Thus, in this paper, SISP can be seen as the analysis of an organisation’s information and processes using business information models together with the evaluation of risk, current needs and requirements. The result is ‘an action plan showing the desired course of events necessary to align information use and needs with strategic direction of the company’ (Battaglia 1991). He also emphasizes the need to note that SISP is a management function and not a technical one. As the process of identifying a portfolio of information systems and the critical of information management, SISP will assist an organization in executing its business plans and realizing its business goals by the supporting of strategic resources of the organisation.
Resource-based Approach
Resource-based approach (RBA) focuses on the internal strengths and processes of the company rather than in the product/market situation of the company, and it identifies key resources that may generate a competitive advantage that is sustainable in the longer term. Bogner & Thomas(1994) also recognise that the internal facts of a firm… the skills and understanding accumulated over time (core competences), can lead to competitive advantage in the external market based on the bundle of good, service and price. These argue that competitive advantage arises from the ability to accumulate resources and capabilities that are rare, valuable, non-substitutable and difficult to imitate.
Organisations usually hold a range of resources of different value. Proponents of the resource-based view often define resources broadly as the assets, knowledge, capabilities, and organizational processes that enable the firm to conceive and implement strategic decisions.
As Ferguson et al point that, in the literature, the terms ‘resource’, ‘skill’, ‘competence/competency’, ‘capability’ and ‘assets’ are frequently used in different ways, often without precise definition and sometimes interchangeable. According to their classification (Figure 1), resources cover all the elements including tangible and intangible.
In most organisations, by assessing above available resources, they will identify an extensive array of assets that enjoy markedly different degrees of strategic relevance. Among which, those can make it different and compete with others are called ‘core’ or ‘strategic’.
The concept of ‘core competence’, popularised by Prahalad and Hamel, is based on a series of tests that identify organizational resources offering the greatest strategic value. They define core competences as:
…the collective learning in the organization, especially how to co-ordinate diverse production skills, and integrate multiple streams of technologies…Core competence is communication, involvement, and a deep commitment to work across the organization. (1990: 82)
In other words, the organisation must be highly effective in deploying and augmenting its members’ skills. Moreover, core competence can potentially be found in a whole range of aspects of an organisation.
Prahalad and Hamel also argue that to be considered a core competence, a stock of assets should 1) offer real benefits to customers, 2) be difficult for competitors to imitate, and 3) provide access to a variety of markets. Those bundles of assets or resources that pass these three tests are strategic, or most relevant to the future product and market decisions of the firm. (1990: 83-84)
Within the RBA it is suggested that companies should develop unique resources in order to gain a lasting competitive advantage. The core competence concept can be fitted into the RBA framework using the definitions above.
But, more and more discussions have shifted the focus from competences to organizational capabilities. Competences, as Prahalad and Hamel discussed, have a technology or knowledge-based component. In particular, competences often result from a blending of technology and production skills. For example, Canon has developed expertise in optics, microelectronic, and precision mechanics that have been leveraged into a wide array of product/market opportunities.
Capabilities, on the other hand, are rooted more in processes and business routines. A distinctive capability is a broadly-based, deep-seated source of advantage. In practice, John Kay, by his work ‘Foundations of Corporate Success’, may give a good illustration. He defines it as ‘…most often derived from the unique character of a firm’s relationship with its suppliers customers or employees’ (1993: 4). Distinctive capabilities are complex phenomena that involve the interactions of individuals and structures and, therefore, are difficult to imitate.
However, the difference of core competences and distinctive capabilities will not distract their significance that represents strategically relevant resources; they are both the ‘strategic resources’. Further, a term, ‘architecture’, introduced by Kay, is used to combine them. It is ‘a system of relationship within the firm or between the firm and its supplier and customers, or both’ (1993: 14). To create a distinctive architecture requires a number of core competences relating to task such as the selection of the most suitable suppliers, the fostering of relationships outside the organisations, the creation of an appropriate of culture, and an ability to response to change.
Strategic Resources and IM
The strategic value of an organisation’s resources can be conceived only through the activities that they contribute to support or realize like the information management and SISP. By those strategic resources, as mentioned above, an organisation may deploy in the process of converting inputs into outputs strategically, which can be reflected in the every aspect of SISP and Information Management as they are simply seen as Input-Process-Output functions (Figure 2).
The information management is aimed at ‘to add value by exploiting information as a core business resource’ (Ward and Griffiths 1996, 363) and therefore, it should to be based on core competences of an organisation. Analogously, IM needs to determine how they support, complement, enhance, or, as increasingly the case, create or potentially transform — ‘re-engineer’—the organisation’s core competences.
IM’s core competences, once developed, will probably put an enhanced focus on the way in which core competences of the organisation can be re-engineered, which in turn will refine the understanding of IM’s role.
SISP will create a central planning process to ensure that IS/IT occupies the place of maximum leverage with respect to the core competences of an organisation including areas identified, and a process put in place for continuous improvement of core competences for IM towards achieving goals related to quality.
Difficulties and Advices:
When core competences or distinctive capabilities introduce into SISP, it is difficult for managers to sift through the myriad of resources controlled by the firm and identify those that promise a sustainable competitive advantage, the strategic core of their organisation. Elements of the strategic core are few in number and complex to distinguish, but that is, surely, that makes them so valuable.
Thus, the effective SISP process should involve highly core competences and capabilities from various parts and different levels of the organisation. Key people should also stay on the SISP study from its start to finish (Hoffer, Michaele and Carroll, 1989).
Second, however, senior and middle level managers do not consider SISP so critical that they would use a lot of time and resources in it. Inadequate participation is one of the major problems in SISP (Lederer and Sethi, 1988; Mentzas, 1997). SISP project leaders do, however, have some control over the planning resources. They should ensure that senior managers perceive the issues in the planning agenda as important for the strategic goals of the organization (Goodhue et al., 1992). The process should not be so complex or technical that management is deterred from participating. Planning should focus on short-term opportunities and problems, so that the analyses and discussions have direct implications for actions to be taken in the near future (Boynton and Zmud, 1987). To encourage a continuous, if intermittent, planning process, an informal network of planning needs to be established and nurtured (ibid.). IS planning should build commitment and support for the planning process (ibid.).
Perhaps most importantly, however, the planning goals should be kept reasonable with respect to the time and resources available for planning (King, 1988). Following the contingency and resource prescriptions does not ensure that the SISP process fulfils its goals.
At last, SISP as a process using core competence and distinctive capabilities to realize competitive advantage, it will find that insisting on or having an agreement on those strategic resources is more difficult. In order to employ strategic resources successfully in information management, the organisation would be better form consensus regarding those resources. Moreover, there is a danger of defining too many supposed strategic resources and in too vague a manner in SISP
Conclusion
An organisation’s success is more than just a matter of a good choice of products and markets in which to compete; instead, success many be attributable to its unique resources. The resources of a firm will provide the basis for its survival and success through time as external conditions in the environment change. Those strategic resources are critical to strategic planning and information management.
As Ferguson et al (2000) points that possession of strategic resource is a necessary though not a sufficient condition of attaining competitive advantage. Additional, they say that ‘What is required is that they are exploited effectively.’ Here it also implies the importance of SISP. In practical, carrying it out is a critical challenge for many information systems and business executives.
On one hand, by successfully adapting strategic resources, strategic information systems planning can contribute to their organization. For example, it can identify the most desirable information systems applications in which to invest (Henderson and Sifonis, 1988). SISP can help an organization use its information systems to carry out its existing business strategies, help it define new business strategies, technology policies, and architectures (Earl, 1993; Porter, 1985). Finally SISP can help it align its information systems strategy with its business strategy (King, 1988).
On the other hand, the failure can cause lost opportunities, duplicated efforts, incompatible systems, and wasted resources (Raghunathan and King, 1988).
Therefore, when the Resource-based approach is introduced to IM for attaining a lasting competitive advantage of the organisation, it will be helpful to select a strategy that exploits core resources and competencies and ensure that resources are fully employed and exploited. Moreover, this should involve investing in resources continuously,
upgrading resources, creating or acquiring new resources, finding alternatives resources and develop unique resources in some form or other.
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