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Enterprisewide Information Management: State-of-the-Art Strategic PlanningMarilyn M. Parker & Robert J. BensonPublished online: 21 May 2007.

To cite this article: Marilyn M. Parker & Robert J. Benson (1989) Enterprisewide Information Management: State-of-the-ArtStrategic Planning, Journal of Information Systems Management, 6:3, 14-23, DOI: 10.1080/07399018908960153

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CIO CONCERNS AND CORPORATE ISSUES

Enterprisewide Information Management:

Strategic Planning Marilyn M. Parker and Robert J . Benson

MIS plans compete with many other poten- tial business investments and business problems for the attention of senior man- agement. Consequently, a strategic plan- ning methodology should not only produce a plan linked t o business planning but also should create a persuasive case for its sup- port. This article examines the state of the art in strategic planning in terms of en- terprfsewide information management (EwlM), which i s a set of concepts and tools that enable MIS managers to plan, orga- nize, implement, and control information resources to meet current andfuture strate- gic goofs.

I mportant differences exist between plan- ning that results in systems and data archi- tectures and planning that identifies com- petitive systems opportunities. However, senior management desires both results, -

which can be part of a single planning process. The difficulty is not only knowing which to pursue in a particular enterprise but knowing what is pos- sible to pursue for a particular enterprise. In each case, the planning process should link to the en- terprise business planning process; the planning results should link to business planning, strategy, and objectives.

For the last few years, MIS directors, business executives, consultants, companies and institu- tions have worked to better understand effective planning for information technology. This article focuses on successful strategic planning and up-

dates the central ideas in planning for information technology in the enterprise. The main question is how can MIS managers motivate and mobilize the enterprise management team to recognize, under- stand, and act concerning the role and mission of information technologies in the enterprise?

The ultimate challenge for an enterprise is actu- ally being productive. Planning by itself is not suffi- cient without effective execution. Furthermore, planning without a vision of the business itself and of the realistic technological opportunities for the business is not productive. The level of accom- plishment is determined by the type of leadership -business or technology-in the enterprise. The concepts and methodologies that foster business and technology leadership in the enterprise is what strategic planning and enterprisewide infor- mation management is a1 about.

Enterprisewide Information Management

Enterprisewide information management com- prises five basic ideas, origina.lly defined in the fist report from a 1985 joint study between the IBM Los Angeles Scientific Center and the Center for the Study of Data Processing in St Louis.' These ideas are:

A connection between business planning and information technology (i.e., MIS) planning is possible. The pIanning link is based on relationships be- fween the business domain and the technology

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domain of the enterprise. Planning focuses on each line of business in the business domain. In the technology domain, planning focuses on infrastructure and application portfolios. Four planning processes link business and tech- nology planning.

The following sections summarize and update these ideas.

MIS Planning Link t o the Business Plan

The premise of EwIM is that it is possible to plan effectively for the use of information technology in business by linking technology planning to busi- ness planning. With this premise, EwIM has devel- oped an intellectual framework that links various planning approaches and concepts and produces a relevant, rational, and workable approach to long-range planning. The key is the dual recogni- tion that business and technology planning should be linked and that business planning should drive the technology planning.

As shown in Exhibit 1, the planning relation- ships are circular. Business planning drives how the enterprise is organized, which should drive the technology planning to support the business. Technology planning produces opportunities for the future use of technology in the enterprise which will influence business strategies and plans.

Business and Technology Domains

Toe basic EwIM concept divides the enterprise into two parts: its business activities and its tech-

Exhibit 1, . Enterprisewide Informatipn '; . . , ': ' ?fanagemen t Plantiing:'., .Ti,-.'.

' : . . , ;.Fra'hewo&, ~ . . \ ~ b ~ ~ : ~ . ~ . ~ 2 : ~ ~ 4 , ~ ,;>::;;;:

Business Information Planning 4- Technology

and Strategy Opportunities

I Business

t Information

Organization - Technology and Planning Systems Planning

SJunCE: M.M.'Parker, R.J. Benscn. and E. frainor, Inlormation Ecc- nomics (Englewood Cliffs Kl: PrenticeHall. 1988). p 59.

nology activities. The term domain is used to char- acterize the two different activiti.es and to empha- size the different management and planning processes involved. For example, a system used to store and manage personnel data creates sev- eral management responsibilities, including sys- tems design, software development, control over the data, security of information, and authoriza- tion for staff to acquire and use the system's infor- mation.

These management responsibilities exist whether the computer is a large mainframe in a centralized location or a personal computer in the business manager's office. These responsibilities, however, differ from the business manager's re- sponsibilities that underlie the usefulness of the data. It is this difference in responsibilities and the fact that the use of the information technology cre- ates these responsibilities within the technology domain that makes the basic EwIM concept so im- portant and valuable.

P fanning Focus and Objectioes

The definition of the two domains provides a classification of planning objectives. In the busi- ness domain, long-range planning may identify expected products and markets, whereas short- range planning may target staff levels, organiza- tional forms, and specific business strategies to ac- complish specific results. In the technical domain, however, planning focuses on the infrastructures needed to 'support the business domain and on the application portfolios that support current business needs and future requirements.

Two problems arise, however, with this classifi- cation of planning objectives. Fist, critics (espe-

' cially MIS executives) assert that planning for an enterprise, at least a large one, is likely to be'im- possible. Enterprises d o not usually work in a fash- ion that supports a monolithic, single-enterprise view of information systems. Intellectually, the problem is too large and complex, and, in any case, there is usually no strategic plan for an entire enterprise.

Second, other skeptics propose that informa- tion technology planning is essentially an architec- tural problem (rather than a strategic problem), in

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which architecture refers to data, communications networks, end-user computing support service, and MIS portfolios or master plans. This infra- structure view is comparable to building manufac- turing facilities or office structures.

The key in both views is the idea of linkage; that is, the planning objective for technology domain planning should be derived from business domain requirements. In some ways, the relationship is similar to systems development. Considerable. work is done to determine the business needs for the proposed application, and systems develop- ment methodologies work to ensure the link be- tween the business needs and the resulting appli- cation system. Here, the same notion of linkage applies, except in this case the link is to business skategic planning.

Business domain strategic planning has two separate dimensions. First, planning is focused on the allocation of resources-i.e., investments- across an enterprise's lines of business. This class of planning stems from the General Electric ap- proach to portfolio planning.2 Portfolio planning determines how to best apply the enterprise's re- sources across the lines of business.

The second class of strategic planning looks at each line of business to consider business strategy for product, customer, market, and basic competi- tive plans. A good description for this class of planning is Michael Porter's book Competitive Ad: vantage: Creating and Sustaining Superior Perfor- mance, which introduces the concept of the line of business as the critical point of analysis for business strategy.

As the means to analyze each line of business for an enterprise, Porter introduced the concept of a value chain: "a systematic way of examining all of the activities a firm performs and how they in- teract. The value chain disaggregates a firm into its strategically relevant activities in order to under- stand the behavior of costs and the existing and potential sources of differentiation.

According to Porter, "A firm's value chain and the way it performs individual activities are a re- flection of its history, its strategy, its approach to implementing its strategy, and the underlying eco- nomics of the activitiei them~elves."~ The line of

business is not necessarily the same as an organi- zational unit (i.e., department or division). Rather, the line of business represents all organizational units that conduct business with the common cus- tomer, product, and market characteristics.

Both portfolio and business strategy planning are complementary aspects of planning for infor- mation technology. Portfolio planning is useful in determining the best allocation of corporate re- sources, for which information technology is one potential claimant. Business planning, as repre- sented by the line-of-business and value chain concepts, is exceptionally helpful in organizing and assigning priority to information technology planning for the use of corporate resources.

The technology domain has its own structure and planning processes. An enterprise can impose information systems on all its business compo- nents (i.e., divisions); a corporate payroll system is a common example. Individual organizational units can develop unique systems requirements as well. For example, a division of a manufacturing company may have a specific order entry problem unique to its line of business.

Individual organizational units can have specific needs for information technology as well. For ex- ample, the corporate treasurer might have an in- vestment portfolio or cash management problem unique to a particular operating unit. This require- ment might be satisfied with either end-user com- puting tools, such as a personal computer, or spe- cial inquiry or processing systems on the central corporate computer system. Exhibit 2 sums up the differences in the planning focus between the busi- ness and technology domains.

Technology Domain Planning

As suggested previously, architecture and infra- structure are potential planning objectives and results. Much of the current strategic planning practiced in companies and by consultants is within this area. For example, considerable atten- tion is now given to the idea of strategic data mod- els for the enterprise. Likewise, planning for com- munications networks and mainframe hardware and software configurations requires a multi-year

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Exhibit 2 . Planning Focus of Business Domain Versus Technology Domain

The Business Domain The Technology Domain

- -

s o u ~ c ~ . M.M. Parker. R.J. Benson and E. Trainor, lnformation Economics (Englewood Cliffs NJ: Prentice-Hall, 1988). p 205.

Enterprise Corporate, enterprisewide backbone applications systems; the enterprisewide information and systems architecture, decision support.

(Line of) Individual line-of-business application systems; the line-of- Business Line of business information and systems architecture, decision Strategic Business support. Planning

Organization Primary. End-user computing, departmental applications; office-based Planning Function computing; operational data processing.

horizon and consequently a close link to antici- pated enterprise requirements.

The concept of architecture pervades technol- ogy planning concepts. Architecture represents four component.. of the technology domain: data, application systems, technology, and the business organization. Each can be described for a line of business and characterized in a broad architectural fashion. For example, the idea of architecture is organized into a three-component table (see Ex- hibit 3).

Technology domain managers (i.e., MIS man- agers) often undertake strategic planning as a method for developing architectures. This ap- proach is a natural outgrowth of systems develop- ment methodologies and helps solve the problems of systems integration and data sharing across ap- plications. Enterprises with substantial customer interaction (e.g., telephone companies, airlines) need data and systems integration and apply vari- ous architectural strategic planning methods to meet this need. These methods are supported by such ideas as the core area, value chain, and criti-

. . . . . . . : ' . . . ' . ! . . . .... . . . . a . . . . >.

. . . . . . . . Exhibg' 3. ~ ~ & t e h , ~ r c h i t e c t u r e Elements . . . . . . . - . . , . . .I ...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . > - , .: . . '! . . . . :- . . . . . . . . . - . !.".:. . , . - ,. ,

ElemenULevel Data Function Network

Boundarylscope Important items Process performed Location

Business described Entities, rules Functions and flows Unit relations

Information system Data model Data flows Process nodes

Technology Data structure Jobslprocesses Architecture

Detail description Data base defined Logic structure Protocols

Actual system Data Function Communications

Technology architecture Data base management MlSlEDP organization Communications architecture

Technology strategy Information strategy MlSlinformation Network strategy technology 'strategy

SOURCE: J. Zachman. "A Framework lar lnformation Systems Architectures," U S C Repor! G3202785 (March 1986). - .

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cal success factors, which help define the impor- The investment approach, however, severs the tant issues for the business, something easily lost link to'business requirements in the actual business or obscured in architecture planning. domain. For example, if the necessary technology

The risk of overemphasizing technology do- main concerns to the exclusion of business do- main requirements parallels the risk found in sys- tems development. Although architectures can be the foundation for implementing a group of (inte- grated) systems, the priorities-the basis for recog- nizing value to the enterprise-are set by business planning approaches. The key is to link architec- tural outcomes to business planning and pro- cesses.

Exhibit 4 shows a.possible set of planning pro- cesses and relationships in a particular enterprise. EwIM endorses the concept that such processes are needed and that they should be linked. The challenge is to define the appropriate relationships and describe how to make them happen.

Another issue is that investments necessary to build infrastructures and implement architectures are not easily tied to the benefits derived in the business domain. Consequently, the link between technology domain planning and business plan- ning becomes doubly important, though difficult to demonstrate. Some enterprises overcome the problem by considering the technology domain as a business itself, the so-called "business within a business" paradigm.' This view treats investments in the infrastructure as capital investments in the business.

investments are evaluated from a portfolio plan- ning perspective, how should the value to the en- terprise be assessed? Exactly what is the basis of . comparison between a proposed investment in an advanced data base environment such as IBM's DB/2 as compared to an investment in a particu- lar line of business? So, although technology do- main planning around architectures is useful- particularly for enterprises with well-integrated functions and data-the link to business domain requirements is indispensable.

Planning Links

The important planning links connect the busi- ness and technology domains of the enterprise. Exhibit 5 illustrates the requirement for both the business and technology domains to address the strategies for the impact and the alignment issues. By solving the alignment issues, new opportuni- ties are created for addressing issues of impact, which then create new issues of alignment, and so forth.

Technology trends and vendor product offer- ings also drive an enterprise's planning process. For example, personal workstations, computers, and.high-speed communications create new busi- ness opportunities. The enterprise itself has char- acteristics that drive the planning processes and

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. . . . , a ' . ' , . '

. , , . , . 7 . . . ' S'? ,;,; ,,,.<: i i ' - ' ' . .+~r. - . ' . . '

I,':.,. ; : ' ... ,: ,.,,,. x .4, -c .,. ~.:.~>*:..!y,~~;;:~.,,:;: '::. . , .: ....+-. . ',. ,1 ' . . .,. . .._- ." # , . . . I.'

. . .. . , t.:, . .. .. . ,

. .' ' . ,,.. -- . . , . , . - ,.#.. Exhibit 41. . _ , . .. ~e=hjidl&$~$?aiij ,... , ~ l & h ~ i n ~ -., i.. . ,Y:. ' :::. , ;

, .. ., c7,>.:;' ...; j,'."" .,".g.. , ;. ..-1*.- '. . .. . ., .I;,. . j :.. . . ..,;. !,:, y;- , ,,,;,: ' % ., ,.?,.< ; ;;.,,.>. ;... ,4-:;3y,4t,;,.;.:;. .!,'. -,.?;:.;* ; ' . : . .

. . .. ..,A," ;t ,, ;. ' 8 .< .. . .. :,:+. : -

Business Plannlng Technology Planning Enterprise Line-of- Backboneand Data Strategic -* Business -* Line-of-Business Architecture, Planning Planning Information - Data

Systems Administration it Architecture

(Possible . Effect on Strategy)

t Hardware/Sottware

Infrastructure. Architecture

-Driven by Information ~ e c h n o l o ~ ~ strategy +

sounca: M.M. Parker, R.J. Benson, and E. Trainor, lnformalion Economics, p 206.

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. . . . ._. ._._. . .. . -. .:. . 1 ' . . . . . . . . . . - . .

a Exhibit 5 . Links . between . . ...-, ~ b t e r ~ r + e . . . , . and ~ Technology . Planning , .- I . ,. , . . . . . , *-. " . - : . : . . . , ,.' . . . . . , .

The Business Domain The Technology Domain

Strategic -Impact - Information Technology

Opportunities

External and Internal Organization Environment, Opportunity, Inhibitors

Business - Alignment - Information Organization Systems, Data

and Processes Architecture and MIS Organization

souace: M.M. Parker, R.J. Benson and E. Trainor. ~Information Economics, p 59.

create internal application opportunities. The cur- tional form needed to implement it. The organ- rent organizational form and the management ization works to identify and align the role of team personalities can, however, act as inhibitors. information technology in accomplishing the Current computing architectures and the applica- business plan. tion portfolio can also inhibit rapid change. Alignment - Begins with the existing business

The links between enterprise planning and technology planning are illustrated in Exhibit 5. The two-domain perspective permits a classifica- tion of the enterprise's planning process. In the business domain, planning focuses on business and financial performance. Long-range planning may target products and markets, whereas inter- mediate planning may target staff levels, organiza- tional forms, and specific business strategies for accomplishing specific results. In the technology domain, however, planning concentrates on the application portfolio to support the business plan- ning. The combination of planning processes in the business and technology domains reflects the central EwIM problem: how to understand and link them.

As illustrated in Exhibit 5, the four basic EwIM planning processes are:

Impact-Starts from information technology opportunities and generates changes- including new products, channels to customers, strategies, and markets-to the line-of-business plan. Organization-Begins with the line-of-business strategic plan and defines the effective organiza-

organization and its needs and generates the supporting information technology plan and the MIS plan to satisfy the needs of the busi- ness. Opportunity-Starts from the existing MIS ac- tivities and defines current and future resources and assets that can be deployed to change the business plan or to align to business needs.

The planning relationships are circular and syn- ergistic. Business strategic planning drives the business organization and processes, which should drive the technology planning required to support them; technology planning produces op- portunities for future use of technology in the en- terprise, which, through strategic planning pro- cesses, will influence business strategies and plans. By formally recognizing the boundaries between the business and technology planning-interest, control, management, and effect-EwlM under- lines both the potential risk and benefit that ac- company information technology.

The Value of Strategic Planning The first two years' work in the Joint Study re-

sulted in some preliminary conclusions. These are

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discussed in the following sections. should be a wiser, more effective allocation of cor-

Business Managers are Interested in Strategic Planning for lnformation Technology, If Such Planning is Based on Clear Economic Justifica- tion. Traditional cost/benefit analysis, however, is inadequate. Consequently, more suitable eco- nomic tools and methods to support strategic planning have been developed. Research in infor- mation economics, supported with A1 consulting tools, is a result.

Artificial Intelligence and Expert Systems are Useful Consulting 7001s. AI-based consulting tools enable a management team to examine its business plans and strategies in the context of in- formation technology opportunities. Using A1 tools as "consultants" makes them function as cat- alysts for managers. Senior managers are not al- ways ready to recognize that MIS strategic plan- ning is linked to business strategic planning. The development of AI-based consulting tools is an important step toward solving this problem.

Most Work in Enterprisewide Information Tech- nology Planning Has Focused on Technical Archi- tectures. From the EwlM perspective, this work is a necessary foundation for more advanced en- terprisewide planning. However, the real discov- ery is that all planning methods are most effective when applied to the line-of-business level of the enterprise, rather than to the enterprise as a whole.

Overblown Claims about Competitive Uses of fechnology Leave MIS Managers with No Insight as to How Opportunities Can be Pursued in Their Particular Enterprise. Achieving real planning and action requires more than simply recognizing strategic possibilities. Without a vision of how to accomplish strategic objectives in an enterprise, strategic concepts are interesting and motivational but unlikely to generate competitive advantage. Presenting a practicaI vision of how to d o strategic planning is essential.

porate resources. Consequently, strategic plan- ning is based on persuasion: successful strategic planning persuades senior management to allo- cate resources to the opportunities and plans iden- tified through the planning process.

Business planning as represented b y the line-of-business and value chain concepts, is exceptionally helpful in organizing and assigning priority t o information technology planning for

the use of corporate resources.

How does any manager persuade others? When the Joint Study in EwIM was started, the major topics and projects were to focus on en- terprisewide data models, competitive advantage and strategic systems, and advanced technolo- gies. These are important factors, but a way to measure this importance was also needed.

MIS managers need a means to persuade se- nior management, making an effective case based on the value these matters have for the enterprise. Consequently, their attention turned to econom- ics, starting with traditional cost/benefit analysis and return-on-investment concepts. Little work had been done extending economic theory or codbenefit concepts to the issues of strategic planning and enterprise-wide information man- agement; however, the materials and ideas that had been developed could be extended and ap- plied to strategic planning.

The State of the Art in Strategic Planning

The state of the art in strategic planning has ad- vanced dramatically. For example, 10 years ago, the planning focus was almost exclusively techno- logical; the primary objective was the definition of applications and data bases. Since then, a wealth

Strategic Planning, and Planning for Informa- of tools and methodologies has emerged, enlarg- tion Technology in Particular, is Not Just a Process ing the planning focus to include strategic applica- or a Plan; Strategic Plans, Processes, and Meth- tions, business performance, and business strat- odologies are Responsible for Changing the Allo- egy. The state of the art in strategic planning can cation of Capital and Operating Resources within be summarized and categorized into the four topic . an Enterprise. The outcome of strategic planning areas described in the following sections.

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Planning Vision Through Execution

There seems to be one overriding element in planning success stories: successful application of information technology in an enterprise is a com- plex process of vision through execution. In each case, four distinct but related phases occur: 1. Agreement on the future: Business vision and

technology opportunity. 2. Development of the business ideas for infor-

mation technology application. 3. Business and information technology planning

for applications and architectures. 4. Successful execution of the business and infor-

mation technology plans.

These four phases are the basis for success in information technology planning methods to pro- duce innovation. Articles, books, and to a large extent, consultants' practices tend to concentrate on developing either the vision-to-idea o r , the planning-to-execution steps but not both. The state of the art iii a planning process that clearly provides all four planning elements. Each plan- ning phase has its own purpose and uses its own specific planning tools.

Vision phase-Defines business direction and technology opportunity using business strategy and portfolio analysis. ldeas phase-Creates new ideas for use of in- formation technology using critical success fac- tors and customer resource life cycle. Planning phase-Creates architectures, justifi- cation, and applications using enterprisewide data models and information technology blue- prints. Execution phase-Implements project tasks and schedules using an action plan and project plans.

The initial EwIM report looked at 25 planning m e t h ~ d o l o ~ i e s . ~ Most planning methodologies use many of the tools and vocabularies repre- sented by one or two of the four phases. A signifi- cant additional distinction is the degree to which a planning methodology develops the results as op- posed to describing them. For example, the con- cept of critical success factors accomplishes both. It can be useful in describing the current business condition and helpful in understanding new op- portunities for applications of technologies. State-

of-the-art planning is based on methodologies that can produce new insight and useful results in all four planning phases.

Seven Questions for Strategic Planning

There seem to be two major impediments to successful planning. F i , gaining senior manage- ment support is difficult when senior managers are disinterested or misunderstand the planning objec- tives. Second, planning is widely perceived as complex and time-consuming.

To simplify senior management's understanding of strategic planning for information technology as well as the job of planning, a fast-path methodol- ogy has been developed that can be applied with- out demanding significant commitment. This con- sists of seven simple questions that focus on the major points of EwIM. The questions can be used as a mini-planning process and permit the planner (e.g., the MIS manager, business manager, or se- nior manager) to quickly identify the real ques- tions in a given line of business or enterprise: 1. What business are we in? 2. What problems do we have in this business?

What (competitive) forces are affecting this business, and what are its critical success fac- tors?

3. What are our strategies in the business? 4. How can we apply information'technology to

improve our functioning ,and achieve success in strategies and critical success factors?

5. How can we apply information technology to change the business strategy or basic business plan (i.e., new product, customer, market)?

6 . How can we organize the business (and the information technology activity) to most effec- tively achieve its goals, business strategy, and plans?

7. How can we adopt an action to obtain the answers to questions 1 through 6?

These questions can be used throughout the planning process. However, a useful planning process can be directly implemented without ref- erence to any more complex or detailed steps. It is possible to organize the questions into a reason- able planning process. The key is the use of ap- propriate conceptual tools to derive the answer to each question. (See the recommended reading list

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for the LASC report that assists in choosing the appropriate tools.)

The Action Plan

Most strategic planning presentations appear long on concept and short on execution. Discuss- ing Porter's value chain concept is one matter; us- ing it for business planning is another. One reason strategic planning methodologies tend to overlook this process is the spectrum of differences among enterprises; it is difficult to specify a general pro- cess or methodology that successfully applies to every type of enterprise.

However, a contingent approach to planning processes is both feasible and effective. The key ideas of a contingent planning process are repre- sented by the EwIM action plan. The goal of the EwlM action plan is to actually do strategic plan- ning: to apply the insights from the Joint Study to create a state-of-the-art methodology.

The combination of planning processes in the business and

technology domains reflects the central EwlM problem: how t o

understand and link these domains.

Three ideas are primary. First, enterprises are different. Accordingly, a generic action plan should provide diagnostic steps to fit the planning process to the requirements and circumstances of the specific enterprise. Thus, a contingent ap- proach to planning is desirable, allowing the plan- ner to define the most suitable approach.

Second, enterprises consist of one or more lines of business. The same planning process may be used in one or two, but not likely all because they are, in fact, different businesses. In this sense, planning is bottom-up; the focus is on a line of business and not the enterprise as a whole.

Third, many tools already exist for planning. A generic planning methodology should not invent new ones but rather identify where existing tools can be applied in the lines of business studied.

The resulting EwlM action plan provides for en-

terprise processes and line-of-business processes. The plan concludes with an application of infor- mation economics. Planning is fundamentally an exercise in persuasion; it must be convincing and effective in communicating its worth. This requires an effective measurement of cost and value.

Information Economics

Regarding economics, the essential problem is how to measure and justify the necessary invest- ments in information technology for the competi- tive health of the enterprise. This problem has two parts. The f i is one of persuasion: the task is to measure and jusbfy the value of information tech- nology to the enterprise. The objective is to per- suade management to allocate resources to the in- formation technology application. Strategic planning in general, and enterprisewide informa- tion management in particular, consists of pro- cesses designed to define the opportunities and present a persuasive case.

The second part is the process of establishing evaluations and measurements. This problem is rooted in limitations of cost/benefit analysis. To overcome them, the value of information technol- ogy, based on linking information technology to business performance, has six classes: 1. Cost reduction and performance enhance-

ment. 2. Strategic alignment. 3. Competitive advantage (e . g. , interorganiza-

tional information systems). 4. Management information support. 5. Competitive risk (or remedial catch-up) . 6. MIS strategic alignment.

Except for the fist class, traditional justification techniques do not effectively guide senior man- agement in making the best allocation of corpo- rate resources to attain maximum value from in- formation technology. In particular, a decision process that relies on traditional cost/benefit anal- ysis or return-on-investment will miss five catego- ries of value (i.e., items 2 through 6) that can be important prospective. benefits from information technology. (A companion Joint Study paper on information economics further describes the deci- sion and valuation processes.')

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C/O Concerns and Corporate Issues

Summary MIS managers often raise several important ob-

jections to enterprisewide information manage- ment. In general, they question the practicality of the ideas; for example, whether they are truly ap- plicable in an actual organization, given the char- acter and experience of senior management and the history of the MIS department. Most MIS managers perceive planning methodologies as very detailed, requiring many steps and much data collection, with limited impact on such MIS problems as backlogs, inadequate resources, and .

disinterested business management. Thus, they do not want to attempt another (complex) plan- ning process.

Senior business managers raise similar objec- tions, particularly fighting the need for another framework, another set of concepts. MIS has been characterized as the framework-of-the- month club;' EwIM and its various parts seem to be yet another framework.

'These are substantive issues. Highly detailed planning processes that focus on data, processes, and current application portfolios often overbur- den the planners and obscure basic insights and conclusions. Senior management in general loses interest in technology-based details. And yet, an- other framework or planning methodology ap- pears of limited value.

This article's view of the state-of-the-art and en- terprisewide information management address these objections. Although many academics' and practitioners' well-developed concepts and tools have often proved effective, EwIM seeks to place available concepts and methods into a useful con- text: an action plan that can be fitted to the needs of a specific enterprise. There is no point in rein- venting conceptual wheels and little point in ap- plying highly' detailed tools to simple problems; however, there is a great deal to be gained from linking technical planning to business planning.

Initially, the value of strategic planning was thought to be found solely in technology domain results such as an enterprisewide architecture for

computers, communications, arid data. In fact, important results can be equally found in the busi- ness domain-for example, in a crisp definition of the lines of business and business strategies, to which technology domain plans can be linked. Organizations need a unified view of strategic planning that links the business use of information technology to the means of producing that tech- nology.

Marilyn M. Parker is the co-investigator of an IBM-sponsored joint study at Washington University in St Louis on enterprise- wide information management. She is also a widely pub- lished author and internationally known lecturer on the sub- jects of information economics and stralegic planning.

Robert J. 8enson is an associated vice-chancellor for com- puting and communications and the dean of the school of technology and information management at Washington Uni- versity. Benson is also involved in the joint study.

Copyright O 1989, Marilyn M. Parker and Robert J. Benson: this article is reprinted with permission.

Notes 1. R.J. Benson and M.M. Parker, 'Enterprisewide Inforrna-

tion Management: An Introduction to the..Concepts." LASC Report G320.2768 (May 1985).

2. R.G. Harnermesh, Making Strategy Work (New York: John Wiley & Sons. 1986).

3. M.E. Porter, Competitiue Advantage: Creating and Sus- taining Superior Performance (New York: The Free Press, 1985), p 86.

4. M.E. Porter, p 123. 5. B. Allen. 'Computer Strategy: A Philosophy for Manag-

ing Information Processing Resources." The Economics o j Injormation Processing, eds R. Goldberg and H. Lorin, (New York: John Wiley & Sons. 1982).

6. R.J. Benson and M.M. Parker, pp 16-25. 7. M.M. Parker and R.J. Benson. "Information Economics,

an Introduction," LASC Report G320-2798 (1987). 8. R. Virgil, Proceedings, First international Conference on

Enterprise-wide Information Management, (St Louis MO: Washington University, June 1984).

Recommended Reading Clemons. E.K., and McFarlan, EW. 'Telecorn, Hook Up or Lose Out," Haruord Business Reuiew (July-August 1986), pp 91-97.

Parker, M.M., and Benson, R.J. 'Enterprise-wide lnforma- tion Management: The Available Tools and Methods," LASC Report G320-2780, February 1986.

Parker, M.M. ; Benson, R.J.. and Trainor. E. Information Economics, (Englewood Cliffs NJ: Prentice-Hall, 1988).

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