itif cn e Ci oc nS fl ea rn eo ni ct ea 2nr 0e 1t 1nI

ISC 2011

Proceeding of the International Conference on Social Science, Economics and Art 2011

ISC 2011

International Conference onSocial Science, Economics and Art

ICSSEA 2011

SRI EA V IUN

ITN IES

ED KOBIN

NR A

GJA

AL SA

AE

N P

M N

AA

LU

AT

YA

SS

AI

RE

P

NINO O

D

I TA ENI CO AI S

SSA TS NSTNEDU

Organized by Indonesian Students AssociationUniversiti Kebangsaan Malaysia

Proceeding of the

Cutting Edge Sciences for Future SustainabilityHotel Equatorial Bangi-Putrajaya, Malaysia, 14 - 15 January 2011

ISBN 978-983-42366-5-6

Hotel Equatorial Bangi-Putrajaya, Malaysia, 14 - 15 January 2011

A Competency Model for Strategic Information

Systems Planning (SISP) Success Naser Khani, Khalil Md Nor, Mojgan Bahrami

Faculty of Management and Human Resource Development

Universiti Technologi Malaysia

Johor, Skudai

Tel: 07 553 1900, E-mail: khani451@yahoo.com

Abstract— Successful planning of IS is perhaps going to be more problematic in today’s world of rapid change and uncertainty. SISP

is a cornerstone of the information system discipline and very little attention has been paid to its success based on the resource- based

view point of the firm (RBV).The researchers believe that the aim to build a model for SISP success based on RBV theory is

important because this new perspective will be helpful for gaining a superior assessment and better underpinning of the SISP. The

purpose of this study is to conceptualize the relationship between IS competencies and SISP success and contingency factors

moderating that relationship. Finally, a competency model for SISP success is proposed.

Keywords— strategic information system planning, IS competency, moderating variables.

I. INTRODUCTION

Nowadays, organizations are facing with more economic

uncertainty, more complex technologies and more

innovations. Additionally, technological and development

requirements have forced organizations to use more

effective and efficient Information Systems. Annually,

billions of dollars has been spent on Information Systems

(IS) formulation, implementation and maintenance. Studies

have shown that a large amount of organizational

expenditures is related to IS [1], [2]. If all these

expenditures were resulting in gaining benefits, spending

that amount of money was justified; but it does not happen

and almost half of the IS projects are unsuccessful [1], [3].

Those failures could be explained by turbulences in both

business and IS environments and lead to the strategic

importance of IS planning.

Successful planning of IS is perhaps going to be more

problematic in today’s world of rapid change and

uncertainty. Lack of successful IS management could result

in (a) missing business opportunities, (b)duplication of

efforts, (c) inaccurate and inadequate information, (d)

incorrect prioritizing, (e) low business performance and low

IS productivity, (f) incoherent technology strategy, (g)

retrospective resource allocation, and (h) conflict between

IS users that leads to inappropriate solution [3].

IS success has been such an attractive research subject

for many scholars and researchers. In addition, it has been

interpreted as an important management issue. Some

believe that strategic information system planning (as of

now: SISP) is the best framework for assuring that IS

efforts are concordant with other organization’s activities

and arising needs [4]. According to Bechor et al [5], SISP

“is the process of strategic thinking that identifies the most

desirable IS on which the firm can implement and enforce

its long-term IS activities and policies” (p: 1). Prior

research on SISP success involves topics such as the effect

of senior management enforcement [6], SISP critical

success factors [5], [7], and various other aspects.

Until now, empirical research examining the SISP

success has been established on key success factors (KSFs).

Some of these KSFs are organizational commitment, senior

management support and team involvement [5].Those

studies, despite their valuable contribution to the body of

knowledge on SISP field, suffer from lack of sound

theoretical framework. A review of the existing literature

revealed that there was no prior research in SISP field

289

dealing with the resource based view of the firm

(RBV).Hence, RBV attracted our attention.

According to RBV, it is possible to exploit technical and

business dimensions of information systems (i.e. IS

competencies) as another view to SISP process. In this paper

through a competence perspective we argue about the factors

that influence SISP success. Many studies have been done

on SISP or competencies, but there is room to examine the

relationship between IS competencies and SISP success and

moderating factors affecting this relationship.

II. SISP

SISP is required to provide a strategic plan for future

IS/IT requirements according to the business objectives. In

the 1970s information systems were implemented for

manual processes automation resulting in more effective

daily routines and ultimately in cost savings [8], [9].

In the mid-1980s the use of IS for competitive advantage

became a significant determinant for competitive position of

the firm. Consequently, this role as an important

organizational activity becomes strategic. Therefore,

strategic information system planning attracted many

scholars attention.

The distinction attribute of strategic information system

that makes it different from Data Processing (DP) and

Management Information System (MIS) is in its strategic

focus. Strategic systems are necessary to acquire competitive

advantage. According to Ernest and Chen [10], a strategic

system can change: (a) the overall performance, (b) the way

of doing business, (c) the way of interaction with customers

or suppliers, and (d) the instruments for goal achieving.

Information system has all above characteristics, thus it

could be strategic. In order to do IS strategically, managers

in SISP process have to answer three questions: (1) what is

the current status? , (2) what are the objectives? and (3) How

to implement planning? Therefore SISP is the process of

preparing a plan for IS implementation in line with

organization goals [11].

Several research streams can be identified that have tried

to improve SISP practice. One stream is focusing on “SISP

success” by discussing issues of planning (i.e. finding

critical success factors of planning process). This stream has

resulted in new methodologies and tools for this process.

There is another research stream that is working on

“contextual factors” affecting SISP process. Researchers in

this flow believe that the appropriateness of those context-

free studies is questionable and accordingly, contingency

theory is the pivotal theory in this group. Another research

flow is about applying those theories and models that have

been tested in private sector in “other organization types”

such as public sector, non for profit organizations and

universities. A considerable attention has been paid to “SISP

approach” and “top management support” as well.

SISP is now a crucial issue of the firm’s strategic planning

process; but it has some characteristics that make it

intriguing: (1) it is an ongoing process, rather than an event

[3]; (2) SISP process has many stakeholders working

together not individually [11], and (3) the biggest detriment

of an improper SISP process is in its possible missed

opportunities rather than in direct financial effects. All above

specifications with considering costs of IS failure support

this argument that SISP success is a valuable area for more

research and investigation.

III. SISP SUCCESS

SISP requires significant amount of financial and human

resources and considerable budget and managerial efforts

[12] and is a crucial issue for IS and business managers and,

furthermore, oftentimes is unsuccessful and hard to complete

[13], [14]. These issues have made it a legitimate goal for

research. But such research could not be simply established

on financial measures like return on investment (ROI) and so

on; because like any other strategic planning it contains

several intangible outcomes. There are several research

streams that have explored SISP success. First efforts

resulted in single items known as key success factors (KSFs).

After introducing single dimension scales in early stages of

IS success measurement (see [7]) multi item scales were

explored as well. Then, Raghunathan and Raghunathan [14]

proposed a two dimensional model involving capabilities

improvement and gaining objectives of SISP

process .Another well-known research is the work of Segars

and Grover [12].They introduced alignment, analysis,

capabilities improvement, and cooperation as four

dimension of SISP success and suggest that SISP

effectiveness can be predicted through those four factors.

Recently, IS research area has been influenced by

resource based view of firm [15]. Resource-based view

(RBV) claims that the organizational resources are the main

source of competitive advantage and a subset of them will

provide excellent performance [16].These resources must be

valuable, rare, inimitable, and hard to replace [17]. RBV

introduces resources, capabilities, competencies and core

competencies respectively as the hierarchy of resources [18],

[19]. Combining resources for building particular firm

abilities will develop competencies [20].

The competition pressure has forced organizations to

develop their competence and trying to find new ways for

performance improvement .This paper proposes the

relationship of those competencies and success of SISP

process. As will be seen in the following sections, the

concept of IS competency is introduced in IS management

field.

IV. IS COMPETENCY

Some researchers have proposed that IS management area

has arrived to a “4th era” of IS management [21]. Previous

eras are DP (data processing), MIS (management

information systems), and SIS (strategic information

systems) respectively. The focus of this 4th era is not on

strategic use of IS, or IS planning methodology, but rather

on IS competency development. In the model of Peppard and

Ward [21], IS competencies are the components of IS

capability and this capability affects business and IS

strategy, operations, and firm performance.

290

It is well established that by ongoing readjustment or

radical change, firms try to build a set of competencies that

will guarantee future success. The real challenge is how to

recognize those competencies and their components. In other

terms, the changing nature of business, and with the pressure

for acquiring competitive advantage from IS investments

have made this new challenge for SISP: the challenge of

measuring firm’s competencies to gain benefit of IS

investments [9].In IS management area, the notion of” IS

competencies” is defined as the organizational ability to gain

benefits from IS investments through a set of required

abilities and skills, knowledge and capacities in both

individual and organizational level [3]. Firms expand

competencies through experience step by step and as a result

they will be able to compete properly. It should be

mentioned that competency building and development is a

process not a quick change. Simply stated, by merging

notions of the RBV in IS area, researchers [15], [19], [21],

[22], [23], [24], [25], [26] could exploit various IS

competencies that produce value for the organization.

IS competencies are not merely embodied in the IS

function, but they diffuse across business [3]. IS

competencies must be seen from business perspective not

solely from IS function perspective. Marchand et al. [27],

believe that for improving businesses use of IS, more efforts

must be done in combining IS competencies with IS

routines. This is very important to view those IS

competencies from an overall business point of view rather

than from a limited IS functional vision.

In this paper, IS competencies will be viewed from the

perspective of an organizational ability to gain benefits from

IS investments. According to the previous research, IS

competencies are a cluster of related IS strategy, IS

contribution, IT capability and exploitation, IS supply, and

many other competencies ranging from fundamental to

facilitating competencies [15] and from strategic to

exploitation and supply [23]. Calderia and Dhillon [15]

introduce 6 fundamental and 17 facilitating competencies as

follow:

Fundamental IS competencies:

1. Ability to conduct IT strategic thinking and planning;

2. Ability to align IT with business processes and objectives;

3. Ability to deploy cost effective applications and systems;

4. Ability to conceptualize the maintenance of data integrity

and confidentiality.

5. Ability to facilitate behavior enrichment for technology

adoption;

6. Ability to ensure compliance with standard IT methods

and procedures; (p: 6) and

Facilitating IS competencies:

1. Ability to select and manage IT staff;

2. Ability to provide ongoing IT training;

3. Ability to get top management support in IT projects;

4. Ability to design business processes for effective use of IT

expertise;

5. Ability to maintain systems consistency;

6. Ability to involve users in IT projects;

7. Ability to institute SLAs (Service Level Agreements) with

IT suppliers;

8. Ability to identify and set IT standards and procedures;

9. Ability to develop software in-house;

10. Ability to select and contract IT vendors and IS

consultants;

11. Ability to decide on software sourcing strategies;

12. Ability to maintain or decrease system response time;

13. Ability to ensure user application knowledge;

14. Ability to identify business IS requirements;

15. Ability to increase the credibility of the IT department;

16. Ability to increase service accountability;

17. Ability to develop an IS architecture (p: 10, 11).

By defining IS competencies, the question is that “what is

the nature of the relationship between IS competencies and

SISP success.

V. COMBINING IS COMPETENCIES AND SISP

SUCCESS

As Lee and Bai [29] suggest, a large number of studies in

SISP field suffer from a lack of investigating the relationship

between organizational aspects and SISP success. To fill this

gap we introduced IS competencies as a type of

organizational aspect. Providing such aspect may lead to

better underpinning of SISP success. Further, despite this

fact that SISP is a cornerstone of the information system

discipline, very little attention has been given to its success

based on the resource- based view of the firm (RBV) that is

the latter discipline in strategic management studies.

Finally, literature review shows significantly little effort

about integrating RBV and SISP in general and about

recommending a framework for understanding the

relationship between “IS competencies” and “SISP success”

in particular. To be clearer, the question is that what kind of

skills and abilities, knowledge, and qualification or capacity

is required in organization level to have a successful

strategic information system planning? And what conditions

affect this relationship?

VI. THE NATURE OF THE RELATIONSHIP BETWEEN

IS COMPETENCIES AND SISP SUCCESS

According to this fact that information systems are

becoming more important in organizations, managers realize

that they have to equip their organizations with other tools

more than solely human and physical resource to ensure that

IS planning and implementation would be successful. In

other words, individual and organizational levels in which

strategic information system planning is taking place in them

need to be researched appropriately to identify issues and

failure reasons.

If organizations could understand the competencies

required for IS success, by developing and leveraging them,

they can use their IS investment more competitive and more

effective.

291

VII. MODERATOR VARIABLES

There might be a possible planning paradox [5] in

studying the relationship between IS competencies and SISP

success. The SISP process and implementation can not

merely anticipate from IS competencies. Based on a

contingency model, there are moderating factors that might

affect this relationship. Wade and Hulland [30] introduce

external environment (that mostly refers to environmental

uncertainty) and internal influences (organizational culture,

and organizational structure) and top management support as

main contextual factors in IS studies. Therefore, in this

paper, organizational and environmental influences are

selected as moderator variables.

VIII. RESEARCH MODEL

Based on prior discussion, the research model is as follow

(Fig.1). This study established on some of theoretical

perspectives to introduce the relationship between IS

competencies and SISP success (H1). The model also

considers the role of moderating variables; environmental

and organizational influences (H2, H3).

Figure 1. The relationship between IScompetencies and SISP

success

IX. CONCLUSION

The purpose of this paper was to investigate what

competencies are necessary and what factors are moderating

or mediating the possible relationship between IS

competencies and SISP success. Consequently, through a

competence perspective, SISP success was investigated. For

this aim, we studied the relationship between IS

competencies and SISP success as the basic relationship and

Because of possible inconsistency between those two

variables (IS competencies and SISP success), factors

moderating this relationship were introduced based on a

contingency model to address planning paradox. While IS

failure has many consequences for organizations, the results

of this research can support organizations understanding the

competencies they need to acquire in order to have a

successful SISP. This research specifically investigated the

detailed relation amongst characteristics of IS users and the

firm in which they work (IS competencies) and SISP success

and requires empirical research to examine abovementioned

relationships.

REFERENCES [1] N.G. Carr, Does IT Matter, Harvard Business School Press, Boston,

MA, 2004.

[2] K.S. Nash, “What It Takes to Succeed Now as a CIO,” in: CIO,

International Data Group, 2008. [3] J. Ward, , j. Peppard, , strategic planning for information systems,

Cranfield School of management, Cranfield, Bedfordshire, UK, third

edition, 2002. [4] R. Sabherwal, Y.E. Chau,” Alignment between business and IS

strategies: A study of prospectors, analysers and defenders”,

Information Systems Research 12 (1, pp. 11-33.), 2001. [5] T. Bechor, S. Neumann, M. Zuiran, C. Glezer, “A competency model

FOR estimating success of strategic information systems planning”, Journal of Information and management, Vo47, pp.17-29, 2010.

[6] G.S. Kearns, “The effect of top management support of SISP on

strategic IS management: insights from the US electric power industry”, Omega 34, pp. 236–253, 2006.

[7] V. Basu, E. Hartono, A.L. Lederer, V. Sethi, “The impact of

organizational commitment, senior management involvement, and team involvement on strategic information systems planning”,

Information and Management 39 (6, pp. 513–524), 2002.

[8] S. Zuboff, In the Age of the Smart Machine: The Future of Work and Power, Basic Books, Inc., New York, NY, 1988.

[9] R. Hackney, “challenging assumptions for strategic information

system planning: theoretical perspectives”, communications of the association for information systems, V3, April 2000.

[10] T. Ernst, C. Chen, “Strategic information systems planning: a

management problem”, Journal of Computer Information Systems, 34 (3), 19–23, 1994.

[11] S.K. Min, E.H. Suh, S.Y. Kim, “An integrated approach toward

strategic information system planning”, Journal of Strategic Information Systems, Vol 8, pp.373-394, 1999.

[12] A.H. Segars, V. Grover, “Strategic Information Systems Planning

Success: An Investigation of the Construct and Its Measurement”, MIS Quarterly, 22(2), 139-163, 1998.

[13] A. L. Lederer, H. Salmela, “toward a theory of strategic information

systems planning”, Journal of Strategic Information Systems, 5, 237–253, 1996.

[14] B. Raghunathan, T. S. Raghunathan, “Relationship of the rank of

informative systems executive to the organizational role and planning dimensions of information systems”. Journal of Management

Information Systems, V6, 111–126, 1989.

[15] M. Calderia, G. Dhillon, “Are we really competent? Assessing organizational ability in delivering IT benefits”, journal of business

process management, Vol 16, pp.5-28, 2010.

[16] C.K. Parahald, G. Hamel, “The core competence of the corporation”, (also includes a related article on the corporate structure at Vickers

Co.), Harvard Business Review (68:3), pp 79-92, 1990.

[17] J. Barney, “Firm resources and sustained competitive advantage”, Journal of Management, V 17, 99-120, 1991.

[18] M. Javidan, “Core competencies: what does it mean in practice?”

Journal of long range planning, Vol: 31, pp: 60-71, 1998. [19] L. Chasalow, A model of organizational competencies for business

intelligence success, Virginia Commonwealth University, Richmond,

Virginia, unpublished doctorate dissertation, May 2009. [20] D.J. Teece, G. Pisano, A. Shuen, “Dynamic Capabilities and

Strategic Management”, Strategic Management Journal, 18(7), 509-

533, 1997. [21] J. Peppard, J. Ward, “beyond strategic information systems: Towards

an IS capability”, Journal of Strategic Information Systems, 13, 167–

194, 2004. [22] D. E. Feeny, L. P. Wilcocks, “Core IS Capabilities for Exploiting

Information Technology” Sloan Management Review, 39(3), 9-21,

1998. [23] G. Dhillon, “Organizational competence for harnessing IT: A case

study”, Information and Management 45, pp.297-303, 2008. [24] G. Bassellier, B.H. Reich, Benbasat, I., “Information technology

competence of business managers: A definition and research model”

Journal of Management Information Systems, 17(4), 159–182, 2001. [25] M. Wade, J. Hulland, “Review: The Resource-Based View and

Information Systems Research: Review, Extension, and Suggestions

for Future Research”, MIS Quarterly, 28(1), 107-142, 2004. [26] N.F. Doherty, M. Terry, “the role of IS capabilities in delivering

sustainable improvements to competitive positioning”, Journal of

Strategic Information Systems, 18 (2), 100–116, 2009.

IS COMPETENCIES

SISP SUCCESS

ORGANIZATIONAL INFLENCES

ENVIRONMENTAL

INFLUENCES

H1

H2

H3

292

[27] D.A. Marchand, W. Kettinger and J.D. Rollins, “Information orientation: People, technology and bottom line”, Sloan Management

Review, summer, 69–80, 2000.

[28] J.T. Hackos, “From Theory to Practice: Using the Information Process-Maturity Model as a Tool for Strategic Planning”, Technical

Communication, 369-381, June1997.

[29] G. Lee, R. Bai, “Organizational mechanisms for successful IS/IT strategic planning in the digital era”, Management decision, Vol.41,

Iss 1, pp. 32-42, 2003.

293