Strategic Information Systems
Retrospect and Prospect

Roger Clarke
Australian National University

Presented at the International Conference on IS and Organisations
Bled, Slovenia, September 1992

Version of 1 March 1992

© Australian National University, 1992

Extended Abstract
The topic of 'strategic information systems' is concerned with systems which contribute significantly to the achievement of an organisation's overall objectives. The body of knowledge is of recent origin and highly dynamic, and the area has an aura of excitement about it.

During the 1980s, instances were becoming apparent in which information technology (IT) had not only served the accounting and operational needs of an organisation, but had been critical to the implementation of corporate strategy. The context within which this insight emerged was the 'competitive strategy' framework of Porter. Most of the early literature was anecdotal, mentioning early examples of systems, but lacking references to authoritative papers or case studies.

The early papers and books focussed on the 'competitive advantage' which IT could lead to. During the period following 1985, the literature focussed less on the opportunities and more on the processes and the pitfalls. Progressively, a collection of qualifications arose to the initial, relatively 'naive' theory.

One series of papers focussed not on companies which adopted a successful leadership role in the application of IT, but rather on those which followed. They recognised that where one corporation achieved a significant competitive advantage, it quickly became incumbent on its competitors to neutralise that advantage, and hence to avoid 'competitive disadvantage'. The notion of 'competitive necessity' was created to complement that of 'competitive advantage'. A special case was the phenomenon of 'second-mover advantage', where the first-mover incurs a disadvantage because the pioneer increases the knowledge available about the application, establishes a level of volume, or becomes locked into a system which quickly becomes obsolescent. The question of 'sustainability' of competitive advantage arose: many kinds of advantage which can possibly be derived from innovative use of IT result only in ephemeral advantage, which is quickly neutralisable by second- and later-movers.

An enhancement to the Porter framework of competitive strategy was the notion of 'alliance'. This referred to chains or clusters of organisations which collaborate in order to gain competitive advantage over other, similar organisations, or to neutralise the advantage of one or more competitor organisations.

A further idea which has emerged is that innovation in IT is of strategic importance only if it is compatible with, and preferably leverages upon the company's existing characteristics and advantages. One particularly important facet of this is the notion of 'strategic alignment' of IT policies and initiatives with the directions indicated by the corporation's senior executives.

In addition to these well-established lines of analysis, there is a number of areas in which maturation is incomplete. The terms 'comparative advantage' and 'competitive advantage' are too often used as though they were equivalent and interchangeable, whereas they actually derive from different disciplines. Competitive strategy has been discussed predominantly in terms of leadership, or 'first-mover' status, and other perspectives are sometimes overlooked. A particularly surprising weakness of the existing literature is its inapplicability to organisations which are not subject to powerful market-based competitive forces, such as those in the public sector, and associations which are intentionally monopolistic, including industry and professional associations. There is a need for recognition of collaboration or cooperation at a level higher than a competitively-motivated alliance. This raises the need to define what comprises public infrastructure, industry infrastructure and private investment, and the extent to which the responsibility for investment is public, private or dual.

A significant literature has developed relating to the process whereby strategic systems are, can be and/or should be uncovered. A common feature of most papers to date is the implicit assumption that business needs drive IT and information strategy. The literature to date also generally adopts the attitude that executives do, can or should uncover systems by at least semi-plannable processes. It is apparent that an alternative view may be beginning to emerge, deriving from the Japanese tradition and reflected in the notions of 'organisational transformation', IT-induced business re-configuration, business process re-design, and 'renovating the corporation'.

Strategic information systems is a topic which is very important, and highly dynamic. This paper provides a summary of the literature, accompanied by an extensive reference list, identifies weaknesses in the existing body of theory, and suggests directions in which knowledge is developing.


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