Abstract: Despite the importance of strategic information systems planning, few studies have been conducted in Asia; particularly in Middle Eastern countries. This study examines SISP in the context of Iran from an organizational perspective. In this study, we introduced organizational IS capabilities needed for SISP success based on analyzing and synthesizing previous SISP literature. Using a quantitative method, data were gathered from 2000 medium-to-large Iranian firms. Totally, 167 usable questionnaires were collected. The demographics of the participant firms is presented along with their SISP status in terms of SISP approach, SISP stages and IT role. Furthermore, we analyzed the level of organizational IS capabilities among those firms and their level of SISP success in terms of objective fulfillment and planning improvement.
INTRODUCTION
By definition, Strategic Information System Planning (SISP) is the identifying a group of IS/IT-based functions that will help a firm in accomplishing its business plans and recognizing its business goals (Bechor et al., 2010). Recently, SISP has attracted many researchers’ attention as firms heavily utilize information systems for performance improvement and competitive advantage purposes. However, unlike its importance and its possible benefits, the number of failed SISPs is shown to be high (Pita et al., 2009). Reviewing the reason of these failures it reveals that little attention has been paid to the organizational aspects of SISP (Pita et al., 2009; Lee and Bai, 2003). Nevertheless, research focus on organizational aspects of SISP is rather limited (Lee and Bai, 2003). Therefore, this study attempts to fulfill this need by reviewing and extending the literature by an empirical examination.
Moreover, although many studies have been conducted in SISP field (Basahel, 2009; Bechor et al., 2010; Pita, 2007), few of them have studied SISP status in Asia particularly Middle Eastern countries. Most of the studies in U.S. and Europe have examined aspects such as problems of IS planning, SISP methodology, and planning success. Among those studies, research related to the status of SISP activities is rather scarce but can help researchers and practitioners to be familiar with overall status of SISP in certain contexts (Singapore: Pavri and Ang, 1995; Teo et al., 1997; Australia: Falconer and Hodgett, 1996; Croatia: Spremic and Strugar, 2002; China: Kunnathur and Shi, 2001).
In this regard, this study reports a research of Strategic Information Systems Planning (SISP) in medium-to-large Iranian companies. The study’s content is part of a larger study examining the SISP success from an organizational perspective and the factors studied in this research are results of classification of previous literature.
In particular, in this study, the research questions are: What is the role of IT in Iranian companies? What stage of SISP are Iranian companies in? What SISP approaches have been chosen by Iranian companies? What is the status of organizational attributes of SISP success (i.e., six organizational IS capabilities) among Iranian companies? What is the status of SISP success in terms of objective fulfillment and planning improvement in those companies? In essence, through this study we examined the SISP practices in medium-to-large Iranian companies in terms of SISP context (i.e., environmental, organizational and IS context), IT role, SISP stage and SISP approach.
LITERATURE REVIEW
Categorization of SISP success drivers: Examining the IS literature, there is little evidence on the status of SISP in Iran. Therefore, this study is focused on Iran, which is a large investor in IT/IS in the Middle East. Such large investment needs examining status of IS planning in such a context. In order to study SISP status in Iran, we examined previous SISP literature (Baker, 1995; Lederer and Salmela, 1996; Teo et al., 1997; Basu et al., 2002; Lee and Pai, 2003; Pita et al., 2009; Abu Bakar et al., 2009; Bechor et al., 2010) and found more than hundred SISP success drivers (Appendix A). Using resource-based view of the firm theory (RBV), we synthesized those success drivers and established six categories (Appendix B) as organizational IS capabilities (i.e., IS external relationship capability, IS internal relationship capability, IS knowledge and skills capability, IS planning and change management capability, IS-business integration capability and IS infrastructure management capability). Those firm-wide IS capabilities and their definition are presented in Table 1.
Furthermore, we investigated other important variables in SISP literature and came out with (1) environmental context (i.e., turbulence, munificence, complexity), (2) organizational context (i.e., formalization, decentralization and top management support) and (3) IS context (IT role, SISP stage, SISP approach). In following sections each of those factors are explained.
| Table 1: | Typology and definition of IS capabilities relevant to SISP success |
| Source: Morris (2006) and Wade and Hulland (2004) | |
| Table 2: | Analysis of “context factors” used in SISP research |
SISP context factors: According to the SISP literature, it can be concluded that generally, the SISP context is divided into three parts that are: (1) environmental context, (2) organizational context and (3) IS context (Lederer and Salmela, 1996; Lee and Pai, 2003; Wang and Tai, 2003; Chi et al., 2005; Warr, 2006; Cohen, 2008; Bechor et al., 2010; Newkirk and Lederer, 2010). Environmental context is relevant to influential factors outside the organization’s borders that must be taken into consideration (Duncan, 1972). It refers to customers, suppliers and competitors that directly impact the day-to-day operations and also general environment that is social, economic, and demographic characteristics that has indirect and gradual influence on the firm (Bourgeois, 1980; Draft, 2001). Likewise, the organizational context refers to the firm attributes of SISP, and IS context is relevant to the IS characteristics of the organization (Lederer and Sethi, 1996; Cohen, 2008). Table 2 indicates an analysis of context factors used in SISP research.
Furthermore, SISP stage, SISP approach and IT role were shown to be important elements in studying SISP status and are discussed in coming titles.
SISP stage: According to the previous study of Grovera and Segars (2005), both planning process and planning evolution can provide valuable insights into planning evolvement and planning effectiveness and both are among those factors that need more attention. Generally, research indicates that (1) SISP has three stages, (2) different processes are required in each stage and (3) the firms have different contexts and outcomes in each stage (Grovera and Segars, 2005). In more detail, SISP adapts overtime and as firms become geographically or theoretically more complex, the planning activities become more important. In other words, as firms start to be more mature, they can be categorized in different SISP stages. Table 3 shows characteristics of each SISP stage.
According to the Table 3. it can be concluded that there are different processes and consequently different outcomes (based on their planning maturity and experience) and different contexts (higher uncertainty and diffusion level as SISP becomes more mature) in each stage.
SISP approach: Different firms view SISP from different perspectives. Studying those different views provides an opportunity for interpreting organization’s approach to SISP. Research on SISP approach involves studying the distinction between different approaches to SISP and the effect of those SISP approaches on SISP success. SISP approach studies are categorized in Table 4.
| Table 3: | Characteristics of SISP stages |
| Source: Grovera and Segars (2005) | |
| Table 4: | The main studies about “SISP approach” |
In one of the SISP approach studies, Segars and Grover (1999) conducted a research on SISP profiles/approaches. Based on a multivariate analysis of responses collected from 253 IS executives, they presented five distinct SISP profiles. Further analysis showed that those five SISP profiles could be related to the five strategic planning schools (i.e., design, planning, positioning, learning, and political schools).
Studies conducted on “SISP approach” provide sufficient evidence to support that SISP is not a one-dimensional technique, but is a multidimensional concept. Collectively, planning systems’ approaches are ranged from thoroughly adaptive to thoroughly rational (Segars and Grover, 1999). Besides, reviewed studies provided strong evidence that as a multifaceted phenomenon, SISP must be interpreted in terms of adopted planning activities and its available alternatives. Therefore, following Segars and Grover (1999), this study will adopt their five SISP approaches to study the SISP status.
IT role in organization: IT might have different roles in different organizations. These IT roles are competitive, operational and administrative. The administrative role of IT focuses on an efficient platform for controlling organization’s functions. The operational role deploys and creates technology within the firm and finally the competitive role of IT concentrates on efficiency in order to achieve competitive advantage through the firm’s strategy (Basahel, 2009; Bechor et al., 2010).
EXPERIMENTAL METHODS
The research instrument was a questionnaire developed from previous SISP studies contained items related to respondents’ demographics, SISP success, organizational IS capabilities, IT role, SISP stage and SISP approach. Using previously validated items (Segars et al., 1998; Morris, 2006; Bechor et al., 2010; Grovera and Segars, 2005), a survey questionnaire was used to investigate the SISP status among Iranian medium to large organizations. Survey method provided the opportunity to gather required data and test the hypotheses. Since we translated the research tool from English to Persian, we investigated its validity and reliability. After pre-test and pilot-test, the survey questionnaire was sent to around 2000 CIOs of medium-to-large Iranian firms. We asked CIOs (or similar job titles) to respond to the questionnaire in order to make sure that responses are reflecting the firm’s SISP perspective. The questionnaire was distributed through e-mail and responses were collected using a web-based application. All responses were collected in June and July, 2011 and totally 167 usable responses were collected. As will be seen in the result section, only 57% (1140 firms) of Iranian medium-to-large firms conduct formal or partially formal SISP. Therefore, the response rate was 14.6% (167/1140) that was comparable with similar studies (Bechor et al., 2010) 90% (Newkirk et al., 2008) 13.41% and (Pita, 2007) 13.05%. Meanwhile, this response rate could be related to the low response rate among CIOs (Bechor et al., 2010) and also this fact that many organizations do not conduct SISP (Pita, 2007).
RESULTS
The demographic profile of participant firms is reviewed in Table 5 in terms of industry types, firm size, ownership status, IT role, SISP stage, and SISP approach.
Industry types: The study’s analysis was based on 167 usable responses collected from different industry types. Table 5 shows the demographic profile of respondents. A majority of respondents were from manufacturing industries (26.3%). Other respondents were from technology and media (19.8%), education (15%), financial and insurance services (13.2%), government (10.2%), Transport and distribution services (8.4%) and Health (7.2%) firms. According to the Chi-square test, technology and media, finance and manufacturing firms (IT intensive firms), IT role was more important compare to other firms. In other words, IT in these firms was more engaged with firm strategy. Furthermore, ANOVA tests showed that technology and media firms and financial organizations had stronger IS capabilities and also more successful SISP (p<0.05).
Firm size: The medium-to-large organizations were selected as sample of this study. Those firms were divided into three parts: medium (59.3%), large (28%) and very large (24%). There was no difference between environmental context among medium and large organizations (Table 5). Similarly, only for organizational context, medium firms reported stronger top management support (p<0.05). Totally, medium size firms were more successful at their SISP in terms of objective fulfillment and capability improvement (p<0.05).
| Table 5: | Demographics of respondent firms |
Moreover, medium firms had stronger IS capabilities (p<0.05) except for IS external relationships and IS knowledge and skills capability that were the same for both firm sizes.
Ownership status: Firms’ ownership status is summarized in Table 5. Totally, about 54.5% of respondents were state-owned and other 45.5% were private firms. Generally, private firms were more successful in achieving SISP objectives (p<0.01). Furthermore, private firms were stronger than state-owned firms (p<0.05) in terms of their capabilities except IS knowledge and skills capability. Chi-square test also showed that private firms were in higher SISP stages compare to state-owned firms (p<0.05).
Environmental context: We investigated environmental context in terms of turbulence, munificence and complexity. Based on the analysis, there was no difference between environmental context dimensions based on firm size. Therefore, it can be concluded that the perception of those IT managers of their external environment did not differ significantly.
Organizational context: For organizational context, we investigated formalization, decentralization and top management support. According to the findings, the only difference was that middle size firms had more top management support for their SISP (p<0.01). Consequently, as shown previously, the medium firms enjoyed more strong IS capabilities and more successful SISP.
IS context: Several factors have been used for identifying IS context of participant firms.
IT role: IT role in respondent firms was divided into three parts. Firstly, in 39.8% of respondent firms, IT supports operations and administrative function, but IS group is not related to the development of organizational strategy (administrative IT Role). Secondly, in about 18% of participant firms, IS group activity supports the organizational strategy, but is not involved in the business strategy development (operational IT Role). Finally, in majority of respondent organizations (43.1%), IT is integrated to the organizational strategy. Both IS group and corporate managers work together to develop IS application that can change firm’s strategic position (competitive IT Role) (Table 5).
Based on data analysis, generally, participant firms reported more SISP success and also stronger IS capabilities according to the role that IT have had in them. In other words, the more the IT has role in firms, the stronger organizational IS capabilities and also possibility of SISP success (p<0.01).
SISP stage: SISP stage is related to stage of SISP that respondent firms were in. Overall, about 36.5% of the respondent firms were in the first stage in which the SISP participants have little planning experience and policies and procedures are recently developed. A majority of firms participated in study (44.3%) were in second stage in which there is some IS planning experience among SISP participants. Plans are formally developed, but planning process still is being corrected. Lastly, the remaining firms (19.2%) were in the third stage in which there is much experience and a long history in IS planning activities. Besides, there are well established procedures and policies for planning (Table 5).
SISP approach: SISP approach is related to different perspectives whereby different firms view SISP. In present study, five different SISP approaches were considered. In most of the participant firms (30.5%) SISP was assumed as a conceptual process that was done by senior management to capture success (Design Approach). In About 23.4% of the firms, SISP was considered a formal process, the IS strategy was determined through specific policies and methodologies (Planning Approach). Few firms assumed SISP approach as an analytical process in which strategy selection was based on calculation and using high-level planning tools (9.0%-Positioning Approach). Likewise, in 25.1% of firms, SISP was a learning and emergent process, thereby, previous experience in conducting SISP was important and SISP was adaptive to changing needs of organization (Learning Approach). Lastly, in remained firms (12.0%), SISP was a power process in which negotiating, power and politics play important role (Politic Approach).
According to the data analysis, the first approach was shown to be less successful than other approaches in terms of objective fulfillment and planning improvement (p<0.01). Likewise, organizational IS capabilities were weaker in this approach compare to other approaches (p<0.01). Furthermore, the second approach showed less SISP success and weak IS capabilities compare to the third and forth approach (p<0.01). The analyses did not show any significant difference between other approaches (Table 5).
SISP success and organizational IS capabilities: We conducted a t-test for the dimension of SISP success, organizational IS capabilities, environmental context, and organizational context factors. As shown in Table 6, almost all SISP success factors and organizational IS capabilities were above medium level (p<0.01) in seven point scale (i.e., = 4). Only environmental complexity was reported at medium level and decentralization was below medium (p<0.01).
Moreover, we examined the Pearson correlation test between SISP success dimensions and capability factors (Table 7).
| Table 6: | T-test of study’s variables |
| Table 7: | Pearson correlation test between SISP success dimensions and capability factors |
The result of Pearson correlation test showed that almost all of the correlation coefficients between capabilities and success constructs were strong and significant at p<0.01. Therefore, as a marginal outcome, it provides initial support for the relationship between organizational IS capabilities and SISP success.
DISCUSSION
The findings of this study indicated that most of participant firms view SISP as formal process through specific policies or as a learning process that adapts to changing needs of firm. This information indicates that IS investments are (or tend to be) based on formal plans in 57.5% of Iranian medium-to-large firms. As an overriding conclusion, comparing SISP approaches and SISP stages, it can be concluded that most of Iranian firms are in a transition stage in which they have some IS planning experience and attempt to develop plans formally. Results also showed that most of the firms have realized the importance of strategic planning for information systems. Most of the firms declared that IT either supports their firm’s strategy or is actively integrated to the firm’s strategy. This was consistent with the stage that those firms were in (partially mature stage) and with the approach (positioning approach and learning approach) that they had chosen.
The findings also showed that medium firms had stronger firm-wide IS capabilities and more successful SISP compare to the large firms. This might reflect the possible core rigidity in large firms (Slotegraaf and Dickson, 2004). It can be concluded that larger firms might have further possibilities to have stronger IS capabilities but their structure or their complexity might prevent them to further nurture their capabilities.
Interestingly, the level of organizational IS capabilities and SISP success dimensions were higher than medium level but was not at a very high level. Also it worth highlighting that information intensive firms such as technology and media and financial firms had more strong organizational IS capabilities and also were more successful in their SISPs. As we expected, the private firms had stronger IS capabilities and were more successful at SISP compare to state-owned firms. Finally, we found strong support for the idea that organizational IS capabilities are highly correlated with SISP success. Further research is required to examine this relationship more exactly.
APPENDICES
| Appendix A: | The relation between the conceptual model and the major sources- SISP success predictors derived from previous literature |
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Appendix B: |
Proposed organizational IS capabilities derived from SISP success predictors |