Proceedings of the 32nd Hawaii International Conference on System Sciences - 1999
Proceedings of the 32nd Hawaii International Conference on System Sciences - 1999
Critical Success Factors (CSFs) and the Growth of IT in Selected Geographic
Regions
Dr Vijay K. Khandelwal
School of Computing & IT
University of Western Sydney
P.O. Box 10, Kingswood NSW
Australia
email: [email protected]
Abstract
Phenomenal growth in information technology has
made the job of the IT managers of enterprises
extremely complex. In multinational corporations
(MNCs) this is equally apparent. Quite often there
are conflicting demands from the MNC’s business
units because the growth and maturity of their
operations vary from one geographic region to
another. A system that works effortlessly in one
country may be a total failure in another. This is
because the management in different geographic
regions face different sets of IT issues. For an MNC
to develop a robust and reliable global IT strategy it
is important to understand the issues in the different
geographic areas in which it operates. Once the
issues are properly understood the management can
take appropriate actions to achieve success.
To identify the IT issues and measure their
criticality in different geographic regions this paper
extends the concept of Critical Success Factors
(CSFs) and the Stages Theory. By developing an
understanding of the growth process for IT it would
be possible to foresee what lies ahead, which in turn
will help in managing the issues properly and in
developing a sound IT strategy.
Using the CSFs approach and the Stages Theory
this paper identifies the Critical Success Factors in
the geographic regions of North America, Europe,
Australia/New Zealand, and India, and determines
the growth of IT in these regions. It is found that the
alignment of business and IT, and end user fulfilment
are the two most critical success factors in all of
these geographic regions, whereas outsourcing of IS
is considered much less relevant by all the IT
managers. Finally there are some other issues which
Mr Jeff R. Ferguson
School of Computing & IT
University of Western Sydney
P.O. Box 10, Kingswood NSW
Australia
email: [email protected]
are considered critical by organisations in some
regions while they are considered less important in
other regions. Notably among them are IT for
competitive or significant advantage, Linking with
external organisations, Integrating systems and
Technical skills of IS staff. These conclusions are
significant to the management of IT in international
businesses, governments at various levels, and
academic institutions.
1
Introduction
With the phenomenal growth in information
technology the job of the IT manager of an enterprise
has become increasingly complex. In multinational
corporations (MNCs) this is equally apparent. At one
time the IT manager’s responsibility was limited to
providing technology support and solutions to the
enterprise in a centrally controlled environment. The
task now has become manifold more challenging.
The enterprise that the IT manager is a part of, is
competing in a highly charged, global environment.
Quite often there are conflicting demands from the
MNC’s business units because the growth and
maturity of their operations vary from one
geographical region to another. A system that works
effortlessly in one country may be a total failure in
another. One important reason for this is the
differences between the growth and maturity of IT in
the geographic regions. Such differences result in a
different set of IT issues faced by the management in
the different geographic regions. For an MNC to
develop a robust and reliable global IT strategy it is
therefore important to understand the issues in
different geographic areas in which it operates. This
will help management not only address the IT issues
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Proceedings of the 32nd Hawaii International Conference on System Sciences - 1999
Proceedings of the 32nd Hawaii International Conference on System Sciences - 1999
appropriately but also prepare them for future courses
of action.
A number of studies addressing IT management
issues have been carried out in the past. Most notable
among them is the annual study conducted by the
Computer Sciences Corporation analysing the IS
(Information Systems) Management issues of North
America and Europe [6] which includes a comparison
of the criticality of these issues over the past years.
Hansell et al., [11] also investigated the key issues of
IS management but limited their study to the
mainframe computer clients of IBM in Australia and
New Zealand. This study was later updated [4] but
was still confined to Australia and New Zealand.
Benjamin and Blunt, [2] have explored the critical IT
issues in North American context. More recently
Brancheau et al. [3] investigated key issues of IS
management using Delphi technique comprising
participants mostly from the USA. Most of the
present data is available mainly for North America
and Europe. The data for the other parts of the world
is either dated, or is unavailable [24]. Furthermore the
research so far is limited to the issues concerned with
the management of IT in a localised, intra-national
environment. In the context of emerging global
environment these results are plainly inadequate.
The purpose of this study is to establish the
concept of Critical Success Factors (CSFs) and the
Stages Theory as a measure of the criticality of IT
issues and maturity of IT in different geographic
regions. The study concludes with the assessment of
the CSFs and the growth of IT in North America,
Europe, Australia/New Zealand, and India. These
geographic regions were selected as they are
representative of large developed economies, small
western economies and emerging economies.
2 Critical Success Factors (CSFs) and
the Stages Theory
2.1
Critical Success Factors
The concept of Critical Success Factors (CSFs)
was first introduced by Rockart [25] as a mechanism
to identify the information needs of chief executive
officers. Since then it has become a widely used
technique in a number of situations. Rockart had
based the CSF concept on the idea of “success
factors” first discussed in the management literature
[7]. CSFs are defined as those few key areas where
things must go right for the business to flourish. If the
management doesn’t pay attention to these areas the
organisational performance would suffer. The
emphasis here is on “few” and “must go right”.
Because of this limited number the management is
able to provide a constant focus on the CSFs until
they are successfully achieved.
Although introduced initially to determine the
information needs of managers, the current use of
Critical Success Factors has grown to cover all
legitimate areas of management. Examples of these
are the use of CSFs for management of the Year 2000
project [28, and the CSFs for identification of global
business drivers [12]. The CSF technique has been
assessed for reliability and consistency by comparing
the results of management studies carried out for
identifying the key concerns of IS managers. The
results published [18] confirm that it indeed is a
reliable technique.
Individual and group CSFs
2.1.1
Although the CSFs aim at organisational
objectives, each individual manager of an
organisation can have a different set of CSFs. In a
company for example, the Marketing Manager may
have a different set of CSFs to the Personnel
Manager. The CSFs for the Marketing Manager may
include Market success, Profit margin, and the
Performance of the sales staff, while those of the
Personnel Manager may be Human resource
planning, Occupational health and safety, and Staff
rewards.
Studies have shown that CSFs can be synthesised
(While each manager in an organisation may have
different, individual CSFs, the whole organisation
may have its own, aggregated set of CSFs
(organisational CSFs). This argument has been
extended to include CSFs for a group of organisations
belonging to an industry (industry CSFs), or CSFs for
a group of managers in a particular role belonging to
different organisations (occupational CSFs), giving
rise to the concept of group CSFs. Thus there could
be generic CSFs for manufacturing managers, or
CSFs for the retail industry. This concept can be
further broadened to incorporate geographic regions
of the world. We can thus, for example, have IT
management CSFs for Australia which will define
those few factors that are required by Australian IT
management for their success.
Temporality, maturity and CSFs
2.1.2
CSFs can either be ongoing, or they can be
temporal. The Year 2000 problem is an example of a
temporal CSF the proper management of which is
essential for the success of an organisation for a
period after which it will cease to be critical. On the
other hand, strategic IT planning is an example of an
ongoing CSF because the IT plans need to be updated
on a regular basis for the organisation’s success.
Because of the changing circumstances a
manager’s priorities may change from time to time.
What is critical for him today may in time be
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Proceedings of the 32nd Hawaii International Conference on System Sciences - 1999
accomplished and thus cease to be critical.
Conversely what is commonplace today may become
critical in the future. The same would apply to
organisations, industries, geographic regions, etc.
With time, as an organisation grows and matures, it
may possess a differing set of Critical Success
Factors. The CSFs can thus be used as a tool to
measure the maturity of an organisation, industry, or
a geographic region. By matching the CSFs of an
organisation with the characteristics of a maturity
model, such as Nolan’s Stages Theory [19] it would
be possible to establish the maturity of the
organisation.
It is implicit in the above argument that CSFs are
temporal. We assert, notwithstanding the earlier
statement that the CSFs can either be ongoing, or
temporal, that all CSFs can be defined in a way that
they are temporal. For example, strategic IT planning
can be defined as, implementing process to develop a
long term IT plan incorporating platforms, standards,
priorities and resources. This CSF will then be
considered having been achieved as soon as a process
to develop the strategic IT plan is implemented. The
assumption is that once this process is implemented
the ongoing updating of the IT plan would be an
integral part of this process. All CSFs would thus
belong to a point in time, although they may differ in
their degree of temporality. It is this feature of the
CSFs which can be used for determining the level of
maturity of an organisation (or an industry, etc.).
Organisations that are more mature will have a
different set of CSFs than those that are less mature,
changing their CSFs as they grow. This, together with
the CSF performance measurements, can be an
effective tool for management to identify their level
of maturity and the actions required to achieve
success.
2.2
The stages theory
Time
Stage 6
Maturity
Stage 5
Data
administration
Stage 4
Integration
Stage 3
Control
Stage 2
Contagion
Transition point
Stage 1
Initiation
Stage 4
Maturity
Stage 3
Formalisarion
Stage 2
Expansion
Stage 1
Initiation
IT budget
Organisation learning
Managers sometime wonder how they could have
made what, in hindsight, appear as mistakes in
managing their function. However these so-called
mistakes are usually the natural symptoms of growth
experienced by all enterprises, and are perhaps
conducive to the development that has brought the
function to its current maturity. What actually
happens is that new circumstances require new
management practices. If outmoded practices are
retained after their appropriateness has passed,
mistaken decisions result. This phenomenon of the
changes that an enterprise, or a function, experiences
as it grows from inception to maturity is defined by
the concept of stages of growth.
A pioneering work on growth of organisations was
carried out by Greiner [9] who focused on the
enterprise as a whole, and developed the
understanding of evolving management practices as
an organisation grows. Greiner described five phases
of growth that an enterprise passes through, and
Time
Figure 1. Four stages (Nolan 1974) and six stages (Nolan 1979) of IT growth
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Proceedings of the 32nd Hawaii International Conference on System Sciences - 1999
Organisation learning
stated that age, size and the growth rate of its industry
are the most important factors in determining which
of the phases the enterprise is in. These five phases
are identified by their dominant growth themes of
Creativity, Direction, Delegation, Co-ordination, and
Collaboration. Each phase is characterised by a
period of evolution, followed by a period of steady
growth and stability, finally ending with a period of
organisational turmoil and change. The stable period
lasts as long as the profits grow at a satisfactory rate.
Such growth usually ends in revolution - some crisis
which, when confronted, leads to the next phase. The
critical task for management in each revolutionary
period is to find a new set of organisational practices
that will become the basis for managing the next
period of evolutionary growth. Those new practices
in turn outlast their usefulness and lead to another
period of revolution. Managers therefore discover
that certain decisions that worked well at one time do
D P E ra
not yield the same satisfactory outcome in another
time.
Twenty-six years later Greiner revisited his model
to discover that his basic ideas still apply [10]. He has
however suggested that a sixth phase may be
evolving in which growth depends on the design of
extra-organisational solutions, such as a network
organisation composed of alliances and crossownership. Research has also shown that the model is
applicable to knowledge or service organisations in
as much as it is applicable to manufacturing
companies.
While Greiner looked at the growth of the
enterprise as a whole, Nolan [20] focused on the
evolution of the IT function within an enterprise. His
early ideas on the growth of IT within an enterprise
[8] employed IT budget as an indication of the
evolution of IT using an S-shaped curve consisting of
four stages - Initiation, Expansion, Formalisation and
IT E ra
N W E ra
T im e
Stage 9
Rapid reaction
Stage 8
Tailored growth
Stage 7
Functional
infrastructure
Stage 6
Demassing
Stage 5
Architecture
Stage 4
Integration
Stage 3
Control
Stage 2
Contagion
Stage 1
Initiation
D is c o n tin u ity
Figure 2. Three eras of IT growth (Mustaers et al 1997)
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Proceedings of the 32nd Hawaii International Conference on System Sciences - 1999
Maturity (Figure 1). As research continued in this
area it was realised that the S-curve not only
represented the growth of the IT budgets but also an
enterprise’s “learning experience” in managing its IT
function. This led to the well-known Nolan’s stages
theory [21] comprising of six stages- Initiation,
Contagion, Control, Integration, Data administration
and Maturity (Figure 1), with a transition point in
between the Control and Integration stages. The
transition point defined the end of the first S-curve
and the start of a second S-curve of explosive growth
of costs and organisation learning. This work
generated immense interest, and also certain
criticism. Benbasat et al. [1] for example, using data
from a number of empirical studies cast doubts on the
validity of the stages theory, though they did concede
that “… while the evidence to date is not very
encouraging, it does not definitely reject the stage
hypothesis”.
To test the stages theory further an extensive set of
quantitative and qualitative measuring instruments
was developed by Koot and van der Zee [16] and
used to measure the IT maturity of an organisation
and compare it with other organisations. What
resulted was an extended stages theory consisting of a
third S-curve [23]. It is interesting to note that in their
early work Gibson and Nolan [8] had predicted that,
“… history has not yet come to an end, and we are
sure that the S-curve of contemporary experience
there will doubtless be more S-curves, as new EDP
technologies emerge, and as companies become more
ambitious in their use of EDP techniques …” (p.77).
Expansion of the stages theory has continued.
Mutsaers et al. [19] have described the three S-curves
model as three “eras” of IT growth and maturity, the
Data Processing (DP) era, the Information
Table 1. Key indicators of Stages of Growth
Era
DP
Stage
1. Initiation
2. Contagion
3. Control
IT
4. Integration
5. Architecture
6. Demassing
NW
7. Functional
infrastructure
8. Tailored
growth
9. Rapid
reaction
Key indicators
Operational support, largely finance and accounting.
Rapid expansion. Little control. IT expenditure growing 20% to 40%.
Control of high automation cost. DP steering committee. Use of
methods/standards. User participation to develop systems.
Integration of applications. Old systems replacement to facilitate integration.
IT enables new business methods. Systems justified for business
contribution. Users assume greater control over their own computing.
Information dispersed. Data management is critical. New systems focus on
strategic business objectives. Rapid increase in top management
involvement.
Disbanding of central IT. Business unit has responsibility for deployment of
IT. Outsourcing of processing becomes a commodity. Clear trend towards
maintenance of legacy systems.
Translation of business architecture into a new additional layer of functional
infrastructure. Continuous shift towards open and public platforms. IT staff
get accustomed to powerful tools. Organisations develop strategic alliances
with their customers and suppliers. Focus is to develop applications
according to quality standards, at high speed and low cost. The focus will
move from system integration to flexible module integration. There will be
continuous shift towards a client-server environment and attempts of truly
integrated office automation.
IT infrastructure centres operated as profit centres. Expansion of the
functional support for users by adding top layer applications that use the
functionality provided by the functional infrastructure. Vast amounts of
external servers are available and accessible via public networks.
Adaptation of functionality with dynamic business team changes. Many
required adaptations performed by the users by simply changing the
parameters. All development of new applications will have the character of
pragmatic engineering with high efficiency.
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Technology (IT) era, and the Network (NW) era as
shown in Figure 2. Rather than evolution, business
transformation through creative destruction [22] will
occur. Each era is characterised by a period of
evolution, followed by a period of stability, ending
with a period of discontinuity and revolution, before
the start of the next era. Venkatraman [29] also
describes revolution that will occur in business
transformation as higher-benefit, IT enabled business
operations are achieved. Mutsaers et al [19], Griener
[10] and Venkatraman [29] all describe resulting
inter-organisational, networked business structures.
In contrast, Venkatraman [29] does not agree that the
transformations are consistent with growth or
maturity of the organisation.
The stages theory provides IT management with a
powerful tool to determine where on the curve they
currently are, and to predict the actions they need to
take to achieve their future goals. To do this
management needs to recognise and understand the
indicators of each stage. These indicators
characterised by business, management and IT issues,
described in Mutsaers et al [19], are summarised in
Table 1.
3
3.1
Methodology
Determination of CSFs
To determine the CSFs a number of techniques
exist. Prominent among them are structured
interviewing [5], focus groups, the Delphi technique
[3] and the group interview [13]. Each of these
techniques have their respective strengths and
weaknesses. In the structured interviewing technique
interviews are carried out by an analyst to zero-in on
the Critical Success Factors of individual managers.
Two, or sometimes three, interviews are required to
obtain the CSFs of a particular manager. The focus
groups technique involves a group of managers who
collectively discuss and decide upon their group
CSFs guided by an experienced facilitator. This
approach obviously is much more effort effective as
it employs group synergy and takes significantly less
time. The Delphi technique involves a number of
iterations through the same set of managers, and
while this makes it a slow and somewhat inefficient
process, it is an ideal technique when little initial
information about the CSFs is available. Finally, the
group interview approach is similar to the focus
group approach except that it starts with a number of
prepared CSF constructs and proceeds quickly to
identifying the CSFs. This technique is very efforteffective, and in our view gives superior output.
Needless to say the development of quality CSF
constructs is an important prerequisite for this
technique.
For determining group CSFs of a large number of
managers dispersed throughout a geographical region
we have developed a modified survey approach
which utilises the strengths of the above techniques,
and has been used for several past years. In brief the
approach involves the following steps:
Identifying a number of CSF constructs.
1.
This is a list of possible CSFs, as high as 40, covering
the needs of the whole group of managers. An
important consideration here is the correct
identification and definition of the constructs [15].
Designing a survey instrument. The survey
2.
instrument consists of the constructs, and their
definitions, for rating by the respondents on a Likert
scale such as the one given below.
1 = Critical for this year
2 = Important for this year
3 = Nice to have this year
4 = Not required for this year
Because CSFs are temporal, an additional option
for the respondents to indicate that the construct is
already achieved is included because if the construct
is already achieved none of the above options are
meaningful.
Mailing the survey instrument along with a
3.
briefing to the target managers. The managers are
asked to identify the importance to them of each
construct on the pre-defined scale. Space is provided
for additional items that the respondents may choose
to add. In the end they are asked to name their top
five CSFs distilled from the above list.
Analysing this data to arrive at the final
4.
CSFs for the entire group. The analysis process
generally includes a number of follow-up interviews.
This technique has been found to be extremely
efficient and has been used with very positive
outcome (refer for example, Khandelwal and Miller
1992, Khandelwal and Hosey 1996).
Of the four disparate geographic regions included
in this investigation, namely, North America, Europe,
Australia/New Zealand and India, the data for
Australia/New Zealand and India were obtained using
the four-step technique outlined above. For this 38
constructs (see Appendix) were identified for
inclusion on the survey instrument. The constructs
were identified from extensive literature search of
current IT issues, MIS Quarterly Keyword
Classification Scheme for IS Management [27], IT
management surveys carried out in the US and
Europe (for example [6], [3], [2]), and Australian
surveys on related subjects ([30], [14]). Space was
also provided on the survey instrument for additional
CSFs that the respondents wished to include. For
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each CSF construct on the survey instrument the
respondents were asked to rate the criticality of the
CSF to them on a four-point Likert scale of 1
(critical) to 4 (not required) mentioned above, or
alternatively indicate if they had already achieved
that CSF. After rating each of the CSFs the
respondents were asked to review the list, select their
top five CSFs, and write them in order of importance
in the space provided on the survey instrument. The
data for North America and Europe was obtained
from the CSC survey [6], which uses similar
constructs and survey technique.
The total numbers of responses on which these
results are based are 339 (North America), 120
(Europe), 186 (Australia/New/Zealand), and 69
(India). Because the investigation focused on
geographic
regions
rather
than
individual
organisations the respondents belonged to a mix of
organisation size and industries. These included
building & construction, commercial, mining,
education, finance & insurance, government, local
councils, health, legal, manufacturing, production,
retail, service, utility and wholesale/distribution. For
all the geographic regions the latest available data
was used for the analysis. For North America and
Europe this data was for 1997, for Australia 1998,
and for India 1996. All the respondents were
managers responsible for the IT functions of their
organisations.
3.2
Mapping of CSF constructs and stages
of growth
As discussed earlier the temporal nature of the
CSFs makes them a very useful tool to identify the
position on the growth curve the IT function of an
Table 2. Mapping of CSF constructs and the Stages of Growth
DP Era
NW Era
Stages 1 & 2
No CSF constructs
Stage 3 CSFs
Reducing IS costs
Strategic IT plan development
Project management methodologies
End user service management
IS-user partnership
Stage 7 CSFs
Adoption of open systems platform
Technical skills of IS staff
Linking with external organisations
Quality standards for IT
Software development productivity
Developing modular applications
Educating end users in IS tools
Workflow and work management implementation
Client-server systems
Office systems facility
Stage 8 CSFs
Running IS as independent business
Achieving end user autonomy
Public domain software and shareware utilisation
Stage 9 CSF
Use of emerging technologies
IT Era
Stage 4 CSFs
Integrating systems
Assessment of business value of IT
IT for competitive or significant advantage
Retiring obsolete systems
Data availability to users
Executive information systems implementation
Stage 5 CSFs
Information architecture development
Distributed systems
Alignment of IS and organisational objectives
Disaster recovery planning
Security of IS facilities
Educating senior management in IT
Stage 6 CSFs
Reviewing IT organisation
Outsourcing IS
Business skills of IS staff
Reengineering of business processes
Reduction of software maintenance
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organisation is at. To do this the CSF constructs were
mapped against the characteristics of different stages
of growth. This mapping was determined through a
systematic matching of the definition of the stages
[19] and the definitions of the CSF constructs
(Appendix). The outcome of this is shown in Table 2.
It should be noted that two of the constructs namely,
Achieving year 2000 compliance, and Management
of IS human resource have been excluded from this
mapping because they are not related to the growth,
or maturity of the IT function. In situations where the
CSF construct was called by a name different than
the ones used in Table 2 the definition of the
construct was used for matching purposes
3.3
Determination of IT maturity
By identifying the CSFs of the IT function of an
organisation, and grouping them to into the IT CSFs
of a geographic region, it is possible to determine the
IT maturity of the geographic region in terms of the
stages of growth with the help of Table 2. It may
however be noted that not all the CSFs of a
geographic region will fall entirely within a particular
era.
4
4.1
Results
CSFs for the selected geographic
regions
Using the above methodology the IT management
Critical Success Factors were determined for the
geographic regions under investigation. Table 3 lists
the top seven CSFs, in order of their importance. The
decision to limit the CSFs to the top seven was based
on the fact that it is the ideal number of issues to
which management can provide constant attention
[17].
It is obvious from Table 3 that the two CSF
themes that are most important in all the geographic
regions under consideration are:
IS-business alignment, which includes
1.
alignment of IS and organisational objectives, and
strategic IT planning
End user fulfilment, which is an extended
2.
view of end user satisfaction and includes end user
service management, and data availability to end
users
Table 3. Key CSFs in various geographic regions
IT CSFs- Australia/New Zealand
1.
Alignment of IS and organisational
objectives
2.
Strategic IT plan development
3.
Disaster recovery planning
4.
Integrating systems
5.
End user service management
6.
Information architecture development
7.
Technical skills of IS staff
IT CSFs- Europe
1.
Alignment of IS and
objectives
2.
Distributed systems
3.
Data availability to users
4.
5.
6.
7.
organisational
Reducing IS costs
Linking with external organisations
Information architecture development
Reengineering of business processes
IT CSFs- North America
1.
Alignment of IS and organisational
objectives
2.
Data availability to users
3.
Use of emerging technologies
4.
IT for competitive or significant advantage
5.
Linking with external organisations
6.
Integrating systems
7.
Management of IS human resource
IT CSFs- India
1.
Strategic IT plan development
2.
End user service management
3.
Alignment of IS and organisational
objectives
4.
Technical skills of IS staff
5.
Management of IS human resource
6.
IT for competitive or significant advantage
7.
Quality of systems development
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It should be noted that IS-business alignment has
been rated as a top IT management issue in most
surveys around the world for many years. There are
at least two possible explanations of the continuing
importance attached to this issue. In the early days of
information technology, key business strategies often
focused heavily on achieving high Return on
Investment (ROI)- and alignment could be achieved
by developing high volume, operational applications,
that contributed to ROI objectives. Today, ROI is not
the only measure of success for an organisation, thus
requiring IT functions to achieve alignment with
business objectives by providing a broader, more
complex range of support. Secondly, rapid changes in
today’s business environment make it even more
difficult for IT to achieve and sustain alignment with
the business objectives. Frequently, it is not easy for
management to rapidly translate changing strategies
information support required for effectively carrying
out their jobs. It was believed that computerisation of
operational processes was all that was required. It
was the era when the systems analyst knew bestbetter even than the end user. Today when enterprises
are linking their systems with their customers,
channels, and suppliers the situation is entirely
different. The end user is not only within the
organisation but often external to the organisation. A
high priority concern for end user fulfilment implies a
more mature and forward looking management.
At the other end of the scale it was found that
“Outsourcing IS” is considered of low importance by
IT management in all the geographic regions under
study. This is perhaps because a large number of
organisations have already outsourced whatever IT
operations they needed to, with nothing additional
that they want to outsource anymore. Organisations
5
5
5
4
3
4
3
3
2
No. of CSFs
1
2
1
2
1
0
1
1
DP Era
IT Era
0
India
NW Era
Europe
North America
Australia
Figure 3. Comparative maturity of IT in various geographic regions
into current business objectives- let alone
communicate these objectives effectively throughout
the organisation. If communication of objectives does
not occur on a timely basis, it becomes difficult if not
impossible for IT to achieve the required alignment
with the business as a whole.
Importance attached to end user fulfilment
signifies the client centred view of the IT
management. In the initial stages of the DP era the IT
function focused mainly on automation of the
organisation’s operational processes. Little attention
was paid to the clients, or in providing them with the
have come to realise that outsourcing is quite
complex specifically where employees of the parent
organisation become redundant, or move to the
outsourcing vendor, creating a major human resource
issue. Just to set up an outsourcing contract is quite
demanding, and to manage it requires skills generally
not present in the current organisation. Also, the
success of outsourcing is not yet universally proven.
Many organisations are waiting for outsourcing to
mature before stepping into it.
Finally there are some CSFs with mixed reaction
among the above geographic regions, with some
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regions considering them important while others
considering them less relevant. Notably among them
are IT for competitive or significant advantage,
Linking with external organisations, Integrating
systems, and Technical skills of IS staff. There are
many possible reasons for these differences. The
concept of IT for competitive advantage started as a
move to direct the use of IT to enable new methods
of doing business for increasing market share and
improving customer satisfaction, rather than just
achieving operational efficiencies. The success of this
is only possible when the business executives, and
not just the IT management are fully committed. Not
all executives have the level of IT awareness required
for them to give this commitment, resulting in the
above differences.
Linking with external organisations is a much
more complex issue, which involves the enterprise to
develop strategic alliances with the customers and
suppliers, for which it is essential to have executive
commitment. It also requires a continuous shift
towards “open” and public platforms such as internet
and intranet solutions. The level of management
involvement or availability of such technologies may
be the cause of the differences in the importance of
this CSF. The differences in the criticality of
integrating systems is perhaps based on the level of
maturity attained by IT organisations. The more IT
mature an organisation the more the need for
integrated systems for reducing redundancy,
enhancing accuracy, and having a proper platform on
which to build new applications. Technical skills for
IT professionals becomes an issue when the
organisation reaches the network era. In this era the
client applications will be developed by users with
the support of the IT staff. IT staff will also be
required to keep track of and develop standards for
external and internal interfaces. This will put
increasing demands on the IT staff. To master these
tasks IT staff will need to get accustomed to powerful
tools. Without appropriate skills and tools, IT staff
will not be in a position to answer all the demands of
the organisation.
4.2
Maturity of IT for the selected
geographic regions
Mapping of CSFs of the geographic region under
investigation (Table 3) against the stages of growth
(Table 2), and conducting further interviews with a
number of organisations to substantiate the findings
revealed that there are differences in the maturity
level of IT in organisations in different geographic
regions.
Figure 3 shows the count of the top seven CSFs in the
various geographic regions as they pertain to the
three different eras. For example out of the top seven
CSFs for North America two belong to the Network
era, three to the IT era, and none to the DP era.
Looking at the analysis for Europe it is clear that the
IT functions of European organisations are following
the North American ones in maturity. Australia with
two CSFs in the DP era has some catching up to do,
while the Indian organisations are lagging behind
those in the other geographic regions. It will require
significant effort on the part of these organisations if
they have to come up to the world standard.
5
Conclusion
Organisations are not static. They go through
cycles of evolution and revolution as they grow. An
understanding of the process of organisational growth
and maturity is essential for proper management of
IT. Critical Success Factors provide an accepted
measure for determining the needs of management at
any stage, and therefore can be used as a tool to
determine the stage of maturity of IT organisations.
There is no doubt that the challenges facing the
organisations are changing as they become global. A
system that works effortlessly in one country may be
a total failure in another. This is because the
management in the different geographic regions face
different sets of IT issues. By understanding these
differences management will be able to effectively
manage the IT function.
By investigating the geographic regions of North
America, Europe, Australia/New Zealand, and India
this study has found that the alignment of business
and IT, and end user fulfilment are the two most
critical success factors in all these geographic
regions, while outsourcing of IS is considered much
less relevant by all the IT managers. Then there are
some issues with mixed reaction among the above
geographic regions, with some regions considering
them important while others considering them less
important. Notably among them are IT for
competitive or significant advantage, Linking with
external organisations, Integrating systems, and
Technical skills of IS staff. These conclusions are
significant to the management of IT in international
businesses, governments at various levels, and
academic institutions. For global organisations this
will help the management in determining their IT
strategic plans and priorities in the geographic
regions in which they operate, or wish to operate, and
in developing a level of confidence in their IT
investments. For governments in different geographic
regions the findings will help determine their national
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strategies for harnessing information technology
effectively. Finally the results of the study can guide
the academic institutions to streamline their curricula
and research projects so that they are aligned to the
global market forces.
6
Appendix
Following is the list of 38 CSF constructs used in
the study. The constructs are categorised under broad
headings for easy comprehension.
IT Strategy and Vision
1. Reviewing IT organisation
Reviewing IT function reporting chain, levels of
reporting, IT leadership style and other co-ordinating
processes.
2. Reducing IS costs
Cutting IS costs by downsizing the IS function,
holding off projects, or similar actions.
3. Information architecture development
Developing an organisation-wide corporate
infrastructure including hardware, software,
functionality, and business blueprint
4. Strategic IT plan development
Implementing process to develop long term
(typically 3-5 yr.) IT plan incorporating platforms,
standards, priorities, resources, etc.
5. Integrating systems
Integrating existing applications and platforms,
including discontinuing old systems if required.
6. Adoption of open systems platform
Adopting a vendor independent set of hardware,
software, and communication standards on which to
develop the systems strategy.
7. Outsourcing IS
Having significant part of the IS activities carried
out by an external organisation.
8. Distributed systems
Implementing distributed data and systems.
9. Running IS as independent business
Running the IS function as a profit centre, or as a
business separate from the parent organisation.
Includes carrying out work for outside organisations.
IS Human Resource
10. Technical skills of IS staff
Keeping the IS staff and management up-to-date
in technical developments, specialised tools, and
disciplines for the organisation’s IS needs.
11. Business skills of IS staff
Enhancing business and management acumen of
IS personnel to enable them to relate IS better to the
core business of the organisation, and its markets.
12. Management of IS human resource
Managing the IS professionals and managers,
including managing their career paths.
Business and IT
13. Assessment of business value of IT
Assessing the value of IT to the organisation in
terms of return on investment, increased information
satisfaction, direct impact on the organisation’s
strategies, etc.
14. IT for competitive or significant advantage
Using IT to develop systems that give the
organisation a substantial competitive or significant
advantage.
15. Retiring obsolete systems
Reviewing application portfolio to identify
obsolete and outdated systems, and retiring them.
16. Linking with external organisations
Developing links with the vendors, suppliers,
channels,
consumers,
and
other
external
organisations using internet, the world wide web, etc.
17. Alignment of IS and organisational objectives
Developing IS infrastructure and plan, including
that of application and data, to directly support the
organisational objectives.
18. Reengineering of business processes
Using IT innovatively to enable the organisation’s
activities to be carried out in radically new and
efficient ways.
Quality and Productivity
19. Quality standards for IT
Developing and managing organisation-wide IT
policies and standards, such as TCP/IP and ISO
9000 standards.
20. Project management methodologies
Establishing
proper
project
management
methodologies for effective management
21. Reduction of software maintenance
Reducing software maintenance workload without
significantly impacting the service to end users.
22. Software development productivity
Reducing lead time and the cost of software
development by utilising productivity tools and
techniques such as, Object Oriented methodologies,
and CASE tools.
23. Developing modular applications
Developing applications at high speed using
software modules and purchased components.
Integrity and Security
24. Disaster recovery planning
Developing and regularly testing a comprehensive
Business Continuity Plan or Disaster Recovery Plan
against major loss of IS assets and facilities.
25. Security of IS facilities
Implementing systems to protect the data, network
and other IS assets against unauthorised access,
sabotage, crime, viruses, and other abuse.
26. Achieving year 2000 compliance
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Developing strategy & plans, obtaining budgets
and management commitment for timely year 2000
(Y2K) compliance.
End User Fulfilment
27. End user service management
Effectively managing end user expectations.
28. Data availability to users
Making data available to all those in the
organisation requiring it for the effective
performance of their jobs.
29. IS-user partnership
Fostering IS-user partnership by joint application
development, end user assuming ownership of the
system, etc.
30. Educating end users in IS tools
Training of end users in IS tools, such as query
systems, spread sheets, graphics, and JAVA script to
help them develop their own applications.
31. Achieving end user autonomy
Implementing systems to enable the end users
become autonomous in the acquisition and
manipulation of data, including from external
sources.
32. Educating senior management in IT
Enhancing senior executives’ appreciation of the
increasing overlap between business and IT, and the
management issues therein.
Progressive Technology
and
work
management
33. Workflow
implementation
Implementing automated systems to enable people
working in teams to communicate, collaborate, and
share common resources.
34. Client-server systems
Developing client-server systems, or converting
the existing legacy or heritage applications to clientserver platform.
35. Public domain software and shareware utilisation
Using public domain software and shareware,
such as the applications available from the internet,
for developing systems.
36. Office systems facility
Expanding office systems to include internet and
e-mail aimed at increasing white collar and
management effectiveness.
37. Executive information systems implementation
Implementing executive decision support systems
based on current, on-line data (rather than historical
data) obtained both from internal and external
sources.
38. Use of emerging technologies
Implementing systems using wireless and pen
based computing, voice processing, artificial
intelligence, image technology, massively parallel
computing, etc.
7
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