Int. J. Business Information Systems, Vol. 3, No.

5, 2008 529

Designing a model for the development of

strategic information systems in Indian public
sector undertakings

Bikram Jit Rishi*

Institute of Management Technology
Ghaziabad, India
E-mail: brishi@imt.edu
*Corresponding author

D.P. Goyal
Instiute of Management Education
GT Road, Sahibabad, Ghaziabad, India
E-mail: dpgoyal@ime.in
E-mail: dpgoyal_23@yahoo.com

Abstract: The strategic value of information systems and the impact of

information technology on businesses have increased the need for effective
Strategic Information Systems (SIS) development. But the available
methodologies for the development of SIS stress different issues, hence
there is no clear guidance available for SIS development. Further review of
literature indicates that in the case of developed and developing countries,
a gap exists in the application of an integrated model for the development of
SIS. Thus this study proposes a model and tests the model by collecting data
from 164 managers who worked in Indian public sector undertakings. The
results show that for the different constructs of the model, there are different
factors, which must be considered by the organisations while developing SIS.

Keywords: Strategic Information Systems; SIS; public sector undertakings;

Information Technology; IT; management levels; SIS development model;
success and hindrance factors.

Reference to this paper should be made as follows: Rishi, B.J. and Goyal, D.P.
(2008) ‘Designing a model for the development of strategic information
systems in Indian public sector undertakings’, Int. J. Business Information
Systems, Vol. 3, No. 5, pp.529–548.

Biographical notes: Bikram Jit Rishi has an MBA from Punjabi University,
Patiala and is a Senior Lecturer at the Institute of Management Technology,
Ghaziabad, India. He has recently submitted his doctorate thesis for the award
of PhD. He is an Accredited Management Teacher under the All India
Management Association. His areas of interest include marketing management,
consumer behaviour, marketing research and marketing information systems.
He has published more than ten papers in national journals of repute and
participated in various national and international seminars and conferences.

D.P. Goyal, PhD, is serving as a Professor of Information Systems Strategy and

as the Director of the Institute of Management Education, Ghaziabad, India.
Prior to joining this institute, he served at the Institute of Management

Copyright © 2008 Inderscience Enterprises Ltd.

530 B.J. Rishi and D.P. Goyal

Technology, at the Punjab School of Management Studies, Punjabi University

and at Thapar University, India. With over 22 years of teaching, executive
development, consultancy, research and academic administrative experience,
Dr. Goyal is the author of two books in the area of MIS and has regularly
contributed to journals and presented his research in several national and
international conferences. He has been the principal investigator of various
sponsored research projects and has supervised a number of PhD candidates.
Currently, he is involved in supervising research projects in the areas of
strategic information systems, decision support systems and enterprise resource
planning systems.

1 Introduction

In the present competitive world, Strategic Information Systems (SIS) provide readily
available, complete and accurate information about various stakeholders. For any
organisation it is essential to get a competitive edge and this can only be possible if the
right information at the right time is available to the right decision-maker. Thus
information has become a key catalyst of integration and the enabler of competitiveness
for today’s enterprise in the global environment. It is essential for any organisation to
identify the information needs on a regular basis so that effective and efficient
information systems can be developed. Successful information systems development and
implementation is a rigorous process.
Even after a business organisation has identified its information needs, it is not easy
to decide whether the system could be affordably purchased, maintained, expanded or
upgraded. These factors are as important to deciding how to meet organisational
information needs as identifying the information needed. The strategic value of the
information system and its contribution to the achievement of organisational objectives is
an area which has drawn the attention of many academicians and researchers. It is always
highlighted that SIS development has major risks and uncertainties associated with it.
The major issue is related to the establishment of information system requirements both
for individual end users and the organisation as a whole.
On the basis of the above discussion it becomes essential to provide insight for the
development of SIS. To further highlight the relevance of the study, significant
theoretical, conceptual and empirical developments related to the SIS and relevant to the
development of the model have been reviewed. In order to study the practices in SIS, an
attempt has been made to understand and analyse the current trends, which further
determine the availability, expectations and gaps limiting the realisations of those
expectations. In this paper, we present a model that will introduce structure to the process
of deciding how to meet information needs. The model offers three constructs and a
subconstruct, with the help of which SIS can be properly developed for the achievement
of organisational objectives.

2 Review of literature

Hedlin and Allwood (2002) highlight that poor knowledge management, i.e., few
opportunities to store, reuse and share knowledge in an organised and disciplined way
due to inefficient Information and Communication Technology (ICT), becomes an
 Designing a model for the development of strategic information systems 531

obstacle to supporting the decision-making process effectively. Reddy and Reddy (2002)
attempted to illustrate the common concerns of large, often multinational corporations
with their legacy information systems. Over time, many large firms have accumulated a
multitude of disparate, often large-scale information systems, each fulfilling a particular
competitive need at a particular point in time. Pai (2006) discussed that to consistently
achieve planning objectives, knowledge sharing is necessary to IS/IT strategic planning.
Bai and Lee (2003) focused on the effects of resources and information input. Bourlakis
and Bourlakis (2006) highlight that logistics and information technology strategies
are developed and implemented in a parallel way by both local and multinational
multiple food retailers in Greece. Rondeau et al. (2006) have emphasised that a
rapidly changing environment requires firms to adopt a customer-driven approach in
managing their information systems. Study results indicate that firms with a high
level of organisational involvement in IS-related activities have higher levels of IS
management effectiveness. Simon (2006), through a review of a sample of the existing
literature focusing on transparency, observed a common theme regarding information.
In a corporate environment, information transparency is reached when internal
decision-makers receive, at their desktop, the internal and external information necessary
to make sound business decisions. Jennings and Disney (2006) provide a review of the
empirical literature concerning the design of the strategic planning process and its
relationship to environmental, organisational, strategic and psychological factors. The
article reviews contextual studies that have implications for the design of the strategic
planning process and develops understanding of a comparatively neglected contextual
factor, psychological type. Campwell et al. (2005) highlight the importance of aligning
information systems with organisational processes, goals and strategies. The research
suggests that, although practitioners understand that a high level of connection between
IS and business planning processes may be dependent on the level of integration between
the IS group and other sections of the organisation, they are still unable to develop the
necessary relationships.
Gadman and Cooper (2005) explore ways in which the internet and advanced
electronic communication systems are enabling a new economy based on the networking
of human knowledge. The study addresses the fundamental leadership and the
organisational challenges they face as they attempt to connect people to people and
people to knowledge across the borders of business units and countries. Cegielski (2001)
found out that many organisations have developed information systems strategies that
incorporate information technology. There are only a small number of organisations that
have developed a proactive approach to identifying the potential business applications of
emerging information technologies. Grant (2003) explored the issue of strategic
alignment and Enterprise Systems (ES) implementation from the point of view of one
organisation involved in deploying an enterprise resource planning system globally. The
research shows that achieving alignment is still important yet difficult to attain. The study
provides additional empirical support for the strategic IS alignment construct and goes
further to suggest that deploying an ES does not by itself create integrated and seamless
operating environments. Lee and Bai (2003) give a framework for IS/IT strategic
planning, with a special focus on identifying and discussing key organisational
mechanisms relating to IS/IT strategic planning, as well as on how these mechanisms
influence the effectiveness of IS/IT strategic planning given the lack of a comprehensive
framework clearly defining all necessary tasks. Dvorak et al. (1997) concluded that
532 B.J. Rishi and D.P. Goyal

achieving IT success is less about overcoming technical challenges and more about
mastering IT management. Carr (2003) highlighted that, as information technology’s
power and ubiquity have grown, its strategic importance has diminished. The way one
approaches IT investment and management will need to change dramatically. When a
resource becomes essential for competition but inconsequential to strategy, the risks it
creates become more important than the advantage it provides. Earl (1998) highlighted
that formulating IT strategies is the main concern of many IS executives today as well as
of their senior management. The need may be obvious but discovering an appropriate
method is more difficult.

2.1 Gap analysis of review of literature

From an analysis of the above studies, the following conclusions are made:
• Although SIS is a major concern, most organisations find it difficult to apply the
concept in full. In the context of India, the lack of experience of the organisations
with SIS development and the absence of a comprehensive, structured and
easy-to-use methodology have also been main reasons for its low adoption.
• There is a marked difference in the approaches being used with information
technology to obtain competitive advantage. This is because of the slow growth in
information technology and its application, especially in developing countries.
• In the case of Indian organisations, a comprehensive SIS planning, implementation
and control exercise is lacking and the organisations are not in a position to reap the
benefits by using information technology for competitive advantage.
• The overall success of integrated business/technology architecture depends upon the
organisational structure, the level of IT experience within the company and the
availability of information resources. Since these factors differ among the firms,
there may not be a single best way to view IT planning.
Keeping in mind the above-mentioned gaps in research in the development of SIS,
we attempted to undertake research in this important area so as to bridge the existing gaps
in SIS in general and to design a model for the development of SIS in Indian public
sector undertakings.

3 Objectives of the study

This study has been carried out with the following objectives in mind:
• To propose and test a model for the development of SIS in Indian public
sector undertakings
• To identify the critical factors for the development of SIS in selected Indian public
sector undertakings
• To analyse the development process and methodologies used in the development of
SIS in the selected public sector undertakings.
 Designing a model for the development of strategic information systems 533

4 Proposed model for the development of SIS

In order to develop SIS, the following three main constructs and one core construct have
been proposed:
• Main constucts
1 Organisation existence
2 SIS development process
3 Success and hindrance factors
• Core constuct
1 SIS capabilities
The framework of the proposed model is shown in Figure 1.

Figure 1 Proposed model for SIS development

Construct 1
Critical Factors
1. Industry/Market Context
(Customers, suppliers,
competitors)
2. Organisation Context
Strategy, structure,
resources

Understanding and
application of Construct 1

Core Construct
SIS capabilities
Understanding and ‰ Managerial
application of Construct 3 ‰ Technical
‰ Operational

Construct 3
Success and
Hindrance factors
1. Industry/Market Context
(Customers, suppliers,
competitors)
2. Organisation Context
Strategy, structure,
resources
Understanding
and application Construct 2
Strategic Information
of Construct 2 Systems (SIS) Development
‰ SIS Development phases
‰ SIS development models
‰ SIS design
‰ SIS implementation
534 B.J. Rishi and D.P. Goyal

4.1 Scope of the model

The proposed model has been limited to only two Indian organisations, namely
Hindustan Machine Tools (HMT) and Bharat Heavy Electronics Limited (BHEL), both
located in India. HMT was incorporated in 1953 by the Government of India as a
machine tool-manufacturing company, which has been diversified into watches, tractors,
printing machinery, metal-forming presses, die-casting and plastic-processing machinery,
and CNC systems and bearings. Today, HMT comprises six subsidiaries under the
ambit of a holding company, which also manages the tractors business directly. BHEL
is the largest engineering and manufacturing enterprise in the energy-related/
infrastructure sector in India today. BHEL was established more than 40 years ago,
ushering in the indigenous heavy electrical equipment industry in India. The company
manufactures over 180 products under 30 major product groups and caters to core sectors
of the Indian economy, e.g., power generation and transmission, industry, transportation,
telecommunications, renewable energy.

4.2 Application of the model

The model can be applied to any organisation using the following steps:
Step 1 Identify the various constructs and subconstructs of the development process
of the SIS to be studied. It is recommended that first time all the constructs/
subconstructs of the model should be undertaken for studying SIS in
the organisation.
Step 2 Select an appropriate and representative sample from the population of the
organisation under study.
Step 3 Get the responses by using the appropriate data collection tool for the different
constructs/subconstructs.
Step 4 Analyse the responses with the help of different statistical techniques. The use
of Statistical Package for Social Sciences (SPSS) is recommended for the data
analysis. Some of the techniques which may be used are frequency distribution,
average, standard deviation, variance, skewness, chi-square test for
independence of attributes and T-tests for significance of the difference in
means between two samples.

Step 5 Action can be taken to develop SIS based upon the results of Step 4.
Step 6 Steps 1 to 5 can be repeated depending upon the needs and requirements of the
changing environment.

4.3 Representation of the model

The representation of the model can be expressed and studied with the help of different
tools. Each construct/subconstruct has been represented by a separate instrument for
noting down the perceptions of the respondents on that particular construct/
subconstruct. Different questionnaires should be used to record the responses on each
construct/subconstruct. The respondents should be selected as a right mix of employees
 Designing a model for the development of strategic information systems 535

from various levels of management per need of the study. Most of the instruments are
based on a five-point Likert scale indicating how an employee at a particular level feels
about the factor. Some of the tools gather data in the form of yes/no responses indicating
whether a particular step has been taken for the development of SIS. For simplicity of the
instrument, the strategic planning level, management control level and operational control
level have been named Level I, Level II and Level III respectively.
A comprehensive view of these instruments is listed in Table 1.

Table 1 List of instruments

Factor/Variables defining Likert scale

Sr. no. Construct/Subconstruct of the model constructs/subconstructs from 1 to 5
1 Critical factors of the organisation
1.1 Industry environment Factor1------Factor N
1.2 Organisational environment Factor1------Factor N
2 SIS development
2.1 Development stages Factor1------Factor N
2.2 Requirement analysis methods
2.3 Development design
2.4 Implementation Factor1------Factor N
3 Success and hindrance factors Factor1------Factor N
3.1 Industry environment Factor1------Factor N
3.2 Organisational environment Factor1------Factor N
4 SIS capabilities
4.1 Managerial, technical, operational Factor1------Factor N

5 Research methodology

The validity and applicability of the model have been tested by using the sample of
public sector undertaking units and then the sample of the respondents from the selected
public sector units for the study. Two large public sector undertakings participated in the
study. The respondents from both units were selected so as to build a proper mix of all
managerial levels in various functional areas of the selected organisations. For selecting
the respondents, a stratified random sampling technique was applied. The details of the
sample are given below:
• 50% of the population, where population size <50
• 30% of the population, where population size =>50 but <100

• 20% of the population, where population size >100.

The distribution of the sample is given in Table 2.
536 B.J. Rishi and D.P. Goyal

Table 2 Sample distribution

Percentage
Actual of response
Organisation Management level Population Sample response rate
HMT Level I 35 18 14 77.78
Level II 69 21 13 61.90
Level III 295 59 51 86.44
Total 399 98 78 79.59
BHEL Level I 34 17 17 100
Level II 89 27 17 62.96
Level III 368 74 52 70.27
Total 491 118 86 72.82
Grand total 890 216 164 75.92

The various subconstructs and their factors were identified on the basis of an extensive
survey and the study of the literature. The discussions with the experts and academicians
revealed that the questionnaire was comprehensive. In the questionnaire, any other was
an option given to the respondents to identify some more variables to get some new
variables. The questionnaire was refined through rigorous pretesting. The pretesting of
the questionnaire focused on the instrument clarity, question wording and validity. Two
rounds of pretesting were conducted. In the first round the questionnaire was circulated
among a group of prominent academicians and practitioners. Their suggestions were
incorporated and the questionnaire was revised. In the second round of pretesting the
questionnaire was administered to 20 sample respondents from each organisation and
their feedback was incorporated in the questionnaire. The scale reliability was studied
with the help of the Space Saver method of scale reliability. Cronbach’s alpha for the
questionnaire was found to be 0.856.

6 Data analysis and findings

The collected data from 164 managers from both the organisations under study was
subjected to various tools. SPSS package was used to analyse the data.

6.1 Construct I: Critical factors for the organisation

An analysis of Table 3 reveals that the important factors (overall score >= 4.0)
are corporate planning; improved market share; response to customer queries;
value-added service; reduced variable cost; increased revenue; account payable terms and
conditions; capacity utilisation; regular upkeep of the machinery; utilisation of internal
funds; external borrowing management; regular deposit of taxes; dealer efficiency;
inventory management; fire and safety audits; quality control; quality assurance;
executive compensation; nonmonetary incentives; ensuring better work environment;
knowledge management; reward to innovations; and maintenance of pollution control
norms. The application of the χ2 test also supports the above-stated findings.
 Designing a model for the development of strategic information systems 537

Table 3 Critical success factors for the development of SIS

BHEL HMT
Level I Level II Level III Level I Level II Level III
Factors N = 17 N = 17 N = 52 N = 14 N = 13 N = 51
Corporate planning 4.12* 4.12* 4.13* 4.34* 4.16* 3.85
(0.57) (0.64) (0.53) (0.45) (0.63) (0.46)
Improved market share 4.18* 4.06* 4.13* 4.00* 2.62 4.08*
(0.86) (0.80) (0.65) (0.85) (0.91) (0.69)
Customer profile 3.80 3.80 4.04* 3.56 3.85 3.55
analysis (0.97) (0.90) (0.73) (0.64) (0.66) (0.74)
Sales force 3.76 3.88 3.87 3.93 3.62 3.75
productivity (1.11) (0.71) (0.94) (0.59) (0.92) (0.74)
Response to customer 4.24* 4.12* 2.60 4.04* 3.69 4.29*
queries (0.73) (0.90) (0.89) (0.86) (0.91) (0.73)
After-sales service 3.88 3.82 3.79 3.32 3.77 3.24
(0.73) (0.90) (0.94) (0.83) (0.70) (0.76)
Value-added service 4.12* 4.06* 4.08* 4.00* 4.23* 3.12
(0.47) (1.00) (1.03) (0.53) (0.58) (0.84)
Reduced variable cost 3.82 3.76 2.00 4.14* 4.23* 3.61
(0.92) (0.81) (0.88) (0.91) (0.58) (0.84)
Increased revenue 4.26* 4.06* 4.31* 3.83 3.82 3.85
(0.24) (0.73) (0.67) (0.45) (0.89) (0.74)
Account receivable 3.83 3.82 3.96 3.79 3.85 3.78
terms and timing (0.97) (0.86) (0.98) (0.86) (0.66) (0.78)
Account payable terms 3.59 4.00* 3.81 3.84 3.85 3.76
and conditions (0.91) (0.91) (0.94) (0.59) (0.66) (0.78)
Capacity utilisation 4.24* 4.00* 3.82 3.93 4.08* 3.94
(0.42) (0.77) (0.65) (0.70) (0.62) (0.67)
Regular upkeep of 3.84 4.12* 4.04* 4.00* 4.00* 4.00*
the machinery (1.00) (0.83) (0.94) (0.53) (0.68) (0.89)
Utilisation of 4.00* 4.00* 3.59 3.33 4.00* 3.53
internal funds (0.91) (0.84) (0.82) (1.05) (0.55) (0.78)
Equity issue 3.40 3.76 3.65 3.36 3.35 3.41
management (0.82) (0.81) (0.87) (0.97) (1.05) (0.80)
External borrowing 3.94 4.06* 3.84 3.57 3.50 3.73
management (0.87) (0.80) (0.95) (1.05) (0.66) (0.82)
Regular deposit 4.18* 4.12* 4.02* 4.07* 3.85 3.73
of taxes (0.98) (0.76) (0.99) (0.88) (0.77) (0.82)
Dealer efficiency 3.82 4.00* 3.92 3.86 3.69 3.78
(0.92) (1.28) (0.87) (0.91) (1.14) (0.72)
538 B.J. Rishi and D.P. Goyal

Table 3 Critical success factors for the development of SIS (continued)

BHEL HMT
Level I Level II Level III Level I Level II Level III
Factors N = 17 N = 17 N = 52 N = 14 N = 13 N = 51
Raw material 3.82 3.76 3.77 3.86 3.75 3.82
procurement (0.86) (0.81) (0.97) (0.91) (0.72) (0.76)
Inventory management 3.88 3.89 4.02* 4.00* 3.52 3.76
(0.83) (1.07) (0.80) (1.00) (0.75) (0.67)
Fire and safety audits 3.98 3.98 4.06* 4.14* 4.08* 4.04*
(0.97) (0.78) (0.93) (0.52) (0.62) (0.74)
Quality control 4.06* 4.06* 3.90 3.87 4.15* 4.12*
(0.64) (0.80) (0.94) (0.74) (0.77) (0.71)
Quality assurance 4.12* 3.88 4.04* 3.96 4.12* 3.96
(0.68) (0.71) (0.85) (0.88) (0.77) (0.77)
Maintenance of 3.59 3.65 3.62 3.50 3.00 3.05
performance records (0.77) (0.68) (0.86) (0.63) (0.88) (0.71)
Executive 4.00* 3.82 3.88 3.50 3.26 3.47
compensation (0.84) (0.78) (0.85) (0.73) (0.73) (0.92)
Nonmonetary 3.71 4.00* 4.12* 4.07* 3.48 3.63
incentives (0.84) (0.97) (0.78) (0.59) (0.61) (0.84)
Ensuring better work 3.72 3.76 3.94 4.29* 3.53 3.76
environment (0.92) (1.00) (0.98) (0.88) (0.70) (0.78)
Knowledge 3.88 3.80 4.04* 3.93 3.68 3.82
management (0.83) (0.84) (0.73) (0.46) (0.74) (0.71)
Reward for innovations 3.83 3.94 4.00* 3.71 4.00* 3.86
(1.33) (0.94) (0.76) (0.59) (0.68) (0.63)
Employee education 3.65 3.82 3.88 3.93 3.78 3.88
and training (0.91) (0.86) (0.82) (0.46) (0.61) (0.73)
Maintenance of 3.65 3.94 3.75 4.36* 3.48 3.80
pollution-control (0.89) (1.00) (0.90) (0.81) (0.82) (0.56)
norms
Energy consumption 3.88 3.76 3.81 3.86 3.77 3.82
(0.96) (1.11) (1.00) (0.64) (0.80) (0.83)
Others 3.64 3.85 3.90 3.38 3.80 3.81
(1.20) (0.72) (0.71) (0.48) (0.64) (0.71)
Notes: *0.05 Level of Significance (refer to Table 1 in the Appendix).
N = 164, Average Scores Max. = 5, Min. = 1, Standard Deviation Scores
(Max. = 1, Min. = 0).
 Designing a model for the development of strategic information systems 539

6.2 Construct II: Development process and methodologies

6.2.1 Stages in system development
Level-wise analysis was conducted and the percentage values of all seven stages were
calculated. The scores are shown in Table 4. An analysis of the table clearly indicates that
different stages of the system development are followed by the organisations but
consistency in the use of different stages is lagging.
Table 4 Stages in system development

BHEL HMT
Management levels Management levels
Level I Level II Level III Level I Level II Level III
Stages N = 17 N = 17 N = 52 N = 09 N = 13 N = 56
Feasibility analysis 88.24 76.47 78.85 100.00 69.23 92.16
Requirement analysis 70.59 70.59 63.46 92.86 84.62 92.16
System analysis 94.12 88.24 75.00 100.00 76.92 82.35
System design 82.35 82.35 75.00 100.00 76.92 80.39
System 94.12 94.12 84.62 100.00 100.00 72.55
implementation
System testing 76.47 76.47 78.85 92.86 84.62 64.71
System maintenance 70.59 64.71 75.00 78.57 53.85 47.06
Note: N = 164 (all figures are in percentages).

6.2.2 Methods used for the requirement analysis

Level-wise analysis was conducted for the methods used for the requirement analysis.
The average scores and standard deviation scores are shown in Table 5. An analysis of
Table 5 reveals that all the methods are used for the requirement analysis. No particular
method is preferred over other methods for the requirement analysis.
Table 5 Methods used for requirement analysis

BHEL HMT
Management levels Management levels
Level I Level II Level III Level I Level II Level III
Methods N = 17 N = 17 N = 52 N = 14 N = 13 N = 51
Questionnaire 2.76 2.59 2.62 2.86 2.85 3.00
(0.42) (0.69) (0.71) (0.64) (0.53) (0.52)
Interviews 2.41 2.59 2.65 2.71 3.00 2.88
(0.49) (0.84) (0.76) (0.80) (0.78) (0.55)
Internal records 2.82 2.65 2.52 2.57 3.00 2.80
(0.51) (0.76) (0.64) (0.90) (0.88) (0.82)
On-site observation 2.41 2.47 2.50 2.57 2.38 2.76
(0.49) (0.85) (0.91) (0.73) (0.74) (0.85)
Review of literature 2.59 2.71 2.73 2.36 2.69 2.80
(0.49) (0.67) (0.98) (0.81) (0.82) (0.71)
Others 3.00 2.22 2.80 2.60 2.78 2.96
(0.00) (0.79) (1.20) (1.11) (0.79) (0.82)
Notes: N = 164, Average Scores Max. = 5, Min. = 1, Standard Deviation Scores
(Max. = 1, Min. = 0).
540 B.J. Rishi and D.P. Goyal

6.2.3 Implementation methodologies

Table 6 lists the level-wise scores for the implementation methodologies for SIS in the
organisations. An analysis of the table indicates that the different implementation
methodologies are adopted for the implementation of SIS and no particular methodology
is preferred over any other methodology.

Table 6 Implementation methodologies

BHEL HMT
Management levels Management levels
Level I Level II Level III Level I Level II Level III
Implementation
methodologies N = 17 N = 17 N = 52 N = 14 N = 13 N = 51
Parallel system 2.12 2.88 2.71 2.93 2.85 2.73
(0.47) (0.47) (0.66) (0.26) (0.53) (0.60)
Direct cut-over 2.47 2.76 2.62 2.50 2.77 2.67
system
(0.50) (0.94) (0.65) (0.50) (0.58) (0.58)
Pilot system 2.12 2.59 2.50 2.36 2.46 2.69
(0.76) (0.84) (0.80) (0.61) (0.75) (0.64)
Phase in system 2.65 2.76 2.58 2.43 2.54 2.61
(0.48) (0.88) (0.69) (0.62) (0.75) (0.84)
Combination of all 2.10 2.25 2.59 2.30 2.80 2.77
(0.54) (1.01) (1.06) (0.90) (0.75) (0.80)
Notes: N = 164, Average Scores Max. = 5, Min. = 1, Standard Deviation Scores
(Max. = 1, Min. = 0).

6.3 Construct III: Success and hindrance factors

An analysis of Table 7 reveals that the following factors are important, as perceived
by the managers at the different levels for their respective organisations. The important
factors (overall score >= 4.0) are organisational bureaucracy; management involvement
in planning; management involvement in development; management involvement in
implementation; systems department involvement in planning; systems department
involvement in development; systems department involvement in implementation;
strategic alignment of business and information systems; availability of off-the-shelf
software solutions; proper implementation plans; pace of technology change; lack of
skilled staff in systems; cost of technology; budget allocation; high turnover of skilled
staff in systems; lack of professional consultancy; competition in the market; lack of
information systems standards; lack of frequent training; customer expectations;
competition between systems and other functional units; user involvement; and personal
ego. The application of χ2 test supports the above-stated findings.
 Designing a model for the development of strategic information systems 541

Table 7 Success and hindrance factors

BHEL HMT
Level I Level II Level III Level I Level II Level III
Factors N = 17 N = 17 N = 52 N = 14 N = 13 N = 51
Organisational 4.35* 3.71 4.02* 3.43 3.15 2.96
bureaucracy (0.62) (0.54) (0.52) (0.78) (0.45) (0.69)
Organisational autocracy 3.53 2.82 2.85 3.36 2.92 2.84
(0.54) (0.75) (0.64) (0.52) (0.93) (0.47)
Organisational 3.59 4.06* 3.71 3.86 3.31 3.51
democracy (0.41) (0.54) (0.63) (0.47) (0.58) (0.62)
Management 4.29* 4.35* 4.04* 3.43 3.85 3.45
involvement in planning (0.58) (0.57) (0.64) (0.87) (0.54) (0.68)
Management 4.12* 4.24* 4.15* 4.14* 3.54 3.69
involvement in (0.85) (0.54) (0.45) (0.64) (0.53) (0.35)
development
Management 4.41* 4.41* 4.46* 3.50 4.08* 3.69
involvement in (0.54) (0.62) (0.35) (0.74) (0.64) (0.53)
implementation
Systems department 4.18* 4.24* 4.02* 3.50 3.85 3.71
involvement in planning (0.74) (0.54) (0.64) (0.53) (0.47) (0.63)
Systems department 3.53 4.12* 4.23* 3.50 3.92 4.10*
involvement in (0.54) (0.87) (0.64) (0.31) (0.62) (0.64)
development
Systems department 3.82 3.88 4.33* 4.00* 3.92 3.92
involvement in (0.74) (0.75) (0.63) (0.74) (0.65) (0.58)
implementation
Strategic alignment of 4.06* 4.06* 4.08* 4.07* 3.95 4.20*
business and information (0.53) (0.47) (0.63) (0.74) (0.65) (0.58)
systems
Availability of off-the- 4.06* 3.71 3.90 4.07* 3.62 3.73
shelf software solutions (0.52) (0.63) (0.74) (0.57) (0.47) (0.86)
Availability of systems 3.88 3.25 3.00 3.21 3.23 3.80
staff skills (0.36) (0.74) (0.64) (0.59) (0.64) (0.45)
Department staff skills 3.35 3.88 3.00 3.21 3.92 3.90
(0.64) (0.62) (0.59) (0.51) (0.62) (0.53)
Availability of software 3.41 3.18 3.27 3.14 3.77 3.02
manpower (0.57) (0.64) (0.67) (0.85) (0.75) (0.64)
Availability of 3.35 3.24 3.96 3.14 3.08 3.08
professional consultants (0.57) (0.64) (0.87) (0.34) (0.64) (0.54)
Departmental interest 3.94 3.29 2.19 3.00 2.08 2.27
in systems growth (0.64) (0.62) (0.36) (0.54) (0.59) (0.57)
Awareness of latest 3.59 2.24 2.13 3.21 2.00 3.12
technical skills (0.63) (0.74) (0.75) (0.63) (0.76) (0.72)
Existing maintenance of 3.82 3.29 2.37 3.93 2.23 2.22
hardware and software (0.54) (0.65) (0.63) (0.78) (0.58) (0.76)
Proper implementation 3.88 4.41* 4.27* 3.93 3.92 3.88
plans (0.36) (0.74) (0.75) (0.63) (0.76) (0.72)
542 B.J. Rishi and D.P. Goyal

Table 7 Success and hindrance factors (continued)

BHEL HMT
Level I Level II Level III Level I Level II Level III
Factors N = 17 N = 17 N = 52 N = 14 N = 13 N = 51
Proper training of 3.53 2.65 2.08 3.43 2.08 3.73
end users (0.87) (0.64) (0.75) (0.67) (0.68) (0.64)
Proper use of standards 3.88 2.35 2.10 2.21 3.31 3.92
(0.63) (0.54) (0.64) (0.57) (0.68) (0.68)
Systems audits 3.41 3.00 2.08 2.86 2.92 3.02
(0.54) (0.64) (0.78) (0.62) (0.78) (0.48)
Systems quality checks 3.35 3.41 3.88 3.79 2.31 2.14
(0.53) (0.48) (0.78) (0.46) (0.78) (0.48)
Pace of technology 3.82 2.47 3.90 4.64* 3.77 3.92
change (0.84) (0.82) (0.86) (0.67) (0.92) (0.64)
Lack of skilled staff 3.53 3.53 3.79 3.43 4.00* 4.00*
in systems (0.85) (0.97) (0.64) (0.67) (0.64) (0.67)
Cost of technology 3.41 4.00* 3.94 4.43* 4.08* 2.14
(0.85) (0.97) (0.64) (0.67) (0.64) (0.67)
Budget allocation 4.06* 3.59 4.12* 3.71 4.31* 3.90
(0.87) (0.86) (0.67) (0.78) (0.96) (0.85)
High turnover of skilled 3.82 3.41 3.58 3.71 3.46 4.12*
staff in systems (0.65) (0.74) (0.63) (0.74) (0.64) (0.65)
Lack of professional 2.47 2.88 3.19 4.14* 3.46 3.69
consultancy (0.36) (0.85) (0.75) (0.64) (0.58) (0.46)
Competition in the 3.47 4.00* 3.75 4.64* 3.62 3.86
market (0.85) (0.74) (0.64) (0.98) (0.45) (0.64)
Lack of information 2.35 2.35 3.27 4.14* 3.85 3.59
systems standards (0.56) (0.47) (0.58) (0.64) (0.85) (0.64)
Lack of frequent training 1.76 2.94 3.15 4.21* 4.08* 4.14*
(0.53) (0.85) (0.64) (0.57) (0.75) (0.84)
Customer expectations 3.65 4.24* 3.75 4.29* 4.08* 4.14*
(0.69) (0.67) (0.84) (0.78) (0.76) (0.56)
Competition between 3.35 3.35 3.35 3.48 3.71 4.00*
systems and other (0.65) (0.78) (0.86) (0.92) (0.67) (0.75)
functional units
User involvement 3.65 4.53* 4.17* 4.07* 4.38* 4.16*
(0.68) (0.78) (0.69) (0.85) (0.67) (0.75)
Personal ego 3.29 2.94 2.31 3.64 3.85 4.00*
(0.67) (0.56) (0.58) (0.78) (0.64) (0.85)
Position of systems 3.88 3.76 3.85 4.36* 2.38 2.06
department in overall (0.65) (0.74) (0.85) (0.69) (0.62) (0.75)
organisational structure
Others 3.12 3.29 3.44 3.29 3.69 3.84
(0.67) (0.60) (0.63) (0.58) (0.75) (0.45)
Notes: *0.05 level of significance (refer to Table 2 in the Appendix).
N = 164, Average Scores Max. = 5, Min. = 1, Standard Deviation Scores
(Max. = 1, Min. = 0).
 Designing a model for the development of strategic information systems 543

7 Findings

• For the development of SIS many factors have been found to be critical. The overall
factors include organisational bureaucracy; management involvement in planning;
management involvement in development; management involvement in
implementation; systems department involvement in planning; systems department
involvement in development; systems department involvement in implementation;
strategic alignment of business and information systems; availability of off-the-shelf
software solutions; proper implementation plans; pace of technology change; lack of
skilled staff in systems; cost of technology; budget allocation; high turnover of
skilled staff in systems; lack of professional consultancy; competition in the market;
lack of information systems standards; lack of frequent training; customer
expectations; competition between systems and other functional units; user
involvement; and personal ego.
• System analysis, feasibility analysis and systems implementation phases are given
due importance, whereas systems design, system testing and system maintenance
phases are being ignored in the system development process.
• For requirement analysis, no particular method is preferred over other methods. All
the methods are used for the requirement analysis.
• The different implementation methodologies are adopted for the implementation of
SIS, which shows that the organisations use the required method as per the suitability
of the method for the particular SIS.

8 Recommendations of the study

• Being a heavy investment, it is high time for organisations to realise the importance
of SIS and take the necessary steps for the proper development of SIS. The
organisations should use the suggested model for the development of their SIS.
• SIS developers should make concerted efforts to understand internal operations of
the organisation in terms of processes, procedures and technologies. This will
certainly lead to the development of an effective SIS. In a nutshell, the effective
analysis will provide a clear understanding of how the information is being used in
the organisation and help in the achievement of the strategic objectives of
the organisations.
• Even before the implementation of SIS, proper training programmes should be
organised to change the mindset and skills of the employees. This would reduce the
resistance to change and would improve the skills set of the users.
• Success and hindrance factors must be taken into consideration by the organisations.
They would enable the organisation to strengthen the positive factors and to reduce
the impact of negative factors.
• The model that has been proposed in this study should be applied to the development
of SIS. It is expected that the use of the model for the development of SIS would
provide competitive advantages to the organisations.
544 B.J. Rishi and D.P. Goyal

• It is high time that the organisations plan to have a full-fledged SIS. This will help
the organisations to assess the customer needs and preferences and further help in the
management of the entire supply chain in an effective and efficient manner.
• There is a lack of benchmarking of SIS standards with the other competing firms in
the industry. For benchmarking the analysis of the case studies, empirical findings
and research in this area can provide an assessment of the pros and cons of the
various policies adopted by the competitors. The steering committee and IS team
analysts must keep a close watch and vigilant eye on the IT experiences and
practices adopted by the competitors. This benchmarking will help the organisation
to improve organisational learning, controlling IT costs and disseminating the value
of IT across the organisation.
• The critical success and failure factors for the development of SIS must be
understood so as to boost the success factors and reduce the impact of
negative factors.

9 Directions for further research

SIS researchers must undertake the challenge of designing an integrated SIS. As the focus
of this study is limited only to the public sector undertakings in India, there is further
scope for its application across other industries, states and countries. Comparative studies
between two countries, especially India and some other developed country, can also be
undertaken. Some of the issues, such as implementation, post-implementation processes,
product and organisational environmental factors have not been detailed in the study;
initiatives should be taken to further investigate these areas.

10 Conclusion

In this paper, an attempt has been made to provide a model for the SIS development in
large Indian public sector undertakings. This will go a long way in sensitising Indian
managers to understand and apply the concepts and applications of SIS, which would
aid the organisations in achieving a competitive advantage. In addition to this, the
organisations can make better strategic decisions, which have paramount importance in
today’s competitive world. The findings and recommendations of the study will serve
in providing the framework for developing the SIS in Indian public sector undertakings in
particular and for the development of SIS in general. The findings of the study have also
established a need for further studies in the field of SIS.

Acknowledgements

The authors gratefully acknowledge the constructive criticism and suggestions received
from the reviewers for the first and second drafts of this paper.
 Designing a model for the development of strategic information systems 545

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 Designing a model for the development of strategic information systems 547

Appendix
Chi-square values at the 0.05 level of significance
Table 1 Critical success factors

Management levels
Degrees of freedom: 8
Factors BHEL HMT
Corporate planning 7.810 13.373
Improved market share 7.897 12.420
Customer profile analysis 18.193 18.789
Sales force productivity 17.694 14.572
Response to customer queries 12.627 14.624
After-sales service 15.007 19.593
Value-added service 6.391 16.447
Reduced variable cost 18.215 9.868
Increased revenue 14.905 8.413
Account receivable terms and timing 18.919 19.927
Account payable terms and conditions 15.133 3.526
Capacity utilisation 8.338 2.052
Regular upkeep of the machinery 9.855 6.019
Utilisation of internal funds 12.627 15.907
Equity issue management 18.012 11.679
External borrowing management 13.516 19.073
Regular deposit of taxes 4.250 18.372
Dealer efficiency 14.421 18.698
Raw material procurement 18.081 18.136
Inventory management 19.547 12.540
Fire and safety audits 15.112 14.036
Quality control 13.379 13.941
Quality assurance 15.260 12.881
Maintenance of performance records 18.837 16.556
Executive compensation 14.237 16.335
Nonmonetary incentives 10.627 13.572
Ensuring better work environment 17.722 12.125
Knowledge management 14.467 19.915
Reward for innovations 12.239 11.685
Employee education and training 18.641 15.218
Maintenance of pollution-control norms 16.045 15.012
Energy consumption 18.128 19.526
Others 18.614 18.042
548 B.J. Rishi and D.P. Goyal

Table 2 Success and hindrance factors

Management levels
Degrees of freedom: 8
Factors BHEL HMT
Organisational bureaucracy 20.916 7.143
Organisational autocracy 7.216 8.220
Organisational democracy 7.170 5.427
Management involvement in planning 6.138 11.161
Management involvement in development 6.671 5.862
Management involvement in implementation 4.619 9.917
Systems department involvement in planning 19.347 7.491
Systems department involvement in development 10.683 9.898
Systems department involvement in implementation 8.884 8.830
Strategic alignment of business and information systems 11.258 2.737
Availability of off-the-shelf software solutions 8.169 4.713
Availability of systems staff skills 13.486 5.055
Department staff skills 9.662 9.504
Availability of software manpower 7.396 4.429
Availability of professional consultants 5.349 3.914
Departmental interest in systems growth 3.058 9.916
Awareness of latest technical skills 16.905 10.268
Existing maintenance of hardware and software 9.423 6.319
Proper implementation plans 4.124 3.347
Proper training of end users 6.836 6.208
Proper use of standards 14.507 2.784
Systems audits 7.051 2.307
Systems quality checks 15.033 13.107
Pace of technology change 10.201 11.508
Lack of skilled staff in systems 3.988 4.149
Cost of technology 8.616 2.533
Budget allocation 14.789 10.164
High turnover of skilled staff in systems 8.557 7.867
Lack of professional consultancy 13.795 6.336
Competition in the market 3.937 11.501
Lack of information systems standards 18.149 9.842
Lack of frequent training 13.514 4.081
Customer expectations 5.578 4.136
Competition between systems and other functional units 9.694 5.670
User involvement 11.624 2.543
Personal ego 7.053 5.595
Position of systems department in overall 8.679 3.756
organisational structure
Others 4.392 7.688