The Relationship Between Information System Planning Sophistication and Information System Success: An Empirical Assessment*

Literature on information systems (IS) planning implicitly assumes that a sophisticated IS planning process leads to greater IS success. This paper questions the exclusive reliance on this traditional belief. Instead, because IS planning requires significant organizational resources, prior IS success is essential to convince top management of the importance of IS planning sophistication. Therefore, IS success may influence IS planning sophistication. Several theoretical arguments are advanced in support of this explanation. Data from a survey of 236 academic institutions are used to empirically assess the two alternative directions of the relationship between IS planning sophistication and IS success. Four structural models including the alternative causal directions are evaluated. Two of these models are supported. Together, they imply that for a high level of IS planning sophistication, either the previous ISs should have been successful or the organization should possess advanced information technology capabilities. Thus, empirical results suggest that the explanation presented here (i.e., IS success facilitates IS planning sophistication) provides an equally good alternative to the more traditional explanation (i.e., IS planning sophistication facilitates IS success).     

Decision Processes for Developing Strategic Applications of Information Systems: A Contingency Approach*

Strategic applications of information systems (IS) are considered by IS researchers to be determined by contextual factors such as environmental uncertainty, and influenced by attributes of the processes preceding them, such as planning and top management support. For better management of the process leading to these applications, it is essential to understand the relationship between process attributes and contextual factors. Utilizing a contingency approach, this article takes a step toward such an understanding. Based on successful strategic IS applications from 81 large companies, it examines the relationship between the context of these applications and the decision-making process leading to them. The results indicate that the external environment is related to whether a rational or political decision-making process is used. The IS function seems to influence the use of the decision process implied by IS researchers, one in which the top management champions the strategic application, while the IS managers contribute by conducting in-depth analysis. However, the organization structure was not related to any decision process attribute. The implications of these findings for future research and practice are also discussed.     

Planning Implications of the Information Systems Strategic Grid: An Empirical Investigation

In recent years, information systems (IS) planning has come to represent a key IS management tool to practitioners and researchers. Concurrently, there has been increasing recognition by organizations that their IS can be viewed as a strategic resource. This research is an attempt to explore the relationship between these two aspects of IS. It analyzes, in an empirical setting, the contingent nature of some IS planning-related variables in the context of the strategic relevance of an organization's IS. The basis for the empirical test is the IS strategic grid framework developed by Cash, McFarlan, McKenney, and Vitale [6]. A questionnaire survey method is employed to elicit information on the strategic orientation of IS and IS planning issues within respondent organizations. The difference in emphasis on various planning aspects in organizations with different IS environments is analyzed. Results of the analysis indicate that there is empirical support for the strategic grid framework and that there are differences in planning aspects among organizations, depending on their location in the grid. The implications of these findings for IS and IS planning are then discussed.     

The sophistication of capital budgeting in Malaysian companies

The sophistication of capital budgeting in 70 Malaysian companies is assessed in terms of a three-stage model of the capital budgeting process with reference to the following: the percentage of capital investments for which the techniques are used, explicit assessment of risk, the method of determining the cost of capital, the method of measuring cash flows, the formal profit contribution analysis, the extent of use of management science/operations research in capital budgeting, information systems support and the planning and control of capital expenditures. The assessment reveals a general tendency in the direction of increasing sophistication in the various phases of capital budgeting in Malaysian companies.     

Marketing planning in India—A survey

This paper describes the response to a study of the marketing planning function in large-size companies in India and the techniques used to assess the level of sophistication achieved. The authors analyse their findings and conclude that although a high level of sophistication had not yet been achieved, the process was accelerating and there was a positive relationship between the size of the company and its profitability and the accompanying level of marketing planning sophistication.     

A process-oriented perspective of IS success: Examining the impact of IS on operational cost

Effective measurement of information system (IS) success continues to be a top concern for both practitioners and researchers. Labeled the “productivity paradox”, previous attempts to quantify the benefits of IS have often resulted in inconclusive or inconsistent results. The present study contributes to IS success research through the development and empirical testing of a process-oriented model of IS success. Using an operational perspective and combining primary and secondary measures, this study examines the influence of lower-level intangible IS and information technology (IT) benefits on higher-level financial measures. Additionally, we introduce IS plan quality as an antecedent to the model's input variables. Primary survey data from CIOs of primarily Fortune 2000 size firms are combined with secondary data, total operational cost, from Compustat to facilitate the examination of the IS benefits. This study also addresses shortcomings cited in other studies that might have contributed to the productivity paradox by including control variables in the model, defining a research perspective—the operational success perspective—and clearly articulating the level of analysis as the organizational level. The results supported a process-oriented view of the benefits from IS and showed how the effects of IS along a path can lead to better organizational performance, in this case, lower overall costs. These results are discussed and future research implications are presented.     

An Examination of IT Planning in a Large,Diversified Public Organization*

The conduct of information technology (IT) planning processes has been of dominant managerial concern in public and private organizations. Yet, current IT planning research offers little guidance on the types of planning actions and behaviors that are appropriate to organizational contexts. We focus on the conduct of the IT planning process by describing an exploratory research project. The project empirically examined a number of issues associated with managing IT planning within a single large public enterprise, particularly identifying actions and behaviors related to producing quality IT plans. The results of the study yield some useful set of guidelines; most interesting is the importance of building IT infrastructure based on IT sophistication and innovativeness for large agencies to improve plan quality. Other recommendations include having a focused, balanced technology and business planning orientation that incorporates a strategic outlook, support of top management, attention to business planning, and early consensus among planning members.     

A path analytic study of the effect of top management support for information systems performance

Information systems (IS) have become a vital component of an organization's competitive practices. Organizations have tried to differentiate themselves based on their use and adaptation of new information technology. Top management support (TMS) is a significant factor in influencing the effectiveness of the IS function in an organization. The literature has conceptually supported this notion, but empirical evidence has been sparse. This paper develops a two-tiered framework for studying the relationship between top management support, the IS function, and IS performance. This conceptual model was empirically tested using structural equation modeling based on data collected through a survey instrument. The results support the direct and indirect relationships depicted in the model between top management support and IS performance.     

The state of private sector strategic planning in Canada

This paper examines Canadian strategic planning expertise from a number of different aspects. It evaluates the relative sophistication of Canadian and American management consultants and points out that the U.S. expertise is still particularly good and preferred. It is perhaps a pertinent comment that the view of many is that ‘The U.S. people have … defined their products in such a way as clients can use them’. Analysis of the stimuli for strategic planning is an appropriate focus, particularly since it concludes that it is rare that a visionary cheif executive is responsible! Most companies appear to pursue strategic planning through fear rather than enlightenment. The quality of input to the planning process varies widely, with extrapolation from the past a major preoccupation. There appears to be a lack of environmental analysis. The author analyses a number of important issues and concludes that a bolder embrace of strategic planning would serve Canadian management well in responding to the extensive challenge facing their country's economy in the next 10 years.     

Creating a climate conducive to planning

An improved climate for long-range planning, a better understanding of divergent viewpoints among planning participants and increased satisfaction with planning systems do not automatically occur with more experience in planning. Learning to cope with planning problems requires a continuing investment of management time and energy. Many of the companies included in this study were willing to make this investment—progress has been slow and more needs to be done. This article describes the lessons that mature systems companies have learned.     

The need to improve communication about scope changes: frustration as an indicator of operational inefficiencies

Early and timely sharing of information can provide a sustainable competitive advantage. However, even if lean information management aims to improve this information flow, it has mainly been investigated in ‘operations-based’ companies. This paper fills this gap, drawing upon the experience of the authors working within a large project-based company engaged in the ‘engineer and manufacture to order’ of a complex piece of equipment costing millions of dollars, for its strategic long-term client, both working in the same industrial field, i.e. nuclear decommissioning. This research investigates the information flow regarding scope changes between the project-based company and the long-term client adapting and applying a five-step framework to highlight operational inefficiencies, reduce the corresponding transaction costs and increase the overall company’s competitiveness. This is exemplified through a particular case, but can be applied to other project-based companies dealing with strategic clients involved in long-term relationships.     

The corporate planning process of the regulated utility companies

The utilization of corporate planning models has been increasingly important to the utility industry due to the uncertainty of energy prices, regulations, financing and the long lead time associated with the construction of power plants. This paper provides an overview of the concept, developments and how the corporate planning models are utilized by the regulated utility companies in the United States and benefits derived from utilization of corporate planning models by several electric utility companies.     

Can Management Accounting Be Helpful for Young and Small Companies? Systematic Review of a Paradox

While management accounting (MA) implies potential benefits for large established companies, its usefulness for young and small companies is less clear. This review analyzes and partially resolves the paradox and provides a structured overview of present knowledge. A systematic literature search yielded 67 empirical papers in 25 journals. Drawing on the results of a two‐step coding process, this study proposes 20 novel second‐level constructs expressing the types of MA, their antecedents and their consequences in young and small companies. The main results show that, in discussing MA, the literature refers mainly to business planning, accounting‐based management control activities and financial accounting. Most studies find MA to be helpful for young and small companies because it provides tools to overcome difficulties arising from company growth and reduces information asymmetry with external partners. Overall, however, the empirical literature on this topic is highly concentrated, offers theoretical construct definitions of poor quality, and lacks a clear statement of what MA really does in young and small companies. Therefore, future research and theory development are warranted.     

Decisions to Outsource Information Systems Functions: Testing a Strategy-Theoretic Discrepancy Model

In recent years, the decision to outsource information systems (IS) functions has become a viable strategic alternative in managing the increasingly complex IS functions. In this study, the IS outsourcing phenomenon is conceptualized as a strategic decision in the organization. Drawing on resource-based theories, resource dependence theories, and other theories of strategic management, a discrepancy model of this decision is developed. Relationships between a number of strategy-theoretic factors and the IS outsourcing decision are hypothesized. These factors include IS resource performance discrepancies manifested in the form of gaps in information quality, IS support quality, IS cost effectiveness and financial performance, as well as the strategic orientation of the firm. Results of the study indicate that, while cost consideration and the firm's financial performance are not associated with the IS outsourcing decision, difficulties in providing good information outputs and IS support services are associated with the decision. Overall, the findings suggest that the current trend toward outsourcing represents a continuing evolution of the IS function as it attempts to fulfill its traditional mission of providing high quality information resource to the firm. When the performance of the delivered resource begins to slip in the current environment of rising expectation and technological complexity, outsourcing may become a strategic response of necessity. The paper concludes with a discussion of the implications of the results for practicing managers and suggestions for future research.     

The Role of Interorganizational and Organizational Factors on the Decision Mode for Adoption of Interorganizational Systems*

The dramatic growth of interorganizational systems (IOS) has changed the way organizations conduct their business, and has resulted in significant tangible and intangible benefits being realized by participating firms. However, the implementation of these IOS requires the cooperation and commitment of all the participating members. These members may have complex economic and business relationships among themselves that can result in a number of social, political, and economic factors influencing the adoption and implementation of IOS. This study examines the role of interorganizational and organizational factors on the decision mode for adoption of IOS, in the specific context of electronic data interchange (EDI). Four interorganizational factors, based on the socio-political framework derived from research in marketing, and five organizational factors based on research in IS were used in the study. The data for the study were collected through a large scale field survey. Two respondents, the sales/purchase manager and the IS manager, from 201 firms responded to the survey. The results of discriminant analysis of the data reveal that two interorganizational variables, competitive pressure and exercised power, and two organizational variables, internal need and top management support, are important variables to differentiate firms with proactive decision mode from firms with reactive decision mode. The study also evaluates the differences between proactive and reactive firms on three implementation outcomes. Proactive firms are found to have greater extent of adaptation, more external connectivity with trading partners, and better integration of EDI information in their internal IS applications.     

高级管理人员变更、股权特征与盈余管理——来自中国上市公司的经验证据

本文以2003-2006年我国A股上市公司为研究样本,检验公司发生高级管理人员变更时的盈余管理行为。研究结果表明,发生高级管理层变更的公司,高级管理人员变更的当年存在较严重的调减利润的盈余管理行为;此外,对于发生了高级管理人员变更的公司,如果其控股股东是地方和中央政府部门所属国企或中央直属国企,则其调减利润的盈余管理行为可以得到一定程度的抑制;大股东的制衡度越大,公司盈余管理的幅度也将越小。研究结果还显示,当发生高级管理人员变更时,上述因素对公司调增利润的盈余管理行为基本没有影响。     

Construct Measurement in Information Systems Research: An Illustration in Strategic Systems

This study seeks to highlight construct measurement issues in information systems (IS) research. It describes the normative process of construct measurement and identifies the difficult problems involved in measurement and some ways in which these difficulties may be overcome. An illustrative construct-operationalization study in the area of strategic systems outlines how the normative guidelines may be applied to IS. Some specific recommendations for IS include developing a preliminary model of the construct even if there is little previous measurement research, devoting greater attention to predictive validity because a lack of theories in IS precludes the examination of nomological validity, verifying the assumptions underlying the computation of an overall index, and examining the measurement properties of the index.