System Dynamics Modeling Oriented Strategic Information System Planning
Yi-Ming, Tu, Associate Professor
Wei-Young, Wang, Doctoral Student
Department of Management Information System
National Sun Yat-sen University, Kaohsiung, Taiwan, R.O.C.
Abstract
Organization strategic information system planningSISPis the guide
for organizational information systems development. The purpose
of SISP is to satisfy managerial information requirements. However,
there is large gap between the demand side and supply side of
management information. To eliminate this gap, the system dynamics
approach was used to develop a new method for organizational SISP.
This new method is based on an organizational system dynamics
model. We use the model to identify organizational information
requirements and to design a systems architecture for future management.
Simultaneously, it can be used to explore the contradictions between
information systems and corporate policies. It also provides an
evaluation of IS alternatives and a guide for system ordering,
the implementation of alternatives. Finally, the implementation
steps of the method are discussed.
1.Introduction
The effectiveness of using information technology is a core
competency of today's organizations. For application of the concept
there are some questions that all organization must answer, a
priori. These include: "Should the information technology
or systems be applied? What kind of IT/IS is needed? When should
IT/IS be implemented?" Importantly, all of these considerations
must be coordinated and linked to the organizational objectives.
To address these questions, many researchers have focused on organizational
strategic information system planning to facilitate organizational
IT/IS development and to satisfy managerial needs (Bowman, Davis
and Wetherbe 1983; Martin 1989; Henderson and Sifonis 1988). Their
work helped direct and apply for organizational strategic information
system planning to facilitate organizational IT/IS development
and to improve managerial effectiveness. However, some problems
are left unsolved if organizations want to improve the effectiveness
of IT/IS(King 1978, Lederer and Sethi 1988, and Lederer 1991).
Why? First, organizations are negligent of the direction of IT/IS
development should take in satisfying organization needs. The
cause of this problem arises because managers are not sure early
what information they need. Second, throughout the processes of
SISP, it is to introduce distortions from step to another step.
This research first reviews the existing SISP methodologies and
then proposes a system dynamics approach to create an organizational
information system architecture. Finally, this research also proposes
the implementation steps of the method.
2.Review of Strategic Information System
Planning Methodologies and Assumptions
Several studies have been conducted
to develop the processes or steps of SISP. For example, Bowman
et al.(1983) proposed a three stage SISP methodology; Martin(1986,1989)
suggested a framework for SISP called information engineering;
and Handerson et al.(1988) proposed a planning model for organizational
SISP. Each of these has two common in two aspects. The first
is that the organizational SISP activities they described can
be divided into three phases:organizational strategic planning
stage, information system strategic planning stage, and information
systems implementation stage. The second is that all approaches
are based on the same assumptions.
2.1Organizational Strategic Planning Stage
The organizational strategic planning stage the translation
of organizational strategies into the strategies of the organization's
information system. The purpose is to ensure that the organization's
information systems support the organization's strategies. The
basic assumptions of this stage are:1.organizational strategic
planning should has been done; 2.the organization's functional
systems can be defined clearly; 3.the goals and responsibilities
of the departments must be clarified explicitly.
However, some distortions are likely
within the process of translation . The ultimate reason for distortion
is that some of the basic assumptions of organizational strategic
planning will be revealed during the transformation process and
these may be in conflict with existing procedures and goals. Besides,
some distortions may arise because some goals or objectives are
difficult to perceive or measure. When the measurement are difficult,
organizations often neglect or distort them. Thus the important
points are shifted.
2.2 Information System Strategic Planning Stage
The purpose of this stage is to identify the strategies for
information systems and the information requirements of departments.
The outcomes here are the definition of an organization's fundamental
databases, information system architecture, and the high-level
entity-relationship model. All the processes proceed in topdown
decomposition sequences.
A problem arises because of the inability to validate the information
requirements acquired in this stage which is, indeed, the information
that can help the managers. Though this process can be improved
through extensive monitoring, it is costly and its potential contribution
is very limited.
2.3.Information Systems Implementation Stage
In this stage the organizational resources of IS including
finance, personnel, hardware, software, database, etc. are allocated.
The essential purpose is to develop criteria to arrange the implementation
priorities of information systems.
However, the greatest limitation of existing methods results from
static and linear thinking which makes it difficult to evaluate
system effectiveness. These impediments often result in neglecting
the development and adoption of the activities needed. For example,
it is very likely that the schedule of development priority is
processed according to political considerations or the managers'
intuition.
System dynamics can solve a major part of the above problems.
It can be used to examine basic assumptions hidden at different
levels of organization and to design organizational policy effectively.
Besides, in the process of model building, it can explore the
important and relevant information, thus influencing and informing
the key information requirements of managers. All the advantages
are expectations of organizations, but it is not possible to provide
these simultaneously with present methodologies.
3.System Dynamics Modeling Oriented SISP Methodology
There are three stages contained in this methodology as shown
in figure 1. Step 1 is to express the organizational operating
diagram in terms of six basic "flows" prevalent in organizationsForrester,
1961. The presentation of this diagram is by system dynamics model
symbols. With the diagram , the operating processes and decision
making mechanisms of an organization may be visualized.. Besides,
it also illustrates the existing design rules of information systems.
After understanding the overall configuration of present information
systems, one can go further to lower or upper level planning as
necessary.
Figure 1 System Dynamics Modeling Oriented SISP
The next step is to establish a system dynamics model. The model
constructed here is a strategic model. Because it also contains
the programmed rules of the information system. The impacts of
information systems on the model behaviors can be investigated.
According to the modeling processes, it is possible to redesign
policy for advanced management.
There are several activities that are necessary in the final step.
One is to define the database and to analyze the developmental
architecture of the information systems. Besides, it is necessary
to evaluate the information systems impacts to determine resource
allocation and implementation priorities.
In this section, we described the overall structure of the methodology.
Thus focusing primarily on step 3. The organizational information
systems developmental architecture will be discussed further.
4. Architecture of Information Systems
4.1.Organizations Basic Database
First, the system dynamics model developed in step 2 is used
to transform different flows or levels into different databases.
Next, the states and sub-flows within each database are categorized
according to their differentiation of management nature, and the
states and sub-flows are transformed into the organizational sub-database.
As to the contents of each database and sub-database, there are
two major components. One of the components is the data flow.
The other is the data for operations and management. If it is
necessary to plan and to analyze in more detail, the basic databases
acquired should be combined with the previous organizational operating
diagram. Additionally, other factors should also be taken into
account, such as the geography of operations, the channels of
communication, size of the data set, etc..
4.2.Organizational Information System Architecture
After completing the previous step, there are some remaining
variables that are uncategorized and not included in the data
bases. They are the transformations of original data and the mechanisms
for management requirements. These variables can be classified
into three types. Each of these stands for one kind of information
system. The first has direct control over the levels of corresponding
databases. The second contains information whose purpose cannot
be placed into a specific database. However, this kind of information
offers important indices of an organization's performance. The
third kind of information system includes information that comes
from outside of the organization. This kind of information may
play a major role in system behaviors. From the perspective of
such information, some strategic advantages may be derived.
A new issue arises when defining each kind of information system.
Interactions among each information system and database constitutes
the interfaces to be developed. So far, we have defined the information
system and interfaces among them. When linked to the information
system architecture, it also informs the basic development strategy
of information systems.
4.3.Integrating Existed Information Systems and Database
Previous steps have defined the information systems needed
by organizations. It must be integrated with the existing information
systems. There are some guidelines to direct this integration
process. First, one must check and correct if the operating rules
of existing information systems are in conformity with the strategies
of organizations. Second, one must check the existing databases
to see if all the data defined in the organization's basic databases
is available. Third, one must check the existed interfaces of
information systems to confirm that all the information that is
defined in the information systems architecture can be transformed
and satisfied. Fourth, one must consider the existing databases
and the information system's ability and flexibility for further
extension. If necessary, new systems or databases should be created.
After completing the questions above, we can determine the revision
plan of the present information system according to our original
planning principles. The ordered principles of the overall plan
can be used to advise the work.
4.4.The Guidelines of Systems Development Sequence
Several researchers have proposed principles of the priority
of systems development. Some guidelines are suggested in this
research from the perspective of system dynamics. One of the guidelines
is that information systems that have the greatest influence on
system behavior should be developed first. The other is to analyze
the influence of resources allocation on information systems.
All of these items should be evaluated by simulation.
5.Conclusion
This research proposed a SISP methodology derived from system
dynamics models. The procedure of this methodology included three
major steps: 1)Understanding the basic operation and management
mechanisms of an organization, with the concepts and symbols of
levels, rates, and auxiliary variables for investigating the configuration
and rules of present information systems; 2)establishing the strategic
systems dynamics model and exploring the consistency of policies
hidden in the information systems; 3)analyzing the organization's
information requirements according to the model developed earlierly.
The content includes the basic database, information system architecture,
and the interfaces among information systems. In the implementation
stage, this approach also suggests a method to evaluate and to
understand the impact of information systems by the simulation
of previous system dynamics model.
Reference
Bowman, B. & G. Davis, 1983, "Three Stage Model of
MIS Planning," Information & Management, Vol. 6.
Forrester, J. W., 1961, Industrial Dynamics, MIT Press.
Henderson, J. C. & J. G. Snifonis, 1988, "The Value of
Strategic IS Planning: Understanding Consistency, Validity, and
IS Markets," MIS Quarterly, June.
King, W. R., 1978, "Strategic Planning For Management Information
Systems," MIS Quarterly, 2:1, March.
Lederer, A. L.& V. Sethi, 1988, "The Implementation of
Strategic Information Systems Planning Methodologies," MIS
Quarterly ,Sep.
Lederer, A. L.& V. Sethi, 1991, "Application and Implementation
Critical Dimensions of Strategic Information Systems Planning,"
Decision Science, Vol. 22.
Martin, J., 1989, Strategic Information Planning Methodologies,
second edition," Prentice-Hall.
ISDC '97 CD Sponsor 