Introduction to Information Systems in Business

5. Strategic Information Systems Planning

In the past information systems were developed simply to improve the efficiency of specific business functions. More recently information systems have been viewed as tools for obtaining competitive advantage. Avison and Fitzgerald (1995) have discussed the following ways in which information systems can help to achieve competitive advantage:

"Redefine the boundaries of particular industries,
Develop new products or services, 
change the relationships between suppliers and customers, 
Establish barriers to deter new entrants to marketplaces." 

Porter (1980) identifies five competitive forces that any organisation needs to consider :-

1. Threat of new entrants.
2. Bargaining power of customers.
3. Threat of substitute products or services.
4. Bargaining power of suppliers.
5. Rivalry among existing firms.

Earl (1989) extends Porter’s work by illustrating the strategic role that Information Technology (IT) can play in addressing these forces. The result of Earl’s work is a ‘multiple’ methodology. The methodology adopts a three pronged approach to strategic information systems development. The first prong involves the top-down analysis of business objectives using Critical Success Factors (CSF), SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis and Porter’s five forces. The second prong involves bottom-up analysis of existing systems and the third prong emphasises the creative use of IT.

Bullen and Rockart (1984) have produced a strategic information systems methodology based on CSF analysis. The methodology involves the analysis of business goals and objectives and the factors critical to achieving those objectives. The next stage is the identification of the information systems required to support these CSFs.

The discussion so far has emphasised a holistic approach, looking at high-level business objectives rather than detailed functional requirements. These approaches emphasise the importance of shared corporate data, an issue which will be discusses in detail in the next section.

6. Corporate Data Management

Organisations like British Gas, British Telecom and the NHS have come to realise that on a replacement cost basis their computerised databases are amongst their most valuable assets (consider how much it would cost for British Gas to recapture its customer database) and that as such they need to be professionally managed.

These companies have realised how important data accuracy and consistency is and have developed company systems and data architectures. These are very high level models that describe the main processes the organisation carries out and the main entities and relationships required to support these business processes. The development of application systems is constrained by the need to be consistent with the overarching, high level, company wide view of its data.

7. Business Process Re-Engineering / Process Innovation

The idea of process innovation (Davenport and Short, 1990, Davenport, 1993) is closely linked with the techniques of Business Process Re-engineering. The argument is that computerising existing systems is only likely to yield marginal gains. In many cases the only means of achieving radical improvements is to radically re-engineer the business process itself and use IT to enable to re-engineered process. Process Innovation illustrates the main argument of the paper, i.e. that an effective methodology for ISE should adopt a rigorous, structured approach to data design and a dynamic approach to process design.

8. The Technical Environment

A company which has made a substantial investment in ICL hardware and the INGRES Relational Database Management System (RDBMS) does not decide to convert to IBM and DB2 lightly, so realistically the development is constrained by the existing technical environment.

1. Paradigms, Models & Methodologies:

1. Structured Methodologies

The industry has realised that a standard approach using proven analysis and design techniques should improve the ‘quality’ of systems. The standard methodology for the development of business information systems in the UK is Structured Systems Analysis and Design Methodology (SSADM). However there are many other methodologies in use around the world such as Yourdon, Gane & Sarson, Hood and Information Engineering and DSDM (Dynamic Systems Development Methodology). A company that has adopted SSADM has chosen to constrain its systems development activities in a particular way.

 SSADM is an example of the waterfall model of information systems engineering. SSADM covers the Feasibility, Analysis and Design stages of the waterfall project lifecycle

• Feasibility: Is the project likely to be cost effective?
• Analysis: What is required by the business?
• Design: How are the requirement going to be implemented?
• Software Development: Building and testing software.
• Implementation: Delivery and installation of new hardware/software systems.
• Maintenance: The cycle continues ad infinitum at a lower level.

The whole process is circular and never ending because implemented systems become part of the current set of IT systems, which feed into the on-going SISP exercise.

 There are other non-monolithic models of information systems engineering which are discussed at length in a paper by Graham entitled ‘Incremental Development: review of non-monolithic life cycle development models’ (Graham, 1989).

2. Object Orientation

In this approach information systems can be viewed as networks of objects, communicating with each other via messages. An object consists of data attributes and a set of methods which enable objects to be created, updated queried and deleted. One of the objectives of object orientation is software re-use. The idea is that all the processing complexities are encapsulated within the object. In this scenario information systems can be engineered from existing objects.

3. Rapid Application Development

RAD (Rapid Application Development, Martin, 1991) approaches began to be adopted in the late 80’s and are based on a number of fundamental premises, the most important being the acceptance that business processing requirements will inevitably change during the development cycle of a system. In order to work with this fact of systems development life the RAD approach mandates:

• the use of 4th Generation Tools (to enable quick delivery);
• an iterative model of systems development which allows backtracking in the light of changing requirements;
• the use of evolutionary prototypes (SSADM adopts the adage that a picture is worth a thousand words, RAD goes a step further and advocates that a working model is worth a thousand pictures);
• a very high level of user involvement in the development process to aid in communications and to encourage feelings of commitment and ownership;
• the empowerment of highly skilled, multi-disciplinary teams consisting of users, analysts and technical specialists.

There will be further notes on this subject.

2. Socio-Behavioural Development

• ETHICS: (Effective Technical and Human Implementation of Computer-Based Systems, Mumford, 1995). ETHICS is based on an explicitly stated philosophy. The philosophy views ISE as an organisational issue concerned with the process of change. The methodology adopts a socio-technical approach taken from the field of Sociology
• Participatory Development: (PD, Floyd et al 1989), PD is a philosophy for the analysis, design and implementation of computer systems, rather than a specific methodology. PD has been called the Scandinavian approach. The approach stems from the underlying nature of Scandinavian culture.
  "An essential feature in Scandinavia is, above all, what appears to outsiders as a far reaching and widely supported fundamental concern with the building and development of a society in which each individual may live in dignity and in conditions conducive to personal development.....an egalitarian society."
  The natural result of the application of this philosophy of life to the development of computer systems is that humanisation and democratisation become overriding design goals.
• SSM: (Soft Systems Methodology, Checkland, 1981, Checkland and Scholes, 1990). SSM involves the use of rich pictures and root definitions to assess the problem situation in all its political glory, showing the different viewpoints and the conflicts these cause.
• ISAC: (Information Systems Work and Analysis of Change, Lundeberg et al, 1982). ISAC views an information system as organised co-operation between people in order to process and convey information to each other.
• MULTIVIEW: (Avison and Wood-Harper, 1990). Multiview is a hybrid methodology, which is based on the work of Checkland (SSM) and Mumford (ETHICS) but has integrated techniques from structured methodologies such as STRADIS.

3. Supporting Tools

Standard tools are likely to be used, e.g. Case tools, data dictionaries, analyst workbenches and 4th Generation Environments (4GE). These are often linked with methodologies, e.g. the PC/Select Case product has add-on toolkits for SSADM and Yourdon. Again organisations using these tools are choosing to constrain their systems development process.

9. Quality Assurance

Quality may seem to the current buzzword, however many organisations take quality very seriously and have instigated quality improvement programs, which involve the use of informal/semi-formal walkthroughs and formal inspections and reviews. These quality control mechanisms can be applied at every phase of the systems development lifecycle including Strategic Information Systems Planning.

4. Project Management

Everyone has heard of spectacular overruns in terms of time and budgets for computer projects. In an attempt to overcome these problems many organisations have adopted formal, structured (or semi-structured) project management techniques, examples are ‘PRINCE’ (Bentley, Introducing PRINCE - the structured project management method). These techniques are frequently integrated with the methodology in use and have their own supporting tools, e.g. PMW (Project Managers Workbench from the Hoskyns company) and ‘Microsoft Project’.

5. Resource Constraints

Last but by no means least, the availability of suitable staff, money and time provide the most obvious constraints on the systems development process.

10. End-User Systems Development

In this approach end-users develop their own systems using a variety of user-friendly application development packages such as PC databases and spreadsheets. There will be further notes on this subject.

11. References

1. Avison & Fitzgerald 1995, Information Systems Development: Methodologies, Techniques and Tools 2nd ed. McGraw Hill, Maidenhead.
2. Avison and Wood-Harper, 1990 MultiView - an exploration in information systems development, McGraw Hill, Maidenhead. (In Avison & Fitzgerald 1995).
3. Bullen and Rockart 1984, A Primer on Critical Success Factors, CISR Working Paper 69, Sloan Management School, MIT, Boston, Mass. (In Avison & Fitzgerald 1995).Porter 1980, Competitive Strategy, Free Press, New York. (In Avison and Fitzgerald 1995)
4. Checkland 1981, Systems Thinking Systems Practice, Wiley, Chichester. (In Avison & Fitzgerald 1995).
5. Checkland and Scholes 1990, Soft Systems Methodology in Action Wiley, Chichester. (In Avison & Fitzgerald 1995).
6. Davenport 1993, Process Innovation: Re-engineering work through IT, Harvard Business School, Boston. (In Avison & Fitzgerald 1995).
7. Davenport and Short 1990, The new industrial engineering: information technology and business process re-design, Sloan Management Review, 31,4. (In Avison & Fitzgerald 1995).
8. Earl 1989, Management Strategies for IT Prentice Hall, Englewood Cliffs, New Jersey (In Avison & Fitzgerald 1995).
9. Floyd et al 1989, Scandinavia
10. Graham 1989, Incremental Development: Review of nonmonolithic life-cycle development models, Information and Software Technology Vol 31, no 1 January/February 1989
11. Lundeberg et al, 1982 Information Systems Development - A Systematic Approach Prentice Hall, Englewood Cliffs, New Jersey. (In Avison & Fitzgerald 1995).
12. Martin, 1991, Rapid Application Development, Prentice Hall Englewood Cliffs, New Jersey. (In Avison & Fitzgerald 1995).
13. Mumford 1995, Effective Requirements Analysis and Systems Design: the ETHICS method, MNacmillan, Basingstoke. (In Avison & Fitzgerald 1995).

With grateful acknowledgement to Tim Hutchings, Department of Computer Studies, University of Glamorgan.