidethe SISP endeavor

by helping identify future management control systems. (Recent versionsof BSP also useCSF.) IE provides severalsoftware packages facilifor tating the SISP effortl However, differs from IE other methodologiesby providing automated tools to link its outputto subsequent systems development efforts. Anapplicationgenerator inis tegrated with IE and producessystems with COBOL code.

Othermethodologies
Besides BSP,SSP IE, firms might choose and Method/1 (Arthur Andersen Co., 1982),Inforand mationQuality Analysis(Vacca,1984), Business InformationAnalysisand Integration Technique (Carlson,1979),Business Information Characterization Study (Kerner, 1979), CSF (Rockart, 1979), Ends/Means Analysis (Wetherbe and Davis, 1982), Nolan Norton Methodology (Moskowitz,1986), Portfolio Management (McFarlan,1981),Strategy Transformation Set (King, 1978),ValueChain Analysis (Porter, 1985),orthe Customer Resource Life Cycle (Ives and Learmonth,1984). Alternatively,firms often selectfeatures these of methodologies then, possibly with outside and consulting assistance, developtheir owninhouseapproach (Arthur Andersen Co, 1985; and Sullivan,1987). Table2 presentsfour majordistinctions among some methodologies. classifies them alignIt as ment impact or approaches. table also distinThe guishes them their primaryfocus. Finally, it by shows whether they define a data architecture, and whether they provideautomated support.

Problems with the methodologies
It haslongbeen recognized SISP anintrithat is cate andcomplex activity fraught with problems (McFarlan, 1971). Several authors have described these problems.Their workis based on field surveys, cases,andconceptual studies, and investigatesmostof the methodologies described previously. review themost A of significantof their articles served the basisto createa compreas hensive of the problems Table list (see 3). In order to organize summarize problems, and the this researchusedthree categories--resources, process,and output. Resource-related problems addressedthe issues of time-requirements, money,personnel, and top management support for the initiation of the study. Process-related

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Table2. Some Characteristics Different Methodologies of Methodology BusinessSystems Planning Strategic Systems Planning Information Engineering Method/1 Critical Success Factors Customer Resource Life Cycle Value Chain Analysis Impact or Alignment Primarily Alignment Primarily Alignment Primarily Alignment Alignment CanBe Both Impact Impact Focus Defines Data Architecture Yes Yes Yes No No No No Automated Support No Yes Yes No No No No

Data Data Data Projects Decision Information Customers Internal Operations

problems involvedthe limitations of the analysis done the methodology. by Finally, output-related problems dealt with the comprehensiveness and appropriateness the final planproduced the of by methodology. This categorization wasderived froma similar scheme to definethe different used components IS planning(King, 1984). of Table 3 shows problems the from the surveys, cases and conceptual studies. The problems have beenparaphrased, simplified and categorized into the framework.

Mendelow, 1986b).Similarly, as business planning becomes moresophisticated (and hence routine), organizational goalsandstrategiesare better defined,andthe IS plancanthus be more effectively aligned with business goals(King, 1978).Thus,less severe SISP problems wouldbe expected firms with more in sophisticated businessplanning. McLean Soden and (1977)confirm that the absence formal businessplanning of makes more SISP difficult. Participationby IS Department Business in Planning TopIS executives participate in strategic who businessplanninghaveless difficulty understandingtop management’s objectives (Lederer and Mendelow, 1987). Theyare moreexperienced planningand moreinformedabout the in firm’s goals.Therefore, arelesslikely to have they problems guiding or participating in the SISP studyandin ensuring its outputsupports that organizationalgoals¯ Hence, their SISPproblems should less severe, be Reporting Relationship the IS Executive of McFarlan (1971)suggests firms in whichthe that top S execut reportsto a h~gher ve leve busness executiveplace more emphas~s planning, use on IS resources more effectively, andhavegreater planning ability. These firms couldmore easily initiat~ . a study, acquireits resources, impleand ¢ ment output. Thus, its they should encounter less severeSISPproblems.

Potential causal factors
Unfortunately, little is known very about manthe agerialfactorsthat affect these problems differin ent organizations. Johnson (1984)refers to 1983study by the New York consulting firm of Cresap, McCormick, Paget.It concluded and the following: "Although companies employ variety a of techniques approaches, and success planin ningis surprisinglyunaffected such by factors as industry, size of enterprise, methodology used, andorganizational arrangement" 97). (p. However, there are some reasons believe that to certain organizational and managerial factors mightbe related to SISP problems. following The variables represent selection a (not intended be to comprehensive)suchfactors, andthe text exof plainsreasons expecting for their effects¯ Sophistication Business in Planning Thecompletelack of a businessplan can be a severeimpediment IS planning (Ledererand to

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Table3. TheProblems Problem Code R1 R2 R3 R4 R5 R6 R7 R8 R9 R10 Rll R12 R13 R14 R15 Problem Statement Source

Resources Implementing Methodology for the The size of the planning team verylarge. is Vacca, 1983 Vacca, 1983 It is difficult to find a team leader meets criteria specified who the by the methodology. It is difficult to find team members meet criteria specified who the Vacca, 1983 by the methodology. Thesuccess the methodology greatly dependent the team Zachma~,1982 of is on leader. Many supportpersonnel required for data gatheringand are Rockart,1979 analysis duringthe study. Theplanningexercisetakesverylong. Bowman, al., 1983 et Theplanningexerciseis very expensive. Moskowitz,1986 Thedocumentation not adequately does describethe stepsthat Zachman,1982 shouldbe followed for implementing methodology, the Themethodology lacks sufficient computer support. Zachman,1982 Zachman,1982 Adequate externalconsultant support not availablefor is implementing methodology. the Themethodology not based anytheoretical framework. is on Zachman,1982 Theplanninghorizonconsidered the methodology by is McLean and Soden, 1977 inappropriate. It is difficult to convince management top to approve the Vacca, 1983 methodology. Yadav,1983 Themethodology makes inappropriate assumptions about organization structure. Themethodology makes inappropriate assumptions about Yadav,1983 organization size. Planning Process Specified by the Methodology King, 1978 Themethodology to take into account fails organizational goalsandstrategies, Schwartz,1970 Themethodology to assess current information fails the systems applications portfolio. King, 1984 Themethodology to analyze currentstrengthsand fails the weaknesses the IS department. of King, 1984 Themethodology to takeinto account fails legal and environmental issues, King, 1984 Themethodology to assess external technological fails the environment. King, 1984 Themethodology to assess organization’s fails the competitive environment. Zachman, 1982 Themethodology to takeinto account fails issuesrelated to plan implementation. Themethodology to takeinto account fails changes the in organizationduringSISP. Kay,et al., 1980 Themethodology not sufficiently involveusers. does Boyntonand Zmud, Managers it difficult to answer find questions specified by 1984 the methodology. The methodology requires too much management top Bowman, al., 1983 et involvement. Themethodology requires too much user involvement. Boyntonand Zmud, 1984 Zachman, 1982 Theplanning procedure rigid. is Themethodology not sufficiently involvetop does Kay, etal.,1980 management.

P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 Pll P12 P13 P14

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O1 02 03 04 O5 O6 07 O8 09 O10 Oll O12 O13 O14 O15 O16 O17 O18 O19 020

Table3. (continued) Outputof the Planning Methodology SISP outputfails to provide statement organizational a of objectives the IS department. for SISP outputfails to designate specific new steeringcommittees. SISP outputfails to identify specificnew projects. SISP ~utfails to determineuniform out a basisfor prioritizing projects. SISP )ut falls to determine overalldataarchitecture out an for theorganization. SISP )ut fails to provide out priorities for developing specific databases. SISP ~utfails to sufficiently address need Data out the for Administration the organization. in SISP )ut fails to includeanoverall organizational out hardware plan. SISP )ut fails to include overall organizational out an data communications plan. SISP outputfails to outline changes the reporting in relationships in the IS department. SISP outputfails to includean overall personnel training and plan for the IS department. SISP output falls to include overallfinancialplanfor the an IS department. SISP output fails to sufficiently address role of a the permanent planninggroup. IS Theoutputplansare not flexible enough takeinto account to unanticipate.d changes the organization its environment. in and The outputis not in accordance the expectations top with of management. Implementing projectsandthe dataarchitecture the identified in the SISP outputrequires substantial further analysis. It is difficult to secure management top commitment for implementing plan. the Theexperiences fromimplementing methodology not the are sufficiently transferable across divisions. The final outputdocument not veryuseful. is TheSISP outputdoes capture the information not all that wasdeveloped duringthe study.

McLean Soden, and 1977 McLean Soden, and 1977 King, 1978 Zachman, 1982 Zachman, 1982 Sullivan, 1985 McLean Soden, and 1977 Sullivan, 1985

McLean Soden, and 1977 McLean Soden, and 1977 King, 1984 McLean Soden, and 1977 Gi11,1981 Zachman, 1982 Gill, 1981 Zachman, 1982 King, 1984 Gi11,1981

Initiator of the SlSP Study Top management involvementin SISPhas been emphasized (IBM Corporation, 1975; Martin, 1982;Rockartand Crescenzi,1984). Thus,top management initiation of the studyshould reflect the commitment involvement and that IS executives seek,andless severeSISP problems would thenbe anticipated. Scope the SISPStudy of Thescope the SISP of studyrefers to the organizational unit underinvestigation. A studymight cover entire organization, division, or merely the a a particularfunctionalarea.SISP the corporate at level must addressadditional complex issues

suchas technology management, use of data the communications, data architecture (Kay, et and al., 1980;Sullivan,1985).Thus,a broad,corporate scopemay associatedwith moresevere be problems. Planning Horizon The planning horizonrefers to the planning period covered the study. Effective usersof informaby tion resources employ suchhorizons(McFarlan, 1971). IS planninghorizonsvary depending on businessplanninghorizons, management style, andother organizational factors (Martin, 1982). Because useof a planning the horizonmightforce the studyteam bemore to detailedin its analysis andto develop schedule, a less severe problems

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may occur studiesthat consider specific planin a ninghorizon. OrganizationOwnership McLeanand Soden(1977) had expected but failed to find a relationship theSISP in characteristics of publicly andprivately held companies. Their studyshowed in publicly held firms, that planning is moredependent external conon straints. Therefore, problems SISP would likely be moresevere. Methodology Thesurveyinstrument a three-part questionwas naire. In the first part, respondents identifiedthe methodology theyhadused.They that also identified the extent to whichthey hadencountered the aforementioned problems.Subjects rated each problem a scaleof oneto five, where on 1 = not a problem 2 = an insignificant problem 3 = a minor problem 4 = a major problem 5 = an extremeproblem Thisscalehasbeen used similar previous in studies (McLean Soden, and 1977). Thesecond part of the instrument includedquestions relatedto the implementation of plans.In this section, respondents indicatedthe extentto which different outputsof the plan hadbeen affected. This follows King’s (1984)recommendation that criterion for evaluating planningsystem the a is extentto which final plan actuallyguides the the strategicdirectionof theIS function. In the second part, the subjects also answered scaled questions about their satisfaction with variousaspects the SISP of experience aboutthe and reasonsfor any deviation from the final SISP recommendations. The third part of the survey contained number a of questionsrelated to respondent organizaand tional characteristics. These wereadapted from Mcleanand Soden (1977). Twoexperiencedstrategic IS planners pilottested the questionnaire.One planner, with 21 years IS experience, currentlyresponsible of is for SISPat a large regional grocery chain andwas previously of the top planners a Fortune one at 50 international petroleum corporation. Theother planner, with nearly30 yearsof IS experience, is currently an independent consultantin the SISP area.Thepilot test brought threeadditional out

problems that wereincorporatedinto the questionnaire. They appear in Table 3 without references. Therevised questionnaire wasthen mailed to members the StrategicDataPlanning of Institute andto thefirms in VaCca’s (1983) study.A total 251 organizationsreceivedthe questionnaire. Threeweeks after the first mailing, reminders weresent to thosewhohadnot yet responded.

Results
This sectioninitially discusses characterissome tics of the respondents. thenexamines findIt the ings aboutthe problems implementing SISP of an methodology. it focuses a particular diNext, on mension the problems considersthe orgaof and nizational and managerial factors potentially related to the problems. Finally, it compares frequently usedmethodologies.

Characteristicsof the respondents
One hundred sixty-three firms returnedthe completed surveyfor a response of 65%. rate Eighty (or 32%) thesefirms hadalready of participated an SISPstudy and thus provided usable data. Thiswas highrate considering the questiona that naire waseight pages long andfairly complex. The rate attests to the fact that the respondents found topic to be important. this Although of the 80SISP all participants either had completed were completingan ongoingSISP or study,their demographic profiles differed. Table 4 shows that the respondents were, in general, highly experienced professionalswith exposure to more thanoneemployer that they currently and worked medium large firms. Table4 also for and shows that BSP,SSP IE accounted 50% and for of the methodologies by the participants. used

Extent of problems SlSP of methodologies
Table5 shows rankingof the problems adopta of ing an SISPmethodology. the questionnaire, In subjectshadratedthe problems listed in Table 3 as extreme, major,minor,insignificant, or not a problem all. The"Extreme MajorProblem" at or column the table shows percentage subin the of jects rating the problem such;the "MinorProbas lem" column displays the analogous percentage. As Table5 shows, mostsevere the problem the is failure to securetop management commitment for

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Table4. Characteristics Respondents of Job Titles of Respondents President Vice President Director Manager Supervisor/Group Leader Analyst/Data Administrator Consultant Other IS Experience Respondents of Lessthan 10 years 10 to 20years Over20 years Industries of Respondents Manufacturing Utilities Insurance Government Retail Other/Not Available Scope Studies of Entire Enterprise Division FunctionalArea Not Available Number Employees of Fewerthan 1,000 1,000to 10,000 Morethan 10,000 Not available Number IS Employees of Fewerthan 100 100to 500 Morethan 500 Methodology BusinessSystems Planning Strategic Systems Planning InformationEngineering Method/1 Critical Success Factors NolanNorton In-house Others Not Available 6% 8% 14% 36% 6% 9% 6% 15% 17% 63% 20% 26% 13% 10% 8% 5% 38% 44% 40% 10% 6% 23% 42% 32% 3% 36% 55% 9% 21% 15% 14% 9% 4% 3% 14% 16% 5%

sufficient resources. might It alsopossibly reabe soned that the requirement further analysis for (rankedsecond) a problem is simplybecause insufficient resources allotted to complete are an appropriately comprehensive study. Alternatively, it may that the methodologies poor be make useof the resources allocatedto the study. Regardless, the viewof the respondents, lack in the of resources appears play a very significant to role.

Further evidence the resource of problem
On scaleof zeroto six (where refers to exa zero tremelydissatisfied andsix refers to extremely satisfied), the respondents’ average rating for overall satisfaction with the SISP methodology was3.55, where neutral scorewould a havebeen 3.00. Satisfaction scores the different dimenfor sionsof SISP were also slightly favorable.Satisfaction with the SISP process 3.68, with the was SISP outputwas3.38, andwith the SISP resource requirements 3.02. Given evidence the was the in previous subsection, is notsurprising satisit that faction with the SISPresourcerequirements is lessthansatisfaction withthe process output. and However, satisfactionwith carryingout final SISP planswas much lower(2.53); in fact, only 32% the respondents weresatisfied while 53% were dissatisfied. Table 6 summarizes responthe dents’ satisfaction with these aspectsof the 1 SISP. Furtherevidence focusingon the problem efof fecting the planarises froma comparison the of elapsed planninghorizonwith the degree comof pletion of SISPoutputs. Theaverage planning horizon the SISP of studieswas 3.73 years,while an averageof 2.1 years had passed since the studies’ completion; thus, 56% the planning of horizonshadelapsed.However, of an averout age of 23.4 projects recommended the SISP in studies,only 5.7 (24%) been had initiated. Therefore, it appears firmsmay been that have failing to initiate projects rapidlyas necessary order as in to complete duringthe planning them horizon.It also appears that there mayhavebeeninsufficient project start-ups orderto realizetheplan. in 1, authors noassertions theabsolute . about The offer values thesatisfaction of ratings.However, examinafter ing them, university one professor noted if his that students’ ratings his classroom of instruction remained consistently these at levels, hewould eventually be fired for incompetent teaching!

carrying out the final plan. The second most severe problem the requirement substantial is for further analysisafter the completion the SISP of study. Furthermore, despitethe fact that those two problems output-related, is interesting are it to note that six of the eight remaining ten top problems resource-related. are Thus,it mightbe argued that the difficulty of securingtop managementcommitmentto carry out the plan (ranked first) is associated the approval inwith of

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Table5. Extentof Problems SISPMethodologies of Problem Code O17 O16 R4 R2 R9 R6 P7 R13 O11 R3 O12 R8 06 05 R7 O13 R5 07 O18 09 O10 04 O15 P3 08 P11 O14 P5 P12 O19 P10 020 P4 R14 P8 O1 P9 R1 P6 03 02 P13 P2 P14 P1 R12 RIO R15 R11 AbbreviatedProblem Statement Extreme or Major Problem 52% 46% 41% 37% 36% 33% 33% 32% 30% 30% 29% 28% 27% 27% 26% 26% 26% 26% 24% 22% 22% 22% 22% 21% 20% 20% 20% 19% 18% 18% 17% 17% 14% 14% 13% 13% 13% 12% 12% 12% 11% 9% 9% 9% 8% 6% 5% 4% 3% Minor Problem 16% 31% 30% 17% 27% 30% 18% 36% 29% 24% 28% 33% 26% 22% 29% 24% 23% 16% 19% 38% 31% 19% 15% 32% 36% 21% 18% 20% 28% 20% 39% 25% 16% 14% 25% 21% 5% 21% 19% 13% 18% 17% 16% 13% 10% 7% 11% 8% 5%

Difficult to securetop management commitment Requires further analysis Success dependent teamleader on Difficult to find team leader meeting criteria Methodology lacks sufficient computer support Planning exercisetakeslong time Ignoresplan implementation issues Difficult to obtaintop management approval Notraining planfor IS department Difficult to find team members meeting criteria Nofinancial plan for IS department Documentation inadequate is Nopriorities for developing databases Nooverall dataarchitecture determined is Very expensive Nopermanent planninggroup IS Many supportpersonnelrequired Nodata administrationneedaddressed Experiences sufficiently transferable not Noorganizationaldata communications plan Nochanges IS reportingrelationships in Nopdodtization scheme provided Outputbelies top management expectations Noanalysis of IS department strengths/weaknesses Nohardware plan Heavytop management involvement Resulting plansare inflexible Noanalysisof technologicalenvironment Toomuch user involvement Final outputdocument very useful not Questions difficult for managers answer to Information duringstudynot captured Methodology ignoreslegal/environmental issues Badassumptions aboutorganizationstructure Ignoresorganizationchanges during SISP Noobjectivesfor IS department provided are Insufficient user involvement Verylarge planningteamrequired Methodology ignorescompetitive environment Nonew projects identified in final plans Output fails to designate steering committees new Rigidity of planning procedure Noassessment currentapplicationsportfolio of Lackof top management involvement Ignores organizational goalsandstrategies Inappropriate planninghorizon Inadequate consultantsupport Inappropriatesize assumptions Notheoretical framework

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Table OverallSatisfaction 6. Average The Methodology The Resources Required TheMethodology’s Process TheMethodology’s Output CarryingOutthe Plan 3.55 3.02 3.68 3.38 2.53 Satisfied 54% 38% 48% 55% 32% Neutral Dissatisfied 23% 24% 17% 17% 15% 23% 38% 25% 28% 53%

At the sametime, organizations had begun projects whichwerenot part of their SISP plan. These constitutedabout38% all projects iniof tiated after the study. Finally, in organizations where the SISP had recommended changesin the IS department,only 50% these changes of hadbeen carried out. These data suggest that the respondents not did execute their final plansvery scrupulously. They raise questionsaboutthe resemblance between the systems envisioned the planninggroupand by their final implementations. mightalso specOne ulate that the methodologies failed to generhave ate useful ideaswhichorganizations couldthen translate into implementable computer systems. Given their great expense time consumption, and such findingsseriously challenge utility of the the planning methodologies represented in this study. However, findingsare not necessarily the surprising. They confirm the workof Runge (1985)who studiedsuccessfully implemented strategic informationsystems.In 80% his cases,existing of SISPprocedures were either purposelycircumvented ignored.Runge or attributed the successful implementation thesesystems, to SISP of not methodologies, largely to "productchampibut ons," i.e., top generalbusiness executives who securedthe necessary resources,overcame resistance to approval and development,and actively promoted the systems during implementation.

ningwas financial/tactical rather thanstrategic. Analysis variance of testedthe differencein the mean scoresunderalternatives for eachfactor. Thus, Table shows e levelsof statistical signif7 th icancefor the alternativewith more severe problems.(Therelatively lowmean scores reflect that some the problemsare considerably less of severe thanothers.) Thefollowing subsections discuss the problem factors. The headings reflect the study’sfindings based strictly on the alternative with the lower mean score. Thesubsequent discussionfurther considers strength the findings;cautious the of interpretationof the non-significant differences is suggested. Factor1: Organizations less sophisticawith tion in business planning hadmore severe problems than moresophisticated organizations, Organizations characterized that their business planning financial or tactical hadsignificantly as moresevereproblems than organizations that characterized their business planningas strategic. The effectwas significant ratings all four for in categories. is not surprising It that a general sophisticationin settinggoalsandobjectives permeates the SlSP activities. In suchsophisticated organizations,IS executiveshaveless trouble justifying resources, carrying the process, out and analyzing output. the Factor2: Organizations with less participation by the IS department busiin ness planning had more severe problems than organizationswith greaterparticipation. Although differences not statistically sigthe were nificantin any category, effectheldin all four. this Thedirection of the effect suggests importhe tance such of participation.Participation stratin egy formulation enablesthe IS department to better understand management’s top objectives andthus, to ensure that the SISP outputssupport their goals.

Potential causalfactors affecting extent of problems
Table identifies the previously 7 discussed organizational andmanagerial factors potentially related to the severity of the SISP problems.It shows mean the ratings of the problems from the resources, process, outputcategories for and and all 49(i.e., overall) problems. example, For the 2.38 in row 1, column refers to the average 1 severity of the 15 resource problems Table3) (in for subjectswho statedthat their business plan-

MIS Quarterly/September 1988 455

Strategic Planning

Factor3: Organizations where the top IS executivereported a controllerhad to moresevereproblems than organizations where the top iS executive reported to a president or vice president, Thiseffect was statistically significantfor all four categories. parallelsthefindingsof Benjamin, It et al. (1985) observed chief information who that officers in leading-edge companies frequentlyreport to anareaother thanfinance.More highly placed IS executives more can easily initiate, carry out, andanalyze exercises. SISP Also,the primarilyfinancial orientation of the controller may ennot hance IS Department’s the position or contribute to its SISP skills. The reporting relationship might merelyreflect more archaicorganizations. Thisresult is particularlyimportant because IS top executives frequently reportto a controller.Arthur Andersen Co. (1986)recently foundthat 32% and

of the top information executives surveyed reported a senior-level to financialofficer. Factor 4: Organizationswheretop managementinitiated the study hadmore severe problemsthan organizations where IS management initiated it. This finding was surprising. Although differences in ratings were statistically significant,theefnot fect wasuniformacrossall four categories.The finding suggests although executives that IS seek top management involvement, still prefer to they maintaincontrol. Topmanagement-initiated SISP studiesmay likely bethe result of displeasure with the performance IS management. manageof IS ment-initiated SISP studies probablypermit IS management exercisemoreinfluence over the to SISP study. However, finding mightsimplybe the attributable to the fact that the respondents were IS executives. :

Category

Table7. FactorsRelated $1SP to Problems Mean Severity of Problems Overall Resources Process ~ Output

1. Organizational Unit’s Degree of Sophistication Business in Planning Financial/Tactical Strategic 2. Participation by IS Department in Business Planning Does Participate Not Participates 3. To Whom Doesthe Top IS ExecutiveReport Controller President/VP 4. Initiator of the SISP Study Top Management IS/Other Management 5, Scope the SISPStudy of Division/Function Enterprise 6. Consideration Specific Planning of HorizonBy the SISPStudy NoPlanningHorizon HorizonSpecified 7. Organization Ownership Publicly Owned Privately Owned * Refers the .10level of significance. to ** Refers the .05level of significance. to

2.38** 1.87

2.13"** 1.55 2.13 1.98

2.46*** 1.91

2.34*** 1.80

2.38 2.26 2.69*** 2.10 2.33 2.27 2.43* 2.09

2.45 2.30

2.34 2.20

2.55*** 1.82 2.16 1.95 2.04 1.94

2.66** 2.28 2.39 2.32 2.33 2.35

2.59** 2.14 2.31 2.20 2.28 2:16

2.58* 2.20 2.39 2.08

2.29 1.94 2.20 1.87

2.53 2.28 2.40 2.21

2.47* 2.16 2.31 2.07

*** Refers the .01level of significance. to

456 MIS Quarterly~September 1988

Strategic Planning

Factor5: SISP studies witha divisionor function as their scope more had severe problems than studieswith the entire enterprise their scope. as Again, finding, although weak, surpristhe very is ing. Studies divisionsand of functions signifihad cantly moresevere resource problemsthan studiesof entire enterprises. same The effect, although statistically significant, truefor the not was process overall categories.For the output and category, ratings were the nearly equal(although in the opposite directionas theothers).The implicationof this finding is that the broad general and recommendations the methodologiesmight of simply bettersuitedto the definitionof dataarbe chitecturesof broader scopes. Factor6: When SlSPstudyfailed to specthe ify a planninghorizon, problems weremore severe than when did it specifya planning horizon. The effect of this findingwas consistent across all four categories wassignificant for the reand sources overall categories. implication and Its is fairly straightforward a planning -horizonis a control mechanism. demands a schedule It that be drawn andfollowed.It forcesplanning up participants to confront resolve and problems order in to meet their milestones.This finding suggests that the importance a planning of horizonhasnot diminishedeventhoughincreasing environmental volatility hasmade usemore its difficult (Lederer and Mendelow, 1986c; Sullivan, 1987). Factor 7: Publicly-owned organizations had moresevere problemsthan privately-owned organizations. Although effect was the consistent all four catfor egories,none the differences of were significant, Still, the implication mightbethat publicly-owned firms are generally morebureaucraticandmore subjectto externalpressures privately-held than organizations,possibly because is easier to it controlplanning a privately-held in firm. Thus, IS departments public companies in would find more difficulty in obtainingresources, executing the process,andanalyzing output. the

et al., 1983;Zachman, 1982), BSP’s problem top is that its documentation not adequately does describe the stepsto follow. Thetop problem SSP of andIE is the difficulty of obtaining managetop ment commitment implementing plan, perfor the haps because these methodologies (and their vendors)are less well-known top management to thanIBM.It may also be dueto their more recent origin. Themajorproblem in-house-developed of methodologiestheir lack of sufficient computer is support; this is not surprisingwhen considers one the expense developing of suchsupportandthe likelihoodthat a firm would so. do Table8 also shows some other potential differences among methodologies. of a trainthe Lack ing planandthe lengthydurationof the planning exerciseare two problems SSP’s IE’stop in and ten that are not in BSP’s ten. Inadequate top documentation,lack of computer support, anddependenceon a teamleader are three problems in BSP’s ten that are not in SSP’s IE’s top top and ten. Among top ten problems the four methodthe of ologies, three are common all four. These to includethe difficulty in obtainingtop management commitment implementing outputs,the refor the quirement substantial for further analysis,andthe difficulty findinga good leader.In fact, most team of the top ten problems eachmethodology of are related to carryingout the plan andthe planning team; this finding accents underlying the similarities among methodologies. the These similarities and differences might offer some preliminaryguidance firms selecting or to developingan SISPmethodology. However, due to smallsample sizes(17, 11, 12, and11, respectively, for thefour methodologies in Table cau8), tiousinterpretation this table is suggested. of

Summaryand Conclusion
Improved is a majorchallenge SISP facing IS executives today.Effectiveplanning essentialto is therealizationof the potentialstrategicimpact of computer-based informationsystems. This article hasexamined difficulties of implementing the a methodology performSISP. to Theresults suggestthat IS planners are not particularly satisfied with their methodologies. Planningrequires too many resources.Topmanagement commitment not easily obtained. is When SISP the exercise complete, is further analysis is required beforethe execution the plan of

The problemsof specific SISP methodologies
Thetop ten problems the four mostfrequently of usedS~SP methodologies appear Table8. Dein spite the common belief that oneof BSP’s major strengthsis its detailed documentation (Bowman,

MIS Quarterly~September1988 457

Strategic Planning

Table8. Extentof Problems Different Methodologies of Problem Code Abbreviated Problem Statement Extreme or Major Problem 58% 53% 53% 53% 47% 47% 44% 42% 37% 37% 60% 46% 44% 40% 36% 36% 36% 36% 36% 30% 67% 58% 46% 46% 46% 46% 42% 42% 42% 38% 55% 50% 46% 46% 40% 36% 36% 36% 33% 30% Minor Problem

BSP R8 Documentation inadequate is O17 Difficult to securetop management commitment R4 Success dependent teamleader on O16 Requires further analysis R9 Methodology lacks sufficient computer support 06 Nopriorities for developing databases P7 Ignoresplan implementation issues R2 Difficult to find team leadermeeting criteria R7 Very expensive P5 Noanalysisof technological environment IE O17 Difficult to securetop management commitment Difficult to find team leader meeting criteria R2 O16 Requires further analysis Oll Notraining plan for IS department 08 Nohardware plan P12 Too much user involvement R6 Planning exercise takeslong time Pll Heavytop management involvement O7 Nodata administrationneedaddressed O13 Nopermanent planninggroup IS SSP O17 Difficult to securetop management commitment Oll Notraining plan for IS department O16 Requires further analysis R13 Difficult to obtain top management approval P3 Noanalysis of IS department strengths/weaknesses R3 Difficult to find team members meeting criteria R6 Planning exercise takeslong time Nofinancial planfor IS department O12 Experiences sufficiently transferable not O18 Difficult to find team leader meeting criteria R2 In-House Methodology lacks sufficient computer support R9 O16 Requires further analysis R4 Success dependent teamleader on Difficult to find team members meeting criteria R3 Difficult to securetop management commitment O17 Documentation inadequate is R8 P10 Questions difficult for managers answer to R2 ¯ Difficult to find team leader meeting criteria O18 Experiences sufficiently transferable not Difficult to obtain top management approval R13 can take place. Consequently, carrying out the planis oftennot veryextensive. Thefinal plan might be a goodplan. However, management commitment the plan might be to missing the means controlling its execution or of might ineffective. be

16% 32% 26% 21% 26% 26% ¯ 17% 26% 32% 21% 10% 9% 11% 10% 27% 27% 18% 18% 9% 20% 8% 17% 39% 39% 27% 15% 25% 25% 8% 31% 18% 30% 36% 36% 20% 46% 18% 9% 11% 20%

Therefore, the objectiveof the SISP if exercise is to alignIS objectives business (as is the with goals primaryobjective of mostof the methodologies used participants this study),thendetailed, by in lengthy and complexSISPmaybe of limited value. Alternatively,the objectiveof an SISP exercise can be to useinformation technology to

458 MIS Quarterly~September1988

Strategic Planning

impacta business strategy; however, methodthe ologiesin this studymay generate useful not the ideas fulfill that purpose. to

several practitioner surveysandtherefore deserves attentionof IS researchers. study the This lays thefoundation furtherwork the area. for in This article has examined number critical a of problems SISP hasidentified the mostimof and portant ones. In doing so, it hasprepared researchers studythe relationshipsbetween to the problems. For example, under what circumstances mightspecific resource problems to lead specific process problems? Likewise,how might specific resourceproblems processproband lemsberelated to specific outputproblems? The investigation a smallnumber factorspoof of tentially associatedwith the problems SISP of methodology implementation reportedin this was article. The resultssuggest it might fruitful that be to developa comprehensive modeland test a widervarietyof such factors.Using model, this researchersmight ask: Underwhatcircumstances would firm best choose methodology ana one or other? would firm cull features How a fromthe various techniquesin order to assemble own its in-house methodology? Thearticle prompts final research one question: What the alternatives to the methodologies are described this study?Perhaps in these methodologiesrequiretoo much detail in their business analysisanddatabase design.It may too much be to expectthat a committee charged with detailed businessanalysis and database design could generate strategicvisions about systems crefor ating a competitive advantage. may too much It be to expect the combination the strategicapthat of plication identification phase the dataarchiand tecture development activity, without product champions each, can producevaluable refor sults. Perhaps because they use extensiveresources, provide limited results, and raise expectations projects that might neverbe for implemented, methodologies actually the are hazardous their users’ health. Perhaps to researchers shouldsearchfor completely and new innovative alternativesfor performing SISP.

Impfications for practitioners
Thisarticle provides practitionerswith a comprehensive list of the potential problems impleof menting SISPmethodology. an Practitioners can examine problems attemptto anticipate the and them within their own organizations. Practitioners can developstrategies for circumventingthe problems.Table3 can serveas a comprehensive checklistfor discussion debate. and Table incor5 poratesevidence aboutthe relative concerns of the variousproblems other organizations. in Practitionersmightalso consider managerial the andorganizational issues investigated this artiin cle and their potential effectonSISP their firms. in The most two significant issues the top IS exare ecutive’sreportingrelationshipandthe organization’s businessplanning sophistication. The findingsrelatingto the first issueadd strength to the positionof anyIS directorswho attempting are to convince management they shouldreport that to a president rather thana controller. Thefindings relating to the second issuesuggest the that need effectiveIS planning for mightpossibly stimulate the need effective business for planning; such a notion was proposed in Lederer and Mendelow (1986b). Practitioners might alsopayparticularattention to methods attenuating potential, detrimental of the effects of some the unavoidable of factors (such as public ownership top management or initiation of the study). Specialconsideration couldbe directed to the IS management’s of rewards use andsanctions controlthe execution the final to of plans. Thus practitioner mightask: How mycomthe in panywill I securegenuine management top commitment? will I develop plan that doesnot How a requireextensive furtheranalysis? will I idenHow tify a team leaderwith excellentbusiness skills andsufficient IS savvy? canI offer to manWhat agement convince to them authorizesufficient to SISPresources? How will I avoiddeveloping thick anddetailed a planthat ultimatelysits on my shelf andcollects dust?

Acknowledgement
Theauthors acknowledge their appreciation to Premkumar Gopalaswamy T.N. Menon,who and contributed the early phases this research. to of

Implications for researchers
Researchers to recognize importance need the of SISP investigateit. It hasreached top of and the

References
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MIS Quarterly/September 1988 459

Strategic Planning

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About the Authors
Albert L. Lederer anassistantprofessor the is at Joseph Katz Graduate M. Schoolof Business at the University Pittsburgh. earned M.S. of He his in computer informationscienceand his Ph.D. and in industrial andsystems engineering the Ohio at StateUniversity.Dr. Lederer spentoverten years in industry the MIS in field. His articles have appearedin the MISQuarterly, SloanManagement Review,Information and Management, Journal of SystemsManagement, Business Horizons, andseveralotherjournals. Heis the consulting editor for a new journal, Computers Personnel. in His research interests include the planningand implementation of management information systems. Vijay Sethiis anassistantprofessor the School at of Management the State University of New at Yorkat Buffalo. Heearned M.B.A.fromOhio his University. is currentlycompleting doctoral He his dissertation at the JosephM. Katz Graduate School Business the Universityof Pittsburgh of at on the measurement extentto whichan inof the formation technology application providescompetitive advantage. articles haveappeared His or are forthcoming INFOR, in Interfaces,Information ManagementReview, and DATABASE. His other research interests are information systems planning, decision support systems,end-user computing, expertsystems. and

MISQuarterly~September1988 461

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