CRITICAL SUCCESS FACTORS OF INFORMATION SYSTEM PLANNING FOR SYSTEM DEVELOPMENT

1. CRITICAL SUCCESS FACTORS OF INFORMATION SYSTEM PLANNING FOR SYSTEM DEVELOPMENT Farahwahida Mohd1 (UNISEL) Raja Haslinda Raja Mohd Ali2 (UUM) Suhizaz Sudin3 (UNIMAP)

2. ABSTRACT • INTRODUCTION • Various roles of SISP • Advantages of ISP • SISP Theory • SISP Critical Success Factors • The Importance to Integrate Culture in the Critical Success Factors Models CONTENT

3. Information system planning has been one of the critical issues in an organization. Besides assisting the organization to achieve its objective, information system planning has been used by organization to identify its higher payback towards implementing it. • In achieving this, organizations should clearly understand the factors that critically importance in the system development for their organizations. • As a result from the above, we propose this paper to discuss the critical success factors that have been found in the literature to be significantly related to the system development in an organization. • These factors include skills, cooperation from other departments, financial investment evaluation, human resources, facilities, IT infrasturucture, IT organizational structure, top management support and management commitment. ABSTRACT

4. The paper has been organized as follows. First section will discuss on the various definition of information system planning by few scholars. Then, the theory of information system planning will be introduced. The third section will discuss on the benefits of IS planning. • Next, we will discuss the factors that have been found to be critically importance in the information system planning for system development. Lastly, we will conclude this paper by discussing the possibility of integrating the culture in the information system planning for system development as many organizations has embraced internationalization.

5. Strategic Information System Planning (SISP) is one of the important management agenda. It helps organization in various ways. • It assists the organization to identify the appropriate technology that should be acquired, it also helps the organization to use its technology competitively as well as help the organization to identify its higher payback when investing towards the technology. • Lederer and Sethi (1988) have defined SISP as a process where an organization determines a portfolio of computer-based applications to help achieve business objectives. • It is essential for organisations since the measurement of organisations’ success is based on the money invested in information processing (Remenyi, Money & Twite, 1991). INTRODUCTION

6. Realizing the importance of SISP, researchers have proposed several models for the successful implementation of SISP (e.g. King, 1978; Lederer & Sethi, 1988; Earl, 1993; Smits & Poel, 1996; Lederer & Salmela, 1996). • These studies also reveal several motivating and inhibiting factors that contribute to the successful implementation of SISP in business organisations, as well as benefits and problems facing ISP implementation (e.g. Lederer & Sethi, 1988; Doherty, Marples & Suhaimi, 1999; Hackney, 2002).

7. SISP has been defined as the process of identifying a portfolio of computer-based applications that will assist an organization in executing its business plans and realizing its business goals. (Lederer and Sethi, 1988). In many organizations, it includes the specification of databases and systems to support those applications. • Also, it might embrace the selection of applications, from an existing list of possibilities that would best fill the organisation’s current and future needs (Carlson, 1979; Kerner, 1979). • Other scholars have suggested that it might also entail the discovery of new applications with the potential to create an advantage over competitors (Parsons, 1983; Ives and Learmonth, 1984; McFarlan, 1984; Porter, 1985; Porter and Millar, 1985; Clemons, 1986; Boynton and Zmud, 1987). • We define the SISP as a process that helps the organization to achieve their business mission and objectives via the organization resources which include financial, time and human resources. Various roles of SISP

8. It can identify the most desirable information systems applications in which to invest. (Henderson and Sifonis, 1988). • It could help an organization use its information systems to carry out its existing business strategies (Hartog and Herbert, 1989). • It helps the organization to define new business strategies, technology policies, and architectures (Earl, 1993; Porter 1985). • It help the organizations to align its information systems strategy with its business strategy (King, 1988). • Various IS planning methodologies can help an organization discover opportunities where IS can support important business requirements. (Dologite, Fang, Chen, Mockler & Chao, 1998). Advantages of ISP

9. Theory of strategic planning has been developed by Lederer and Salmela in the year 1996. • In the year 1978, King has proposed the strategic planning of Management Information System (MIS) which include the organizational strategy set and MIS strategy set. • Fitzgerald (1993) criticized that the dependencies in the King’s model are not validated, and instruments to measure the constructs in the model are vaguely described. Based on the criticism, Smits and Poel (1996) proposed a more descriptive model to describe strategic ISP which includes environment, process, form and content and effects. SISP Theory

10. Since both models did not detailed on how implementation should take in action, Earl’s model (1993) can be used to explain further the necessary conditions for successful strategic ISP. • In 1996, Lederer and Salmela proposed a theory of strategic information system planning to stimulate research and assist practice of SISP. • The theory of SISP consists of seven constructs, which are • (1) the external environment, • (2) the internal environment, • (3) planning resources, • (4) the planning process, • (5) the information plan, • (6) the implementation of the information plan, • (7)the alignment of the information plan with the organization’s business plan.

11. Skills • The success of an organization depends on many factors and one of it is the human factors. In order to make sure that the organization can increased their competitiveness in regards to competitive environment, skills worker or employee is needed. • Papalexandris & Nikandrou (2000) in their study found out that there are four main categories of skills that is demand by the organizations which are technical skills, human skills and conceptual skills and one of the skills included in the technical area is project planning. SISP Critical Success Factors

12. Cooperation from other departments • For some organization, the information system planning is prepared for the department which the information system would like to be implemented. • Therefore, in order to make sure that the information system could benefit to the other users in that organization, it should get a full cooperation from other departments in that organization so that the particular departments could know the process of other departments. • Titthasiri (2000), in her study shows that representatives from all constituencies are important to prioritize the IT/IS objectives

13. Financial Investment evaluation • In order to success in information system planning, an investment towards the information system technology should be made same as the investment towards other assets such as building, machinery, equipment and others where it should be evaluated based on the priorities. • Lincoln and Shorrock (1990) found that many successful strategic IS projects had bypassed the normal justification process used in the organization.

14. Human Resource • Allocation of human resource in information system planning process should be made to make sure that it is not underestimated. • Underestimate of this resource could lead the organization to miss their target dates and budgets (Lederer & Gardiner, 1992). • Thus, the assertion is the better human resource allocation in preparing IS planning, the more likely to success in information system planning.

15. IT Infrastructure • In order to make sure that the implementation of the information system planning is a success, it is therefore much crucial to prepare all the infrastructures needed in implementing the plan. • Without the infrastructure, the plan will remain a plan. In this article, we assume that the better the IT organizational infrastructure of the organization, the most likely to success in information system planning.

16. Facilities • The facilities are also one of the important contents that should be considered in the SISP process. • According to Titthasiri (2000), in a process of IS planning, facilities strategy should be made available such as allocations of the locations, buildings, rooms, security and furniture. • Therefore, the other hypothesis is the better facilities of the organization to support the ISP, the more likely to success in information system planning.

17. IT Organizational Structure • IT organizational structure is also an important content in SISP process. According to Titthasiri (2000), organizational structure is important to answer a question on what IT structure to be organized, how to developed policies and procedures, how to organized the IT planning team, and how many should be included in a team and others. • With the above statement, we assert that the better the IT organizational structure of the organization, the more likely to success in information system planning.

18. External Environment • The external environment such as changes in supplier trends, customer preferences, emerging technology, government legislation and competitors’ actions may influence strategic information system planning by making it more difficult ( Lederer and Mendelow, 1990; Ragunathan and Ragunathan, 1991). • The hypotheses that can be derived from the above statement is the better analysis on the external environment the more likely to success in information system planning.

19. Top management support • Basis for SISP are the business goals, which fall within the scope of top management. Besides, SISP, is very expensive and has far-stretching consequences for the organization (strategic impact, all kinds of business functions are involved). • For successful SISP, it is necessary to have the support of the top management (Galliers, 1992). Fail to get support from top management will leads to fail of SISP. Therefore, our last hypothesis is the better the top management support, the more likely to success in information system planning.

20. Cooperation from other department Financial Investment Evaluation Human Resources IT Infrastructure SISP success Facilities Top management support IT Organizational structure External environment From the above discussion, we proposed the SISP critical success factors model as in figure 1 below. Figure 1: SISP Critical Success Factors Model

21. Another issue that could be raised in this modern era that is related to the SISP is the integration of culture. • As has been known widely that organizations today have embraced internationalization, therefore it is a need to understand the culture which is not similar to the parent organization culture to ensure that the organizations still could benefit from the SISP. • The importance to integrate culture in the critical success factors model could be seen from different perspectives. There are still few studies that have been done regarding the impact of culture in the SISP even though there are many researchers studied on the comparison of IS planning between countries. • For example, Groznik and Kovacic (2000) conducted a research on exploratory study comparing IS planning implementation between Singapore and Slovenia.. Later, Mohdzain and Ward (2007) studied on the subsidiaries’ views towards the information systems strategic planning of the multinational organizations. The Importance to Integrate Culture in the Critical Success Factors Models

22. Realizing this, it is worth for organizations to consider a cross-cultural issues since some of these organizations have started operating at other countries. • According to Hunter and Beck (2000), a process that has been developed at one location might not survive at other location. So, this globalization issues suggests that more cross-cultural research should be conducted since it does not only benefit to the researchers but also valuable to the practical implications.

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