Michael J Earl (1989) realized the complexity of the problem the same way that contemporary IS practitioners did, and he proposed a very comprehensive methodology that provides a basis for analysing all IS planning. He highlights three issues:
1. clarification of the business needs and strategy in IS terms · what is the business strategy and what is the IS strategy;
2. evaluation of current IS provision and use · how to integrate legacy systems;
and
3. innovation of new strategic opportunities afforded by IT · what are the operational goals.
EarlÂs method is known as the Âmultiple methodologyÊ or Âthree-pronged methodologyÊ as he tackles his three issues from different angles · top-down, bottom-up, and inside-out respectively.
Figure 5.5: EarlÊs multiple methodology
Figure 5.5 presents an overview of EarlÊs methodology. In this section, IÊll explain each of the three legs in the figure.
5.4
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5.4.1 Top-Down Clarification
This is the process used to find out the corporate objectives and business strategies that affect the formulation of IS strategy. However, understanding business strategies is difficult because most organizations do not have their strategies or objectives written down, or even when you find some written statements, the business strategies are often ill-defined or are unrelated to IS development plans.
This top-down process should involve the top management or a delegation of senior executives. Commonly called a Âsteering committeeÊ, this group includes management from each department of the organization. Discussions and planning meetings should be conducted where tools like CSFs or the Âscenario approachÊ are applied to identify where IS can help in the business strategy.
Earl suggests a four-step process:
1. identification of corporate objectives · objectives of all business units should be solicited, agreed upon, and clearly stated;
2. determination of critical success factors · CSFs that are needed to achieve the agreed business objectives are suggested and determined after resolving conflicts among different business units;
3. decomposition to critical business processes · the CSFs that were identified are transformed into business processes that can be improved by ISs;
4. identification of IS and IT · details of the ISs to support those business processes and the underlying IT infrastructure are analysed and a development plan is decided.
5.4.2 Bottom-Up Evaluation
Earl argues that the bottom-up process is essential for the following reasons:
1. To find out the quality and capacity of the IS applications (legacy systems) currently being used in the organization.
2. To demonstrate to top management (the strength and the weakness of) the current IS status of the organization.
3. To identify components of the current ISs that can be improved for better strategic advantage by simple add-ons rather than a total renovation.
The evaluation process could lead to a systems audit grid like the one in Figure 5.6 below.
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Maintain and enhance Businessvalue Impactonbusiness Easytouse Frequencyofuse
LOW
HIGH
Technical quality Reliability maintainability
cost-effciency
LOW HIGH
Renew
Divest Re-assess
Figure 5.6: Systems audit grid
To classify ISs by the systems audit grid, you need to evaluate the technical quality and the business value of individual ISs. In each of the axes, you might ask three questions to determine the position of the IS:
• Horizontal axis · How is the system in terms of its reliability, maintainability, and cost-efficiency?
• Vertical axis ·
(a) how does the system impact on business; and (b) how easy and how often is it used?
The grid also suggests that the ISs in it be divested, reassessed, renewed or enhanced according to where they are positioned. Often in cases of developing an e-commerce platform, many components of the current IS applications need to migrate to a Web-based system without making too many alternations. Therefore, the integration of legacy systems (plus legacy data) needs to be handled with care.
For example, special procedures must be followed to guarantee that the integrity of the data would not be affected because of the migration.
5.4.3 Inside-Out Innovation
Earl suggests that people in committees, like in think tanks and brainstorming groups, are more likely to generate creative ideas by which the organization could discover market niches or innovative use of information technology. These people might not be IT professionals. Their new ideas could seek support from leading IT vendors and would successfully be implemented if;
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1. A project sponsor exists · they need to find someone who can support and provide the resources necessary to proceed to the new ideas.
2. A chance to test the idea · the idea can be experimented with without causing too much public alarm.
3. Tight management control · it is needed to ensure satisfactory installation, effective implementation and good integration with business practices.
4. IT capability gap bridged · the project team needs to deal with the knowledge or capability gap.
The three legs of EarlÊs multiple methodology represent the three angles from which IS strategic planning can be considered on the inside of an organization. Earl also suggests that studying the IS strategy from an external point of view (e.g.
competitors, customers, consumers, etc.) is essential. The SWOT method that youÊve learned in chapter 2 is a commonly used tool to uncover the IS stratgic poesition from both internal and external perspectives.