A new six `S' framework on the relationship between the role of
information systems (IS) and competencies in `IS' management
George Philip*, Marilyn E. Booth
Queen's School of Management and Economics, The Queen's University of Belfast, Belfast BT7 1NN, UK
Received 1 December 1998; accepted 1 December 1998
Abstract
The role of information systems (IS) in increasing operational efficiency and strategic advantage has been the subject of much academic research recently. A number of useful models have been developed by several researchers with varying degrees of success to provide a better understanding of the technology's potential in a range of organisational environments. This paper will make a critical assessment of most of the existing models, highlighting in each case, the positive and negative aspects and then proceed to outline the rationale for the development of a new six `S' framework. The guiding principle in the development of this model has been that the adoption and diffusion of technology in organisations is anon-linear processand that organisations need not graduate from step 1 to step 2, etc. as is the case with most existing models. Each organisation's expectations from technology can be different and the fulfilment of these expectations hinges on the core competence of the organisation to exploit technology as the opportunity arises. According to our model, IS has five potential roles to play in an organisation. These are arranged around a `central core' entitled `Survival,' which emphasises that technology is an essential part of doing business and that organisations would be unable to function without it. The other four roles,Sources and resources,Strategic,Service Value Analysis (SVA) and S(C)yberspace act as `satellites' orbiting around this central hub. The sixth `S,'Sustainability, is the protective layer concerned with the management processes associated with the use of technology. Based on a comprehensive review of the literature and case studies in a small number of organisations, this paper will describe the applicability of this model as a methodological tool in enabling organisations to understand clearly the relationship between good IS management practices and the successful use of technology in a dynamic global environment. The model argues that whatever the role of information technology (IT) in organisations, sustainable advantage will depend on the ability to manage the IS resources effectively on an on-going basis.D2000 Elsevier Science Inc. All rights reserved.
Keywords:Six `S' framework; Information systems; `IS' management
1. Introduction
One of the most important characteristics of technology is that it has always been in a state of evolution. This in turn has influenced the way in which technology has been used by organisations over the years. Thus, the early use of technology was in automating routine and mundane internal functions. The emergence of sophisticated and powerful PCs and networks during the 1980s had elevated technology into a new pedestal. Thus, the past 2 decades have witnessed an unceasing torrent of publications championing the stra-tegic potential of technology. A number of case studies and anecdotal evidences have been used to promote information technology (IT) as a competitive weapon without any regard
to the transient nature of any such advantage. Undoubtedly, there have been a number of spectacular successes and, equally well, there has been no shortage of failures. As for the success stories, most of them were constructed around large high profile American multinationals rather than based on a systematic empirical study of a large number of small and medium enterprises (SMEs). Indeed, there has been a bandwagon effect in that some of these stories were used repeatedly by several researchers long after any such stra-tegic advantage to the target organisations has disappeared. Several models and frameworks have also been created, with limited success, to provide a better understanding of the technology's potential in a range of organisational environments. The purpose of this paper is to make a critical assessment of the existing models, highlighting in each case, the positive and negative aspects and then proceed to outline the rationale for the development of a new six `S' frame-work. More specifically, the aim is to show how the most
* Corresponding author. Tel.: +44-28 902 73 385. E-mail address: [email protected] (G. Philip).
valuable parts of the literature can be reconceptualised into a format, which displays the highly dynamic and fluid nature of the role played by information systems (IS) within organisations. The guiding principle in the development of this model is that the adoption and diffusion of technology
in organisations is anon-linear process and that
organisa-tions need not graduate from step 1 to step 2, etc. as is the case with most existing models. Each organisation's expec-tations from technology can be different and the fulfilment of these expectations hinges on the core competence of the organisation to exploit technology as the opportunity arises. First, a review of existing models will be presented to set the context for describing the new conceptual framework.
2. Existing models on the role of IS
As mentioned above, to date, models dealing with IT's role have tended to focus on how organisations can make the most of the technology's strategic potential. A quick scan of the literature will reveal that there is no shortage of models and frameworks, each claiming to be the way forward for achieving competitive advantage through IT. Most of the early impetus for this approach came from Porter's competitive strategy framework consisting of the five external `threats' and three generic strategies to address them. Researchers proposed that IT could be used in an offensive or defensive fashion to face the competitive threats effectively (Parsons, 1983; Cash and Konsynski, 1984; Porter and Millar, 1985). It is now acknowledged, however, that such prescriptive strategies are appropriate only for a static rather than the highly dynamic and globalised business environment of the 1990s and beyond. Models such as the strategic grid (McFarlan and McKen-ney, 1983) and the strategic opportunity matrix (Benjamin et al., 1984) are aimed at helping management focus on those areas where IT deployment could prove most beneficial. While they can raise senior management awareness (valuable in itself), Earl (1989) and Ahrens (1993) stress that they are much too general to be of any practical value to specific firms. Both can also be criticised because of their reliance on
the overused 22 grid structure, which places a limit on the
range of options available and oversimplifies the situation. One potential strength of the strategic grid, however, is the realisation that the `competitive' use of IT may not be feasible for all firms. This point is also raised in Porter and Millar's (1985) information intensity matrix. However, as Earl points out, the value of these particular offerings is severely limited because `they are generally too high level and too descriptive to guide specific users to specific oppor-tunities for strategic information systems' (Earl, 1989, p. 45). These authors, and indeed any who base their work on Porter's (1980, 1985) views, also seem to be suggesting that
allfirms trying to deploy IT as a competitive weapon will be
successful. No attempts are made to address the situation that would arise if the direct competitors were to introduce
similar systems at the same time and for similar purposes. In the UK, for example, Tesco introduced the Club/loyalty card, which was soon copied by Sainsburys and virtually all other main supermarkets. The reliance on Porter's work also creates a situation where individual buyers/suppliers are seen as homogenous groups who will all respond in the same way to the situations imposed upon them. Porter (1996) recently attempted to answer his critics and to salvage his generic framework; however, the degree of his success in convincing his critics is still debatable.
Wiseman's (1985) strategic option generator is a more useful offering in that it broadens out the available options and provides a step-wise process enabling individual firms to focus on their own specific needs. The focus on idiosyn-cratic solutions is a link to the core competence perspective, then of course not fully articulated. Important advice to managers comes in the form of three principles, which suggest that IT will essentially enable a firm to utilise its resources more effectively. The need for high levels of alignment is also stressed, a practical link between the successful use of IT, and the management process. However, the basic problem with this approach, and indeed a range of other advices (Hagmann and McCahon, 1993; Sabherwal and Tsoumpas, 1993) is the emphasis on the concept of the strategic information system, a belief that technology, in and of itself, can provide advantage, a view long since rejected as a misconception (Venkatraman, 1991).
The work of Ives and Learmonth (1984) also focuses on the relationship between IT and the company's resources. Here, the authors pinpoint how systems can be used to acquire and then use resources. Comparisons have been drawn with Porter's value chain analysis. Indeed, both provide valuable mechanisms for managers to think through the issues, and to highlight ways in which technology could be used. Managers are given a list of areas where IT could prove useful, and are encouraged to think of ways in which they could improve their position through the use of IT. Their actual `strategic' value is minimal, though, (Bergeron et al., 1991), since the emphasis would seem to be on improving the status quo.
What all these models fail to grasp is the essential character of the competitive climate, where the only cer-tainty is change and dynamism. The nature of technological change is also largely neglected. Later models do attempt to incorporate this. For example, Feeny and Ives (1990) recognise that sustaining IT-based advantages for any mean-ingful length of time is problematic. Their contribution is a model which does not attempt to generate a list of poten-tially useful systems, but instead tries to help managers assess how sustainable and long-lasting their own ideas are likely to be. Thus, those managers are urged to focus on the use of IT in areas that will be difficult for others to imitate. While this may seem an obvious point, the real departure stems from the argument that `companies should use IT to enhance existing distinctive capabilities.' Thus, IT is not
means of enhancing existing competencies, and facilitating the development of new ones. This connection with the competence-driven perspective is also explored by several researchers (Clemons, 1991; Clemons and Row, 1991; Booth and Philip, 1996, 1998) who suggest that IT's real value stems from this ability to nourish existing skills and strengths and to help create flexible organisational structures that can transcend geographical and organisational bound-aries. Similarly, Land (1994), while comparing the MIT team's (1991) work on the centrality of IT in competitive-ness and Kay's (1993) distinctive capabilities approach, makes the interesting observation that outcomes are the consequences of a range of factors operating in combination or in parallel.
Feeny and Ives' (1990) views on sustainability also reflect the growing belief that it is more realistic to view IS as strategic necessities (Boynton et al., 1994; Davenport, 1994), as opposed to sources of long-lasting competitive advantage in their own right. As customers become more accustomed to systems, or rather the services they provide, they assume greater importance and can become a standard
offering in the service which players in that industry find they have to supply if they are to compete effectively (Boynton et al., 1994) or even remain in business. The system itself may provide no distinct advantage over rivals, but they would be at a distinct disadvantage without it. The diffusion of technology from first movers, through to followers and from thence to strategic necessity, creates a level competitive playing field, where only those who can use their technology in fresher and more creative ways will be able to gain advantage. This transient and fluid nature of the advantage from IS is captured in Figs. 1 and 2.
The need for creativity and innovation has characterised most of the recent approaches to the use of IT. One such approach is business process reengineering (BPR) which emphasises the importance of redesigning the processes themselves before applying the technology medicine (Ham-mer, 1990; Venkatraman, 1991; Hammer and Champy, 1993). The work of those involved in the management of the 1990s research programme (Scott Morton, 1991), and especially Venkatraman's five levels of IT-induced business reconfiguration, provides a useful way of expressing the
need to do more than simply `re-arranging the deck chairs on the Titanic' (Hammer, 1990). In contrast to earlier writers, Venkatraman (1991, 1994) makes no assumptions about IT's competitive potential, and at the same time acknowledges that things have to change if the technology is to have any real benefit. Even at the lower levels of the model, the technology can have a beneficial impact if the company reassesses the way it does business, and more importantly, how it handles the information at its disposal (Venkatraman, 1994).
Venkatraman's model, as outlined earlier, suggests that organisations begin with relatively simple systems, with no real thought given to how the technology will progress or develop. Exploitation is `localised' in the sense that there is no real attempt to create a consistent approach, and decisions are made by individuals or their departments. This is equivalent to Galliers and Sutherland's (1991) `Ad Hocacry' in that there is no real formal management structure in-volved. In the `internal integration' phase, problems have been addressed and an organisation-wide approach adopted. The three `revolutionary' levels recognised that IT can be used to reposition the company, to change processes, struc-tures and, eventually, the very nature of the company itself. The recognition that there is much to gain from inter-organisational arrangements stems from a belief that:
businesses operate within a larger network of suppliers, buyers, intermediaries, and competitors
. . . the sources of competitive advantage lie partly within a given organisation and partly in the larger business network.
This is a clear link with competence-driven competi-tiveness, as is the admission (Venkatraman, 1994) that the same route may not be right for every organisation. However, the sequential movement is somewhat proble-matic in that it presupposes a more or less autoproble-matic increase in benefits. Similarly, the model presumes that IT-enabled reconfiguration is inevitable. This may not be appropriate for every organisationÐeach will have their own reasons for implementing the technology, and many may never have to reengineer process or redefine business networks. Their reasons for implementing IT are equally valid. An approach which attempts to capture Venkatra-man's idea of movement and change, without considering it inevitable is more preferable.
3. The new six `S' framework
Having considered the available models, it is obvious that they have a number of limitations. Models advocating the use of IT for competitive advantage have to be reassessed in the light of competence-driven approaches to competition. Conversely, if the technology is to be used for other (equally important) purposes, these have to be elucidated and ex-plored. Finally, the IS management process is itself a critical organisational competence, and a means of expressing the critical nature of this competence must be found.
These factors led us to investigate how to conceptualise a new model which would incorporate all the best features of existing models, and at the same time provide more clarity in understanding the different roles which IS can
play within organisations. Based on a review of the literature and empirical work, a new framework has been developed. Specifically, it aims to demonstrate the relation-ship between the role set out for IT within the organisation, and the IS management practices adopted. This new frame-work was used at a later stage in several case studies to investigate the current state of IS use within organisations in Northern Ireland.
The guiding principles governing the development of the new framework are given below.
It should show the relationship between IS and IS
management. Whatever the role played by IS in organisations, sustainable advantage depends on the ability to manage the IS resources effectively on an ongoing basis.
IT adoption, development, and diffusion within an
organisation is a non-linear, as opposed to a sequential process. That is, organisations need not necessarily graduate neatly from step 1 to 2, as is the case with most of the existing models.
It should recognise that a new business can embrace
any one or more of the role(s) identified. New enterprises have the advantage to harness the power of new technologies, and may leapfrog or bypass other established firms in their use of IT.
It should recognise the highly dynamic environment
of the 1990s.
It should recognise that while IT has the potential to be
strategic, it is more likely to be a strategic necessity. It should also demonstrate that every organisation may not have similar objectives for its technology.
It should incorporate competence-driven attitudes to
competitiveness, specifically the importance of the interplay of skills and resources, and the view of the organisation as an open system.
It should incorporate the transformational nature of
the technology outlined in Venkatraman's (1991) model. Unlike Venkatraman, however, it should not assume that benefits necessarily increase the more revolutionary IT becomes.
The framework devised suggests that there are poten-tially five main roles played by IT within an organisation. These are arranged around a `central hub' entitled `Survi-val,' which assumes that the technology is an essential part of doing business, without which the organisation would be unable to function. This is shown in Fig. 3 below. The four other roles, Sources and Resources, Strategic, Service Value Analysis (SVA) and (S)Cyberspace act as `satellites' orbit-ing around this central hub. The Sixth `S,' sustainability is concerned with the management processes and practices adopted. This acts as a protective outer layer: ensuring the continued success in the use of IT. The term `Sustainability' was chosen deliberately in order to highlight the criticality of IS management process to the company as a whole.
The framework has been given a circular appearance to try and capture the essence of dynamism and non-linearity. Another feature is that while one role may dominate within an organisation, other aspects may be present. Similarly, there is also a scope for differences between business units in the same firm. There is no real `order' to the elements, although, as detailed, some form of reengineering will be necessary to achieve the degree of cross-functionality and flexibility necessary in a virtual company. For the rest, the strategic level may never be reached by some companies, while those that do may, with the pace of change, find themselves `slipping' to a form of survival. As shown in Fig. 3, the difference between these five roles is primarily logical and that there is no clearly definable boundaries between them. That is, the roles are interdependent rather than standalone entities as outlined in the following description of each role.
3.1. IS for survival
This is the most basic role which IT can play in an organisation. It has a heavy internal focus and is synon-ymous with the data processing era. It deals with such operations as accounting, payroll, automation of manufac-turing functions, etc. This role corresponds with Venkatra-man's localised exploitation and internal integration. The major benefits will be in terms of operational efficiencies and cost reductions. The focus will be on the performance of everyday tasks through IT, with a range of standard, perhaps off-the-shelf, applications. In a manufacturing environment, this could involve automation of repetitive tasks to reduce the time and effort in a particular process but with no other major changes to that process. The absence of automation at this basic level can make any organisation unable to func-tion in a modern competitive environment.
Survival can also incorporate the use of systems which, when first introduced, may have led to some form of advantage. However, that advantage has long gone, and the system concerned will have evolved into a `must have' tool which even the smallest players and newest entrants will have. An example may be the use of EPOS from corner shops to supermarkets. Such systems have even gone beyond the level of strategic necessity: they are regarded as essential, and the organisation may require such applica-tions simply to be taken seriously by both customers and suppliers, not to mention rivals.
While the emphasis may be on operational efficiencies, an organisation-wide approach can be taken, and the potential pitfalls of purely localised exploitation avoided. Systems may be integrated through some form of internal network, although as yet, there will be no linkage with those outside the business.
3.2. IS for sources and resources
for the input of raw materials and other resources, and to get its finished product to the market place (Sabherwal et al., 1994). This role views an organisation as a system with all its input coming from, and all its output going back to, the environment and IT provides an efficient vehicle in the acquisition (from suppliers), processing, and eventual marketing of products/services to customers. This role marks the beginning of links to other organisa-tions, and adopts the competence-driven view that orga-nisations are basically collections of resources. Clemons and Row (1991) suggest that increased integration of resources is a key role for IT allowing companies to gain access to resources which they may not have themselves. Klein and Kromen (1995, p. 43) argue that such co-operation `can become a forceful strategy to develop competencies.'
Organisational effectiveness stems from the ability to manage those relationships, ensuring a free flow of resources into and out of the company (Pfeffer and Salancik, 1978):
The effective organisation is the organisation which satisfies the demands of those in its environment from whom it requires support for its continued existence.
The Resource Dependence view has been advocated as a reason for introducing inter-organisational systems (Sabher-wahl and Vijayasarthy, 1994), while IT itself can be seen as a key resource. Systems that facilitate the entry of resources into a buyer company and their exit from suppliers are obvious instruments in controlling or even stabilising the flow of resources from one company to another. Klein and Kromen (1995) also point to the bridging effect between the company's resources, while Venkatraman (1994, p. 80) refers to inter-organisational systems as `an efficient con-duit' for the exchange of information.
The use of inter-organisational systems at this level is merely associated with stabilising, formalising, and main-taining resource acquisition relationships. No attempts are made to redefine actual relationships through organisational structure changes. Here, organisational boundaries remain
well defined, and it is assumed that systems are merely being used to automate and speed up paper-based exchanges between the relevant players. So, EDI linkages can be considered to fall into this category. As Spinardi et al. (1996) show, such systems at first create no real changes to the actual relationships between and among participants. Rather, that change is incremental and gradual in nature.
3.3. IS for strategic purposes
Most of the research in IS during the 1980s and 1990s has focused on this framework which takes the premise that IT can be used to gain valuable advantage over rivals by moving it from the back room to the firing line. If the previous role can be thought of as facilitating the entry of resources into the company, then this role is concerned with exploiting the full potential of those resources for competi-tive advantage. Creativity and innovation are the driving force behind this role and it is now widely acknowledged that any advantage gained will be transient unless there is on-going management of the IS resource.
This is also the most problematic role to define, given the lack of consensus as to the causes of competitiveness, while the very essence of strategy is that it is unique and idiosyn-cratic to the firm concerned. Similarly a system can often
only be seen to have been strategic after the fact. Thus,
perhaps the most useful way of thinking about this role is in
terms of using systems to do something special, providing
some form of product or service which rivals cannot hope to emulate. While past views of competitiveness through IT
may have stressed the technology as a source of direct
advantage in its own right, in this framework, the view is taken that the technology (or increasingly, the information produced) is more likely to create advantage by enhancing the skills and resources at the firm's disposal (Clemons, 1991; Clemons and Row, 1991; Brady and Targett, 1995). In this respect, the technology becomes a tool (as opposed to a weapon), a way of enhancing the skills which the company has at its disposal, and a mechanism for exploiting the ideas and strategic visions of talented individuals. Thus, systems which enhance existing relationships, or which support existing strategies in a way which helps the orga-nisation to outperform its rivals and attract customers, are the norm in this category. Systems which help the company to deliver products or services at the lowest cost within the industry, and those which help it to deliver a unique product, are also included.
Traditionally, the focus has been on the use of IS to gain control in customer and supplier relationships. In such cases, the systems introduced have done much more than automate transactions, as in the previous role; they have also added an extra dimension to the relationship by encouraging the customer or supplier through convenience or speed. At the same time, the more dominant firm may have tried to build in switching costs (Cash and Konsynski, 1984; Porter and Millar, 1985; Haeckel and Nolan, 1993). Alternatively,
firms were encouraged to use data on customers to improve service, or invest in systems so advanced that they act as a deterrent to the potential new entrant. The technology's ability to enable faster delivery to the customer or client has long been recognised, although his has become increas-ingly difficult as a strategy in its own right due to the proliferation of packaged software.
Current attention is focused on the potential of informa-tion for getting closer to, and anticipating customer needs through data mining. Bessen (1993), for example, points to IT's potential as a `micromarketing' tool that enables companies to accurately pinpoint groups of like-minded customers. In banking and retail, detailed information on customers can assist in the accurate targeting of products and service. For Brady and Targett (1995), the interpretation of data gathered from standard EPOS systems has had a significant competitive impact in three separate situations. Similarly, the manipulation of accurate and up-to-the-minute data has been the key to success for Mrs. Fields Cookies and their retail operational intelligence (ROI) system (Haeckel and Nolan, 1993). Jackson and Humble (1994, p. 36) argue that `IT can be used to help an organisation achieve out-rageous levels of customer satisfaction,' a factor which they believe to be an increasingly important element of the search for competitiveness. Such high levels of customer service are the driving force behind many of the systems operated by Otis Elevator (Jelassi, 1993), and increasingly, data mining activities.
Similarly, IT also has the potential to play an active facilitating role in the competence-driven route to competi-tiveness, where relationships, both internal and external, are emphasised (Pralahad and Hamel, 1990; Kay, 1993; Farbey et al., 1994). Experience within the sources and resources role could lay some of the groundwork for innovation in this area. The technology also has the capacity to enable more flexible organisational structures, faster product design and development, and process changes. These changes can, in turn, create new standards of service and delivery to the increasingly demanding and impatient customer (Edwards, 1997). Systems also open up opportunities for competition on a more global scale. Pyburn (1991, p. 89) points to the fact that the systems most likely to be strategic are those which capitalise on idiosyncrasy and have `thousands of small impacts throughout the firm rather than one colossal and, often, easily duplicated success.'
retaining the more advanced management stance of the strategic role.
3.4. IS for SVA (BPR)
It has been suggested that much of the disillusionment with IT may stem from the fact that it has traditionally been used to merely speed up or automate existing ways of doing business, using methods which are not taking full advantage of the technology's potential, and which are unsuitable for the demands of an increasingly dynamic and customer-oriented marketplace (Davenport and Short, 1990). So, while the survival role may be appropriate for some orga-nisations (especially in the initial stages of their IT adop-tion), others find that something more than automation is required. SVA refers to the identification of new ways of doing business through the redesigning or complete rethink-ing of the way in which individual processes are performed. BPR is often viewed as a way of improving competitiveness and responsiveness, as well as the actual sustainability or longevity of advantage. Hammer and Champy (1993, p. 32) define reengineering as:
the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service and speed.
While early attitudes to reengineering may have went too far and resulted in ruthless `slash and burn' exercises (`business bulimia' according to Martinsons and Reve-naugh, 1997), lessons can still be drawn from such recommendations, specifically that advantages cannot be sustained by plodding along in the same ways that have traditionally been followed. The need for faster responses and delivery may also make a more cross-functional approach more appropriate.
IT is a key enabler in the move to more flexible and cross-functional process arrangements. Ford (Hammer and Champy, 1993; Mowshowitz, 1994) and Chrysler (Teng et al., 1994) have both improved between department coopera-tion, taken several steps out of unwieldy process (in Ford's case significantly reducing costs in terms of personnel), and improved responsiveness to the customer. Similarly, Amer-ican Express (Ballou, 1995) found that radical change was necessary to improve cost, quality, and speed of service. Willcocks and Smith (1995) present three cases, one in a UK hospital, detailing how IT has been used in this way. These three organisations' experiences show that it is by no means an `easy' choice, but one fraught with difficulties and risks, where many organisations fail to achieve the hoped-for benefits.
While the BPR or SVA role is likely to be temporary, it marks a permanent departure in the organisational role played by IT. Davenport and Short (1990) suggest that the relationship between IT's capabilities and BPR is a cyclical
or `recursive' one, and that redesign should become an institutional way of life. Such redesign efforts will be likely to occur at intervals in the future as companies try to produce ever more flexible structures, faster responses, and more creative strategies. This represents a particular challenge for those responsible for the technology and its management. Martinsons and Revenaugh (1997) urge that it is:
imperative to create an environment which en-courages the shared learning and continual improve-ment that are imperative to maintain the competitive edge and build on the foundation of a re-engineer-ing success.
Venkatraman (1994) adds that, to be truly effective, reengineering efforts must also be directed across organi-sational boundaries, as is the case in the final role (S)Cyberspace.
3.5. IS and (S)Cyberspace
The virtual organisation (Davidow and Malone, 1992), is one which depends on the powers of cyberspace for its operation, existing in a network or computer-mediated relationships with suppliers, customers and other organisa-tions. This type of structure could be expected to offer greater possibilities for flexibility; innovation; and customi-sation of service, as well as the ability to significantly reduce product life cyclesÐall ways of coping with fast changing marketplaces. Partnerships between different or-ganisations may be highly temporal, only existing for as long as is absolutely necessary (Chesbrough and Teece, 1996). Davidow and Malone (1992, p. 240) argue that such a company is essentially characterised by `time, learning, and adaptability.'
Mowshowitz (1994, p. 268) points to an organisation which is characterised by `ever-shifting job responsibilities and authority structures that permit extraordinary flexibility in modes of functioning and responsiveness to the environ-ment.' Responsiveness and speed are key elements in satisfying the customer who expects a more tailored and personalised service. Chesbrough and Teece (1996, p. 65) also point to the increased flexibility and choices offered by such a structure, arguing that:
. . . virtual companies co-ordinate much of their business through the marketplace, where free agents come together to buy and sell one anothers' goods and services: thus virtual companies can harness the power of market forces to develop manufacturing, marketing, distribution and support their offerings in ways that fully integrated companies can't duplicate.
hastened the emergence of the virtual company (Clemons, 1991; Davidow and Malone, 1992), or the `Martini' orga-nisation (due to the emphasis on producing products/ser-vices available at any time, and in any place). In such a company, products often do not exist until absolutely necessary, and are generally information-based. The empha-sis here is on providing a flexible, tailored (customised) and fast response for the all-important customer, who may actually help in the product's design, while suppliers and customers are viewed as part of the business itself (Davidow and Malone, 1992). This can be seen as a move towards the `boundaryless' company promoted by General Electric among others (Kay, 1993; Syrett and Kingston, 1995). The experiences of Rosenbluth Travel (Clemons, 1991; Benjamin and Wigand, 1995) show how the creation of virtual alliances improves not only speed and responsive-ness, but also enables the company to trade in geographi-cally remote areas.
The spread of this type of company has been most apparent in the financial services sector (for example, Hol-land and Lockett, 1995; Loebbecke and Jelassi, 1997), where the success of First Direct and Direct Line (CSFI, 1995) shows that customers do want to use the new electronic distribution channels with their attendant conve-nience. Jensen (1995), chairman and CEO of Visa Interna-tional, highlights the folly of ignoring such developments, and suggests that those involved in the field of financial services will have to embrace those new modes of delivery if they are to maintain their customer base. Tailoring responses to individual customer requirements is also rising up the agenda, as Jensen looks forward to the creation of a `structure that will enable each customer to be treated as a segment of one.' Bauer (1995) points to another advantage of the use of virtual delivery channels, suggesting that they are up to 20 times cheaper than the equivalent transactions performed manually.
4. The sixth `S' of the framework: sustainability
The common denominator in all the five roles
de-scribed so far is the Sustainability framework. That is,
whatever role IS plays in organisations, the process of IS management will determine the continued success or fail-ure of that particular role. As competence in IS manage-ment increases, organisations can move into, and benefit from, more innovative use of IS such as strategic, SVA, and (S)Cyberspace.
The nature of IS management efforts necessary for each role is, however, different. This issue will now be discussed, taking each role in turn, and relating it to the IS management process. While it is difficult to come up with a precise definition, many researchers have identified a range of issues for good IS management practice. Since these issues are well documented, only a brief reference to them will be made here. Galliers (1991), for example, makes the point
that the approach to IS management should not be confined solely to IT-related or technical issues, but:
also such organisational issues as change management and a human resources strategy associated with ISÐin other words a strategy that takes into account the manner in which one might move from A to B, and the necessary organisation, people and skills asso-ciated with this movement. (Galliers, 1991, p. 60)
For the purpose of this discussion, the IS management process is taken to include: The IS planning efforts, management attitudes and commitment, alignment efforts, overall responsibility for IT issues, and skill in technol-ogy forecasting.
Management attitudes are the focus of attention for a wide range of authors who argue that commitment and support are central to a successful planning effort (Galliers, 1991; Earl, 1993; Norton, 1995), and also if the technology is to be deployed in an innovative fashion. Commitment is also seen as a valuable resource in its own right, and a pre-requisite for successful IT usage (Powell and Dent-Micallef, 1997). The planning approach is also considered by Galliers and Sutherland (1991), who see a gradual progression from decisions concerning IS made on an ad hoc basis, to a much more integrated situation. The importance of achieving alignment in that planning effort is included too, given the priority attached to this within the literature as a whole.
Commitment itself may be displayed in a range of different ways, from encouragement from the sidelines to more tangible measures as active involvement in the IT-related planning process. Indeed, the very establishment of a planning process is a sign of support, as is the creation of an IT position at board level.
Thus, in the survival role, where systems focus on
efficiency, one might expect the least structured approach
to IS management. The systems needed for this purpose are usually designed or bought by the IT manager or his department without much direct involvement of top level managers. Most of the applications automated at this level are largely routine tasks and a software might be readily available to do this. However, this should not mean that planning efforts, or the link with the business strategy and objectives, should be ignored. In line with Galliers and Sutherland's (1991) model, the approach at this basic level is rather disorganised and characterised by an emphasis on technical aspects.
consequently, impose severe restrictions on establishing IOS relationship (Fearon and Philip, 1998). It is the responsibility of senior managers to address those pro-blems. Also increasing cooperation between the IS staff and business managers is needed to deal with both the internal and external concerns of participating organisations for IOS. A more structured planning approach might be expected given the connections with other companies. The needs of those using the inter-organisational systems may call for more business understanding on behalf of the IT staff, a fact reflected in the character of their department, and by closer relations between the IT staff and their business colleagues.
Active support from the management will probably have occurred before the customer or supplier connection has been established. That support may extend to an active role in IT-related decision-making, but the IT department retains over-all responsibility, as highlighted by Venkatraman (1994).
At the strategic level, IT is used to directly support the business, and closer integration between the business and IT domains is widely recognised as the key to success in such an endeavour. Ideally, the management and IT department would work closely to generate IT-based initiatives. Ob-viously, this calls for a high degree of mutual understanding, which is likely to be channelled through formal contacts in the planning process, and an increase in overall alignment efforts. More displays of active commitment might also be expected. The technology itself is likely to be more widely used right through the company, and its potential understood by the staff throughout the organisation.
SVA, or BPR calls for a very different approach than for any of the previous roles. Willcocks and Smith (1995, p. 472) contend that `Central to BPR practice is a holistic approach to strategy, structure, process, people and technol-ogy.' Managing the introduction of change is the key to success; so, while changes may be radical in nature, they should be phased in, and people kept informed. Both the IT department and corporate managers must have a clear and shared vision of business strategy.
Davenport and Short (1990, p. 178) also point to the disruption caused by the BPR effort, and suggest that `both high-level and broad support for change are necessary.' Support for IT also calls for closer alignment between business and IT goals, and more concerted efforts to improve that alignment. As Fiedler et al. (1995, p. 17) state: `As IT is used to enable more radical and strategic change to be achieved, it becomes increasingly important that it is planned and co-ordinated to support the overall organisation's business plan and goals.' Indeed, Teng et al. (1994, p. 105) see the `integration of corporate and IS strategic planning' as a central success factor in the whole effort. So, there is more emphasis on planning and align-ment; IT and the business staff are likely to work closely together for at least the duration of the change project. Thus, users at various levels within the organisation are likely to be involved.
In the final role, IT is the business in the sense that it
underlies the organisation's whole existence. Commitment at all levels is essential, and especially that of senior management. This is highlighted by Loebbecke and Jelassi (1997, p. 144)Ð`top management awareness and commit-ment to technological innovation is a necessary ingredient for successfully implementing IT-based solutions that cut across business units, processes, and ultimately alter the organisational structure.' That awareness and commitment are likely to be a necessary prerequisite for the formation of strategic alliances. Management are also likely to have a real understanding of IT, and perhaps, a `vision' of how they wish the organisation to progress. Their interest will prob-ably be matched right throughout the organisation, creating a situation where IS and business staff work easily together towards the identification of new opportunities.
As alignment, and efforts to achieve it, are high on the agenda within the organisation, there is a corresponding need to take account of the needs and goals of virtual partners. Holland and Lockett (1995, p. 1119) put the success of one such partnership arrangement down to `the vision which has enabled all parties in the agreement to evolve strategies which are mutually beneficial.' They continue: `It is impor-tant for organisations to have personnel who can adapt quickly to the new form of business partnership that are being created.' Thus, the flexibility of the organisation as a whole is matched by the versatility of its workforce.
the market plummeted from over 80% in 1995 to about 50% in 1997, while Microsoft's share went up from less than 3% to over 40% during the same period. It is now widely accepted that having the best high technology product in itself does not guarantee success in the market place. For example, the software graveyard is littered with the remains of such great products as Lotus 1-2-3, WordPerfect, dBase, etc. Similarly, Betamax videos are superseded by its `infer-ior' cousin, VHS, and Apple operating systems overtaken by DOS/Windows. The moral of the story is that the evolu-tionary nature of technology makes forecasting skills, and by implication competence in IS management, an invaluable asset in a modern competitive environment.
5. Case studies
The purpose of this paper largely has been to discuss the new six `S' framework. However, having developed the new model, we tested its usefulness as a research tool in understanding the roles which technology can play in organisations and to see if our views on IS management and the corresponding role of IT are in tune with corporate reality. Initially, we had plans to use one company each from each of the categories of the six `S' framework. Unfortu-nately, the one company which fitted the S(C)yberspace framework refused to participate. Eventually, four case studies were conducted and brief details of the participating companies are shown in Table 1. These are large companies in Northern Ireland with the number of employees ranging from 700 to over 2000.
The researcher has spent several days in each of the organisations. In each case, a combination of interviews, observation, and document analysis was conducted spread-ing over several weeks. The participants included chief executives, IT managers (if applicable), senior managers and employee representatives from all levels.
6. IS management practices in the companies and the six `S' framework
Within all the companies, managing the relationship with the user community was seen as one valuable way of
aligning IS with the goals of the organisation: with the implication that greater exposure to `real' users in real situations leads to the development of better systems. However, the actual degree or extent of overall alignment
activities also varied from case to case in line with the sixS
framework as shown in Table 2.
In Company A, there are no formal mechanisms in place to control IT as such, and the IS `function' is limited to one individual. Although change (in the shape of an IT director) was put forward, it was felt that the essentially basic nature of systems in use did not make this necessary. The computer manager's role is an informal one and concerned with, as his title would suggest, ensuring that computers within the company are kept up and running. That informality also extends to the approach to planning for future developments within IT, with individual decisions being taken as and when necessary.
Informality also stems from the actual size of the company, which allows free contact with users as and when they need it. In terms of relations with those users, this company represents a closeness which the other case com-panies do not have, and could not hope to achieve. How-ever, while the computer manager is very aware of how the
Table 1
B Clothing manufacturer 2640 Sources and
resources
C Carpet manufacturer 1083 Strategic
D General engineering 795 SVA
Table 2
Comparison of case alignment efforts
Cases Action
MD on IT steering group; other managers disinterested
Good: former IT staff take on new business roles
All business managers participated in global IT conference to set future direction for IT IT staff seconded to business units
IS manager and manufacturing systems representative involved in business planning IT steering group (MD on)
Forum for IT groupÐlooks at future systems that could fulfil business needs Team briefings and regular interaction
with other departments Internal customer contract SVA
(Company D)
No IT strategy but CE directly involved in IS planning
IS manager involved in business planning Suppliers involved in reengineering drive Users involved in MRPII implementation teams Directors involved in future plans
business functions, a similar level of awareness cannot be found on the parts of the users themselves. As yet they have insufficient familiarity with IT, and a lack of substantive knowledge about what the technology can offer. Some seemed reluctant to learn any more about the technology, and suggested that further investment would be futile. This may have stemmed from the underlying belief that IT represents a threat to jobs. Training the new user community was initially seen as important; indeed, it was the main reason why the computer manager was appointed in the first place. However, subsequent training was felt to be poorly organised, if delivered at all.
In terms of the acquisition of new hardware or software, alignment is there, although again, in a very informal sense. The company has no separate IT budget and there are no formal planning processes for IT. New purchases are each judged on their merits. Here, the company has perhaps a greater luxury of more time to make those decisions and think them through, with senior management figures having the final say about investment decisions.
Thus, the sustainability component of Overall
Responsi-bility for ITis not as clear cut as had been expected given the IT focus of survival within the company. Their criteria for investment were felt always to be a strong business need for each new investment.
Company B may well have been in a similar position, but for the appointment of the IT executive, which itself stemmed from a commissioned report to establish just what role IT would play in the organisation in future. Here, the actual status of the IT department has improved, but it still comes under the wing of the Finance function, a fact which, it was acknowledged, could limit the IT executive's possible room for manoeuvre. More formal mechanisms are beginning to settle in, and there is a recognition that managing IT is about more than just managing and ac-counting for technical projects, at least in the eyes of the IT staff. This figure sees his job very much as being about improving the flow, and the use, of information within the company, and in enhancing the relationship with the customer. Within this, and the remaining companies, the approach to planning is much more structured than within Company D, reflecting the overall importance attached to the technology.
Here, similar structures have been set in place to those within Company C, such as the IT Steering committee and the User's group. However, the greatest contributor to alignment is arguably the IT executive's own attendance of Board meetings, and the fact that he is involved in setting the objectives both for the business, and for the technology (as are his counterparts in cases B and D). As yet, however, the activities and attitudes of the IT executive are not fully reciprocated by his colleagues who are undoubtedly com-mitted to IT, but are not that interested in detail. The company's managing director was aware that involvement by business managers in IT-related activities was an area where improvement was necessaryÐ`I feel that the line
management of the company (as well as senior management and directors) need to become a little bit more involved in determining the priorities.' As the situation stands, an examination of Table 2 suggests that alignment within this company is something of a ``one-way street'', with all the efforts being made by the IT staff, as opposed to the two-way or mutual alignment efforts promoted by Rockart et al. (1996) and others.
The situation with IT-related awareness on behalf of business managers improves slightly in Company C, where greater experience of systems is accompanied by a more well established structure for its management. The strategic nature of IT within the company is reflected in high levels of alignment, and efforts to achieve it. Here, directors are more au fait with IT, having seen how it can support strategic business objectives. This support extends to set-ting the agenda for IT, most notably through participation in the (company-wide) global IT conference and the IT steering committee.
The IS Management process here is formalised to a high degree, with the IT department having a set of contractual obligations to adhere to, and direct accountability to the user community. The existence of the IT forum, which was set up specifically to improve alignment, and involves representa-tives from all areas of the company, is another sign of just how importantly IT is viewed. This was the only case company to have in place explicit technology forecasting procedures in order to keep pace with technological devel-opments. This is matched by close relationships with the company's software providers: partnership, and working with those suppliers is seen as one way of ensuring that new developments are in tune with company objectives. There has also been a history of close cooperation with the company's loom provider, which has already led to the development of the strategically important computerised looms. Given the importance of `external' alignment (Hol-land and Lockett, 1995) within S(C)yberspace, the company would seem to be moving in the right direction to position itself for the managing director's plans to become a virtual organisation. Comparable initiatives are occurring within case company D, where suppliers of non-IT services are working closely with the company in the overall reengineer-ing effort, again, perhaps, positionreengineer-ing the company for movement beyond SVA.
will become more closely entwined, and which will result in an extensive reengineering effort. The IS manager, in this instance, works closely with the manufacturing systems representative, whose role is dedicated to finding ways that IT can support and reposition the company to take advan-tage of future challenges.
Such close involvement with business objectives was also apparent within Company D, although again the transitory nature of the company makes its activities more difficult to accurately pinpoint. Again, though, the new IT figure has come in with a slightly higher profile, this time as a former consultant. User development groups have worked closely with their IT colleagues for a year in the implemen-tation of MRPII. The attitude of those in sales, however, may be an indication that the project may not have been as all-embracing as had been hoped. Alternatively, it may simply be a sign that the IT department, like those of the other case companies, is stretched almost to breaking point, and cannot fulfil all the demands that it would like to. Recently, the division has not grown at anywhere near the rate of the company as a whole. As a result, training is an area, which was felt to have been neglected, while others suggest that they could receive a much more responsive service from the department as a whole.
All in all, many of the predictions made within the Six `S' Framework in the previous pages have been borne out in practice. In terms of the focus of IT deployment, and the contributions made by IT, the companies all corresponded to the role into which they had been placed. With reference to
sustainability, thereisa definite movement from simplicity
and a technical focus within the survival role, to greater sophistication and more concerted IS management efforts within later roles. However, none of the cases correspond exactly with the predictions, and some throw up some rather surprising anomalies.
Company A corresponded most closely to the predictions made, in this instance for survival, with the only real departure being the role and attitude of the managing director, the significance of which has already been dis-cussed. The size of this company may have affected the results obtained, and reflects the findings of Doukidis et al. (1996). Within that particular study, the authors discovered many examples of small companies where the activities of those at managing director level are directly at odds with received wisdom, and ``the `normal' course that is described for them''. The influence of this figure is felt to be more pronounced within smaller organisations, while their role is considered less defined and formal. For this reason, the authors suggest that, as in case A, they are more likely to take a hands-on approach in all aspects of the business.
Company B had only very recently moved beyond the survival level and the strategic review process that prompted this change itself resulted in a series of initiatives beyond what might have been expected for a company with an essentially simplistic and internal focus for its applications. Indeed, many of the efforts to facilitate strategic alignment
are similar to those of company C, which has more experience of IT, and a deeper understanding of the need for such measures. The managing director admitted that this change had been a gamble, but one which he (and the company's consultants) felt was necessary. The initiatives have thus been adopted with the company's long-term future in mind. The company can also be contrasted against Company A, as a way of illustrating `what might have been' if that company had appointed an IT director. How-ever, apart from the fact that IT has executive representation, the IS function corresponds exactly to what we expected. The actual power of that function is restricted in that it comes under the Finance umbrella. The attitudes of those at director level are also problematic. Despite the changes undertaken, and the drive of the managing director, these figures remain reluctant to gain a deeper understanding of the issues.
Within company C, the strategic significance of IT is appreciated, and has been backed up through experience. Not surprisingly, then, the company is fully geared to take advantage of IT-related possibilities. Given that much of the advice within the literature is based on ideas about the strategic use of IT, the company is almost a textbook example of how IS management should be approached. However, these activities are driven forward not by a focus on IT, but through the company's concern for high levels of quality in all aspects of the business.
Within company D, the transitory state of the company has already been emphasised, but its importance cannot be dismissed. The company is also unusual in that it has dispensed with strategy making. This may go against the spirit of the literature, but it is seen as the right choice within this company, and more importantly, a choice, which does not mean that strategic alignment is neglected. Adriaans (1993, p.107) suggests that this is a particularly appropriate route for companies in this situation, since `developing an IT strategy in an organisation which is being reorganised and restructured involves considerable complications. It is difficult to win support under these conditions.'
In spite of this, the company does correspond to the predictions made for a company in the SVA role. As in company C, the IT department has access to the board, and relations between senior executives and the department are generally good. Commitment at all levels is also high, as is the actual support for IT enabled changes. The one difficulty for this particular organisation, though, is its growth rate which puts an extra strain upon already stretched IT resources, and means that efforts to improve alignment are also somewhat restricted, at least in the eyes of certain individuals within the organisation. Similarly, some within the organisation feel excluded from the overall alignment effort, and know little about how the planned changes will affect them.
It is particularly reassuring to note that all the
compa-nies have, at the very least, considered moving beyond
IS management. This may offer a potential use for the framework, as a way of suggesting just how such improvements could be made, or for highlighting what has to be done before IT-related change is introduced. The organisation is encouraged to look forward, instead of merely accepting the suggestions for the respective role. Companies C and D, for example, both exhibit elements of the S(C)yberspace organisation to which they both aspire, most notably in working closely with their suppliers to improve alignment.
Companies inSurvival, such as Company A, could also
look at later levels to pinpoint areas for attention, as it would seem Company B has been able to do. As stated, even though this company has some way to go, it has put in some of the groundwork, and introduced some of the initiatives that enable company C to use IT in a truly strategic sense. Within this firm, such IS management activities are recognised as key competence, which in turn directly supports the company's use of IT. The technology also drives forward the company's TQM-based goals of customer delight and supplier partnership. Thus, one of this project's main points is illustratedÐthe fact that IT works in conjunction with a range of organisational skills, compe-tence, and resources in the rare situations where advantage can be gained.
So, as stated, the companies do exhibit general move-ment to back up the suggestions made for sustainability. The majority of the detailed suggestions made can also be accepted, given the case experiences. The differences though, suggest that there is a need for further research in a full range of other organisations before those predic-tions can be conclusively accepted. Future research should attempt to deal equally with both manufacturing and service organisations, unlike this study which had to focus mainly on manufacturing, while examples of the fifth role, S(C)yberspace must also be probed. However, the out-comes of this particular study are promising, and the findings are largely in line with the suppositions of the six `S' framework.
7. Conclusion
Despite identifying five different roles for IS, it is difficult to draw a clear boundary between them. For example, it is now recognised that IOS (EDI), which falls under the sources and resources framework, can provide both strategic and operational benefits (Reekers and Smith-son, 1994; Philip and Pedersen, 1997; Fearon and Philip, 1998). In other words, it displays the characteristics of all the five roles of IT. The level of strategic benefit from IOS, however, depends on the management competence of the organisation to differentiate its products and services as well as in achieving a reduction in cost associated with collapsing the value chain (Porter and Millar, 1985; Fiedler et al., 1995).
The six `S' model presented above represents a new departure on two major fronts. Firstly, it attempts to show how organisational use of IT can develop, without assuming that that development will occur in an orderly or sequential fashion. It also moves away from the view that there can be a universally applicable IS management solution, and builds in some of the most valuable ideas on IS management to pinpoint changes in practice from role to role. Using case studies, these preliminary assumptions have been explored. Above all, the model highlights the growing connection between IT and emerging trends within the literature on strategy and competitiveness. Thus, strength in IS manage-ment can be seen as a competence which must be developed in its own right; a competence which enhances the use of IT within the company, and, in doing so, supports the overall strategic direction and development of the organisation.
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