An investigation of the strategic information systems planning success in Chinese publicly traded firms

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Abstract

Based on a survey of Chinese publicly traded firms, we report on the status of the strategic information systems planning success in China. Through this analysis of the survey data, we found that Chinese managers are not using IS as a competitive weapon though they have already realized some aspects of strategic information system planning. We also examined the differences between Eastern and Western cultural and political context factors to explain this phenomenon.

Introduction

Much has been published about strategic information systems planning methodologies in companies in the Western world. These methods are designed to help IS planners to integrate their strategies with organizational strategies (King, 1988; Chan, Huff, Barclay, & Copeland, 1997; Segars & Grover, 1998). They identify opportunities to utilize information technologies for competitive advantage and/or to reorganize the internal business processes to achieve greater efficiency (Ives & Learmonth (1994), Venkatraman (1997); Ives & Learmonth, 1984; McFarlan, 1984; Porter & Millar, 1985; Wiseman, 1985; Brancheau & Wetherbe, 1986; Davis, 1982; Goodue, Kirsch, Quillard, & Wybo, 1992; Zachman, 1982; Segars & Grover, 1998). Strategic information system planning (SISP) is a group of resource consuming activities with the expectation of gaining benefits from this planning process (Segars & Grover, 1998). Based on the goal centered judgement perspective, Venkatraman and Ramanujam (1987) and Raghunathan and Raghunathan (1994) identified six important goals for IS planning: namely, enhancing managerial development, predicting future trends, improving short term performance, improving long term performance, gathering relevant information, and avoiding problem areas. One other theoretical perspective is the planning capability improvement perspective. King (1988) relied on the improvement judgement perspective to evaluate SISP success. Venkatraman and Ramanujam (1987) and Raghunathan and Raghunathan (1994) also incorporate this perspective into their work.

Segars and Grover (1998) built an instrument and empirically verified a second order model based on these two perspectives for SISP success. In their instrument, there are four constructs: alignment, analysis, cooperation and improvement in capabilities. They rigorously tested the model through confirmatory factor analysis in the US setting. Their test confirmed that planning success is multidimensional (King, 1988) and can be represented well as a second order factor (SISP success, SISP). Their study, thus, has provided a theoretical and operational definition for many aspects of SISP success. As they pointed out, “a potential avenue of future research is the replication of this study across a broader sampling frame or across a selected sample of international entities”.

We believe that a study of IS planning success in Chinese firms adds to this stream of research since China is in a very different environment with different philosophical, cultural and political context than the West and is in the process of transition to a market-oriented economy. In 1978, China revolutionized its economic management, placing greater emphasis on private incentives and markets. Today it is still in the process of market-oriented transformation and is becoming more and more successful in economic development. Along the path of China's noteworthy success in this reform, the Chinese government and a number of firms have realized the importance of information technology for the continuation and sustenance of the fast track to economic prosperity. Thus SISP is obviously an important and critical tool for China to utilize its limited resources to achieve the best results. Alignment, analysis, cooperation and improvement of IS planning capability are certainly important goals and targets. Our current study adapts the Segars and Grover (1998) SISP instruments to investigate the SISP success in the context of a dynamically changing economic process in China from the central planning economy to the market-oriented economy.

Our paper is organized as follows. The next section is a brief review of the state of information technology applications and research on IT management in China that suggests the necessity for strategic information systems planning research in China. Section 3 explains the theoretical and operationalized definitions of SISP success. Section 4 describes the research methods including sampling, data analysis and results. The results are discussed in Section 5 and conclusions presented in Section 6.

Section snippets

IT in China and research on IT management in China

China is one of the world's fastest growing computer markets. IDC reported that China was on the verge of overtaking Australia as Asia/Pacific's (excluding Japan) largest IT market (2000). In 1999, China's IT market was over US$11 billion and accounted for 21% of the area's IT revenues. IDC expects China's IT market will more than triple by 2004, when it will account for almost one-third of Asia/Pacific's IT market.1 There are now over

Theoretical and operationalized constructs for SISP success

As mentioned before, Segars and Grover (1998) developed and empirically tested the SISP success instruments. Using an adaptation of their instrument, we investigate the SISP success in Chinese publicly traded firms. The following is a brief summary of the theoretical and operationalized definitions for our research. Their instrument (SISP success) includes four constructs: alignment, analysis, cooperation and improvement in planning capabilities.

Alignment. It is generally accepted that one of

Sampling

In order to make sure that the Chinese translation of the adapted Segars and Grover (1998) questionnaire be as accurate and appropriate as possible, one IS professional who knows both English and Chinese translated survey questions into Chinese and another who also knows both English and Chinese translated the Chinese back into English and checked the consistency between the translation and the original questions to make sure of the right translation into Chinese. We also E-mailed the Chinese

Discussion

Through data analysis, we can see that Chinese SISP success measurement items are a subset of the original measurement items in Segars and Grover (1998), implying a lesser level of sophistication in IS planning. For the alignment construct, Chinese items include AL3, AL5, AL6, AL7, and AL8. The deleted item AL4 (educating top management on the importance of IT) is correlated with AL6 (assessing the strategic importance of emerging technologies) and has a lower factor loading. This seems to

Conclusion

This paper investigates SISP success in Chinese publicly traded firms using an adaptation of the SISP success instrument developed by Segars and Grover (1998). Through the integration of data analysis and cultural and political characteristics unique to China, we found some differences between Chinese IS managers and US IS managers in terms of IS management maturity. We clearly see that though Chinese managers have already realized some aspects of strategic information systems planning, they

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