Banks, developers accused of cheating
BERNAMA
Saturday, May 14th, 2011 19:22:00
PORT KLANG: About 1,400 buyers of apartments planned for five sites on Pulau Indah are asking the authorities to investigate allegations that bank personnel and the developers are colluding to deceive them.
The buyers made part payments in 1999 for apartments at Bahtera, Yamin Tower, Indah Heights, Yamin Heights and Mutiara Heights costing RM45,000 to RM120,000 which were supposed to be completed in 2003.
While none of the apartments had been completed, many of the buyers had received letters from banks asking them to pay what they still owed for the units or risk being declared a bankrupt.
Chairman of the committee of Indah Heights, Yamin Heights and Mutiara Heights buyers Wan Zamzahidi Wan Zahid said that some of the banks appeared to have issued the full amount of loans to the developers even though the projects had not been completed.
He was especially concerned because the developers did not seem to have obtained approval to change the status of the project sites from agricultural to residential land.
"A file search showed that the developers had not obtained permission from the Klang Municipal Council to build on the land," he told reporters here.
Chairman of the committee for the Bahtera apartment buyers Anuar Ibrahim said the banks had given loans in full to the developers without them meeting the stipulated conditions.
He said that he had lodged reports with the Ministry of Housing and Local Government, the Malaysian Anti-Corruption Commission and the Selangor government.
Sunday, May 15, 2011
Saturday, March 27, 2010
Saturday, February 6, 2010
Another day another challenge
Here start another term of life. Another semester, another challenge.
Hope to have a happy end.
Hope to have a happy end.
Saturday, August 1, 2009
Balanced Scorecard
Article taken from Balancedscorecard.com
Balanced Scorecard Basics
The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It was originated by Drs. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance. While the phrase balanced scorecard was coined in the early 1990s, the roots of the this type of approach are deep, and include the pioneering work of General Electric on performance measurement reporting in the 1950’s and the work of French process engineers (who created the Tableau de Bord – literally, a "dashboard" of performance measures) in the early part of the 20th century.
The balanced scorecard has evolved from its early use as a simple performance measurement framework to a full strategic planning and management system. The “new” balanced scorecard transforms an organization’s strategic plan from an attractive but passive document into the "marching orders" for the organization on a daily basis. It provides a framework that not only provides performance measurements, but helps planners identify what should be done and measured. It enables executives to truly execute their strategies.
This new approach to strategic management was first detailed in a series of articles and books by Drs. Kaplan and Norton. Recognizing some of the weaknesses and vagueness of previous management approaches, the balanced scorecard approach provides a clear prescription as to what companies should measure in order to 'balance' the financial perspective. The balanced scorecard is a management system (not only a measurement system) that enables organizations to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise.
Kaplan and Norton describe the innovation of the balanced scorecard as follows:
"The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation."
(Adapted from The Balanced Scorecard by Kaplan & Norton)
Perspectives
The balanced scorecard suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives:
The Learning & Growth Perspective
Kaplan and Norton emphasize that 'learning' is more than 'training'; it also includes things like mentors and tutors within the organization, as well as that ease of communication among workers that allows them to readily get help on a problem when it is needed. It also includes technological tools; what the Baldrige criteria call "high performance work systems."
The Business Process Perspective
The Customer Perspective
In developing metrics for satisfaction, customers should be analyzed in terms of kinds of customers and the kinds of processes for which we are providing a product or service to those customer groups.
The Financial Perspective
Strategy Mapping
Strategy maps are communication tools used to tell a story of how value is created for the organization. They show a logical, step-by-step connection between strategic objectives (shown as ovals on the map) in the form of a cause-and-effect chain. Generally speaking, improving performance in the objectives found in the Learning & Growth perspective (the bottom row) enables the organization to improve its Internal Process perspective Objectives (the next row up), which in turn enables the organization to create desirable results in the Customer and Financial perspectives (the top two rows).
Balanced Scorecard Software
The balanced scorecard is not a piece of software. Unfortunately, many people believe that implementing software amounts to implementing a balanced scorecard. Once a scorecard has been developed and implemented, however, performance management software can be used to get the right performance information to the right people at the right time. Automation adds structure and discipline to implementing the Balanced Scorecard system, helps transform disparate corporate data into information and knowledge, and helps communicate performance information.
Increase focus on strategy and results
Improve organizational performance by measuring what matters
Align organization strategy with the work people do on a day-to-day basis
Focus on the drivers of future performance
Improve communication of the organization’s Vision and Strategy
Prioritize Projects / Initiatives
Obtaining executive sponsorship and commitment
Involving a broad base of leaders, managers and employees in scorecard development
Agreeing on terminology
Choosing the right BSC Program Champion
Beginning interactive (two-way) communication first
Working through mission, vision, strategic results, and strategy mapping first to avoid rushing to judgement on measures or software
Viewing the scorecard as a long-term journey rather than a short-term project
Planning for and managing change
Applying a disciplined implementation framework
Getting outside help if needed
Definitions of Balanced Scorecard Strategic Planning & Management Terms
Customer Value Proposition
Mission
Performance Measures
Perspectives
Strategic Initiatives
Strategic Objectives
Strategic Result
Strategic Theme
Strategy Map
Strategy
Targets
Vision
Balanced Scorecard Basics
The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It was originated by Drs. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance. While the phrase balanced scorecard was coined in the early 1990s, the roots of the this type of approach are deep, and include the pioneering work of General Electric on performance measurement reporting in the 1950’s and the work of French process engineers (who created the Tableau de Bord – literally, a "dashboard" of performance measures) in the early part of the 20th century.
The balanced scorecard has evolved from its early use as a simple performance measurement framework to a full strategic planning and management system. The “new” balanced scorecard transforms an organization’s strategic plan from an attractive but passive document into the "marching orders" for the organization on a daily basis. It provides a framework that not only provides performance measurements, but helps planners identify what should be done and measured. It enables executives to truly execute their strategies.
This new approach to strategic management was first detailed in a series of articles and books by Drs. Kaplan and Norton. Recognizing some of the weaknesses and vagueness of previous management approaches, the balanced scorecard approach provides a clear prescription as to what companies should measure in order to 'balance' the financial perspective. The balanced scorecard is a management system (not only a measurement system) that enables organizations to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise.
Kaplan and Norton describe the innovation of the balanced scorecard as follows:
"The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation."
(Adapted from The Balanced Scorecard by Kaplan & Norton)
Perspectives
The balanced scorecard suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives:
The Learning & Growth Perspective
This perspective includes employee training and corporate cultural attitudes related to both individual and corporate self-improvement. In a knowledge-worker organization, people -- the only repository of knowledge -- are the main resource. In the current climate of rapid technological change, it is becoming necessary for knowledge workers to be in a continuous learning mode. Metrics can be put into place to guide managers in focusing training funds where they can help the most. In any case, learning and growth constitute the essential foundation for success of any knowledge-worker organization.
Kaplan and Norton emphasize that 'learning' is more than 'training'; it also includes things like mentors and tutors within the organization, as well as that ease of communication among workers that allows them to readily get help on a problem when it is needed. It also includes technological tools; what the Baldrige criteria call "high performance work systems."
The Business Process Perspective
This perspective refers to internal business processes. Metrics based on this perspective allow the managers to know how well their business is running, and whether its products and services conform to customer requirements (the mission). These metrics have to be carefully designed by those who know these processes most intimately; with our unique missions these are not something that can be developed by outside consultants.
The Customer Perspective
Recent management philosophy has shown an increasing realization of the importance of customer focus and customer satisfaction in any business. These are leading indicators: if customers are not satisfied, they will eventually find other suppliers that will meet their needs. Poor performance from this perspective is thus a leading indicator of future decline, even though the current financial picture may look good.
In developing metrics for satisfaction, customers should be analyzed in terms of kinds of customers and the kinds of processes for which we are providing a product or service to those customer groups.
The Financial Perspective
Kaplan and Norton do not disregard the traditional need for financial data. Timely and accurate funding data will always be a priority, and managers will do whatever necessary to provide it. In fact, often there is more than enough handling and processing of financial data. With the implementation of a corporate database, it is hoped that more of the processing can be centralized and automated. But the point is that the current emphasis on financials leads to the "unbalanced" situation with regard to other perspectives. There is perhaps a need to include additional financial-related data, such as risk assessment and cost-benefit data, in this category.
Strategy Mapping
Strategy maps are communication tools used to tell a story of how value is created for the organization. They show a logical, step-by-step connection between strategic objectives (shown as ovals on the map) in the form of a cause-and-effect chain. Generally speaking, improving performance in the objectives found in the Learning & Growth perspective (the bottom row) enables the organization to improve its Internal Process perspective Objectives (the next row up), which in turn enables the organization to create desirable results in the Customer and Financial perspectives (the top two rows).
Balanced Scorecard Software
The balanced scorecard is not a piece of software. Unfortunately, many people believe that implementing software amounts to implementing a balanced scorecard. Once a scorecard has been developed and implemented, however, performance management software can be used to get the right performance information to the right people at the right time. Automation adds structure and discipline to implementing the Balanced Scorecard system, helps transform disparate corporate data into information and knowledge, and helps communicate performance information.
Benefits of Implementing Balanced Scorecard
Increase focus on strategy and results
Improve organizational performance by measuring what matters
Align organization strategy with the work people do on a day-to-day basis
Focus on the drivers of future performance
Improve communication of the organization’s Vision and Strategy
Prioritize Projects / Initiatives
Return on investment is an important consideration before investing a significant amount of money to build and implement a new strategic management system.
What are the Primary Implementation Success Factors?
What are the Primary Implementation Success Factors?
Obtaining executive sponsorship and commitment
Involving a broad base of leaders, managers and employees in scorecard development
Agreeing on terminology
Choosing the right BSC Program Champion
Beginning interactive (two-way) communication first
Working through mission, vision, strategic results, and strategy mapping first to avoid rushing to judgement on measures or software
Viewing the scorecard as a long-term journey rather than a short-term project
Planning for and managing change
Applying a disciplined implementation framework
Getting outside help if needed
Definitions of Balanced Scorecard Strategic Planning & Management Terms
Customer Value Proposition
The Customer Value Proposition is the unique added value an organization offers customers through its operations; the logical link between action and payoff that the organization must create to be effective. Three aspects of the proposition include Product/Service Attributes (Performance/ Functionality considerations such as quality, timeliness or price), Image and Relationship.
Mission
A mission statement defines why an organization exists; the organization's purpose
Performance Measures
Performance Measures are metrics used to provide an analytical basis for decision making and to focus attention on what matters most. Performance Measures answer the question, 'How is the organization doing at the job of meeting its Strategic Objectives?'
Lagging indicators are those that show how successful the organization was in achieving desired outcomes in the past. Leading indicators are those that are a precursor of future success; performance drivers.
Perspectives
A Perspective is a view of an organization from a specific vantage point. Four basic perspectives are traditionally used to encompass an organization's activities. The organization's business model, which encompasses mission, vision, and strategy, determine the appropriate perspectives.
Strategic Initiatives
Strategic Initiatives are programs or projects that turn strategy into operational terms and actionable items, provide an analytical underpinning for decisions, and provide a structured way to prioritize projects according to strategic impact.
Strategic Initiatives answer the question, ‘What strategic projects must the organization implement to meet its Strategic Objectives?’
Strategic Objectives
Objectives are strategy components; continuous improvement activities that must be done to be successful. Objectives are the building blocks of strategy and define the organization's strategic intent. Good objectives are action-oriented statements, are easy to understand, represent continuous improvement potential and are usually not 'on-off' projects or activities.
Strategic Result
Strategic results are the desired outcome for the main focus areas of the business. Each Strategic Theme has a corresponding Strategic Result.
Strategic Theme
Strategic Themes are key areas in which an organization must excel in order to achieve its mission and vision, and deliver value to customers. Strategic Themes are the organization's "Pillars of Excellence."
Strategy Map
A Strategy Map displays the cause-effect relationships among the objectives that make up a strategy. A good Strategy Map tells a story of how value is created for the business.
Strategy
How an organization intends to accomplish its vision; an approach, or “game plan”.
Targets
Desired levels of performance for performance measures
Vision
A vision statement is an organization's picture of future success; where it wants to be in the future
Thursday, May 7, 2009
Last minute tip for exam questions
Question 1 : Business Intelligence
by definition : BI refers to any activities or skills or compiling, processing, storing or providing access to data to bring out a timely and precise information that make impact to overall business performance.
factors :
1. Alignment of the system to the business objectives
2. Type of system being used - suitability to organizational needs
3. Knowledge in handling the system
4. Accesibility and availability of data/information
Question 2 : Hardware and Software
by definition : Hardware are components of the system that perform the processing, storing, input and output to and from the system. Software are programs or applications that runs on the hardware.
Selection should be based on :
1. Organizational needs - too less = can't function, too much = waste of effort
2. System's capability and limitation - what it can do and what it can't.
3. Software compatibility to the hardware. e.g if you only can afford RAM 256MB then you should not go for Vista.
4. Organization readiness to the system - if user too slow, should look into a simpler solution.
5. System suitability for future upgrade
Question 3 : Data Communication Evolution
Data communication evolved. Take an example, some few years ago, purchaser had to send the PO through despatch or courier service. Take time to arrive to supplier. Evolve to fax system when can immediately arrive supplier. Some organization uses computerized PO which linke them with the supplier.
Reverse that to the supplier perspective. Last time, when you search for something, have to ask the supplier to come and bring the catalogue. Current system by database sharing through internet permits fast and accurate selection of parts through electronic catalogues.
In daily operation it saves time, cost and also effort.
Question 4 : Integrated Information System
By definition : Integrated Information System is a set of system that interact between each other without human intervention. Output of one system immediately become input to another system.
By example, if we can integrate maintenance reporting system, production report and breakdown record, any stoppages happened in production that reported by maintenance personnel will directly appeared in production report and breakdown record. So total downtime will be tally between this three reports. If output of maintenance report had to be key in manually into production report, then there are possibility of mistake or error to happen so output of production report will be different or not accurate. Action that may triggered from the report may not be accurate.
by definition : BI refers to any activities or skills or compiling, processing, storing or providing access to data to bring out a timely and precise information that make impact to overall business performance.
factors :
1. Alignment of the system to the business objectives
2. Type of system being used - suitability to organizational needs
3. Knowledge in handling the system
4. Accesibility and availability of data/information
Question 2 : Hardware and Software
by definition : Hardware are components of the system that perform the processing, storing, input and output to and from the system. Software are programs or applications that runs on the hardware.
Selection should be based on :
1. Organizational needs - too less = can't function, too much = waste of effort
2. System's capability and limitation - what it can do and what it can't.
3. Software compatibility to the hardware. e.g if you only can afford RAM 256MB then you should not go for Vista.
4. Organization readiness to the system - if user too slow, should look into a simpler solution.
5. System suitability for future upgrade
Question 3 : Data Communication Evolution
Data communication evolved. Take an example, some few years ago, purchaser had to send the PO through despatch or courier service. Take time to arrive to supplier. Evolve to fax system when can immediately arrive supplier. Some organization uses computerized PO which linke them with the supplier.
Reverse that to the supplier perspective. Last time, when you search for something, have to ask the supplier to come and bring the catalogue. Current system by database sharing through internet permits fast and accurate selection of parts through electronic catalogues.
In daily operation it saves time, cost and also effort.
Question 4 : Integrated Information System
By definition : Integrated Information System is a set of system that interact between each other without human intervention. Output of one system immediately become input to another system.
By example, if we can integrate maintenance reporting system, production report and breakdown record, any stoppages happened in production that reported by maintenance personnel will directly appeared in production report and breakdown record. So total downtime will be tally between this three reports. If output of maintenance report had to be key in manually into production report, then there are possibility of mistake or error to happen so output of production report will be different or not accurate. Action that may triggered from the report may not be accurate.
Saturday, May 2, 2009
Strategic Information System and Its Role in Enhancing Organizational Efficiency and Effectiveness - Introduction
Introduction
Information system played a rather important role in most organizations ranging from small business up to large multi national companies. Information system as a basic act as a support in documentation and most of administrative works. Information system can be defined as a set of information resources that interconnected and under same management control and also shares common functionality. This system usually consists of hardware, software, data, information (processes data), applications, communication and user1
Somewhere around late 60’s to early 70’s, some type of information system had been identified to have a strategic importance to the organization. Avison, Eardley and Powell (1996) named Kriebel (1968) and Whisler (1970) as the first two researchers that identified and discussed about strategic importance of information system and linkage between information systems to business framework. Based on the discussion, it can be concluded that information system that have this kind of linkage that enable the organization to perform specific business strategy are called Strategic Information System.
Basically, strategic information system can be described as an information system that has intention to enable the organization to achieve and later to sustain its competitive advantages against their competitors under a variety of environmental conditions. Pant and Hsu (1995) concluded that there is a strong realization by organizations that implementation of information system to the organization’s strategic activities had become one of effective way to improve business performance.
In this review, we are going to establish a hypothesis on the function of strategic information system in enhancing the organizational efficiency and effectiveness. By literature, efficiency means the ratio of output over the input and in depth; efficiency can be explained as achieving the intended result without additional effort, time or expenses. Effectiveness is a measurement of a degree where effect can be attained or how much influence to achieve the effect. To make things simple, efficiency means doing the thing right and effectiveness refers to doing the right thing.
It is important to look into the link, between the system and the businesses strategic objectives.
Basically, review will cover on linkage part which among all will discuss about the alignment of information system to the business strategy, selection of information system to be implemented, knowledge in implementing and handling the information system and also on the factor that either to enable and ease up the implementation or, in the other hand, created hurdles along the path of implementation.
1 http://www.bricker.com/legalservices/practice/hcare/hipaa/164.304.asp
Information system played a rather important role in most organizations ranging from small business up to large multi national companies. Information system as a basic act as a support in documentation and most of administrative works. Information system can be defined as a set of information resources that interconnected and under same management control and also shares common functionality. This system usually consists of hardware, software, data, information (processes data), applications, communication and user1
Somewhere around late 60’s to early 70’s, some type of information system had been identified to have a strategic importance to the organization. Avison, Eardley and Powell (1996) named Kriebel (1968) and Whisler (1970) as the first two researchers that identified and discussed about strategic importance of information system and linkage between information systems to business framework. Based on the discussion, it can be concluded that information system that have this kind of linkage that enable the organization to perform specific business strategy are called Strategic Information System.
Basically, strategic information system can be described as an information system that has intention to enable the organization to achieve and later to sustain its competitive advantages against their competitors under a variety of environmental conditions. Pant and Hsu (1995) concluded that there is a strong realization by organizations that implementation of information system to the organization’s strategic activities had become one of effective way to improve business performance.
In this review, we are going to establish a hypothesis on the function of strategic information system in enhancing the organizational efficiency and effectiveness. By literature, efficiency means the ratio of output over the input and in depth; efficiency can be explained as achieving the intended result without additional effort, time or expenses. Effectiveness is a measurement of a degree where effect can be attained or how much influence to achieve the effect. To make things simple, efficiency means doing the thing right and effectiveness refers to doing the right thing.
It is important to look into the link, between the system and the businesses strategic objectives.
Basically, review will cover on linkage part which among all will discuss about the alignment of information system to the business strategy, selection of information system to be implemented, knowledge in implementing and handling the information system and also on the factor that either to enable and ease up the implementation or, in the other hand, created hurdles along the path of implementation.
1 http://www.bricker.com/legalservices/practice/hcare/hipaa/164.304.asp
Strategic Information System and Its Role in Enhancing Organizational Efficiency and Effectiveness - Alignment of System
Alignment of Strategic Information System to Business Strategy
The alignment of Strategic Information System and Business Strategy has been a consistent topic in the academic and business literature for decades. It is a challenge to link business strategy in this dynamic business world with the fast pace of evolving technologies in information system. Hence, it has to be a continuous process because of continual changes is internal environment that affect the information requirement and the external environment that influences the technological, competitive and manpower availability parameter. This requires a full commitment from top management as it required continual investment to keep abreast with the evolving technology.
It is critical to choose the right technology because it will involve investment and the different between the right and wrong decision can be a pivoting point for the survival of the organization in long run.
The alignment of information technology (IT) and the business goals (hereafter referred to as alignment) is crucial to the success of organizations. Recent studies, however, show that organizations are struggling in addressing alignment challenges (Levy et al., 2003). According to a METAGroup survey of CIOs globally, alignment and value management were ranked as the top issues of concern to CIOs in 2005 (CRM Today, 2005). The Standish Chaos report of 2003 indicates that 71 per cent of all projects were challenged or delivered late and that US IT projects had a waste of $140 billion. Stanleigh (2005) also cites a report by Pricewaterhouse Coopers (2004), which indicated that only 2.5 per cent of global businesses achieve 100 per cent project success. The major reason for these failures has been attributed to poor alignment of projects with core strategies of the organizations (Stanleigh, 2005).
Understanding Strategic Information System.
Strategic information system is a strategy where information systems is used to assists in making timely business decisions and formulating feasible strategic plans. In other words, the synergies of the information systems to business strategy, so that the later will be further enhance with the application of correct information systems.
In 80’s and 90’s there has been a surge in the realization of strategic importance of information systems to an organization.
Strategic Information System comprises a number of modules including strategic prerequisites, competitive priorities, strategic directions, strategic decision areas, strategy choices, strategic options and business transformation, all of which are integrated together seamlessly to form a unified system (Henry C.W.L. et al., 2000). To facilitate the efficient function of the whole system, a free information flow among various modules of the system needs to be achieved.
According to Business Week article, ‘The Technology Payoff’ (Business Week, June 14, 1993), throughout the 1980s US businesses invested a staggering $1 trillion in the information technology. This huge investment did not result in a commensurate productivity gain - overall national productivity rose at a 1% annual rate compared with nearly 5% in Japan. Using the information technology merely to automate routine tasks without altering the business processes is identified as the cause of the above productivity paradox. As IT is used to support breakthrough ideas in business processes, essentially supporting direct value adding activities instead of merely cost saving, it has resulted in major productivity gains.
Strategic Information System Planning
A Strategic Information Systems Planning (SISP) is the blueprint that forms the basis for the initiation and development of information systems in any organization. Without a clearly defined SISP, computers would merely become an expense which does nothing to add value to an organization.
Strategic Information Systems Planning is the analysis of a corporation’s information and processes using business information models together with the evaluation of risk, current needs and requirements. The result is an action plan showing the desired course of events necessary to align information use and needs with the strategic direction of the company (Battaglia, 1991).
SISP thus is used to identify the best targets for purchasing and installing new management Information systems and help an organization maximize the return on its information technology investment. A portfolio of computer-based applications is identified that will assist an organization in executing its business plans and realize its business goals. There is a growing realization that the application of information technology (IT) to a firm’s strategic activities has been one of the most common and effective ways to improve business performance.
Information system has been evolved since the inaugural part of its implementation. It started as a basic data processing system and after time, several stages of realization of system’s utilization which lead to more specific and more business-focus nature of the system. According to the three-era model of John Ward, et al.(1990), there are three distinct, albeit overlapping, eras of information systems, dating back to the 60’s. The relationship over time of the three eras of information systems is shown below :
60’s - Data Processing (DP)
Standalone computers, remote from users, cost reduction function.
70’s & 80’s Management Information System (MIS)
Distributed process, interconnected, regulated by management service, supporting the business, user driven.
80’s & 90’s - Strategic Information System (SIS)
Networked, integrated systems, available and supportive to users, relate to business strategy, enable the business - business driven.
A portfolio model derived from McFarlan (1984) considers that the contribution of IS/IT to the business now and in the future are based on its impact to the industry it belong or in a simple word, to a certain extent, reflects by nature of the business it being involved. Based on this model applications are divided into four categories, as shown here:
Strategic - Applications which are critical for future success. Examples: computer-integrated manufacturing, links to suppliers, etc.
Turnaround - Applications which may be of future strategic importance. Examples: electronic
data interchange with wholesalers, electronic mail, etc.
Factory - Applications which are critical to sustaining existing business. Examples: employee database, maintenance scheduling, etc.
Support - Applications which improve management
and performance but are not critical to the business. Examples: time recording, payroll, etc.
Some characteristics of strategic IS planning are:
• Main task: strategic/competitive advantage, linkage to business strategy.
• Key objective: pursuing opportunities, integrating IS and business strategies
• Direction from: executives/senior management and users, coalition of users/management and information systems.
• Main approach: entrepreneurial (user innovation), multiple (bottom-up development, top down analysis, etc.) at the same time.
Method of Strategic Information Planning.
A number of strategic issues need to be addressed to build an SIS model that will support the realization of business goals.
Michael J.E et. al., (1993) recommends that SISP should target the following area:
Aligning investment in IS with business goal
Exploiting IT for competitive advantage
Directing effective and efficient management of IS resources
Developing technology policies and architecture.
One of the major obstacles to achieving strategy alignment is that many organizations do a poor job of communicating their strategy. When people who are key to executing strategy don’t know what the strategy is or understand how their day-to-day activities contribute to strategy execution, it’s highly likely overall enterprise performance is going to suffer. Strategy maps are one way to shore up communication about strategy with a visual representation.
Strategy maps are:
· Derived from the Balanced Scorecard. Strategy maps emerged as part of Robert Kaplan’s and David Norton’s seminal work with the Balanced Scorecard.1 At their simplest, strategy maps describe how the organization creates value — the missing link between strategy formulation and strategy execution. Using the four balanced scorecard perspectives as a starting point, the strategy map shows the cause and effect linkages between the four perspectives:
Financial — to succeed financially how should we appear to our shareholders?
Customer — to achieve our vision, how should we appear to our customers?
Learning and growth — to achieve our vision, how will we sustain our ability to change and improve?
Internal business process — to satisfy our shareholders and customers, at what business process must we excel?
A strategy map is a generic architecture for describing strategy that helps organizations develop a holistic, integrated, and systematic way of viewing their strategy. The strategy map forces an organization to think about its strategy from the four perspectives, to develop the outcomes and drivers of the strategy, and to draw the linkages between them.
· Developed within a top-down process. Strategy map development is a top-down process beginning with the financial (value) perspective and ending with the learning and growth (future orientation) perspective. Developing a strategy map is a forcing function that drives an organization to first reach a consensus on its strategy and related objectives, and then to develop expected outcomes and their dependent drivers. Financial and customer perspectives represent the expected outcomes of strategy (i.e., make money and have happy customers), while the internal process and learning and growth perspectives represent the drivers of those outcomes.
· A growth strategy drives revenue. Companies in new or emerging markets will be likely to pursue growth strategies. Developing new sources of revenue through new markets, new products, and/or new customers as well as increasing the “wallet share” of existing customers (i.e., expand the relationship through cross-selling, upselling, etc.) are central to a growth strategy. By growing top-line revenue faster than expenses, organizations can expand margins and improve their profitability — typically leading to stock appreciation.
· A productivity strategy focuses on cost and efficiency. Favored by companies in mature industries, productivity strategies work on the expense side to lower the costs of products and services and improve the utilization rate of assets. This too can also lead to improved margins and profits.
Environment for the Success of Strategic Information System Planning.
Rich communications in organizations reflect the intangible cultural traits and tangible strategic practices (Canessa and Riolo, 2003; Carmeli and Tishler, 2004). Effective information flows require high level of congruence between organizational culture and strategic practices (Leisen et al., 2002; Gallivan and Srite, 2005). Outstanding organizations integrate their organizational value architecture and strategic information system (Wagner, 2004; Avison et al., 2004). identifying styles of strategic information system as caretakers, defenders, analyzers and prospectors. This classification is adapted from the works of Miles and Snow (1978) and Apigian et al. (2006).
This integrative framework of organizational culture and Information System is further extended to identifying styles of strategic information system as caretakers, defenders, analyzers and prospectors which are briefly explained.
Caretakers have a consistent and stable internal focus that processes organizational routines with great efficiency.
Defenders try to protect their particular strategic resources and markets.
Analyzers are highly organized according to their goal-driven results.
Prospectors continue to seek and locate new market opportunities while sustain their current markets with resilience. The strategic information system has a profile in the context of integrative framework of Information System and organizational culture.
Information Management Environment IME refers to the organizational environment for IT/IS management. As observed by many, IT application in organizations generally goes through various stages, from inception to maturity. Nolan’s information systems development stage theory provides the theoretical foundation for evaluation of information management environment maturity (Nolan 1973, 1979). Some scholars further proposed the measurement techniques and parameters based on Nolan’s model. For example, Benbasat (1984) summarized and proposed 19 criteria for measuring maturity. They include such criteria as the degree and the scope of IS application in business, level of senior management knowledge and involvement in IS.
In a rapidly changing business environment, although the formation of networks is important, the cultural patterns are less clear and more undistinguishable. Firms may not easily grasp the complexity that exists between organizational culture and Information System. However, a successful formulation and implementation of Information System may need to consider deeply-held cultural traits and intangible behavioral response patterns of supply chain participants. In this sense, this paper clarifies how a particular type of organizational culture may fit better to a particular Information System and furthermore suggests an appropriate style of strategic information system.
However, the consistent challenge for researchers is how to connect organizational culture in the implementation level of business goals and practices (Denison and Mishra, 1995; Flamholtz, 2001). Here lies the need for rigorous examination of organization culture in the context of ever expanding strategic business reality. In particular, as firms interact and align with the diverse network of suppliers and customers as their supply chain partners, rich dynamics of organizational culture become more illusive and less understandable. In this sense, organizational culture in the context of Strategic Information Systems deserves a careful research
Critical Success Factor
Due to the importance of aligning IS plans with business plans, it is useful to examine the critical success factors (CSFs) for such alignment. Briefly, CSFs are those factors that management need to pay special attention to (Rockart, 1975) in order to enhance the chances of successful IS planning alignment. Past research has investigated CSFs in manufacturing resource planning (MRP) implementation (Ang et al., 1995; Burns et al., 1991), quality management (Black & Porter, 1996; Saraph et al., 1989), strategic alliances (Rai et al., 1996), data management (Guynes & Vancecek, 1996) and strategic IS planning (Ang & Teo, 1997). However, none of the existing research has examined CSFs in IS planning alignment and this paper is an initial attempt to do so. The results should prove useful in enhancing our existing knowledge on how to better align IS plans with business plans, thereby facilitating successful IS planning efforts.
A survey done by Thompson S.H.T et. al., (1998) conclude the rank of critical success factors below. It is a result of response from senior IS executives from 169 firms. It rates the degree of importance of each item on a five-point Likert scale ranging from 1 (not important) to 5 (very important). The results are shown below:
CSF#1: Top management is committed to the strategic use of IT (mean"4.34)
The importance of top management commitment to IT is emphasized by an IT director who commented that it is difficult to use IT strategically because top management do not view IT as a strategic tool for competitive advantage. Consequently, alignment between business and IT is weak.
CSF#2: Information Systems (IS) management is knowledgeable about business (mean"4.26)
Note that IS management knowledge about business is even more important than top management knowledge about IT (which is ranked CSF#10). CIOs with high strategic IT and business-related knowledge were found to enjoy significantly greater participation in top management teams. Furthermore, such knowledge also significantly influenced the extent of IT deployment in business strategies and value chain activities. Note that business knowledge encompasses business strategies, organizational work processes, products and services, industry’s recipes for success, and competitors’ strengths, weaknesses and potential actions.
CSF#3: Top management has confidence in the IS department (mean"4.20).
This item is related to CSFd1 above since top management needs to have confidence in the IS department in order to be committed to the strategic use of IT. Without such confidence, it will be very difficult for top management to allocate appropriate resources (in terms of funds, personnel, etc.) for the planning and development of strategic IT applications.
CSF#4: The IS department provides efficient and reliable services to user departments
(mean"4.12)
CSF#5: There is frequent communication between user and IS departments (mean"4.07)
CSF#6: The IS staffs are able to keep up with advances in I¹ (mean"4.10)
CSF#7: Business and IS management work together in partnership in prioritizing applications development (mean"4.06)
CSF#8: Business goals and objectives are made known to IS management (mean"4.06)
CSF#9: The IS department is responsive to user needs (mean"4.03)
CSF#10: Top management is knowledgeable about IT (mean"4.00)
The list of CSFs enables practitioners to concentrate on a set of factors that will enhance the alignment of IS plans with business plans. By evaluating each CSF in the context of its organization, practitioners will be better able to design appropriate strategies for better IS planning alignment.
Researchers can investigate the reasons why there appears to be an emphasis on content linkage rather than personnel or timing linkages. Practitioners should realize that by placing less emphasis on timing and personnel linkages compared to content linkages, they could be missing out on other important or potentially effective mechanisms for aligning IS plans with business plans. This is especially relevant in cases where there is an absence of business plans, or lack of comprehensiveness of business plans, for such content alignment to take place. In such situations, both timing and (especially) personnel linkages may often serve as useful surrogates for content linkage.
The alignment of Strategic Information System and Business Strategy has been a consistent topic in the academic and business literature for decades. It is a challenge to link business strategy in this dynamic business world with the fast pace of evolving technologies in information system. Hence, it has to be a continuous process because of continual changes is internal environment that affect the information requirement and the external environment that influences the technological, competitive and manpower availability parameter. This requires a full commitment from top management as it required continual investment to keep abreast with the evolving technology.
It is critical to choose the right technology because it will involve investment and the different between the right and wrong decision can be a pivoting point for the survival of the organization in long run.
The alignment of information technology (IT) and the business goals (hereafter referred to as alignment) is crucial to the success of organizations. Recent studies, however, show that organizations are struggling in addressing alignment challenges (Levy et al., 2003). According to a METAGroup survey of CIOs globally, alignment and value management were ranked as the top issues of concern to CIOs in 2005 (CRM Today, 2005). The Standish Chaos report of 2003 indicates that 71 per cent of all projects were challenged or delivered late and that US IT projects had a waste of $140 billion. Stanleigh (2005) also cites a report by Pricewaterhouse Coopers (2004), which indicated that only 2.5 per cent of global businesses achieve 100 per cent project success. The major reason for these failures has been attributed to poor alignment of projects with core strategies of the organizations (Stanleigh, 2005).
Understanding Strategic Information System.
Strategic information system is a strategy where information systems is used to assists in making timely business decisions and formulating feasible strategic plans. In other words, the synergies of the information systems to business strategy, so that the later will be further enhance with the application of correct information systems.
In 80’s and 90’s there has been a surge in the realization of strategic importance of information systems to an organization.
Strategic Information System comprises a number of modules including strategic prerequisites, competitive priorities, strategic directions, strategic decision areas, strategy choices, strategic options and business transformation, all of which are integrated together seamlessly to form a unified system (Henry C.W.L. et al., 2000). To facilitate the efficient function of the whole system, a free information flow among various modules of the system needs to be achieved.
According to Business Week article, ‘The Technology Payoff’ (Business Week, June 14, 1993), throughout the 1980s US businesses invested a staggering $1 trillion in the information technology. This huge investment did not result in a commensurate productivity gain - overall national productivity rose at a 1% annual rate compared with nearly 5% in Japan. Using the information technology merely to automate routine tasks without altering the business processes is identified as the cause of the above productivity paradox. As IT is used to support breakthrough ideas in business processes, essentially supporting direct value adding activities instead of merely cost saving, it has resulted in major productivity gains.
Strategic Information System Planning
A Strategic Information Systems Planning (SISP) is the blueprint that forms the basis for the initiation and development of information systems in any organization. Without a clearly defined SISP, computers would merely become an expense which does nothing to add value to an organization.
Strategic Information Systems Planning is the analysis of a corporation’s information and processes using business information models together with the evaluation of risk, current needs and requirements. The result is an action plan showing the desired course of events necessary to align information use and needs with the strategic direction of the company (Battaglia, 1991).
SISP thus is used to identify the best targets for purchasing and installing new management Information systems and help an organization maximize the return on its information technology investment. A portfolio of computer-based applications is identified that will assist an organization in executing its business plans and realize its business goals. There is a growing realization that the application of information technology (IT) to a firm’s strategic activities has been one of the most common and effective ways to improve business performance.
Information system has been evolved since the inaugural part of its implementation. It started as a basic data processing system and after time, several stages of realization of system’s utilization which lead to more specific and more business-focus nature of the system. According to the three-era model of John Ward, et al.(1990), there are three distinct, albeit overlapping, eras of information systems, dating back to the 60’s. The relationship over time of the three eras of information systems is shown below :
60’s - Data Processing (DP)
Standalone computers, remote from users, cost reduction function.
70’s & 80’s Management Information System (MIS)
Distributed process, interconnected, regulated by management service, supporting the business, user driven.
80’s & 90’s - Strategic Information System (SIS)
Networked, integrated systems, available and supportive to users, relate to business strategy, enable the business - business driven.
A portfolio model derived from McFarlan (1984) considers that the contribution of IS/IT to the business now and in the future are based on its impact to the industry it belong or in a simple word, to a certain extent, reflects by nature of the business it being involved. Based on this model applications are divided into four categories, as shown here:
Strategic - Applications which are critical for future success. Examples: computer-integrated manufacturing, links to suppliers, etc.
Turnaround - Applications which may be of future strategic importance. Examples: electronic
data interchange with wholesalers, electronic mail, etc.
Factory - Applications which are critical to sustaining existing business. Examples: employee database, maintenance scheduling, etc.
Support - Applications which improve management
and performance but are not critical to the business. Examples: time recording, payroll, etc.
Some characteristics of strategic IS planning are:
• Main task: strategic/competitive advantage, linkage to business strategy.
• Key objective: pursuing opportunities, integrating IS and business strategies
• Direction from: executives/senior management and users, coalition of users/management and information systems.
• Main approach: entrepreneurial (user innovation), multiple (bottom-up development, top down analysis, etc.) at the same time.
Method of Strategic Information Planning.
A number of strategic issues need to be addressed to build an SIS model that will support the realization of business goals.
Michael J.E et. al., (1993) recommends that SISP should target the following area:
Aligning investment in IS with business goal
Exploiting IT for competitive advantage
Directing effective and efficient management of IS resources
Developing technology policies and architecture.
One of the major obstacles to achieving strategy alignment is that many organizations do a poor job of communicating their strategy. When people who are key to executing strategy don’t know what the strategy is or understand how their day-to-day activities contribute to strategy execution, it’s highly likely overall enterprise performance is going to suffer. Strategy maps are one way to shore up communication about strategy with a visual representation.
Strategy maps are:
· Derived from the Balanced Scorecard. Strategy maps emerged as part of Robert Kaplan’s and David Norton’s seminal work with the Balanced Scorecard.1 At their simplest, strategy maps describe how the organization creates value — the missing link between strategy formulation and strategy execution. Using the four balanced scorecard perspectives as a starting point, the strategy map shows the cause and effect linkages between the four perspectives:
Financial — to succeed financially how should we appear to our shareholders?
Customer — to achieve our vision, how should we appear to our customers?
Learning and growth — to achieve our vision, how will we sustain our ability to change and improve?
Internal business process — to satisfy our shareholders and customers, at what business process must we excel?
A strategy map is a generic architecture for describing strategy that helps organizations develop a holistic, integrated, and systematic way of viewing their strategy. The strategy map forces an organization to think about its strategy from the four perspectives, to develop the outcomes and drivers of the strategy, and to draw the linkages between them.
· Developed within a top-down process. Strategy map development is a top-down process beginning with the financial (value) perspective and ending with the learning and growth (future orientation) perspective. Developing a strategy map is a forcing function that drives an organization to first reach a consensus on its strategy and related objectives, and then to develop expected outcomes and their dependent drivers. Financial and customer perspectives represent the expected outcomes of strategy (i.e., make money and have happy customers), while the internal process and learning and growth perspectives represent the drivers of those outcomes.
· A growth strategy drives revenue. Companies in new or emerging markets will be likely to pursue growth strategies. Developing new sources of revenue through new markets, new products, and/or new customers as well as increasing the “wallet share” of existing customers (i.e., expand the relationship through cross-selling, upselling, etc.) are central to a growth strategy. By growing top-line revenue faster than expenses, organizations can expand margins and improve their profitability — typically leading to stock appreciation.
· A productivity strategy focuses on cost and efficiency. Favored by companies in mature industries, productivity strategies work on the expense side to lower the costs of products and services and improve the utilization rate of assets. This too can also lead to improved margins and profits.
Environment for the Success of Strategic Information System Planning.
Rich communications in organizations reflect the intangible cultural traits and tangible strategic practices (Canessa and Riolo, 2003; Carmeli and Tishler, 2004). Effective information flows require high level of congruence between organizational culture and strategic practices (Leisen et al., 2002; Gallivan and Srite, 2005). Outstanding organizations integrate their organizational value architecture and strategic information system (Wagner, 2004; Avison et al., 2004). identifying styles of strategic information system as caretakers, defenders, analyzers and prospectors. This classification is adapted from the works of Miles and Snow (1978) and Apigian et al. (2006).
This integrative framework of organizational culture and Information System is further extended to identifying styles of strategic information system as caretakers, defenders, analyzers and prospectors which are briefly explained.
Caretakers have a consistent and stable internal focus that processes organizational routines with great efficiency.
Defenders try to protect their particular strategic resources and markets.
Analyzers are highly organized according to their goal-driven results.
Prospectors continue to seek and locate new market opportunities while sustain their current markets with resilience. The strategic information system has a profile in the context of integrative framework of Information System and organizational culture.
Information Management Environment IME refers to the organizational environment for IT/IS management. As observed by many, IT application in organizations generally goes through various stages, from inception to maturity. Nolan’s information systems development stage theory provides the theoretical foundation for evaluation of information management environment maturity (Nolan 1973, 1979). Some scholars further proposed the measurement techniques and parameters based on Nolan’s model. For example, Benbasat (1984) summarized and proposed 19 criteria for measuring maturity. They include such criteria as the degree and the scope of IS application in business, level of senior management knowledge and involvement in IS.
In a rapidly changing business environment, although the formation of networks is important, the cultural patterns are less clear and more undistinguishable. Firms may not easily grasp the complexity that exists between organizational culture and Information System. However, a successful formulation and implementation of Information System may need to consider deeply-held cultural traits and intangible behavioral response patterns of supply chain participants. In this sense, this paper clarifies how a particular type of organizational culture may fit better to a particular Information System and furthermore suggests an appropriate style of strategic information system.
However, the consistent challenge for researchers is how to connect organizational culture in the implementation level of business goals and practices (Denison and Mishra, 1995; Flamholtz, 2001). Here lies the need for rigorous examination of organization culture in the context of ever expanding strategic business reality. In particular, as firms interact and align with the diverse network of suppliers and customers as their supply chain partners, rich dynamics of organizational culture become more illusive and less understandable. In this sense, organizational culture in the context of Strategic Information Systems deserves a careful research
Critical Success Factor
Due to the importance of aligning IS plans with business plans, it is useful to examine the critical success factors (CSFs) for such alignment. Briefly, CSFs are those factors that management need to pay special attention to (Rockart, 1975) in order to enhance the chances of successful IS planning alignment. Past research has investigated CSFs in manufacturing resource planning (MRP) implementation (Ang et al., 1995; Burns et al., 1991), quality management (Black & Porter, 1996; Saraph et al., 1989), strategic alliances (Rai et al., 1996), data management (Guynes & Vancecek, 1996) and strategic IS planning (Ang & Teo, 1997). However, none of the existing research has examined CSFs in IS planning alignment and this paper is an initial attempt to do so. The results should prove useful in enhancing our existing knowledge on how to better align IS plans with business plans, thereby facilitating successful IS planning efforts.
A survey done by Thompson S.H.T et. al., (1998) conclude the rank of critical success factors below. It is a result of response from senior IS executives from 169 firms. It rates the degree of importance of each item on a five-point Likert scale ranging from 1 (not important) to 5 (very important). The results are shown below:
CSF#1: Top management is committed to the strategic use of IT (mean"4.34)
The importance of top management commitment to IT is emphasized by an IT director who commented that it is difficult to use IT strategically because top management do not view IT as a strategic tool for competitive advantage. Consequently, alignment between business and IT is weak.
CSF#2: Information Systems (IS) management is knowledgeable about business (mean"4.26)
Note that IS management knowledge about business is even more important than top management knowledge about IT (which is ranked CSF#10). CIOs with high strategic IT and business-related knowledge were found to enjoy significantly greater participation in top management teams. Furthermore, such knowledge also significantly influenced the extent of IT deployment in business strategies and value chain activities. Note that business knowledge encompasses business strategies, organizational work processes, products and services, industry’s recipes for success, and competitors’ strengths, weaknesses and potential actions.
CSF#3: Top management has confidence in the IS department (mean"4.20).
This item is related to CSFd1 above since top management needs to have confidence in the IS department in order to be committed to the strategic use of IT. Without such confidence, it will be very difficult for top management to allocate appropriate resources (in terms of funds, personnel, etc.) for the planning and development of strategic IT applications.
CSF#4: The IS department provides efficient and reliable services to user departments
(mean"4.12)
CSF#5: There is frequent communication between user and IS departments (mean"4.07)
CSF#6: The IS staffs are able to keep up with advances in I¹ (mean"4.10)
CSF#7: Business and IS management work together in partnership in prioritizing applications development (mean"4.06)
CSF#8: Business goals and objectives are made known to IS management (mean"4.06)
CSF#9: The IS department is responsive to user needs (mean"4.03)
CSF#10: Top management is knowledgeable about IT (mean"4.00)
The list of CSFs enables practitioners to concentrate on a set of factors that will enhance the alignment of IS plans with business plans. By evaluating each CSF in the context of its organization, practitioners will be better able to design appropriate strategies for better IS planning alignment.
Researchers can investigate the reasons why there appears to be an emphasis on content linkage rather than personnel or timing linkages. Practitioners should realize that by placing less emphasis on timing and personnel linkages compared to content linkages, they could be missing out on other important or potentially effective mechanisms for aligning IS plans with business plans. This is especially relevant in cases where there is an absence of business plans, or lack of comprehensiveness of business plans, for such content alignment to take place. In such situations, both timing and (especially) personnel linkages may often serve as useful surrogates for content linkage.
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