Exploring the context, process and outcome of strategic information system decisions: a study of organizations from India and Singapore

Abstract

In this era of rapid change, one of the crucial issues facing senior IS executives is the development of an effective information systems (IS) strategy. Increasing advancements in information technology, together with growing pressure on the IS function to contribute to the success of business units have led to the need for a sound IS strategy. IS researchers as well as consultants have proposed various frameworks and methodologies approach, focusing on the content of the IS strategy, paying little attention to the process, and tend to present IS strategy as a product of a rational deliberate process. The objective of this research study is to understand the process by which IS strategy gets realized in organizations. Viewing IS strategy as a ‘realized strategy’ this study examines the process through which strategic IS decisions are made, and the IS-related contextual factors that affect this process.

Research Objectives: • To improve the understanding of the decision process are affected by various IS decision in organizations. • To understanding how IS decision process are affected by various contextual factors in the internal and external IS environments. • To understand how IS decision process eventually influence the effectiveness of the decision outcomes.

To address the above research objectives, a multiple-methodology design involving a combination of qualitative and quantitative methods was used. The research was carried out in two phases. The first phase of the research involved developing a research model through exploratory case research in India. In the second phase, the model and propositions derived from case studies were examined further through a survey in Singapore. In the first phase of the research, three organizations from different industries were chosen. Data on strategic IS decisions was collected through in-depth, semi-structured interviews with fifty-four executives and through a review of archival data. This yielded information on sixty seven strategic IS decisions made by the three organizations. These decisions were analyzed to explore the linkages between decision process and decision effectiveness, and to identify the IS-related contextual factors that affected the decision process. This qualitative analysis yielded a number of propositions linking the context, process and the effectiveness of strategic IS decisions. In the second phase of research, a survey was conducted among top IS executives. Before conducting the survey, the research model as well as the research instrument were pilot tested with IS researchers, consultants and IS executives. The questionnaire was mailed to 1350 IS executives, and 223 usable responses were obtained. These responses yielded data on a variety of strategic IS decisions concerning the choice of application, technology, outsourcing and internal IS-organizational arrangements. Data from these 223 responses were analyzed using various statistical techniques. Key Findings: • A rational strategic IS decision process characterize by extensive information gathering and through analysis was found to be more effective, and strategic IS decision process characterized by political behavior was found to have a negative impact on the decision effectiveness. • A centralized IS structure characterized by concentration of responsibilities concerning IS activities at the IS unit with little involvement of functional units, inhabits rationality in the decision process. • A formalized IS structure characterized by clearly defined roles, rules, procedures and use of teams contributes to greater rationality and lower politics in the IS decision process. • Higher level of IS knowledge among the top management and the functional executives could lead to political behavior in strategic IS decisions. • Higher level of business knowledge among the IS staff contributes to more rationality in the IS decision process. But, the lack of business knowledge among IS staff does not seem to be related to politics. • Organizations which have experienced success with IS in the past were found to engage in more rational process for their strategic IS decisions. Also, organizations with sophisticated business planning efforts involved in more rational process for their strategic IS decisions. • Organizations acting in highly IS-intense environments were found to curtail rational behavior in strategic IS decisions and also indulged in political behavior. • A munificent IS environment appears to have no effect on the rationality and politics in decision process. We did not find evidence for any association between dynamism in IS environment and the two dimension of the decision process namely rationality and politics. • The importance of IS in an organization and the current role played by IS does not affect the rationality and politics in decision process. • IS decision which involves use of shared resources encounter greater politics in the decision process. The study has implications for improving decision process concerning IS decisions and for designing IS unit structure in organizations. The study suggests use of formal IS management practice and decentralized IS management mechanisms involving IS as well as functional executives in strategic IS decisions. The findings suggest the importance of educating the top and functional managers on IS issues and IS staff on business related issues.