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Implementation of Formal Plans: the Case of Information Technology Strategy Petter Gottschalk
Introduction The need for improved implementation of information technology (IT) strategy has been emphasized in both empirical 1 2 3 4 5 and prescriptive studies 6 7 8. These studies show that implementation is important for four reasons. Firstly, the failure to carry out the strategic IT plan can lead to lost opportunities, duplicated efforts, incompatible systems, and wasted resources 7. Secondly, the extent to which strategic IT planning meets its objectives is determined by implementation 1 8. Further, the lack of implementation leaves ®rms dissatis®ed with and reluctant to continue their strategic IT planning 9 3 4 5 . Finally, the lack of implementation creates problems establishing and maintaining priorities in future strategic IT planning 2. Lederer and Salmela 7 have developed a theory of strategic information systems planning (SISP) which contributes to helping researchers study SISP and present their ®ndings in an organized and meaningful manner. This article adds to the body of implementation research by evaluating the plan implementation link suggested by Lederer and Salmela 7. The research question is presented in the next section, followed by the literature review, research model and research method. Finally, research results are provided and key ®ndings are discussed.
Research Question The theory developed by Lederer and Salmela Pergamon www.elsevier.com/locate/lrp
7
con-
PII: S0024-6301(99)00040-0
The need for improved implementation of information technology strategy has been emphasized in both empirical and prescriptive research studies. In this study, ten content characteristics of formal information technology plans were identified from the research literature as potential implementation predictors. A survey was conducted in Norway to investigate the link between plan and implementation. The analysis of 190 surveyed companies with strategic IT plans revealed a significant relationship between the content characteristics of the plan and the extent of plan implementation. Two implementation predictors proved significant in the testing of hypotheses: description of responsibility for the implementation and description of user involvement during the implementation. # 1999 Elsevier Science Ltd. All rights reserved
sists of an input±process±output model, seven constructs, six causal relationships and six hypotheses. The input±process±output model provides the initial bases for the theory. The seven constructs are Long Range Planning, Vol. 32, No. 3, pp. 362 to 372, 1999 # 1999 Elsevier Science Ltd. All rights reserved Printed in Great Britain 0024±6301/99 $ - see front matter
363 (i) the external environment, (ii) the internal environment, (iii) planning resources, (iv) the planning process, (v) the strategic information systems plan, (vi) the implementation of the strategic information systems plan, and (vii) the alignment of the strategic information systems plan with the organizationás business plan. The seven constructs exhibit causal relationships among each other demonstrated by hypotheses. For this research on the implementation of strategic IT plans, the most important relationship in the theory is the effect of the plan on its implementation. The plan implementation link inspired the following research question: ``What content characteristics of formal IT strategy predict the extent of plan implementation?'' IT strategy is de®ned as a plan comprised of projects for the application of information technology to assist an organization in realizing its goals. The plan also comprises a gestalt view representing philosophy, attitudes, intentions and ambitions associated with future IT use in the organization. The term `plan' refers to a written document following Mintzberg's 10 suggestion that when the word `planning' is used, the understanding should be that of formal planning. In this research, terms such as strategic information systems plan 8 and information technology strategy 6 are treated as synonymous. Two observations formed the basis for the speci®c research question. { Organizations engage in strategic IT planning. Galliers 9, Finnegan et al. 11 and Kearney 12 found that 75%, 76% and 80% respectively of those surveyed had a strategic IT plan. However, as discussed later in this article, the survey in this research was conducted in Norway where the organizations are smaller than those in previous studies, leading to a potential expectation that there would be a lower percentage of organizations with a formal IT strategy. Similarly, an Australian survey found the proportion claiming to undertake strategic IT planning ranged from 58% in large organizations to 29% in mediumsized organizations and 19% in small organizations 13. { Strategic IT plans are not implemented very extensively. Lederer and Sethi 3 found that only 24% of the projects in the strategic IT plans surveyed had been initiated more than two years into the implementation horizon. In a study of four Norwegian organizations, approximately 42% of the projects in the formal IT strategy had been implemented after 5 years 14. Ward and Grif®ths 15 (p. 97) found that ``despite a belief in its importance, in the past decade many organizations have developed perfectly sound IS strategies that have been left to gather dust, or have been implemented in a half-hearted manner''.
Taylor 16 (p. 336), too, found that ``all too often strategies remain `on the page' and are not implemented''. Content characteristics of formal IT strategy as implementation predictors is an important research topic for two main reasons. Firstly, there is a lack of empirical research, and, where it exists, implementation is included as only one of several issues 7 8. Secondly, the strategic IT plan is one of the main concerns of IS/IT managers today 17. In a survey conducted by Stephens et al. 18, 80% of chief information of®cers (CIOs) reported that they had responsibility for IT strategy. The documentation process is, however, challenging for CIOs both because it is a time-consuming effort to write the IT strategy 14, and because the plan contents chosen by the CIO may in¯uence the extent of plan implementation 7. Despite the existence of literature suggesting that a formal IT strategy is neither a true template of an organization's IT strategy process nor a re¯ection of its IT actions (e.g. 10), many organizations seem to concentrate on and struggle with their formal IT strategy implementation 8. Their struggle is the concern of this article.
Research Literature on Implementation Predictors Though there exists an extensive range of literature on strategic information technology planning (e.g. 2) and on information technology implementation (e.g. 19 ), speci®c literature on plan implementation has been relatively sparse. While the literature on strategic information technology planning treats implementation only as one of many phases, the literature on IT implementation lacks the gestalt perspective needed when plan implementation is to be studied. Furthermore, much of the reviewed research literature consists mainly of theory (e.g. 20), often lacking empirical evidence. For the testing of the plan implementation link in the theory of strategic information systems planning suggested by Lederer and Salmela 7, it was nevertheless possible to identify existing literature as listed in Table 1. The 35 organizational practices derived from the six research studies analysed constitute a comprehensive list of practices for the implementation of IT strategy. In this research, the 35 organizational practices were reduced to a set of ten predictors 21 as listed in Table 2. Long Range Planning Vol. 32
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364 TABLE 1. Organizational practices influencing IT strategy implementation Earl 1: Implementation problems E1 Resources were not made available E2 Management was hesitant E3 Technological constraints arose E4 Organizational resistance emerged 9 Galliers : Implementation barriers G1 Difficulty of recruiting G2 Nature of business G3 Measuring benefits G4 User education resources G5 Existing IT investments G6 Political conflicts G7 Middle management attitudes G8 Senior management attitudes G9 Telecommunications issues G10 Technology lagging behind needs G11 Doubts about benefits Lederer and Salmela 7: Effect of plan on implementation S1 Contents of the plan S2 Relevance of proposed projects in the plan to organizational goals S3 Sections of the plan S4 Clarity and analysis of presentation of the plan Lederer and Sethi 4: Implementation problems L1 Difficult to secure top management commitment L2 Final planning output documentation not very useful L3 Planning methodology fails to consider implementation L4 Implementing the projects requires more analysis L5 Planning methodology requires too much top management involvement L6 Output of planning is not in accordance with management expectations Lederer and Sethi 8: Prescriptions for SISP X1 Prepare migration plan X2 Identify actions to adopt plan X3 Identify resources for new tools X4 Avoid/dampen resistance X5 Specify actions for architecture X6 Identify bases of resistance Premkumar and King 5: Implementation mechanisms P1 Monitoring system to review implementation and provide feedback P2 Resource mobilization for implementation P3 User involvement in implementation P4 Top management monitoring of implementation
Research Literature on De®nition of Implementation The term `implementation' is given a variety of meanings in the literature. Nutt 31 de®nes implementation as a procedure directed by a manager to install planned change in an organization, whereas Klein and Sorra 32 see it as the process of gaining targeted organizational members' appropriate and committed use of an innovation. In Table 3, the reviewed research literature on implementation is listed according to the particular de®nition of implementation. The ®rst references in the table represent de®nitions where implementation is completed at an early stage, while those that follow represent de®nitions where implementation is completed at a later stage. The numbers may, therefore, represent a scale of stages at which authors place Implementation of Formal Plans
their de®nition of implementation. Some authors ®nd implementation to be completed when change is occurring, while others ®nd it continues until intended bene®ts have been realized. The purpose of using the stages in Table 3 is not to defend a certain rank order of the authors along the axis of implementation completion, but rather to indicate that the authors have different opinions about when implementation is considered completed. In research, implementation was de®ned as completion of projects as discussed in Appendix A.
Research Model Ten predictor elements are listed in Table 2, while four alternative implementation constructs are listed in Appendix A. To organize the research according to the theory of Lederer and Salmela 7, a causal re-
365 TABLE 2. Implementation predictors derived from organizational practices Practices
Predictors
Measurement 22
E1 G1 P2 X3
Resources were not made available Resources Difficulty of recruiting Resource mobilization for implementation Identify resources for new tools
Multiple item scale by Lee
G4 P3
User education resources User involvement in implementation
Users
Multiple item scale by Chan
G5 L3
Existing IT investments Planning methodology fails to consider implementation Implementing the projects requires more analysis Specify actions for architecture
Analysis
Multiple item scale by Segars
24
Environment
Multiple item scale by Segars
24
L4 X5
Gilbert (1993); Salmela
25
; Teo
26
23
22
E4 G6 X4 X6
Organizational resistance emerged Political conflicts Avoid/dampen resistance Identify bases of resistance
Resistance
Multiple item scale by Lee
E3
Technological constraints arose
Technology
G9 G10
Telecommuncations issues Technology lagging behind needs
Items from Teo 26; Lederer and Sethi 4; Byrd et al. 27; Salmela 25
G2
Nature of business
Relevance
G3 G11 S2
Measuring benefits Doubts about benefits Relevance of proposed projects in the plan to organizational goals Output of planning is not in accordance with management expectations
Items from Teo 26; Lederer and Sethi Segars 24; Chan 23; Hann and Weber 28
Responsibility
X1 X2
Monitoring system to review implementation and provide feedback Prepare migration plan Identify actions to adopt plan
Ideas from Ward et al. pilot tests
E2
Management was hesitant
Management
G7 G8 L1
Middle management attitudes Senior management attitudes Difficult to secure top management commitment Planning methodology requires too much top management involvement Top management monitoring of implementation
Items from Lee and King 5
Presentation
Ideas from Lederer and Salmela 7; Hussey
L6
P1
L5 P4
S1 S3 S4 L2
Contents of the plan Sections of the plan Clarity and analysis of presentation of the plan Final planning output documentation not very useful
22
29
; Gottschalk
; Segars
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24
14
4
;
; and
; Premkumar
30
January 1999
366 lationship between predictor elements and implementation constructs is proposed in the research model as illustrated in Fig. 1. For each of the ten predictors, one hypothesis was formulated stating that the greater the extent of description of the content characteristic, the greater the extent of plan implementation.
Research Method Data was collected through a survey. The CIO or person with CIO responsibilities was chosen as the informant for each organization, following prior research such as Stephens et al. 18, Earl 1, Sabherwal and King 48, and Teo and King 49.
Research Results Of 1108 mailed questionnaires, 471 (43%) were returned. 190 subjects (40%) con®rmed that they had a written IT strategy and provided information on its content characteristics. Ten content characteristics of formal IT strategy were measured in the questionnaire through 62 items as listed in Appendix A. Alternative implementation constructs are developed in Appendix A. The implementation extent scale was the most suitable measure for IT strategy implementation based on decision criteria such as statistical, methodological and theoretical considerations including the gestalt perspective. On a scale from 1 (very little extent) to 5 (very great extent), the CIOs reported an average implementation extent of 3.3. The hypothesis testing was carried out using multiple regression analysis 50. All observations with missing values were excluded, reducing the sample from 190 to 151 valid cases. Table 4 lists the results of multiple regression analysis between the ten independent variables and the dependent variable implementation. The full multiple regression equation with all ten independent variables explains 19% of the variation in implementation, i.e. the adjusted R 2 is 0.19. The F-value of 4.505 is signi®cant at P < 0.001, indicating that the null hypothesis is rejected and that there is a signi®cant relationship between content characteristics and IT strategy implementation. However, none of the content characteristics were individually signi®cant implementation predictors. When stepwise regression 50 was applied, two of the ten predictors had signi®cant coef®cients in the multiple regression equation. The description of responsibility for the implementation was associated with the highest explanatory power since it achieved the highest beta coef®cient. The description of user involvement during the implementation proved to Implementation of Formal Plans
be the other signi®cant predictor. The adjusted R 2 of the stepwise model is 0.19. None of the remaining eight potential predictors are signi®cant. Responsibility was the ®rst hypothesis to be supported in this research: the greater the extent of description of responsibility for the implementation, the greater the extent of plan implementation (H8). Implementation participants must accept responsibility 37; responsibility is a positive duty, and tasks should be assigned to speci®c individuals. Responsibility was measured by responsibility for implementation on time, responsibility for implementation within budget 51, responsibility for im29 , plementation with intended bene®ts responsibility for stepwise implementation of large projects, responsibility for implementation of high priority projects 14, responsibility for short-term bene®ts from initial projects, and personnel rewards from successful implementation. User involvement was the second hypothesis to be supported in this research: the greater the extent of description of user involvement during the implementation, the greater the extent of plan implementation (H2). User involvement during the implementation is the engagement of people who will employ the technology and the systems after implementation. User involvement was measured by a multiple item scale adopted from Chan 23.
Discussion This empirical research con®rms the plan implementation link suggested by Lederer and Salmela 7 in their theory of strategic information systems planning. The total set of content characteristics of the plan has a signi®cant impact on the extent of plan implementationÐin other words, when it comes to implementing strategic IT plans, all factors are necessary and none is suf®cient. With this in mind, however, description of responsibility for the implementation and description of user involvement during the implementation were the two speci®c content characteristics of formal IT strategy of particular signi®cance as implementation predictors. The most surprising result of this study, both from a theoretical and a practical perspective, is the relative lack of importance of management support. All the leading research studies on which this research is based 1 9 7 4 8 5 as well as all the general business literature (e.g. 52), seem to share a strong belief in the importance of management support for the implementation of IT strategy. It is interesting that management support, as re¯ected in management expectations, participation, monitoring, knowledge, time and enthusiasm, is of no signi®cant importance in this study. Several explanations, however, may be offered. Firstly, there is the distinction
367 TABLE 3. Stages of implementation completion Stage
Implementation completed when:
Reference
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.
System is installed System is put to use Programs are adopted Organization acts on new priorities Changes are installed Not abandoned or expensively overhauled Adoption has occurred Innovation is adopted and used Systems are installed and used Change is accepted Systems are accepted Innovation is accepted and used Systems are accepted and used Control rests with users Change process completed Committed use occurs Post-application phase is consolidated Satisfaction with system is achieved Intended benefits are realized
Lucas 33 Brancheau et al. 34 Baier et al. 35 Floyd and Wooldridge 36 Nutt 31 Markus 37 Lucas et al. 38 Leonard-Barton and Deschamps Srinivasan and Davis 40 Baronas and Louis 41 Ginzberg 42 Alavi and Henderson 43 Bradley and Hauser 44 Alter and Ginzberg 45 Joshi 20 Klein and Sorra 32 Rhodes and Wield 46 Griffith and Northcraft 47 Alavi and Joachimsthaier 19
between planning and implementing to be considered. Some argue that management is primarily involved in strategy-making, not in plan implementation 10. Secondly, as long as responsibility for the implementation is de®ned, management support becomes less important 14. Since responsibility is the relatively most important predictor in this research, the latter explanation may well carry weight. Next, the role of management is often to take on responsibility 52, suggesting that management is important through responsibility. Furthermore, the rising top management mobility in recent years in Norway may also have some explanatory power for the relative non-importance of management support for the IT strategy implementation 14. Finally, the existence of a plan may serve to reduce the importance of management support 7. The three main suggestions for future research are concerned with weaknesses of the presented
39
research. Firstly, the research model suggested a connection between implementation of an IT strategy and the content of the strategy. Previous research has identi®ed, as Table 1 indicates, that much more complicated causal relationships might exist. Secondly, the importance of various implementation predictors may depend on contingency issues such as organization size, implementation horizon and environmental turbulence 25. Finally, future research may widen the scope by including both factors and processes in both the planning phase and the implementation phase.
Implications for Management An important practical contribution can be derived from the conducted research. In practice, the CIO is
Information Plan (IP): Resources needed for the implementation User onvolvement during the implementation Analysis of the organisation Anticipated changes in the external environment Solutions to potential resistance during the implementation Information technology to be implemented Projects' relevance to the business plan Responsibility for the implementation Presentation of implementation issues
Plan Implementation (PI): Implementation rate to date Implementation rate to end Implementation extent Contribution to performance
FIGURE 1. Research model: IP to PI. Long Range Planning Vol. 32
January 1999
368 TABLE 4. Multiple regression analysis between implementation and predictors Content characteristics as implementation predictors
Full regression b
Full regression t-test
Resources Users Analyses Changes Resistance IT Relevance Responsibility Management Issues
0.078 0.158 0.019 0.138 ÿ 0.065 0.015 0.048 0.189 ÿ 0.071 0.145
0.766 1.665 0.170 1.407 ÿ 0.628 0.173 0.449 1.672 ÿ 0.599 1.408
Stepwise regression b
Stepwise regression t-test
0.233
2.892a
0.298
3.692a
a
The statistical signi®cance of the t-values is for P < 0.01.
often responsible for the IT strategy process, as well as the IT strategy topics and the IT strategy plan 14 18 [ . When the CIO sits down to produce the formal IT strategy, this research provides clear priorities on what to include in the plan document to increase the likelihood of its implementation. Description of responsibility for the implementation is important. Responsibility description should include responsibility for implementation on time and within budget, intended bene®ts, stepwise implementation of large projects, high priority projects and short-term bene®ts from initial projects. Description of user
involvement during the implementation is the other important factor. User involvement description should include user training, understanding, participation, operation, development and support.
A Research Tables
Implementation is measured in four different ways in this research, based on the two dimensions of time and detail. The ®rst plan implementation measurement is concerned with completion of projects in the plan which were to be completed to date. The second plan implementation
TABLE 5. Four potential implementation constructs Construct
Measurement of construct
1. Implementation rate to date
2. Implementation rate to end
3. Implementation extent
3
3
42 25 29
4. Contribution to organizational performance (Scale adopted from Teo 26 (p. 121), a = 0.87; one item added from Segars 24 (p. 154))
Implementation of Formal Plans
Divide projects actually implemented to date by projects scheduled to be implemented to date Divide projects actually implemented to date by projects in the IT strategy and divide by percent of expired time horizon IT strategy has been implemented as planned IT strategy implementation has been completed on time IT strategy implementation has been completed within budget IT strategy implementation has been completed as expected IT strategy implementation has achieved the desired results Deviations from the IT strategy have occurred during implementation You are satisfied with the IT strategy implementation Contribute to improved organizational performance Contribute to increased Return on Investment (ROI) Contribute to increased market share of products/services Contribute to improved internal efficiency of operations Contribute to increased annual sales revenue Contribute to increased customer satisfaction Contribute to alignment of IT with business needs
369 TABLE 6. Items for measurement of implementation predictor elements Construct
Measurement of Construct
a
Resources needed for the implementation Lee 22, a = 0.68
Financial resources needed for implementation Technical abilities needed for implementation Human resources needed for implementation Project team time needed for implementation External consultants needed for implementation (new) A `project champion' needed for the implementation (new) Degree of systems-related training received by information systems users Users' understanding of systems' functional and technical features Users' participation in systems projects Users' involvement in the operation of information systems Participation in the ongoing development of information systems Users' support for the implementation (new) Information needs of organizational sub-units How the organization actually operates A `blueprint' which structures organizational processes Changing organizational procedures New ideas to reengineer business processes through IT Dispersion of data and applications throughout the firm Organization of the IT function (new) Anticipated changes in competitors' behaviour Anticipated changes in suppliers' behaviour Anticipated changes in customers' behaviour Anticipated changes in information technology Anticipated changes in government regulations (new) Anticipated changes in the economy (new) Solutions to resistance caused by job security Solutions to resistance caused by change in position Solutions to potential resistance caused by new skills requirements Solutions to potential resistance caused by scepticism of results Solutions to potential resistance caused by a unit's interests Solutions to potential resistance caused by our customers Hardware to be implemented Communications technology to be implemented Databases to be implemented Applications software to be implemented Operating systems to be implemented A data architecture for the organization Projects in accordance with the expectations of management Organizational goals for the projects Benefits of the projects to the organization Projects that contribute to new business opportunities Competitive advantage from IT Strategic applications of IT Responsibility for the implementation on time Responsibility for the implementation within budget (continued on next
0.87
User involvement during implementation Chan 23, a = 0.82
Analyses of the organization Segars 24, a = 0.86
Anticipated changes in the external environment Segars 24, a = 0.82
Solutions to potential resistance during the implementation Lee 22, a = 0.64
Information technology to be implemented New scale
Projects' relevance to the business plan New scale
Responsibility for the implementation New scale
Long Range Planning Vol. 32
0.86
0.87
0.83
0.93
0.89
0.88
0.91 page)
January 1999
370 (continued ) Construct
Management support for the implementation New scale
Clear presentation of implementation issues New scale
Measurement of Construct
a
Responsibility for the implementation with intended benefits Responsibility for the stepwise implementation of large projects Responsibility for the implementation of high priority projects Responsibility for short-term benefits from initial projects Personnel rewards from successful implementation Management expectations of the implementation Management participation in the implementation Management monitoring of the implementation Management knowledge about the implementation Management time needed for the implementation Management enthusiasm for the implementation Evaluation of progress Change management A list of projects A schedule for the implementation Alignment of IT strategy with business strategy
measurement is concerned with completion of projects in the plan which are expected to be completed, or at least installed, by the end of the implementation horizon. The third implementation measurement measures completion of the whole plan in a gestalt perspective, while the fourth IT strategy implementation measurement is concerned with improved organizational performance from plan implementation. According to Ward and Grif®ths 15 (p.
102), the impact of an IT strategy implementation is
0.93
0.83
not instantaneous: ``it may, in fact take some timeÐ two or more yearsÐbetween embarking on strategic IS/IT planning for the ®rst time and demonstrating any consequent impact on business practices and results''. The operationalization of these alternative implementation constructs is listed in Table 5.
The Cronbach a for all multiple item scales was between 0.73 and 0.93 as listed in Table 6. as greater than 0.70
are considered evidence of reliability.
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Implementation of Formal Plans
Petter Gottschalk is Associate Professor of Information Management at the Norwegian School of Management, Norway.
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