Strategic Information Systems Planning (SISP) in Australia: Assessment and Measurement A thesis submitted in fulfilment of the requirements for the degree of Doctor of Philosophy Zijad Pita School of Business Information Technology Faculty of Business RMIT University February 2007 Declaration Declaration I certify that except where due acknowledgement has been made, the work is that of the author alone; the work has not been submitted previously, in whole of in part, to qualify for any other academic award; the content of the thesis is the result of work which has been carried out since the official commencement date of the approved research program; and, there has been no editorial work, paid or unpaid, carried out by a third party on this thesis. Zijad Pita February 2007 ii Abstract Abstract Strategic Information Systems Planning (SISP) is an important activity for helping Chief Information Executives (CIOs) and top management identify strategic applications and align Information Technology (IT) with business needs. Like all strategic planning, SISP requires measuring how well SISP is done and how planning is improving over time. The measurement of these intangibles is a complex exercise.
There have been few efforts undertaken in the Information Systems (IS) literature to formally develop a model for assessing and measuring SISP efforts. In this study, two models were proposed: a five-stage SISP maturity model for defining SISP maturity and another one for assessing the degree of SISP maturity. The five SISP maturity levels were defined as: Rudimentary Planning, Ineffectual Planning, Attainable Planning, Sustainable Planning, and Adaptable Planning. The assessment model was structured as a third-order system, where eight first-order dimensions were termed as Form and Content, Collaboration, Policies, Stakeholders’ Designation, Knowledge Bank, Technology, Time Dimension, and Viability.
The first-order dimensions were grouped into three second-order constructs, namely Effectiveness, Efficiency and Manoeuvrability, which ultimately characterise the level of SISP success. This model was used to establish a theoretical benchmark for each SISP maturity level. To model the level of SISP maturity, an ‘Integral Engineering’ approach was established and the Analytic Network Process (ANP) theory was used. The study is a novel approach in using ANP to synthesize the measures of the various SISP constructs into a single overall measure of SISP maturity level.
A survey was performed and data collected from 260 Australian organisations to examine the degree of SISP maturity and the relationships among SISP constructs. Structural equation modelling (SEM) was used to test the fit between the hypothesized model and the survey data The models were applied to the data collected and the findings suggested that the models fit the data well. While Effectiveness and Efficiency are well recognised planning constructs, Manoeuvrability as a measure of planning dynamics is not acknowledged in the literature as an equally important construct. This study confirmed a strong correlation between Manoeuvrability and SISP success and found it to be more important than the iii Abstract Efficiency construct.
The empirical data did not confirm the existence of Rudimentary and Ineffectual planning levels of SISP maturity Australia-wide. SISP maturity in the majority of Australian organisations is at Sustainable and Attainable planning levels. A small percentage of the surveyed organisations have actually reached the highest planning level (Adaptable planning). The empirical data showed that current SISP is lacking strategic dimension and that the recently popularised one-year planning horizon may not be the best choice.
Australian organisations did not consider the strategic relevance of IT as the key objective. IT/IS was seen as a business enabler, thus the strategic advantage associated with IT came as a secondary objective. iv Acknowledgements Acknowledgements It is impossible to name all the people who helped in this research for the last six years. To all who helped, I am forever grateful for your contributions.
I would first of all like to thank my supervisor Dr. France Cheong for the great support given to me during these hard years. He provided me with the complete freedom to explore my own interests and his guidance assisted me throughout this research. My special gratitude also goes out to Professor Brian Corbitt for his time and valuable direction.
The discussions held between us have improved my process of thinking and greatly contributed to the quality of research. I would like to acknowledge the support given to me by my esteemed colleague Professor Dorothy Leidner, Professor of Information Systems at the Baylor University, USA. Her support was a key motivator to endure the hard times. I am also indebted to Rozann Saaty of the Creative Decisions Foundation, Pittsburgh and William Adams of Embry Riddle Aeronautical University, Florida who developed the SuperDecisions software, working with Rozann.
Without the use of this software and invaluable direction from Rozann, this study would have been impossible to complete. I would like to thank my family for being patient with me for all these years. In particular, I am grateful to Emina Kustrich for her encouragement and generous support. Also, I would like to show gratitude to my sons Sanko and Dinko for their assistance in the collection of the data for the research.
I also owe apologies to my little white dog Kiki, for all those walks to the park that he did not receive. Last but not least, I am deeply grateful to my wife Senada from whom I selfishly stole much time but whose support was endless throughout this venture. v Table of Contents Table of Contents Abstract.iii LIST OF TABLES. xi LIST OF FIGURES.
xiv LIST OF ABBREVIATIONS.2 Motivation of the Research .3 Research Aim and Scope.4 Outline of the Thesis. 10 2 A REVIEW of SISP LITERATURE.3 Why Engage in SISP?.1 The Need and the Purpose of SISP.2 SISP Success and Benefits .4 Assessment of SISP.1 Definition of a System.2 Definition of Information .3 Information Systems Definition .1 A System as a Group of Processes.5 Feedforward and Feedback Control Loops .8 Assessment of SISP System Behaviour.1 Gaps in SISP Behaviour Assessment.9 Assessment of SISP System Structure.1 Approaches to SISP Success.2 SISP-related Methodologies, Techniques, and Tools .3 SISP Problem Areas: the Internal Environment.4 Misalignment of SISP and Business Goals.6 Lack of Management Commitment .7 The Problem of Culture Gap.8 Problems with Resources.9 Lack of SISP Measurement and Revisions .10 SISP Problem Areas: External Environment .12 Changes in Economic Structure. 59 vi Table of Contents 2.13 Shifts in Society .17 Pressure Groups and Stakeholders.18 Competitive Forces: Suppliers and Customers .19 Failure to Analyse Major Competitors.20 Gaps in SISP Structure Assessment.10 Assessment of SISP System Evolution.1 The Three-Era Model.2 The Fourth Era Model.3 Gaps in SISP Evolution Assessment. 74 3 RESEARCH DESIGN and RESEARCH METHODOLOGY .1 Ontological and Epistemological Conceptions.3 Choice of Paradigm .3 Goal-centred Judgement.5 Analytic Thinking Approach.7 Reasons for Adopting an Integral Engineering Approach.10 Time Horizon of Data Collection .11 Types of Investigation .12 Extent of Researcher Interference.13 Unit of Analysis.1 Measurement and Measures .1 Internal Consistency of the Measuring Instrument .1 Validity of the Model as Whole .2 Validity of the Measuring Instrument .6 Techniques and Tools Used For SISP Models .1 ANP/AHP Theory .3 The Consistency of a System.2 Steps in Developing the SISP Models using ANP/AHP.
108 vii Table of Contents 3.3 Structural Equation Modelling .4 Summary of the Research Design and Methodology. 116 4 SISP MATURITY MODEL.2 SISP Maturity Definition.3 The Five-Stage SISP Maturity Model.4 SISP Maturity Assessment Evaluation Criteria.1 SISP Maturity Criteria Definition .5 SISP Maturity Assessment Evaluation Subcriteria.1 SISP Maturity Subcriteria Definition .6 SISP Maturity Assessment Evaluation Clusters and Nodes .1 Main Criteria Priorities.8 The Clusters and Nodes Priorities .9 SISP Maturity Model Synthesis .1 How the Alternatives Contributions Fed Forward.3 Attainable Planning - Causing Federalisation.5 Adaptable Planning–achieving Cohesion .10 Usage of the SISP Maturity Model.1 The SISP Assessment Model.11 The SISP Maturity Model Sensitivity Analysis .12 Validation of the SISP Assessment Model. 171 5 SEM: SISP MEASUREMENT and STRUCTURAL MODEL .1 Reliability of Subscales Used in SEM.2 SEM: Testing for the Factorial Validity of Scores from a Measuring Instrument (First- Order CFA model). 174 viii Table of Contents 5.1 Hypothesis 1: SISP is a First-Order Single-Factor Model .2 Hypothesis 2: SISP is a First-Order Three-Factor Model .3 Hypothesis 3: SISP is a First-Order Six-Factor Model .2 Post Hoc Analyses .4 Testing for Factorial Validity of SISP subcriteria (First-Order CFA Model) .1 Test for Convergent Validity .2 Test for Discriminant Validity .3 SEM: Testing Measurement Model (Second Order CFA model) .2 SEM: Testing the Structural Model (Third-Order Model) .3 Characteristics of Organisations that do not Perform SISP .2 Industry Type and Size by Turnover .3 Industry Size by Number of Employees.4 Industry: Other Characteristics.1 Dependency on IT/IS .4 Characteristics of Surveyed Organisations that Perform SISP.2 Industry Type and Size by Turnover .3 Industry Size by Number of Employees.4 Industry: Other Characteristics.1 Dependency on IT/IS Structure .2 Perception of IS/IT Function .5 Characteristics of the Respondents .6 Levels of SISP Maturity and SISP Success in Australian Organisations .1 SISP Maturity versus Company Size.2 SISP Maturity and Benefits from SISP Relations .7 The Key Issues in IT Management .1 Key Reasons for SISP Formulation Failure in Australia.2 Key Reasons for the SISP Implementation Failure in Australia.8 Assessment of SISP System Behaviour and Structure .2 Communication and Coordination .3 Confirming Latent Factor ‘Collaboration’ .2 SISP Form and Content .2 Company Size and SISP Approaches Relationship.6 Confirming Latent Factor ‘Form & Content’.1 Confirming Latent Factor ‘Policy’.1 Confirming Latent Factor ‘Knowledge Bank’.
277 ix Table of Contents 6.3 Confirming Latent Factor ‘Stakeholder’s Designation’ .1 Confirming Latent Factor ‘Technology’ .1 Confirming Latent Factor ‘Viability .1 Confirming Latent Factor ‘Time Dimension’ .1 SISP Measurement Methods .2 Quality of SISP Measurement .3 Scope of SISP Measurement .4 Objectives of SISP Measurement.5 Success of SISP Measurement. 317 7 DISCUSSION AND CONCLUSIONS .2 Summary of the Research Work .1 Context and Issues.2 SISP Theoretical Models.1 The SISP Evolution Model .2 The Model for Assessing SISP Evolution.3 Assessment of SISP Maturity in Australian Organisations .4 Discussion –Revisiting the SISP Literature.3 Implications for SISP Theory .4 Implications for SISP Practice.5 Limitations of the Research.6 Suggestions for Future Research. 452 x List of Tables LIST OF TABLES Table 2.1 Trends of the Key Ideas of SISP .2 Trends of the key issues in IT Management.3 SISP Success Factors.4 SISP Success Factors. Source: Ang et al.5 Methodologies used for SISP (after Remenyi, 1991:233).
Source: Lederer and Sethi (1992:28).8 Barriers to Successful IS strategy Source: Wilson, (1989).9 General problems affecting SISP Source: Cherpa and Vener, (1998).10 The Key SISP Barriers .11 Trends in the evolution of IS/IT and SISP* .2 The Fundamental Scale Used for Paired Comparison Judgments, (Saaty, 2001a).3 Table of Random Inconsistency for Different Size Matrix (source: Saaty, 2001a).4 Survey Based SISP Studies .5 Variables Definition for Hypotheses Testing .6 Summary of the Research Design and Methodology Adopted for this Study.1 Control Hierarchy – Main Subcriteria Network.2 Policy Subcriteria: Hierarchical Organization.3 Knowledge Bank Subcriteria: Hierarchical Organization .4 Stakeholders Designation Subcriteria: Hierarchical Organization .5 Technology Subcriteria: Hierarchical Organization.6 Form and Content Subcriteria: Hierarchical Organization.7 Collaboration Subcriteria: Hierarchical Organization.8 Viability Subcriteria: Hierarchical Organization.9 Time Dimension Subcriteria: Hierarchical Organization .10 Pairwise Comparison Matrix for the Main Criteria.11 Pairwise Comparison Matrix for the Subcriteria.12 SISP Supermatrix of Weighted Priorities.13 SISP Limit Supermatrix – Normalised Column in Each Block .14 Cluster Membership for Effectiveness Control Criterion.15 Cluster Membership for Efficiency Control Criterion .16 Cluster Membership for Maneuverability Control Criterion.17 Pairwise Comparison Matrix for the ‘Formulation Study’ Subcluster .18 Node Priorities: ‘Formulation Study’ Subcluster with Respect to Adaptable Planning .19 Ranking of Alternatives for all Subnetworks .20 Final Synthesis of Priorities for SISP Maturity Model.21 SISP Maturity Model - Summary of Subcriteria Contributions .22 Benefit, Cost, Opportunity and Risk (BCOR) Synthesis for SISP Maturity Stages.1 Reliability of Subscales Used in SEM .2 The overall reliability of SISP constructs.3 A First-Order Single-Factor SISP Measurement Model Fit Summary (Selected Outputs).4 Nested Model Comparisons .5 Unconstrained and Constrained a First-Order Six-Factor SISP Measurement Model .6 A First-Order Three-Factor SISP Measurement Model Fit Summary .7 A First-Order Six-Factor SISP Measurement Model Fit Summary .