teokingim1996assessingimpact

8/4/2019 TeoKingIM1996AssessingImpact

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E L S E V I E R Information & Management 30 (1996) 309-321

R e s e a r c hA ssessin g the im pact of integrating business p lanning and IS planninga *S .H . T e o ' , W i l l i a m R . K i n g bhompson

aDepartmen t of Decision S ciences, Faculty of Business Adm inistration, National University of Singapore, 10 Kent Ridge C rescent,Singapore 0511, SingaporebKatz Graduate School of Business, University of Pittsburgh, Pittsburgh, PA 15260, USA

A b s t r a c t

One o f the key e l emen t s o f s t ra t eg ic p lann ing fo r in fo rma t ion s ys tems ( IS) i s t he in t eg ra t ion o f IS p lann ing ( ISP) andbus ine s s p lann ing (B P) . A l though th i s i s s ue ha s rece ived s ign i f i c an t a t t en t ion in recen t yea rs , empi r i c a l r e s ea rch focus ings pec i f i c a l ly on i t i s s t i l l r e l a t ive ly s pa rs e . He re , B P- ISP in teg ra t ion i s cons ide red in fou r ways (admin i s t ra t ive , s equen t i a l ,r e c ip roca l , and fu l l i n t eg ra t ion ) , r e f l e c t ing va r ious deg ree s o f B P - IS P in teg ra t ion . The re l a t ions h ips be tw een the s e ando r g a n i z a ti o n a l i m p a c t ( m e a s u r e d i n t e r m s o f t h e e x t e n t o f I S P p r o b l e m s a n d t h e e x t e n t o f I S c o n t r i b u t io n s t o o r g a n i z a ti o n a lp e r f o r m a n c e ) a r e i n v e st i g a te d t h r o u g h t h e a n a l y si s o f d a t a g a t h e r e d i n a " m a t c h e d p a i r " f i el d s u r v e y o f b u s in e s s p l a n n e rs a n dIS execu t ive s . The re s u l t s empi r i c a l ly va l ida te the impor tance o f B P- ISP in teg ra t ion , s ince i t was found to have a s ign i f i c an tpos i t ive re l a t ions h ip w i th IS con t r ibu t ions to o rgan iza t ion pe r fo rmance and a s ign i f i c an t nega t ive re l a t ions h ip to the ex ten t o fI S P p r o b l e m s .Keywords: A l i g n m e n t ; B u s i n e ss p l a n n i n g ; I n f o r m a t i o n s y s t e m s p l a n n i n g ; I n t e g r a t i o n ; I S p l a n n i n g p r o b l e m s ;P e r f o rm a n c e i m p a c t

1 . I n t r o d u c t i o n

S t r a t e g i c p l a n n i n g f o r i n f o r m a t i o n s y s t e m s ( I S )h a s b e e n c o n s i s t e n t l y r a n k e d a m o n g t h e to p i ss u e sf a c i n g i n f o r m a t i o n s y s t e m e x e c u t i v e s [ 3 0 ] . G e n e r a l l y ,I S r e s e a r c h e r s b e l i e v e t h a t f o r s t r a t e g i c I S p l a n n i n gt o b e e f f e c t i v e , i t m u s t i n v o l v e t h e i n t e g r a t i o nb e t w e e n I S p l a n n i n g ( I S P ) a n d b u s i n e s s p l a n n i n g( B P ) , w h i c h w i l l h e r e b e r e f e r r e d t o a s " B P - I S Pi n t e g r a t i o n " .

B P - I S P i n t eg r a t io n c a n b e d e f i n e d a s t h e a l ig n m e n to f I S s tr a t e g i es w i t h b u s i n e s s g o a l s a n d b u s i n e s ss t r a t e g i e s g a i n e d t h r o u g h c o o r d i n a t i o n b e t w e e n t h e* Corresponding author. E-mail: [email protected]/96/$15.00 @~ 1996 Elsevier Science B.V. All rights reservedP II S0378-7206(96)01076-2

b u s i n e s s a n d I S p l a n n i n g f u n c t i o n s a n d a c t iv i t ie s . I fI S P a c t i v i t i e s a r e n o t c o o r d i n a t e d w i t h B P a c t i v i t i e s ,i t i s li k e l y t o b e v e r y d i f f i c u l t f o r I S t o s u p p o r tb u s i n e s s s t r a t e g i e s a n d t o c o n t r i b u t e t o t h e a c h i e v e -m e n t o f b u s in e s s v a l u e . I n a d d i ti o n , i t i s o n l y t h r o u g hs u c h e f f o r t s t h a t t e c h n i c a l i s s u e s c a n b e e f f e c t i v e l yi n t e g r a t e d w i t h b u s i n e s s i s s u e s [ 1 ] .

A l t h o u g h t h e c o n c e p t o f B P - I S P i n t eg r a t io nh a s r e c e i v e d s i g n i f i c a n t a t t e n t i o n i n r e c e n t y e a r s ,i t i s p r i m a r i l y c o n c e p t u a l i n n a tu r e . E m p i r i c a lr e s e a r c h f o c u s i n g o n B P - I S P i n t e g r a t i o n i s r e l a t i v e l ys p a r s e ; m o s t h a s f o c u s e d o n i d e n t i f y i n g I S P i s s u e s( e . g . , p r o b l e m s , b e n e f i t s , a n d m a n a g e m e n t ) , r a t h e rt h a n o n a s s e s s in g t h e l e v e l a n d i m p a c t o f B P - I S Pi n t e g r a t i o n .


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310 T.S.H. Teo, W .R. King/Information & Mana gement 30 (1996) 309-3211 .1 . B P - IS P i n t eg r a t io n

King [16] was am ong the f i r s t IS research ers tor e c o g n i z e a n d e m p h a s i z e t h e i m p o r t a n c e o f B P - I S Pin teg r a t io n . He em p h as i zed th a t t h e MI S s t r a t eg y se t( sy s t em o b jec t iv es , sy s t em co n s t r a in t s , an d sy s t emd es ig n s t r a t eg ie s ) sh o u ld b e d i r ec t ly d e r iv ed f r o m th eorgan iza t ional s t ra tegy se t (business miss ion , ob jec-t iv e s , s t r a t eg y an d o th e r s t r a t eg ic o r g an iza t io n a lattr ibutes) .

T h i s c o n c e p t u a l i z a t i o n o f o n e - w a y s e q u e n t i a lin t eg r a t io n ( f r o m B P to I SP) h as b een r e f in ed b yK i n g a n d Z m u d [ 2 0 ] t o a t w o - w a y r e c i p r o c a lin t eg r a t io n b e tween B P an d I SP . Th i s ch an g e wasb r o u g h t ab o u t b y th e r ea l i za t io n th a t I SP can b e u sednot on ly to suppor t , bu t a lso to in f luence , businesss t ra t e gi e s. T h i s c o n c e p t o f t w o - w a y r e c i p r o c a lin t eg r a tio n h as f o r m e d th e b as i s f o r su b seq u en t wo r kin th is a rea .1 .1 .1 . B P - IS P Ta xo n o m i es

Sy n n o t t [ 3 7 ] co n cep tu a l i zed I SP in t e r m s o f t h ee x t e n t o f B P - I S P i n t eg r a ti o n a s:(1 ) No p lann ing :(2) Stand-a loneplanning :( 3 ) R eac t iv ep lanning :( 4 ) L in k edplanning :(5) In tegra tedp lan n in g :

No f o r m a l B P o r I SP .Pr e sen ce o f e i th e r b u s in ess p l anor IS p lan , bu t no t bo th .IS funct ion reac ts to businessp lan s an d h as n o in p u t i n t h eB P p r o cess .B P i s " in t e r f aced " wi th I SP .S y s t e m r e s o u r c e s a r e m a t c h e dagainst business needs.B P i s i n d i st i n g u i sh ab le f r o m I SP .T h e y o c c u r s i m u l t a n e ou s l y a n din terac t ive ly .

A n o tewo r th y f ea tu r e o f t h i s t ax o n o m y i s t h a t i nth e f ir s t an d seco n d f o r m s o f p l an n in g , B P- I SPin tegra t ion is v i r tua l ly absen t . Other fea tures o fSy n n o t t ' s co n cep tu a l i za t io n b ea r so m e s im i l a r i t i e sto ea r l i e r co n cep tu a l i za t io n s o f B P- I SP in t eg r a t io nb y o th e r r e sea r ch e r s .

I n a n o t h e r t a x o n o m y o f t h e l e v e l s o f B P - I S P i n te -g r a t io n , Jan g [ 14 ] p r o p o se d th a t t h e r e a r e f o u r f o r m so f I S P b a s e d o n t h e e x t e n t o f B P - I S P i n te g r at io n :1 . Pre-p lann ing , wh en th e r e i s n o l i n k b e tween B P

and ISP.

2 . S ep a r a t e p l a n n i n g , wh en th e r e i s a weak in t eg r a -t i o n b e t w e e n B P a n d I S P . I S P i s t h e r e f o r ep r im ar i ly n o n - s t r a t eg ic ( s im i l a r t o s t an d a lo n eplanning) .

3 . L i n k ed p l a n n i n g , w h e n I S P i s g u i d e d b y B P a n dh as n o o p p o r tu n i ty to in f lu en ce B P ( s im i l a r t o o n e -way seq u en t i a l i n t eg ra t io n ) .4 . I n t eg r a t ed p l a n n i n g , wh en th e r e i s a two - wayr ec ip r o ca l r e l a t io n sh ip b e tween B P an d I SP , i . e . ,I SP i s n o t o n ly g u id ed b y B P , b u t i t c an a l soinf luence business s t ra teg ies .

Ye t an o th e r co n cep tu a l i za t io n o f i n t eg r a t ed p l an -n in g was o f f e r ed b y G o ld sm i th [ 7 ] wh o i l l u s t ra t edh o w B P - I S P i n t e g r a t i o n w a s c a r r i e d o u t a t S i m o nEn g in ee r in g ( En g lan d ) . B o th th e v a lu e ch a in an dco m p e t i t i v e f o r ces f r am ew o r k [ 2 7 ] wer e in co r p o r a t edin to th e I n f o r m a t io n En g in ee r in g m e th o d o lo g y [ 2 6 ]f o r I SP . Go ld sm i th em p h as i zed th a t r a th e r t h ansep a r a t in g I SP f r o m B P ( an d a l ig n in g th em th r o u g hl in k ag es ) , I SP sh o u ld b e in tegra ted wi th in BP. Hef u r th e r a r g u ed th a t i n o r d e r f o r co m p e t i t i v e ad v an tag eto b e secu r ed f r o m I T ap p l i ca t io n s , i n f o r m a t io ns t r a t eg ie s n eed to b e d ev e lo p ed in th e s a m e p r o c e s sand a t the s a m e t i m e as business s t ra teg ies .

1 .2 . Th e Im p a c t s o f B P - IS P In t eg r a t i o n

Th e b en e f i t s o f i n c r eas in g th e ex ten t o f B P- I SPin teg r a t io n h as b een em p h as i zed in b o th p r e sc r ip t iv e[36] and empir ica l s tud ies [34 , 39] . These s tud iessu g g es t t h a t a g r ea t e r ex ten t o f B P- I SP in t eg r a t io nh e l p s t o e n s u r e t h a t t h e I S f u n c t i o n s u p p o r t so r g an iza t io n a l g o a l s an d ac t iv i t i e s a t ev e r y l ev e l b yid en t i f y in g c ri t i c a l ap p l ica t io n s f o r d ev e lo p m en t an den su r in g th a t ad eq u a te r e so u r ces a r e a l lo ca t ed toc r i t ic a l ap p l i ca tio n s . B P- I SP in t eg r a t io n a lso h e lp s toen su r e th a t t h e I S f u n c t io n b eco m es an in t eg r a l p a r to f t h e o r g an iza t io n , an d i s n o t m er e ly ap p en d ed to i t ,b y f ac i l i t a t i n g in f o r m a t io n sh a r in g , an d f eed b ackb e t w e e n t o p m a n a g e m e n t , a n d I S m a n a g e m e n t d u r in gs t r a t eg y f o r m u la t io n an d im p lem en ta t io n [ 2 ] .

A l t h o u g h m a n y r e s e a r c h e r s h a v e e m p h a s i z e d t h ei m p o r t a n c e o f B P - I S P i n te g r at io n , v e r y f e w a t t e m p tto l i n k B P- I SP in t eg r a t io n to p e r f o r m an ce m easu r e s .I n s t ead , r e sea r ch e r s co m m o n ly f o cu s o n co n cep tu a land organ iza t ional i ssues , e .g . , Powel l [33] examinesth e ex ten t t o wh ich th e r e l a t io n sh ip b e tween I T an d


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T.S.H. Teo, W.R. King/ Info rma t ion & Manag emen t 30 (1996) 309 -321 311b u s in ess s t r a t eg y h as ch an g e d o v e r t im e . Led e r e r an dM e n d e l o w [2 1 ] c o n d u c t e d i n t e r v ie w s t o e x a m i n e w h yco o r d in a t io n b e tw een I S p l an s an d b u s in ess p l an s a r eof ten p lagued wi th d i f f icu l t ies . Simi lar ly , Nath [28]id en t i f i ed o r g an iza t io n a l f ac to r s p e r ce iv ed to b eim p o r t an t i n a l ig n in g I S wi th b u s in ess g o a l s .

I n t e r m s o f t h e em p i r i ca l ev a lu a t io n o f t h e im p ac to f B P - I S P in t eg ra t io n , Das e t a l . [5 ] c i ted an A .T .Kea r n ey s tu d y wh ich sh o ws th a t o r g an iza t io n s th a tin t eg r a t ed b u s in ess p l an s an d I S p l an s g en e r a l lyo u t p e r f o r m t ho s e w h o d o n o t . C h a n a n d H u f f [ 3]f o u n d th a t I S s t r a t eg ic a l ig n m en t was co n s i s t en t lyr e l a t ed to v a r io u s d im en s io n s o f IS e f f ec t iv en ess .Ho wev e r , m ix ed r e su l t s w i th r e sp ec t t o I S s t r a t eg ica l i g n m e n t a n d v a r i ou s d i m e n s i o n s o f IS p e r f o r m a n c ewer e o b ta in ed .

Type 2: On e- way l i n k ed p l an n in g wi th sequent ialin tegra t ion ;Type 3 : Two - way l in k ed p l an n in g wi th reciprocalin tegra t ion ; andType 4: I n t eg r a t ed p l an n in g wi th f u l l in tegra t ion .

Each su ccess iv e ty p e r e f l ec ts an in c r eased s t r a teg icp o ten t i a l f o r I T an d en ab le s m o r e e f f ec t iv e a l ig n m en tb e twe en I S an d b u s in ess s t r a t eg ie s . Th e r o l e o f t h e I Sf u n c t io n f o r Ty p es l an d 2 a r e e s sen t i a l ly r eac t iv e inn a tu r e , s in ce th e I S f u n c t io n h as n eg l ig ib l e i n f lu en ceon business s t ra teg ies . Converse ly , the ro le o f the ISf u n c t io n f o r Ty p es 3 an d 4 a r e m o r e p r o ac t iv e inn a tu r e , s in ce th e I S f u n c t io n p l ay s a r o l e i n b o thsuppor t ing and in f luencing business s t ra teg ies .

2.2. Imp act o f BP -ISP Integration

2 . O p e r a f i o n a l iz i n g t h e m e a s u r e sI n th i s s tu d y , th e in d e p en d en t v a r i ab le o f i n te r e s t i s

t h e " e x t e n t o f B P - I S P i n t e g r a t i o n " . T h e d e p e n d e n tv a r ia b l e i s t h e " i m p a c t o f B P - I S P i n t e g r a t io n " w h i c hi s o p e r a t io n a l i zed in t e r m s o f t h e ex ten t o f I SPp r o b lem s an d th e " ex te n t o f I S co n t r ib u t io n s too r g a n iz a t io n a l p e r f o r m a n c e " .2.1. Extent o f BP -ISP Integrat ion

T h e t a x o n o m i e s o f B P - I S P i n t eg r a t io n s e r v e a s ab a s i s f o r o p e r a t i o n a l i z i n g t h e e x t e n t o f B P - I S Pin teg r a t io n . W e h av e ch o sen to u se a f o u r - s t ag eap p r o ach . I t o m i t s t h e " n o in t eg r a t io n l ev e l " o f so m eo f th e p r ev io u s t ax o n o m ies b ecau se th a t l ev e l i sn e i th e r a s p r ev a len t n o r s ig n i f i can t as i t o n ce was an db ecau se i t is u n l ik e ly th a t i t c an b e d i s t i n g u i sh ed f r o ma weak f o r m o f ad m in i s t r a t iv e in t eg r a t io n - e .g . , t h a t i nwh ich o v e r a l l I S b u d g e t s d ep en d o n th e o u tco m es o fb u s in ess p l an n in g . T h i s d i f f i cu l ty in d i s t i n g u i sh in gb e t w e e n " n o i n t e g r a ti o n " a n d " a d m i n i s t r a ti v e in t e -g r a t io n " b eca m e ap p a r en t d u r in g p r e t e s t in g o f th em e a s u r e m e n t i n s t r u m e n t . H e n c e , w e d e c i d e d t h a t af o u r - s t ag e t ax o n o m y wo u ld b e su f f i c i en t ly p a r s im o -n io u s wi th o u t o m i t t i n g an y s ig n i f i can t f o r m o f B P-I SP in t eg r at io n .

Th e f o u r - s t ag e t ax o n o m y [ 1 9 , 3 8 ] i s :Type 1: S e p a r a t e p l a n n i n g w i t h admin i s t ra t i vein tegra t ion ;

Two v a r i e t i e s o f o r g an iza t io n a l im p ac t s can b eu se f u l ly co n s id e r ed - in t e r m ed ia t e an d o v e r a l l . Inter-mediate impacts per ta in to ISP i t se l f , whi le overal limpacts p e r t a in to t h e o r g an iza t io n a s a wh o le .I n t e r m ed ia t e im p ac t s h av e b een t r ea t ed in t e r m s o f" I SP p r o b lem s" [ 2 3 ] . Ov e r a l l im p ac t s r e l a t e t o t h eim p ac t o f I S o n o r g an iza t io n a l p e r f o r m an ce .

2.2.1 . ISP Problem sM o r e e x t e n s i v e a n d s o p h i s ti c a te d B P - I S P i n te g r a-

t i o n sh o u ld a f f ec t t h e b u s in ess r e l ev an ce an d q u a l i t yo f ISP . P r o b lem s a sso c ia t ed wi th I SP can u n d e r m in eth e q u a l i t y o f I SP , t h e r eb y r e su l t i n g in w as t edr e so u r ces an d lo s t o p p o r tu n i t i e s [ 1 7 ] . I t ap p ea r s t h a ts u c h I S P p r o b l e m s c a n b e m i t i g a t e d b y g r e a t e r B P -I SP in t eg ra t io n .

I SP p r o b lem s h av e b een w id e ly d i scu ssed in th e I Sl i t e ra tu r e an d h a v e b een c l a ss i fi ed in t e r m s o f i np u t ,p r o cess an d o u tp u t p r o b lem s [ 2 2 ] , o r g an iza t io n a l ,c o m m i t m e n t / c o n t r a c t u a l , o u t c o m e / e x p e c t a t i o n s , e x -p e r t i se / t ech n ica l an d im p lem en ta t io n p r o b lem s [ 1 3 ] ,l ead e r sh ip , im p lem en ta t io n an d r e so u r ce p r o b lem s[ 2 4 ] , o r g a n i z a t i o n , i m p l e m e n t a t i o n , d a t a b a s e ,h a r d war e , an d co s t p r o b lem s [ 2 5 ] . S in ce , t h e l a s tca t eg o r i za t io n o f I SP p r o b lem s i s t h e m o s t co m p r e -h en s iv e an d h as b een r ig o r o u s ly d e r iv ed b y Led e r e ran d Se th i , i t w i l l f o r m th e b as is f o r o u r m ea su r em en to f I S P p r o b l e m s .

T h e e x t e n t o f I S P p r o b l e m s c a n b e r e a d i l yo p e r a t io n a l i zed in t e r m s o f :


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312 ZS.H. Teo, W .R. King~Information & M anagement 30 (1996) 309-3211 . Or g an iza t io n p r o b lem s2 . I m p lem en ta t io n p r o b lem s3 . Da tab ase p r o b lem s4 . Har d w ar e p r o b lem s5 . C o s t p r o b lem s .

Organiza t ion p r o b lem s co n ce r n th e f a i lu r e o f I SP tosuf f ic ien t ly cons ider o rgan iza t ion al s t ra teg ies andch a r ac t e r i s t i c s , t h e n eed s o f u se r s , I S o b jec t iv es an dthe IS app l ica t ions por t fo l io . I mp lemen ta t io n p r o -b lem s co n ce r n th e d i f f icu l ty o f ca r ry in g o u t t h e p l and u e t o p o o r c o m m u n i c a t i o n w i t h t o p m a n a g e m e n ta n d p o o r I S P o u t p u t d o c u m e n ts . D a t a b a s e p r o b l e m sconcern the fa i lu re to se t p r io r i t ies fo r da tabases , andp lan f o r an o v e r a l l d a t a ad m in i s t r a t io n an d d a taa r ch i t ec tu r e f o r t h e o r g an iza t io n . H a r d w a r e p r o b l e m sco n ce r n th e f a i lu r e to p l an f o r o v e r a l l h a r d war e an dd a t a c o m m u n i c a t i o n s f o r t h e o r g a n i z a t i o n . C o s tp r o b l e m s d e a l w i t h t h e e x c e s s i v e d u r a t io n a n dassocia ted costs o f ISP.

2 .2 .2 . IS Contr ibu t ions to Organiza t ionalPer fo rma n ce

Sin ce B P- I SP in t eg r a t io n f ac i l i t a t e s a co m m o nf r am e o f r e f e r en ce th a t i s e s sen t i a l f o r t h e in t e r n a lco n s i s t en cy an d th e ex te r n a l v a l id i ty o f p l an s [ 1 2] , i tc a n l e a d t o t h e m o r e e f f e c ti v e d e p l o y m e n t o f I T t ose r v e b u s in ess n eed s an d to b e t t e r ex p lo i t a t io n o fo p p o r tu n i t i e s t o u se I T f o r t h e c r ea t io n o f b u s in essv a lu e . Th e co n t r ib u t io n o f I S to o r g an iza t io n a lp e r f o r m an ce i s p e r h ap s th e o ld es t an d m o s t co m -m o n ly u sed f o r m o f as se ss in g th e im p ac t o f p lan n in gs y s t e m s . H o w e v e r , t h e l in k b e t w e e n I S P a n dorgan iza t ional per formance is e lusive [4 , 6 ] andof ten con trovers ia l [9 , 10]. Simi la r d i f f icu l t ies haveb een f o u n d in th e s t r a t eg y l i t e r a tu r e wh ich r ep o r t edm i x e d f i n d i n g s r e g a r d i n g t h e e f f e c t s o f B P o no r g an iza t io n a l p e r f o r m an ce ( e .g . , [ 3 2 ] ) . Th e b as i sf o r t h is co n c lu s io n i s t h a t an y p l an n in g sy s t em sh o u ldu l t im a te ly h av e an im p ac t o n th e f i r m ' s f i n an c ia lp e r f o r m a n c e ( e . g . , i m p r o v e m e n t i n R O I ) a n d / o rn o n f in an c ia l p e r f o r m an ce ( e .g . , i n c r eased cu s to m ersa t isfac t ion) .

I S co n t r ib u t io n s to o r g an iza t io n a l p e r f o r m an ce cana l so b e a sse ssed in t e r m s o f i n c r eased m ar k e t sh a r e ,im p r o v ed in t e r n a l e f f i c i en cy o f t h e f i r m ' s o p e r a t io n s ,increased annual sa les revenue, e tc .

3 . R e s e a r c h P r o p o s i ti o n s a n d H y p o t h e s e sTh e l i t e r a tu r e su g g es t s t h a t g r ea t e r B P- I SP in t e -

g r a t io n wi l l i n f lu en ce th e o r g an iza t io n in t e r m s o f I SPp r o b lem s an d I S co n t r ib u t io n s to o r g an iza t io n a lp e r f o r m a n c e .3 .1 . I mp a c t o f BP - I S P I n t eg ra tio n3 .1 .1 . 1SP Prob lems

I SP p r o b lem s t en d to b e l e ss sev e r e wh e n p l an n in gis s t ra teg ic ra ther than f inancia l o r tac t ica l . GreaterB P- I SP in t eg r a t io n i s m o s t l i k e ly to b e a sso c ia t edwith p lann ing tha t i s s t ra teg ic ra ther than f inancia l o rt ac t ica l ; th i s a id s co m m u n ica t io n b e twe en I S an d to pm an ag em en t an d cu l t i v a t e s b e t t e r u n d e r s t an d in g an da m o r e r ea l i s t i c ex p ec ta t io n o f t h e r o l e o f t h e I Sf u n c t io n .Th e f i r s t p r o p o s i t i o n to b e ad d r e ssed i s t h a t t h e r e i san in v e r se r e l a t io n sh ip b e twe en th e ex ten t o f B P- I SPin teg r a t io n an d th e ex ten t o f v a r io u s k in d s o f I SPp r o b lem s in an o r g an iza t io n . Th e f i r s t h y p o th es i s i stherefore :H y p o t h e s i s 1: The g rea te r th e ex t en t o f BP - I S Pin tegra t ion , the lesser the ex ten t o f"1 . Organiza t ion problems.2 . I mp lemen ta t io n p ro b lems .3 . Da ta b a se p rob lems .4 . Ha rd w a re p ro b lems .5 . Cost problem s.3 .1 .2 . IS Contr ibu t ions to Organiza t ionalPer fo rma n ce

I n o r d e r f o r t h e I S f u n c t io n to co n t r ib u te t o o v e r a l lo r g an iza t io n a l p e r f o r m an ce , i t i s n ecessa r y to e s t ab -l i sh in t eg r a t io n b e tween B P an d I SP . W h en th ein t eg r a t io n b e tween B P an d I SP i s weak , t h e r o l e o fIS is l ike ly to be suppor t ive ra ther than sa l ien t in thec r ea t io n o f b u s in ess v a lu e .Th e seco n d p r o p o s i t i o n i s t h a t t h e r e i s a p o s i t i v er e l a t io n sh ip b e tween th e ex ten t o f B P - I S P in t eg r a t io nan d th e l ev e l o f o v e r a l l o r g an iza t io n a l p e r f o r m an ce .Th e seco n d h y p o th es i s i s t h e r e f o r e :Hyp oth es i s 2 : Th e g rea te r th e ex ten t o f B P- I S Pin tegra tion , the grea te r wi l l be the ex ten t o f ISco n t r ib ut io n s to o rg a n i za t io n a l p e r fo rma n ce .


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T.S.H. Teo, W.R. King/ Inform at ion & M anagem ent 30 (1996) 309-32 1 3134 . R e s e a r c h M e t h o d o l o g y4.1. The sample

A r a n d o m s a m p l e o f 6 0 0 f i rm s w a s o b t a i n e d f r o mth e Corporate 1000 b o o k : t h i s s o u rce g en e ra l l y l i s t sm e d i u m t o l a r g e U S c o r p o r a t i o n s , a n d c o n s e q u e n t l ya r e l i k e l y t o u s e an d h av e ex p e r i en ce w i t h IT . T h i s i si mp o r t an t , a s w e w an t ed t h e s amp l e t o i n c l u d e f i rmsp rac t i c i n g a l l f o u r t y p es o f i n t eg ra t i o n .

T h e d e v e l o p m e n t o f t h e i n s t r u m e n t i n v o l v e d as e r i e s o f p r e t e s t s u s i n g d o c t o ra l an d M BA s t u d en t s,I S p r a c t it i o n e r s , a n d g r a d u a t e b u s i n e s s s c h o o lf a c u l t y m e m b e r s o v e r a p e r i o d o f a b o u t t h r e e m o n t h s .T h e p r e t e s t s r e s u l t ed i n ch an g es i n t h e w o rd i n g so f c e r ta i n i t e m s a n d t h e r e a r r a n g e m e n t o f t h e o r d e ro f s o m e o f t h e i t e m s t o i m p r o v e c l a r i t y a n d m i n i -m i ze amb i g u i t y . I n p a r ti cu l a r , s o m e o f th e i t emsp e r t a i n i n g t o I S P p r o b l e m s w e r e r e v e r s e c o d e d t om i n i m i z e b i a s d u e t o t he n e g a t i v e c o n n o t a ti o n o f t heco n s t ru c t .

Q u es t i o n n a i r e s w ere p r ep a red an d s en t d i r ec t l y t ot h e CE O w i t h i n s t ru c t i o n s r eq u es t i n g h i m/ h e r t ofo rw ard t h e q u es t i o n n a i r e s t o t h e Sen i o r Bu s i n es sP l a n n e r a n d t h e S e n i o r I n f o r m a t i o n S y s t e m s E x e c u -t i v e . T h e d i r ec t i o n s fo r d i s t r i b u t i o n d i r ec t ed t h a t i fISP i s ca r r i ed o u t cen t r a l l y a t t h e co rp o ra t e l ev e l f o rmo s t b u s i n es s s eg men t s ( i . e . , d i v i s i o n s o r b u s i n es su n i t s ) , t h e q u es t i o n n a i r e s s h o u l d b e fo rw ard ed t o t h eS e n i o r B u s i n e s s P l a n n e r a n d t h e S e n i o r I n f o r m a t i o nS y s t e m s E x e c u t i v e r e s p o n s i b le f o r B P a n d I S P a t t h eco rp o ra t e l ev e l r e s p ec t i v e l y . Co n v e r s e l y , i f ISP i sca r r i ed o u t i n d ep en d en t l y i n each b u s i n es s s eg men t( i .e . , d iv i s i o n o r b u s i n es s u n i t) , t h e CE O w as a s k ed t os e l ec t a co re b u s i n es s s eg men t , an d fo rw ard t h eq u es t i o n n a i r e s t o t h e Sen i o r Bu s i n es s P l an n e r an d t h eS e n i o r I n f o r m a t i o n S y s t e m s E x e c u t i v e r e s p o n s i b l efo r t h a t co re b u s i n es s s eg men t . A s a v a l i d a t i o n ch eck ,b o t h r e s p o n d en t s w e re a s k ed t o s t a t e an d b r i e f l yd e s c r i b e t h e b u s i n e s s s e g m e n t f o r w h i c h t h e y w e r er e s p o n s i b l e .4.2. The instrument

T h e f o u r t y p e s o f B P - I S P i n t eg r a t io n ( a d m i n i s -t r a t i v e in t eg ra t i o n , s eq u en t i a l i n t eg ra t io n , r ec i p ro ca li n t eg ra t i o n , an d fu l l i n t eg ra t i o n ) w ere d es c r i b ed an dre s p o n d en t s w e re a s k ed t o i n d i ca t e t h e t y p e t h a t b e s t

d e s c r i b e d t h e ir f i r m ' s c u r r e n t B P - I S P i n t eg r a t io n ( s e es u r v e y i n s t ru m e n t i n t h e A p p e n d i x ) .

S i n ce t h e IS ex ecu t i v es a r e i n v o l v ed i n ISP ,t h ey w ere a s k ed q u es t i o n s r e l a t i n g t o t h e cu r r en tt y p e o f B P - I S P i n t eg r a t io n a n d a l s o t h e e x te n t o fI S P p r o b l e m s i n th e i r o r g a n i z a ti o n s . T h e B u s i -n es s P l an n e r s w ere a s k ed t o ev a l u a t e t h e ex t en to f I S c o n t r i b u t io n s t o o r g a n i z a t i o n a l p e r f o r -ma n ce . N o t e t h a t s i n ce th e cu r r en t t y p e o f in t e -g r a t i o n a n d I S c o n t r i b u t i o n s t o o r g a n i z a t i o n a lp e r f o r m a n c e a r e m e a s u r e d u s i n g d i f f e r e n t r e s p o n -d e n ts , t h e p r o b l e m o f c o m m o n s o u r c e v a r ia n c e i sr e d u c e d .4.3. Response and non-response analysis

A p r i m a r y m a i l i n g a n d t w o f o l l o w - u p m a i l i n g sw ere mad e ; t h e f i r s t an d s eco n d fo l l o w -u p s w erem a d e a b o u t t h r e e a n d s e v e n w e e k s f r o m t h e d a t e o fi n i t i a l ma i l i n g s . Fo r t y - f i v e f i rms d ec l i n ed p a r t i c i p a -t i o n c i t i n g o n e o r mo re o f t h e fo l l o w i n g r ea s o n s :c o m p a n y p o l i c y n o t t o r e sp o n d t o a n y q u e s t io n n a i re ,l a c k o f m a n p o w e r , c o m p a n y c u r r e n t l y u n d e r g o i n gr e s t r u c t u r i n g . U s e a b l e " m a t c h e d p a i r s " w e r e r e -t u rn ed b y 1 5 7 f i rms (2 6 . 2 % ) . T h i s r e s p o n s e r a t e i sa d e q u a t e b u t s o m e w h a t l o w e r t h a n t h a t u s u a l l ya c h i e v e d . T h i s m a y b e e x p l a i n e d b y t h e h i g h l e v e lo f t h e r e s p o n d en t s an d t h e f ac t t h a t tw o r e s p o n s es p e rf i rm w ere r eq u i r ed . P r ev i o u s r e s ea r ch u s i n g t h em a t c h e d - p a i r d e s i g n u s u a l ly i n v o l v e d a n I S E x e c u t i v ea n d a u s e r w h o m i g h t o r m i g h t n o t b e s e n i o rexecu t ives (e .g . , [35]) .

A s u m m a r y o f t h e c h a r a c t e ri s ti c s o f r e s p o n d e n t s i ss h o w n i n T a b l e 1 . T h e y c o m e f r o m a w i d e r a n g e o fi n d u s t r i e s w i t h a p r e d o m i n a n c e o f m a n u f a c t u r i n gf i n n s . T h e an n u a l s a l e s r ev en u e i s w i d e l y d i s t r i b u t ed ,i n th e a n t i c ip a t e d m e d i u m t o h ig h r a n g e . T h e n u m b e ro f em p l o y ees i n each f i rm v a r i e s . Bo t h t h e j o b t i tl e so f B u s i n e s s P l a n n e r s a n d I S E x e c u t i v e s c o n f i r m t h a tr e s p o n d e n t s a r e a l m o s t e x c l u s i v e ly S e n i o r E x e c u t i v e si n th e f i rm s in ce m o re t h an 7 0 % o f r e s p o n d en t s a r e a tt h e D i r ec t o r l ev e l o r h i g h e r .

C o m p a r i s o n s ( u s in g c h i - s q u a r e t e st s a t p = 0 . 0 5 )b e t w e e n r e s p o n d e n t s a n d n o n r e sp o n d e n t s w e r e m a d ei n t e rms o f i n d u s t ry r ep re s en t a t i o n , an n u a l s a l e sr e v e n u e , a n d t he n u m b e r o f e m p l o y e e s . T h er e s u l ts s u g g e s t e d t h e a b s e n c e o f n o n - r e s p o n s eb ias .


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31 4 ZS.H. Teo, W.R. King/Information & Managem ent 30 (1996) 309-321Table 1Characteristic of respondentsaCharacteristics of respondentsa1. Industry %Oil/Petroleum 3.8Manufacturing 31.2Med icine/Health 5. lUtilities 14.6Transportation 5.7Wholesale/Retail 11.5Restaurant/Hotel 1.9Finance/Insurance/R eal Estate 2.5Publishing/Information/News 5.1Computers/Communications 8.9Others 9.62. Annual Sales ($ Million)Below 300 8.9300 - - Less than 600 12.7600 - - Less than 1000 10.81000 - - Less than 2000 19 .72000 - - Less than 3000 10.83000 - - Less than 5000 15.2Above 5000 21.73. Number of Employees100 - - Less than 300 0.6300 - - Less than 1000 6 .41000 - - Less than 2000 9 .62000 - - Less than 5000 18.55000 - - Less than 10000 21 .0Above 10000 43.94. Respondent 's Hierarchical L ev e l Business ISPlanner ExecutivePresident/Sr. or Exec. VP 19.1 19.1Vice President 35.7 38.9Director 24.2 22.3Man ager 15.9 14.6Asst. VP/D ir/Mgr 1.9 1.3Others 0.6 1.9M issing Data 2.5 1.9a n =1 57; all numbers indicate percentages

4 . 4. A s s e s s i n g v a l i d i t y a n d r e l i a b i l i t yS i n c e a s i n g l e i t e m m i g h t n o t f u l ly ta p a c o n s t r u c t

o r m i g h t b e s u b j e c t t o m i s i n t e r p r e t a t i o n b y t h er e s p o n d e n t s , m u l t i p l e i te m s w e r e u s e d f o r e a c hc o n s t r u c t . T h e r e l i a b i l i t y o f t h e s c a l es w a s a s s e s s e du s i n g C r o n b a c h A l p h a , w h i c h a r e a n i n d i c a ti o n o f t h ei n t e r n a l c o n s i s t e n c y o f th e i t e m s m e a s u r i n g t h e s a m e

c o n s t r u c t . H i g h v a l u e s i n d i c a t e h i g h i n t e r n a l c o n s i s -t e n c y o f t he m u l t i p l e i te m s m e a s u r i n g e a c h c o n s t ru c t ,h e n c e i n d i c a t i n g h i g h r e l i a b i l i t y o f th e i n d i v i d u a lc o n s t r u c t s . E a c h i t e m s h o u l d a d d t o t h e r e l i a b i l i t y o ft h e c o n s t r u c t . B a s e d o n t h i s c r i t e r i a , o n e i t e m f r o mo r g a n i z a t i o n p r o b l e m s a n d t w o i t e m s f r o m i m p l e -m e n t a t i o n p r o b l e m s w e r e d r o p p e d . I n g e n e r al , th er e l i a b i l i t y c o e f f i c i e n t s a r e e q u a l t o o r a b o v e t h er e c o m m e n d e d v a l u e o f 0 . 6 0 f o r e x p l o r a to r y r e s e a r c h[ 3 1 ] ( s e e T a b l e 2 ) .

F o r s t a t i s ti c a l a n a l y z e s , t h e m u l t i p l e i t e m s c o m -p r i s i n g a c o n s t r u c t w e r e s u m m e d t o g e t h e r i n t o as i n g l e s c or e . T h i s a s s u m e s t h a t e a c h i t e m c o n t r i b u t e se q u a l ly , a n d t h i s a s s u m p t i o n h a s b e e n u s e d s u c c e s s -f u l l y i n p r e v i o u s r e se a r c h e x a m i n i n g I S P a n d t h es t r a t e g i c u s e o f I T ( e . g . , [ 2 9 ] ) .

S i n c e t h e e x i s t i n g s t a te o f i n t e g r a t i o n w a s m e a -s u r e d b y a s k i n g r e s p o n d e n t s t o p l ac e a c h e c k - m a r kb e s i d e o n e o f th e f o u r d e s c r i p t i o n s o f th e t y p e s o fi n t e g r a ti o n , i t w a s i m p o r t a n t t h a t r e s p o n d e n t s w e r ea b l e to u n d e r s t a n d a n d d i s t i n g u i s h a m o n g t h e f o u rt y p e s . A s a v a l i d i t y c h e c k , t e l e p h o n e c a l l s w e r e m a d et o r e s p o n d e n t s t o d e t e r m i n e w h e t h e r t h e y h a d a n yd i f f i c u l t y i n u n d e r s t a n d i n g o r d i s t i n g u i s h i n g a m o n gt h e d e s c r i p t i o n s o f th e f o u r t y p e s o f i n t e g r a t i o n . T h er e s u l t s o f t h e s e i n t e r v i e w s s h o w e d t h a t n o n e o f th er e s p o n d e n t s h a d a n y d i f f i cu l t y i n u n d e r s t a n d i n g o rd i s t i n g u i s h i n g a m o n g t h e m . I n f a ct , o n e r e s p o n d e n tc o m m e n t e d t h a t th e f o u r t y p e s o f i n t e g r a ti o n a re" n i c e c o n c e p t s " f o r u n d e r s t a n d i n g B P - I S P i n te g r a-t i o n .

A s a n o t h e r v a l id i t y c h e c k , w e a l so e x a m i n e d t h er e l a t io n s h i p s b e t w e e n t h e t y p e s o f i n t e g r a t i o n a n dc o m m o n l y a c c e p te d m e a s u r es o f g r ow t h , n a m e l y

Table 2Reliability of constructsConstruct No. of CronbachItems AlphaInformation S ystems Planning (ISP)Problems(a) Organization Problem s 4 0.70(b) Implementation Problems 4 0.60(c) Database Problem s 3 0.79(d) Hardware Problems 2 0.88(e) Cost Problems 2 0.62IS Con tributions to Organizational 5 0.87Performance


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T.S.H. Teo, W.R. King/Information & Management 30 (1996) 309-321 315n u m b e r o f y e a r s o f f o rm a l I S P . T h i s m e t h o d o fv a l i d a t io n h as b e e n c o m m o n l y u s e d i n o rg a n i z a t i o n a lr e s e a r c h t o a s s e s s t h e v a l i d i t y o f t h e s e l f - t y p i n gp a r a g r a p h m e a s u r e [ 1 5 ] . A s e x p e c t e d , t h e r e s u l t ss h o w a n i n c r e a s i n g t r e n d in t h e n u m b e r o f y e a r s o ff o r m a l I S P w i t h g r e a te r e x t e n t o f B P - I S P i n t e g ra t i o n( F = 2 . 8 5 , p < 0 . 0 5) . H e n c e , t h e s e l f - t y p i n g p a r a g r a p hm e a s u r e o f th e e x t e n t o f i n t e g r a t i o n i s d e e m e d v a l i d .

5. Analyses and resul tsT h e r e s u l t s s h o w t h a t s e q u e n t i a l i n t e g r a t i o n ( n

= 6 5 ) a n d r e c i p ro c a l i nt e g r a ti o n (n = 6 5 ) o c c u r m o s to f t e n , f o l l o w e d b y a d m i n i s t r a t i v e i n t e g r a t i o n ( n = 1 7)a n d f u l l i n t e g r a t i o n (n = 1 0 ) . T h i s d i s t r i b u t i o n o f t het y p e s o f i n t e g r a t i o n i s n o t s u r p r i s i n g i f w e m a k e t h ea s s u m p t i o n t h a t f i rm s g e n e r a l l y m o v e i n t h e d i r e c t i o nt o w a r d g r e a t e r l e v e l s o f B P - I S P i n t e g r a t i o n ( i. e .,g e n e r a l l y f r o m a d m i n i s t r a t i v e t o w a r d f u l l i n t e g r a -Table 3Correlations with extent of BP-ISP integrationPerformance Measures rISP Problems(a) Organization Problems -0.3 9 a(b) Implementation Problems -0. 36 ~(c) Database Problems -0. 32 a(d) Hardware Problems -0.2 9 a(e) Cost Problems -0. 06IS C ontributions to 0 . 3 5 aOrganizational Performanceap


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316 T.S.H. Teo, W.R. King/Information & Managem ent 30 (1996) 309-321Table 5Post-hoc comparisons using Scheffe estsPerformance Measures Pairwise Comparisons (p > SequentialAdministrative >> ReciprocalAdministrative >> Full

Sequential >> ReciprocalIMPLMN

DBASE

HWARE

PERFORM

Administrative >> ReciprocalAdministrative >> FullSequential >> ReciprocalAdministrative >> SequentialAdministrative >> ReciprocalAdministrative >> FullAdministrative >> ReciprocalAdministrative >> FullReciprocal >> AdministrativeReciprocal >> SequentialFull >> Sequential

>> signifies significantly greater than (at p =0.05)Kruskal-Wallis and Mann-Whitney tests. The resultsare similar to those reported above.

The data are plotted in Figure 1 to determinewhether there are any distinct trends among theperformance measures. It is apparent that ISPproblems are generally less severe at reciprocal orfull integration. With the exception of COST, otherISP problems show a distinct decreasing trend acrossthe types of integration.

As expected, the extent of IS contributions toorganizational performance increases as the firmmoves toward greater integration. However, thereappears to be a pronounced increase in the extent ofIS contributions to organizational performance as thefirm moves from reactive types (i.e, administrative orsequential integration) to proactive types. This isperhaps due to a more proactive role of the ISfunction in supporting and influencing the firm'sstrategy at reciprocal or full integration. Moreimportantly, this result provides empirical evidencefor the beneficial impact of proactive BP-ISPintegration in increasing the extent of IS contributionsto organizational performance.

The extent of IS contributions to organizationalperformance was measured in terms of increasedROI, increased market share of products/services,

improved internal efficiency of operations, increasedannual sales revenue, and increased customer satis-faction.

The contributions of IS to improve internalefficiency reflect the traditional role of IS inautomating work processes. However, in recent years,the focus has shifted from routine automation tobusiness process reengineering in order to reapdramatic rather than incremental improvements inproductivity from the use of IT [ll].The contribu-tions of IS to increase customer satisfaction, perhapsreflect the increased use of IT to provide betterservices. Recent research (e.g., [18]) has shown thatstrategic applications of IT are commonly directed atimproving internal operations and providing betterservices to customers; e.g., easy access to accurateand timely order information. These enhancedservices usually improve customer satisfaction andhelp to encourage customer loyalty, thereby alsocontributing to improved organizational performance.5 .2 . C o m p a r i s o n s o f I S P P r o b l e m s a t V a r i ou sI n t e g r a t i o n L e v e l s

In order to seek greater insight into the meaning ofthese statistical results, comparisons of ISP problemsamong the four types of BP-ISP integration weremade, as shown in Figure 2.

ORG, IMPLMN, DBASE and HWARE problemscan be seen to generally show a decreasing trend, asexpected, across the successive types of integrationdue to the presence of greater coordination betweenBP and ISP at later types of integration. COSTproblems generally did not vary much across thetypes of integration. COST problems are relativelylow at administrative integration, probably becauseminimal attention is paid to ISP. Since IS applicationsat administrative integration are generally routine andnon-strategic, less time and resources are required. Asthe firm begins to leverage IT to support businessstrategies, there is a resulting dominance in COS Tproblems, relative to other ISP problems.

IMPLMN problems are dominant in administrativeintegration and remained dominant, though decreas-ing in magnitude, at each successive types ofintegration. This implies that although there is areduction in the extent of IMPLMN problems acrossthe successive types of integration due to better


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T.S.H. Teo, W.R. King/ Informat ion & Management 30 (1996) 309-321 3 1 7( a ) ( b )

ORG IMPLMNi f i i i l l2

1

0Admln Sequ enti al Reciprocal Full AdmlnTypes of Integration

Sequential ReciprocalTypes of Integration

Full

( d )c )

(f)

DBASE HWARE7r

Admln Seq uant lal Reciprocal FullTypes of integration

i

t / I / I I I . Y l I / / / I I I I I I I / I I I I i i / i / i i iAdrnln Sequ entia l Reciprocal Full

Types of Integration

( e )PERFORMOST

Adm l n Seq uen tia l Reciprocal Full Adm ln Seq uen tial Reciprocal FullTypes of Integration Types of Integration

F i g . 1 . B a r c h a r t s s h o w i n g v a r i at i o n s o f p e r f o r m a n c e m e a s u r e s w i t h t y p e s o f in t e g r a t io n .

c o o r d i n a t i o n b e t w e e n b u s i n e s s a n d I S , I M P L M Np r o b l e m s r e m a i n a k e y i s s u e . O n e p o s s i b le r e a s o n i st ha t t he e lus ive li nk be tw e e n inv e s tme n t s i n I T a ndo r g a n i z a ti o n a l p e r f o r m a n c e m a y r e s u l t i n th e l a c k o ft o p m a n a g e m e n t s u p p o r t a n d c o m m i t m e n t f o ri m p l e m e n t i n g I S p l a n s.

D B A S E p r o b l e m s a r e m o r e d o m i n a n t t h a nH W A R E p r o b l e m s a c r o s s t h e s u c c e s s i v e t y p e s o fin t e g r a t i on , p r oba b ly be c a use ha r dw a r e p l a nn ing i sl e ss c o m p l e x t h a n d a t a b a s e p l an n i n g , p r o b a b l y d u e t othe d i f f i c u l t y o f f i nd ing t he a ppr o pr i a t e ba l a nc ebe tw e e n the c os t ( e .g ., de c r e a s e d f l e x ib i l i t y due t o


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31 8 T.S.H. Teo, W.R. King/Information & Management 30 (1996) 309-321I S P P r o b l e m s7 j 1I / ~ O R G - - I M P L M N - ~ D B A S E ~ - H W A R E - ~ C O S TL /6 t

A d m i n S e q u e n t i a l R e c i p r o c a l F u llT y p e s o f I n t e g r a t i o n

Fig. 2. Comparisons of ISP problems.

gr e a t e r i n t e r de pe nde nc e a mong un i t s ) a nd be ne f i t s( e .g . , r e duc e d da t a r e dun da nc y ) o f i nc r e a se d da t aintegra t ion [8] .

O RG pr ob le ms a r e r e duc e d s ign i f i c a n t ly a t e a c hsuc c e ss ive t ype o f i n t e g r a ti on , s i nc e p r ob l e m s suc h a sthose r e l a t i ng t o a f a i l u r e t o t a ke i n to a c c oun to r ga n i z a t i ona l goa l s a nd s t r a t e g i e s , a nd a s se s s t hec ur r e n t I S a pp l i c a t i ons por t f o l i o , a r e mor e l i ke ly t o ber e so lve d w he n the r e i s g r e a t e r BP - I SP in t e g r a ti on . A sw e l l , p r ob l e m s r e l a t i ng t o t he f a i l u r e t o i nvo lve use r s ,a nd ma ke a ppr opr i a t e a nd r e a l i s t i c p l a nn ing a s sump-t i ons , c a n be mi t i ga t e d .

T h e d e c r e a s in g tr e n d s i n O R G , I M P L M N , D B A S Ea n d H W A R E p r o b l e m s r e i n f o r c e t h e s u g g e s t io n t h a tI SP p r ob l e ms a r e l e ss s e ve r e w he n I SP i s s t ra t e g i c ( asin r e c ip r oc a l o r f u l l i n t e g r a t i on) t ha n w he n I SP i sf i na nc i a l / t a c t i c a l a nd t ha t CO ST r e ma ine d c ons t a n tr e ga r d l e s s o f t he o r i e n t a t i on o f I SP .

6 . C o n c l u s i o n s

D e s p i t e t h e p r e s u m e d i m p o r t a n c e o f B P - I S Pin t e gr a t ion , t he r e i s r e l a t i ve ly l i t tl e e m pi r i c a l r e se a r c hf oc us ing spe c i f i c a l ly on i t. T h i s r e se a r c h bu i lds on

a nd e xpa nds e x i s t i ng r e se a r c h l i t e r a tu r e on BP- I SPin t e gr a t ion , a nd he nc e he lps t o e s t a b l i sh a c umu la t i vet radi t ion.

T h e s ign i f i c a n t pos i t i ve r e la t i onsh ip t ha t w a s f o undb e t w e e n t h e e x t e n t ( t y p e ) o f B P - I S P i n t e g ra t io n a n dt h e e x t e n t o f I S c o n t r i b u t i o n s t o o r g a n i z a t i o n a lp e r f o r m a n c e p r o v i d e s e m p i r i c a l e v i d e n c e o f t h ei m p o r t a n c e o f B P - I S P i n t e g r a t i o n . T h i s e v i d e n c e i sr e in f o r c e d by t he f a c t t ha t the t yp e o f i n t e g r a t i on a ndI S c on t r i bu t ions t o o r ga n i z a t i ona l pe r f o r ma nc e a r eme a sur e d us ing d i f f e r e n t r e spond e n t s i n the sa mef ir m , t h e r e b y r e d u c i n g c o m m o n s o u r c e v a r ia n c e .

T h i s r e su l t a l so sugge s t s t ha t t he no t ion o f ISc o n t r i b u t i o n s t o o r g a n i z a t i o n a l p e r f o r m a n c e m i g h to n l y b e a p p l i c a b l e w h e n t h e r e i s p r o a c t i v e B P - I S Pin t e gr a t i on ( a s i n r e c ip r oc a l o r f u l l i n t e g r a t i on) . T hee x te n t ( t ype ) o f i n t e g r a t i on a l so w a s f ound to ha v e as ign i f i c a n t ne ga t ive r e l a t i onsh ip w i th t he e x t e n t o fo r ga n i z a t i on , imple me nta t i on , da t a ba se a nd ha r dw a r epr ob le ms , a nd a ne g l ig ib l e r e l a t i onsh ip w i th c os tp r ob l e ms . T h i s c onf i r ms t he be ne f i t s o f g r e a t e r BP-I SP in t e g r a t i on i n mi t i ga t i ng I SP p r ob l e ms poss ib lyb y f a c i l i t a t i n g g r e a t e r c o m m u n i c a t i o n a n d u n d e r -s t a n d i n g b e t w e e n t o p m a n a g e m e n t a n d I S m a n a g e -m e n t .


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ZS.H. Teo, W.R. King/Information & M anagement 30 (1996) 309-321 319A p p e n d i x A . S a m p l e Q u e s t i o n n a i r eB P - I S P I n t e g r a t i o n

Please i n d i ca t e wi th a ch eck mark (~ / ) t h ed esc r i p t i o n t h a t mo s t c l o se ly f i t s y o u r cu r ren t BP-ISP in tegra t ion

( ) A d m i n i s t r a t iv e I n t e g r a t i o nBu s in ess In fo rma t io n)Plan n in g sy s t ems p l an n in g

In t h i s t y p e o f i n t eg ra t i o n , t h e re i s a weakre l a t i o n sh ip b e tween Bu s in ess P l an n in g (BP) an dIn fo rma t io n Sy s t em s P l an n in g (1 SP) a s sh o wn b y t h earrow g iven above. G enera l ly there i s l i t t le s ign i f ican te f fo r t t o u se In fo rma t io n Tech n o lo g y (e .g . , co mp u -ters , t e lecommunicat ions) to support business p lans .

( ) S e q u e n t i a l I n t e g r a t i o nBu s in ess In fo rma t io n>Plan n in g Sy s t ems P l an n in g

In th is type o f in tegra t ion , a seq uent ia l re la t ionsh ipex i s ts b e tween B u s in ess P l an n in g (BP) an d In fo rma-t ion Systems Planning (ISP). BP p r o v i d e s d i r e c t i o n sfor ISP. This re la t ionsh ip i s denoted by a un id i rec-t ional a rrow f lowing from BP to ISP. ISP pr imari lyfocuses on provid ing support fo r business p lans .

( ) R e c i p r o c a l I n t e g r a t i o nBu s in ess , In fo rma t io nPlan n in g Sy s t ems P l an n in g

In th is type of equat ion , there i s a rec iprocal andi n t e r d e p e n d e n t re l a t i o n sh ip b e tween Bu s in ess P l an -n in g an d In fo rm a t io n Sy s tems P l an n in g ( ISP). Th e reare therefore two arrows shown above; one arrowf lo win g f ro m BP to ISP , an d t h e o th e r f ro m ISP t o BP.ISP p lays a ro le in bo th support ing and inf luencingbusiness p lans .

( ) F u l l I n t e g r a t i o nIn t eg ra t ed P l an n in g

In th is type of equat ion , there i s l i t t le dis t inc t ionb e tween t h e Bu s in ess P l an n in g an d t h e In fo rma t io nS y s t e m s P l a n n i n g ( I S P ) p r o c e s s . B u s i n e s s a n din fo rma t io n sy s t ems s t ra t eg i e s a re d ev e lo p ed co n -curren t ly in the same in tegra ted p lanning process .

The fo l lowin g i tems are on a 7-poin t sca le: '1 'S t ro n g ly Di sag ree , ' 2 ' Di sag ree , ' 3 ' M i ld ly Di sag ree ,' 4 ' N eu t ra l, '5 ' Mi ld ly Ag ree, ' 6 ' A g ree , ' 7 ' S t ro n g ly

Agree . A ctual i t ems are in terspersed in quest ionnai re .(R) represen ts i tems which are reverse coded .

I S P P r o b l e m s ( a d a p t e d f r o m L e d e r e r a n d S e t h i[23, 25])O r g a n i z a t i o n P r o b l e m s1 . In fo rma t io n Sy s t ems P l an n in g ( ISP) ad eq u a t e lyt a k e s i n t o a c c o u n t o r g a n i z a t i o n a l g o a l s a n d

strategies. (R)2 . ISP fa i l s to adequate ly assess the curren t in forma-

t ion systems appl ica t ions port fo l io .3 . ISP fa i l s to adequate ly involve users .4 . Appropria te and rea l i s t ic assumpt ions are made

during ISP. (R)5 . The Informat ion Systems (IS) p lan provides a

s t a t e m e n t o f o b j e c t i v e s f o r t h e i n f o r m a t i o nsystems department . (R) [Dropped]

I m p l e m e n t a t i o n P r o b l e m s1. ISP fa i l s to adequate ly involve top management .2 . I t is very d i ff icu l t to secure top m anag em ent

co mmi tmen t fo r imp lemen t in g t h e IS p l an .3 . Implement ing the ob jec t ives iden t i f ied in the IS

plan requi res substan t ia l fu r ther analysis .4 . The IS p lan i s in accordance wi th the expecta t ions

o f t o p man ag emen t . (R)5. The IS plan is very useful . (R) [Dropped]6 . ISP adeq uate ly takes in to account i ssues re la ted to

p lan implementa t ion . (R) [Dropped]D a t a b a s e P r o b l e m s1. The IS p lan adequate ly addresses the need for

data /da tabase adminis t ra t ion . (R)2 . The IS p lan provides pr ior i t ies for developing

specific databases. (R)3 . The IS p lan inc ludes an overa l l da ta arch i tec ture

plan. (R)H a r d w a r e P r o b l e m s1. The IS p lan inc ludes an overa l l hardware p lan .

(R).2 . The IS p lan inc ludes an overa l l da ta communica-

t ions plan. (R)C o s t P r o b l e m s1. Th e ISP process takes a s ign i f ican t ly longer t ime

than expected .


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32 0 T.S.H. Teo, W.R. King~Information & Management 30 (1996) 309-3212 . T h e I SP p r oc e s s is ve r y e xpe ns ive .I S C o n t r i b u t i o n s to O r g a n i z a t i o n a l P e r f o r m a n c e( a d a p t e d f r o m P r e m k u m a r a n d K i n g [ 3 4 ] )I n our o r ga n i z a t i ona l un i t , t he i n f o r ma t ion sys t e msf unc t ion ha s c on t r i bu t e d s ign i f i c a n t ly to :a . i nc r e a se d RO I .b . i nc r e a se d ma r ke t sha r e o f p r oduc t s / s e r v i c e s .c . imp r ove d in t e r na l e f f i c i e nc y o f ope r a t i ons .d . i nc r e a se d a nnua l s a l e s r e ve nue .e . i nc r e a se d c us tom e r sa ti s f a ct i on .N ote : ( R) s i gn i f ie s r e ve r se c od ing . [ D r op pe d] s i gn i fi e si t e m ha s be e n e l imina t e d t o impr ove r e l i a b i l i t y .R e f e r e n c e s

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T h o m p s o n S . H . T eo i s a Lecturer in theD epa r tm en t o f D ec i s ion Sc i ences a t t heNat ional Univers i ty of Singapore . Her e c e i v e d h i s P h . D . i n M a n a g e m e n tInformat ion Systems f rom the Univer-sity of Pittsburgh. His curren t resea rchinterests include IS planning, telework-

.... ing, IT person nel , IT adop t ion andd i f fus ion , and e l ec t ron i c com m erce .

. . . . . . H is academ ic w ork has b een pub lish edin journals such as Communications of the ACM, Information andManagement, and Journal of Management Information Systems.

W il l i am R . K ing i s t he U n ive r si t y P ro -fessor a t the Univers i ty of Pi tt sburgh. Hehas served as Pres ident of the Associa t ionfor Informat ion Systems and the Ins t i tu teo f M a n a g e m e n t S c i e n c e s ( n o w I N -FORMS) and the Senior Edi tor of theMIS Quarterly.

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