The need for IS planning is clear. The initial focus of IS planning was on providing a means of control over a growing expense. Later concerns turned to the acquisition and integration of compatible information technologies. Recently, as IT gained competitive importance, IS planning took on a strategic significance. However, despite awareness of the importance of IS planning, the distance between interest and mastery in the area remains significant (Finnegan and Fahy 1993).
IS planning is a complex activity. More effort spent on the IS planning process results in several benefits for the organization as well as the IS management. IS planning helps ensure that the information needs of the organization are considered during the course of normal business planning (Martin et al. 1991, 443). The integration of the IS plan and the overall business plan allows the organization to ensure that the IS plan supports the business direction of the firm.
An orderly IS planning process also allows IS management to focus on key business results rather than just on completing projects. This shift in focus can often result in a better integration of existing and future IS applications. Even though the need for conducting unforeseen or corrective work will still arise, the IS management, however, will be better able to handle such occurrences if a framework of objectives is given.
IS planning also provides a sound base for IS project selection and prioritization, and facilitates effective IS resource allocation (OÊConnor 1993). Operating within a well-conceived framework of objectives and strategic initiatives leaves the firm in a better position to evaluate potential IS projects for their true impact on the organization. More importantly perhaps, the IS planning process helps reduce the risk that money will be spent on ill-fated IS projects that occur because of a lack of a cohesive set of IS plans and objectives.
Good IS planning also helps in the IS control process. Unless the IS management has a concrete idea of what is supposed to be going on, it will be in a poor position to evaluate progress and make appropriate adjustments. Strategic objectives, operating plans, and budgets provide the IS management with concrete guidelines by which to evaluate actual results in order to control IS effort.
User satisfaction has often been a concern of IS departments and their users.
Although most IS applications may perform adequately, some users may still report feelings of dissatisfaction. Often such concerns come from a lack of understanding about the design objectives of a particular IS application. Effective IS planning cannot be conducted without user input. Input in the IS planning stage can greatly increase the likelihood that this important resource i.e. information systems technology (IST) will actually do what users want, not just what the IS management
4.5
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thinks is wanted by the users! Thus, IS planning aids communication between users, IS staff and top management (OÊConnor 1993).
IS planning provides a basis for performance assessment (OÊConnor 1993). It is not, after all, possible to measure achievement unless there is something (a plan) to measure against it!
IS planning may also raise the awareness of IS potential throughout the organization, and also increase IS staff awareness of the business.
IS planning might also provide financial benefits to the organization and improve its performance (OÊConnor 1993). A research study has identified that companies with well-integrated IS strategic plans and business plans outperformed companies that had no such plans by a factor of 6 to 1 (Lederer and Mendelow 1986).
Predicting the future is a difficult task, and IS planning might not identify all IS needs. It will also require regular revision and re-evaluation, as stated in the earlier section. Like business planning, then, the most important benefit of IS planning is that it puts the organization in a better position to react to unforeseen events.
Finnegan and Fahy (1993) conducted a survey of the top 300 companies in Ireland to study the nature of IS planning undertaken by these firms. The survey results identified the following benefits of IS planning:
Table 4.3: Benefits of IS strategic planning (Ireland)
Benefit Percentage of Organizations
Currently Enjoying the Benefit Major one-time IS projects can be often justified 71.4%
A basis for IS budgeting is provided 70.5%
General management becomes informed and involved
concerning IS activities 61.0%
Scarce IS resources can be allocated wisely 55.2%
Business programmes are assured of needed IS help 52.4%
Strategy for selection of IS can be set 49.5%
Performance of IS activity can be measured fairly 39.0%
Emergency IS projects are often avoided 29.5%
It might be interesting to compare these results with EarlÊs study of 21 large UK-based organizations (Earl 1993) in which the respondents also identified the following benefits of IS strategic planning in the rank order as given in Table 4.4.
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Table 4.4: Benefits of IS Strategic Planning (UK) Rank
Order Benefits of IS Strategic Planning
No. of Respondents
(Out of 63) 1 Aligning IS with business needs 49
2 Top management support 27
3 Better priority setting 35
4 Competitive advantage applications 21
5 Top management involvement 19
6 User/ line management involvement 21
There has not been a published study of this nature in Hong Kong so far, though perhaps some research in this direction is underway at present. However, an exploratory study conducted by Rebecca Low et al. (1990) studied IS planning practices in nine organizations in Hong Kong and stated the following benefits of IS planning as identified by the respondents:
Table 4.5: Benefits of IS Strategic Planning (HK)
Benefit Percentage of Respondents
(Out of 9)
Provides a basis for budgeting 87.5%
Scarce IS resources are allocated wisely 75%
General management becomes informed and
involved in IT 75%
Supports business strategy 50%
Crash IS projects can be avoided 37.5%
A strategy for selection of IS can be set 25%
Performance of IS can be measured wisely 25%
It seems that some identified benefits are common to most of the planning studies but some are not. However, IS planning is not a stable process when the business environment changes constantly. According to Applegate et. al (1999) IS planners should consider a number of issues.
Ć Planning is a resource drain · management should be careful not to treat IS planning as a routine deployment of financial and human resources. As technologies change as well as the business environment, good IS planning could leave extra resources to other projects in the organization.
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Ć Corporate culture matters · tall management hierarchies often prefer formal and top-down planning processes. Corporate cultures may also affect commitment of the senior management.
Ć Strategic impact of IT activities · innovative applications of IT are of significant strategic importance to businesses. However, the benefits of the IS plan might not be realized unless it is implemented with the right kind of readiness.
Sometimes, both individual and corporate habits need to change.
Organizations should not, therefore, expect too much from IS planning in its initial phase; i.e. the first one or two years. Rather, they should consider this period as a learning experience and be content with only the intangible benefits.
IS planning provides many benefits depending on the effort spent on the IS planning process and past experience of IS planning. IS strategic planning has a learning effect. Initially, during the first one or two years, organizations may get only ÂsoftÊ benefits, which are hardly related to business strategy. However, after about four to five years experience in IS planning, organizations may start getting direct or ÂhardÊ benefits.