Case studyASSIGNMENTCase Burger King (Mini Case)(J. David.docx

Case study
ASSIGNMENT
Case: Burger King (Mini Case)
(J. David Hunger)
ORIGINALLY CALLED INSTA-BURGER KING, the company
was founded in Florida in 1953 by Keith Kramer and Matthew
Burns. Their Insta-Broiler oven was so successful at cooking
hamburgers that they required all of their franchised restaurants
to use the oven. After the chain ran into financial difficulties, it
was purchased by its Miami-based franchisees, James
McLamore and David Edgerton, in 1955. The new owners
renamed the company Burger King. The restaurant chain
introduced the first Whopper sandwich in 1957. Expanding to
over 250 locations in the United States, the company was sold
in 1967 to Pillsbury Corporation.
The company successfully differentiated itself from
McDonald’s, its primary rival, when it launched the Have It
Your Way advertising campaign in 1974. Unlike McDonald’s,
which had made it difficult and time-consuming for customers
to special-order standard items (such as a plain hamburger),
Burger King restaurants allowed people to change the way a
food item was prepared without a long wait.
Pillsbury (including Burger King) was purchased in 1989 by
Grand Metropolitan, which in turn merged with Guinness to
form Diageo, a British spirits company. Diageo’s management
neglected the Burger King business, leading to poor operating
performance. Burger King was damaged to the point that major
franchises went out of business and the total value of firm
declined. Diageo’s management decided to divest the money-
losing chain by selling it to a partnership private equity firm led
by TPG Capital in 2002.
The investment group hired a new advertising agency to create
(1) a series of new ad campaigns, (2) a changed menu to focus

on male consumers, (3) a series of programs designed to revamp
individual stores, and (4) a new concept called the BK Whopper
Bar. These changes led to profitable quarters and re-energized
the chain. In May 2006, the investment group took Burger King
public by issuing an Initial Public Offering (IPO). The
investment group continued to own 31% of the outstanding
common stock
Business Model
Burger King was the second largest fast-food hamburger
restaurant chain in the world as measured by the total number of
restaurants and system wide sales. As of June 30, 2010, the
company owned or franchised 12,174 restaurants in 76 countries
and U.S. territories, of which 1,387 were company-owned and
10,787 were owned by franchisees. Of Burger King’s restaurant
total, 7,258 or 60% were located in the United States. The
restaurants featured flame-broiled hamburgers, chicken and
other specialty sandwiches, french fries, soft drinks, and other
low-priced food items.
According to management, the company generated revenues
from three sources: (1) retail sales at company-owned
restaurants; (2) royalty payments on sales and franchise fees
paid by franchisees; and (3) property income from restaurants
leased to franchisees. Approximately 90% of Burger King
Restaurants were franchised, a higher percentage than other
competitors in the fast-food hamburger category. Although such
a high percentage of franchisees meant lower capital
requirements compared to competitors, it also meant that
management had limited control over franchisees. Franchisees
in the United States and Canada paid an average of 3.9% of
sales to the company in 2010. In addition, these franchisees
contributed 4% of gross sales per month to the advertising fund.
Franchisees were required to purchase food, packaging, and
equipment from company-approved suppliers.
Restaurant Services Inc. (RSI) was a purchasing cooperative
formed in 1992 to act as purchasing agent for the Burger King
system in the United States. As of June 30, 2010, RSI was the

distribution manager for 94% of the company’s U.S. restaurants,
with four distributors servicing approximately 85% of the U.S.
system. Burger King had long-term exclusive contracts with
Coca Cola and with Dr. Pepper/Seven-Up to purchase soft
drinks for its restaurants.
Management touted its business strategy as growing the brand,
running great restaurants, investing wisely, and focusing on its
people. Specifically, management planned to accelerate growth
between 2010 and 2015 so that international restaurants would
comprise 50% of the total number. The focus in international
expansion was to be in (1) countries with growth potential
where Burger King was already established, such as Spain,
Brazil, and Turkey; (2) countries with potential where the firm
had a small presence, such as Argentina, Colombia, China,
Japan, Indonesia, and Italy; and (3) attractive new markets in
the Middle East, Eastern Europe, and Asia.
Management was also working to update the restaurants by
implementing its new 20/20 design and complementary
Whopper Bar design introduced in 2008. By 2010, more than
200 Burger King Restaurants had adopted the new 20/20 design
that evoked the industrial look of corrugated metal, brick,
wood, and concrete. The new design was to be introduced in 95
company-owned restaurants during fiscal 2011.
Management was using a “barbell” menu strategy to introduce
new products at both the premium and low-priced ends of the
product continuum. As part of this strategy, the company
introduced in 2010 the premium Steakhouse XT burger line and
BK Fire-Grilled Ribs, the first bone-in pork ribs sold at a
national fast-food hamburger restaurant chain. At the other end
of the menu, the company introduced in 2010 the 1 ⁄4 pound
Double Cheeseburger, the Buck Double, and the $1 BK
Breakfast Muffin Sandwich. Management continued to look for
ways to reduce costs and boost efficiency. By June 30, 2010,
point-of-sale cash register systems had been installed in all
company-owned and 57% of franchise-owned, restaurants. It
had also installed a flexible batch broiler to maximize cooking

flexibility and facilitate a broader menu selection while
reducing energy costs. By June 30, 2010, the flexible broiler
was in 89% of company-owned restaurants and 68% of franchise
restaurants.
Industry
The fast-food hamburger category operated within the quick
service restaurant (QSR) segment of the restaurant industry.
QSR sales had grown at an annual rate of 3% over the past 10
years and were projected to continue increasing at 3% from
2010 to 2015. The fast-food hamburger restaurant (FFHR)
category represented 27% of total QSR sales. FFHR sales were
projected to grow 5% annually during this same time period.
Burger King accounted for around 14% of total FFHR sales in
the United States.
The company competed against market-leading McDonald’s,
Wendy’s, and Hardee’s restaurants in this category and against
regional competitors, such as Carl’s Jr., Jack in the Box, and
Sonic. It also competed indirectly against a multitude of
competitors in the QSR restaurant segment, including Taco Bell,
Arby’s, and KFC, among others. As the North American market
became saturated, mergers occurred. For example, Taco Bell,
KFC, and Pizza Hut were now part of Yum! Brands. Wendy’s
and Arby’s merged in 2008. Although the restaurant industry as
a whole had few barriers to entry, marketing and operating
economies of scale made it difficult for a new entrant to
challenge established U.S. chains in the FFHR category.
The quick service restaurant market segment appeared to be less
vulnerable to a recession than other businesses. For example,
during the quarter ended May 2010, both QSR and FFHR sales
decreased 0.5%, compared to a 3% decline at both casual dining
chains and family dining chains. The U.S. restaurant category as
a whole declined 1% during the same time period.
America’s increasing concern with health and fitness was
putting pressure on restaurants to offer healthier menu items.
Given its emphasis on fried food and saturated fat, the quick
service restaurant market segment was an obvious target for

likely legislation. For example, Burger King’s recently
introduced Pizza Burger was a 2,530-calorie item that included
four hamburger patties, pepperoni, mozzarella, and Tuscan
sauce on a sesame seed bun. Although the Pizza Burger may be
the largest hamburger produced by a fast-food chain, the foot-
long cheeseburgers of Hardee’s and Carl’s Jr. were similar
entries. A health reform bill passed by the U.S. Congress in
2010 required restaurant chains with 20 or more outlets to list
the calorie content of menu items. A study by the National
Bureau of Economic Research found that a similar posting law
in New York City caused the average calorie count per
transaction to fall 6%, and revenue increased 3% at Starbucks
stores where a Dunkin Donuts outlet was nearby. One county in
California attempted to ban McDonald’s from including toys in
its high-calorie “Happy Meal” because legislators believed that
toys attracted children to unhealthy food.
Issues
Even though Burger King was the second largest hamburger
chain in the world, it lagged far behind McDonald’s, which had
a total of 32,466 restaurants worldwide. McDonald’s averaged
about twice the sales volume per U.S. restaurant and was more
profitable than Burger King. McDonald’s was respected as a
well-managed company. During fiscal year 2009 (ending
December 31), McDonald’s earned $4.6 billion on revenues of
$22.7 billion. Although its total revenues had dropped from
$23.5 billion in 2008, net income had actually increased from
$4.3 billion in 2008.
In contrast to most corporations, McDonald’s common stock
price had risen during the 2008–2010 recession, reaching an all-
time high in August 2010. In contrast, Burger King was
perceived by industry analysts as having significant problems.
As a result, Burger King’s share price had fallen by half from
2008 to 2010. During fiscal year 2010 (ending June 30), Burger
King earned $186.8 million on revenues of $2.50 billion.
Although its total revenues had dropped only slightly from
$2.54 billion in fiscal 2009 and increased from $2.45 billion in

2008, net income fell from $200.1 million in 2009 and $189.6
million in 2008. Even though same-store sales stayed positive
for McDonald’s during the recession, they dropped 2.3% for
Burger King from fiscal 2009 to 2010. In addition, some
analysts were concerned that expenses were high at Burger
King’s company-owned restaurants. Expenses as a percentage of
total company-owned restaurant revenues were 87.8% in fiscal
2010 for Burger King compared to only 81.8% for McDonald’s
in fiscal 2009.
McDonald’s had always emphasized marketing to families. The
company significantly outperformed Burger King in both
“warmth” and “competence” in consumers’ minds. When
McDonald’s recently put more emphasis on women and older
people by offering relatively healthy salads and upgraded its
already good coffee, Burger King continued to market to young
men by (according to one analyst) offering high-calorie burgers
and ads featuring dancing chickens and a “creepy-looking”
king. These young men were the very group who had been hit
especially hard by the recession. According to Steve Lewis, who
operated 36 Burger King franchises in the Philadelphia area,
“overall menu development has been horrible. . . . We
disregarded kids, we disregarded families, we disregarded
moms.” For example, sales of new, premium-priced menu items
like the Steakhouse XT burger declined once they were no
longer being advertised. One analyst stated that the company
had “put a lot of energy into gimmicky advertising” at the
expense of products and service. In addition, analysts
commented that franchisees had also disregarded their aging
restaurants.
Some analysts felt that Burger King may have cannibalized its
existing sales by putting too much emphasis on value meals. For
example, Burger King Franchisees sued the company in 2009
over the firm’s double-cheeseburger promotion, claiming that it
was unfair for them to be required to sell these cheeseburgers
for only $1 when they cost $1.10. Even though the price was
subsequently raised to $1.29, the items on Burger King’s “value

menu” accounted for 20% of all sales in 2010, up from 12% in
2009.
New Owners: Time for a Strategic Change?
On September 2, 2010, 3G Capital, an investment group
dominated by three Brazilian millionaires, offered $4 billion to
purchase Burger King Holdings Inc At $24 a share, the offer
represented a 46% premium over Burger King’s August 31
closing price. According to John Chidsey, Burger King’s
Charman and CEO, “It was a call out of the blue.” Both the
board of directors and the investment firms owning 31% of the
shares supported acceptance of the offer. New ownership should
bring a new board of directors and a change in top management.
What should new management propose to ensure the survival
and long-term success of Burger King?
(The CASE Burger King (Mini Case) J. David Hunger This case
was prepared by Professor J. David Hunger, Iowa State
University and St. John’s University. Copyright ©2010 by J.
David Hunger, The copyright holder is solely responsible for
case content. TheCase has been taken from Book Strategic
Management and Business Policy, 13th Edition, publisher,
Prentice Hall.
There is no one best way to analyze or present a case report.
You should use to take notes on the below list of questions as
you analyse the case. Check to ensure that your analysis is
within 4-5 Pages
First Reading of the Case
· Develop a general overview of the company and its external
environment.
· Begin a list of the possible strategic factors facing the
company at this time. Second Reading of the Case work on
Strategic;
A Alternatives
· Develop around three mutually exclusive strategic
alternatives. If appropriate to the case you are analyzing, you
might propose one alternative for growth, one for stability, and
one for retrenchment. Within each corporate strategy, you

should probably propose an appropriate business/competitive
strategy.
A Recommendation
· Specify which one of your alternative strategies you
recommend.
A Implementation
· Develop programs to implement your recommended strategy.
· Specify who is to be responsible for implementing each
program and how long each program will take to complete.
A Evaluation and Control
· Specify the type of evaluation and controls that you need to
ensure that your recommendation is carried out successfully.
Specify who is responsible for monitoring these controls.
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52
Received November 30, 2011 / Accepted June 13, 2012 J.
Technol. Manag. Innov. 2012, Volume 7, Issue 2
Strategic Information Systems Planning:
An Empirical Evaluation of Its Dimensions
Carla L. Wilkin1, Narciso Cerpa2
Abstract
Strategic management of Information Technology (IT) has long
been regarded as a critical component of business
performance. This study addresses two objectives. Firstly we
investigate the practice and effectiveness of Strategic
Information Systems Planning (SISP) as a function of strategic

management in 29 large Australian organizations. Secondly
we review these results through a theoretical lens established by
Segars et al. (1998) who identified six dimensions that
provide a structured approach to reviewing the SISP process.
Our results show that SISP was widely used in these 29
organizations in aspects such as planning associated with
strategic IS investment and application, and whilst the
theoretical
review generally supported the literature, some amendments are
required to the participation and focus dimensions
suggested by Segars et al. (1998). Such results have
implications for both practitioners and researchers.
Keywords: strategic information systems planning (SISP);
strategic management of IT; corporate planning.
1Department of Accounting and Finance, Faculty of Business
and Economics. Monash University. PO Box 197, Caulfield
East.
Victoria 3145, Australia. Email: [email protected] Ph: +61 3
9903 1438
2Department of Computer Science, Faculty of Engineering,
Universidad de Talca, Chile. Email: [email protected] Ph: 56-
75-201710
ISSN: 0718-2724. (http://www.jotmi.org)
Journal of Technology Management & Innovation ©
Universidad Alberto Hurtado, Facultad de Economía y
Negocios.
53
1. Introduction

Strategic planning for Information Technology (IT) is increas-
ingly regarded as both a key component of corporate plan-
ning and a critical focus area for sound governance of IT. Ac-
cordingly it has become a concern for both academics and
practitioners (Wilkin and Chenhall, 2010). For practitioners
the primary concern is ensuring that IT positively and ef-
fectively supports and is supported by corporate strategic
objectives, so it provides the necessary capability to deliver
business value. This is reflected in IT strategy being identified
as a top issue for American firms (Peak et al., 2005) and as a
Critical Success Factor (Read, 2004). The benefit of achieving
strategic fit is that it should ensure that IT is positioned to
assist in adding value to products and/or services, which in
turn assists with competitive position and management ef-
ficiency through cost control and more accurate reporting.
Similarly, in an academic context, prior research into strate-
gic planning of IT supports the need to ensure fit between
IT and business strategy (Tallon, 2007/2008), and delineation
of key IT capabilities, future IT requirements and operational
IT resourcing (people and assets) in order to meet business
needs (Schwarz and Hirschheim, 2003; Bernroider, 2008).
Herein researchers have demonstrated a need to focus on
organizational goals to ensure IT supports individual strate-
gic processes (Tallon, 2007/2008). Typically this is achieved
by acquiring a shared understanding between IT and busi-
ness leadership, and connecting business and IT planning
(Reich and Benbasat, 2000). Related research has shown the
need for planning to produce strategies that can be dynamic,
shared and reshaped to meet changing landscapes (Coutaz,
2005; Grover and Segars, 2005; Kim and Mauborgne, 1999),
with contemporary environments needing, at times, inno-
vative strategies to produce long-term growth (Kim and
Mauborgne, 1999) and strategic flexibility (Eisenhardt, 2002).
Whilst this shows consensus between practitioners and

academics about the desired results from IT strategic plan-
ning, what is not as clear are the key indicators of an effec-
tive Strategic Information Systems Planning (SISP) process.
Although indicators like ROI can be indicative, evidence of
effective outcomes can be hard to extrapolate from the
myriad of related business initiatives. Therefore, the first ob-
jective of this study was to investigate the practice and ef-
fectiveness of SISP, as a function of strategic management, in
29 large Australian organizations. Using in depth interviews
with key stakeholders including IT directors, CIOs and/or
those charged with the organizational responsibility for such
decision-making, we demonstrated that organizations did
see value in SISP, as evidenced by its well established use,
with results from SISP being managed as a corporate rather
than IT function. But evaluation of the process by which it
is instituted is less well defined. Consequently, our second
objective in this study was to review these results through
the theoretical lens established by Segars et al. (1998) con-
cerning a structured approach to reviewing SISP. Comprizing
six dimensions, namely comprehensiveness, formalization,
focus, flow, participation and consistency, this lens provid-
ed a “sound foundation for structuring dialog” regarding
the SISP process (Segars et al., 1998:17). Such investigation
enabled more abstract evaluation of the reportedly success-
ful SISP practices. Results revealed new insights into areas
where organizations could improve their SISP processes;
and equally revealed a need to extend the understanding of
two dimensions in order to reflect the evolving role of IT in
organizations.
The remainder of the paper is structured as follows: after
the literature review, which explores SISP, its role in cor-
porate strategic management, and Segars et al. (1998) six
dimensions in the SISP process, we outline the methodology,
which includes an overview of the research approach and

the data collection and data analysis processes. We then pre-
sent the results and discussion before concluding the paper.
2. Literature Review
a) SISP and its Role in Corporate Strategic
Management
Strategic IT management is one of the most demanding and
critical tasks for organizational performance. By identify-
ing IT capabilities and ensuring integration between busi-
ness and IT functionality (Schwarz and Hirschheim, 2003),
it aims to achieve better business outcomes through better
IT performance (ITGI, 2009). Despite evidence that firms
with effective IT strategic management have 20% higher
profits, with success related to effective allocation of IT re-
sources (Weill and Ross, 2005), some organizations are yet
to be convinced of the need. This poor track record from
IT investment is revealed in surveys that consistently show
“20 to 70 percent of large-scale investments in IT-enabled
change are wasted, challenged or fail to bring a return to the
enterprise” (Val IT, 2008:7). Likewise, The Standish Group
(2004) found a success rate of 2% for IT projects over $10
million dollars, with no discernible improvement in IT failure
rates since 1994; a Fortune 1000 survey found that CIOs
believed 40 percent of all IT spending brought no return
(Watters, 2004); and an ITGI survey (2009) of CEO’s found
75% believed there were barriers that prevent full returns
from IT investments. Given this it is not surprising that a
recent study into IT governance for Enterprise Resource
Planning (ERP) found that only about 66% of organizations
used strategic understanding to inform their decisions about
ERP systems (Bernroider, 2008).

Negocios.
J. Technol. Manag. Innov. 2012, Volume 7, Issue 2
54
Yet, as highlighted by King (1978), the importance of a more
deliberate approach to strategic IT management is well es-
tablished; with the discussion extended by researchers in-
cluding Galliers (1991) and more formally established as a
concept by Lederer and Sethi (1988). Herein Galliers (1991)
presaged strategic management for IT as having: a strategy
comprizing maintenance of comparative strategic advan-
tage; a structure of centrally co-ordinated coalitions; inter-
organizational systems with information system (IS)-based
products and external/internal data integration; IS influence
at the Board level; IS staff functioning as a business team;
senior management understanding IS and its potential; and
interactive planning. Further he, like McKersie and Walton
(1991), stressed that IS strategy had to incorporate change
management as well as evaluation and review. SISP, with its
concern for integrating investment and management of IS
with organizational strategy, was particularly evaluated by
researchers in the 1990s. Early problems with SISP related
to a lack of management commitment and a lack of con-
trol mechanisms that ensured plans were followed (Lederer
and Sethi, 1988, 1996). Similarly, Premkumar and King (1992)
showed that significant relationships exist between two of
the performance measures: planning effectiveness and IS’s
contribution to organizational performance, and “fit” be-
tween the role of IS and the quality of the planning process.
Lederer and Sethi (1996) subsequently identified that SISP
plays a significant role in ensuring IT contributes effectively

to an organization: the challenge was that participants had
problems with the process, particularly prioritizing where
SISP delivered benefit to their organization; and problems
with time management that included balancing the imme-
diacy of demands for action against the need for compre-
hensive scoping of possibilities.
As IT has evolved from a focus on internal processes to
a more strategic role, SISP has been used as “the process
of deciding the objectives for organizational computing and
identifying potential computer applications” (Lederer and
Sethi, 1988:445) that “assist an organization in executing its
business plans and realizing its business goals” (Lederer and
Sethi, 1996:35). As a long established process for IT planning
(Bechor, 2010; Holley et al., 2004), SISP is defined as:
“(1) supporting and influencing the strategic direction of the
firm through identification of value-adding computerized in-
formation systems, (2) integrating and coordinating various
organizational technologies through development of holistic
information architectures, and (3) developing general strate-
gies for successful systems implementation” (Segars et al.,
1998:306).
Its foundations lie in findings that include the need for IT
to be: conceptually evaluated; strategically aligned with busi-
ness goals (King, 1988) not individual applications; top-down
driven; an enabler of business/IT initiatives (Basu et al., 2002);
and/or a facilitator of competitive advantage (Peter, 1981).
These are achieved through developments in architecture
(primarily organizational) that facilitate data-sharing and
technology integration (Segars et al., 1998).
Accordingly, because SISP requires organizations to define
their business goals and plans, then determine IT strategies
that optimize achieving business objectives (Cohen, 2008),
it is broader and more corporately accountable than oth-

er forms of IS planning (Segars et al., 1998). Contextually
the characteristics that define SISP include: scope (which is
broad); perspective (which positions planning at the highest
organizational levels); timeframe (which is longer as initia-
tives often relate to significant organizational change); and
level of abstraction (as SISP relates to more conceptual plan-
ning than to practical initiatives). Therefore, SISP involves
formalizing:
• the best strategic business/IT planning approaches for a
particular organization;
• a strategic plan for implementation;
• how to champion the process;
• the size of commitment regarding people, financial and
other resources; and
• a review processes.
b) Segars Six Dimensions in the SISP Process
Given the importance attributed to SISP in ensuring the
strategic function of IT in an organization, our second objec-
tive involved reviewing the effectiveness of the SISP process.
Herein, drawing upon a wide body of investigative research
from the 1980s and 1990s, Segars et al. (1998:17) identified
six dimensions (comprehensiveness; formalization; focus;
flow; participation; and consistency) that provided a struc-
tured approach to reviewing the SISP process (see Table 1).
Given the increasing sophistication of IT; the exponential
growth in investment in IT; and the ever-changing contribu-
tion that IT can/does make to organizational performance, it
is interesting that a constant in such a dynamic environment
has been SISP. Thus, there is timely relevance for a fresh in-
vestigation like ours into how SISP is used and its success
factors.

3. Methodology
a) Research approach
Our study involved carefully planned structured in-depth
interviews with IT directors, CIOs and/or those charged
with the responsibility of making such decisions in their or-
ganization. This approach enabled us to systematically gather
rich descriptive information in order to understand the
organizational approaches taken (Brown, 1999). To ensure
Negocios.
55
Negocios.
consistency we developed a detailed interview guide as de-
scribed below (see Table 3). In a sense the interview guide
acted as a questionnaire that was completed in the course
of an interview.
The measures of SISP contained in the interview guide were
developed using Churchill’s (Churchill, 1979) framework. Al-

though this framework is targeted at developing marketing
constructs, it is applicable to a variety of studies in both stra-
tegic management and IS (Venkataraman and Grant, 1986).
Given that many variables of interest are inherently complex
in nature, we chose multi-item measures to overcome the
difficulties of single measures having considerable unique-
ness and thus low correlation with the attribute being meas-
ured. This also avoided the issue of framing the concepts
too narrowly as individual items could be averaged, leading
to more robust conceptualizations, which reduced measure-
ment error.
We commenced the process of developing measures by
specifying the domain construct, which delineated what is/is
not relevant to the research. The theoretical underpinnings
were drawn from prior literature about planning system
design dimensions and planning systems for SISP (Segars et
al., 1998). Planning system design draws on strategic man-
agement practices (Kukalis, 1991): planning systems for SISP
draws on conceptualizations of IT (Pyburn, 1983). By com-
bining these two perspectives we developed measures that
Dimension Characteristics and meaning of the dimension
Comprehensiveness This concerns “the extent to which an
organization attempts to be ex-
haustive or inclusive in making and integrating strategic
decisions”
(Fredrickson and Mitchell, 1984:402). It is widely regarded as
the exten-
siveness of the search for solutions, which must be balanced
against the
costs of time and financial resources (Segars et al., 1998;
Lederer and
Sethi, 1996).

Formalization This relates to “the existence of structures,
techniques, written pro-
cedures, and policies that guide the planning process” (Segars et
al.,
1998:305). Efficiency gains from collecting, storing and using
informa-
tion in a highly structured manner enhance consideration of a
wider
range of strategic issues.
Focus This is evident through “the balance between creativity
and control
orientations inherent within the strategic planning system”
(Segars et al.,
1998:306). These orientations are commonly either innovative
approach-
es to opportunities and threats; and/or integrative approaches
linked to
control, as implemented through budgets, resource allocation,
and asset
management.
Flow This relates to the “locus of authority and devolution of
responsibilities”
(Segars et al., 1998:306). For example, whether a top-down or
bottom-up
approach is taken.
Participation This is evident in the extent to which multiple
functional areas and key
personnel at lower levels of the organization are involved; as
well as the
extent of lateral communication in the process (Segars et al.,
1998).

Consistency This is determined by the frequency of planning
activities and per-
formance evaluation. High levels of consistency are
characterized by
frequent meetings, constant communication and reassessments
of the
overall strategy, which are all valuable in a dynamic
organizational envi-
ronment (Segars et al., 1998).
Table 1: The six dimensions of the SISP process (as determined
by Segars et al., 1998)
56
Negocios.
were consistent with the established designs for: planning
comprehensiveness; formalization; focus; planning flow; par-
ticipation; consistency; and planning effectiveness (Grover
and Segars, 2005). Thus, our construct measures were based
on the relevant literature including, where appropriate, the
use of existing measurement scales and expert opinion
(Cerpa and Verna, 1998). This ensured completeness and re-
peatability. Moreover, heeding implications for the findings
and replicability of the study, we considered its construct
validity, conclusion validity, external validity and criterion va-
lidity (see Table 2).

The result was a four-part interview guide comprizing a mix
of unstructured, semi-structured and structured questions
(see Table 3). The guide was pilot tested on a random group
of organizations prior to its use in the main study.
The result was a four-part interview guide comprizing a mix
of unstructured, semi-structured and structured questions
(see Table 3). The guide was pilot tested on a random group
of organizations prior to its use in the main study.
b) Data collection
Like previous studies (e.g. Segars et al., 1998) we collected
empirical evidence from key personnel including CIOs, IT
Planning Managers, Directors of Information Services, and
National IT Managers. Because not all organizations use SISP,
our research design did not lend itself to scientific sampling
techniques (Basu et al., 2002). Some organizations’ IT was
not sufficiently significant to warrant formal planning; oth-
ers outsourced IT operations and development; and some
stated SISP produced insufficient organizational benefits.
Therefore, in line with prior explanatory studies of complex
phenomena, we deployed a non-scientific sampling method
that restricted data collection. This approach is justified pro-
vided care is taken in generalizing results (Basu et al., 2002;
Porter and Millar, 1985).
c) Data analysis
As foreshadowed above, the interview guide comprized a
mix of unstructured, semi-structured and structured ques-
tions requiring quantitative and qualitative responses. For
example, management experience was provided in years and
the number of people involved in corporate planning was
similarly quantitative. Where a yes/no answer was required

Validity measure Meaning and operationalization
Construct
validity
• Face construct validity was high as our measurement
instrument appeared to contain
all of the “obvious” constructs considered by various experts.
• Content validity was high due to a detailed literature review,
discussions with prac-
titioners and previous work on the topic. Thus, many of the
critical factors that define
SISP were identified prior to development of the interview
guide. To avoid guess work,
participants were asked to reflect on planning (both corporate
and SISP) in their organi-
zations, but were left unaware of the research’s main objective
Conclusion
validity
• The measures were considered reliable as:
o they were based on a literature review;
o all participants possessed sufficient experience to respond to
the questions; and
o guidance was provided within the instrument to ensure
reliability and consistency.
External validity • The key to establishing external validity is
ensuring that the sample populations repre-
sent the general population to which the findings will be
applied.
• Use of IT directors, CIOs and/or those charged with decision-
making responsibilities
added credibility.
• Participants were recruited on the basis of convenience
sampling (all located in one

Australian capital city), with the only incentive offered being a
summary of the final
results.
Criterion valid-
ity (or predictive
validity)
• This refers to the ability of our interview guide to accurately
predict/portray the status
of SISP in organizations.
• All respondents have experience and involvement in planning
in their organizations.
Table 2: Validity measures related to this study
57
Negocios.
Structure of the interview
guide
Issues explored
Parts 1 and 2: Demographics • Respondents’ details and
experience.
• Nature of their organization, including its size and that of
their IS

department.
Part 3: Organization’s ap-
proaches to corporate strate-
gic planning
• Use of formal corporate planning functions.
• Involvement in this process.
• Frequency of committee meetings during the planning cycle.
• Estimated annual costs.
• Methods used to communicate corporate plans.
• General views about whether the organization was a leader,
fol-
lower, or a combination.
Part 4: Issues pertaining to
SISP as used
• Positioning of the organization and IS department.
• Nature, scope, frequency and reporting of the SISP process.
• Participants, processes and outputs.
• Perceptions regarding success/effectiveness of processes.
• Technologies used and planned.
• Opinions about importance, benefits and problems for SISP.
Table 3: Structure of the interview guide and issues explored.
(for example regarding the presence of a steering commit-
tee), results were coded as yes = 1 and no = 2. Similarly,
results from the: Scope of IS Strategic Plan (Local 1, Region
2, State 3, National 4, International 5); IS Strategic Planning
Cycle (Half-yearly 1, Annually 2, Bi-annually 3, and Other
4); and Frequency of meetings of the SISP Committee (1 =
<Quarterly, 2 = Quarterly, 3 = Half yearly,4 = Annually, 5 =
Bi-annually, 6 = > Bi-annually) were all coded. In this manner
we were able to deduce means and averages across both

the whole group and later within clusters where there were
perceptible variations that provided additional insights.
4. Results
Organizations involved in this study were generally medium-
to-large in size from a range of industry sectors including:
Manufacturing; Service; Finance; Insurance; Government; Me-
dia; IT; and Banking, with some being part of multi-national
operations. For each organization data was collected about
their approach to corporate strategic planning, including
their mission, involvement and cycle time. Data related to
SISP processes included: formality; scope; frequency; partici-
pants and processes involved; outputs; perceptions regard-
ing success or effectiveness; technologies used; and other
qualitative factors. In terms of scope, many (mainly in the
Financial Services and Manufacturing sectors) had either
a national (37.9%) or an international (37.9%) focus. State
(13.8%) or local/regional focus (10.3%) was lower.
Those interviewed were involved in their organization’s
IS/IT planning component. In general they were highly ex-
perienced, having up to 35 years’ IS experience, with the
mean being 15.66 years. General management experience
was somewhat lower (up to 20 years), with the mean being
8.65 years, although not all subjects indicated they had gen-
eral management experience. Job titles like CIO, IT Planning
Manager, Director of Information Services, and National IT
Manager, implied seniority. This was important as previous
studies suggested that senior personnel involved in IS plan-
ning could provide broader organizational perspectives of
IS activities than department heads, a group previously criti-
cized for more parochial views (Basu et al., 2002). Regarding
organizational structure, the most common response re-
vealed a mixture of centralization and decentralization (with
product or service divisions).

The interview results indicated general consensus that SISP
was a valuable tool for strategic planning and investment in
IT. On average SISP had been used for 6 years, with 6 organi-
zations using it in excess of 10 years and 5 less than 3 years.
There was strong agreement (79.3%) that IT provides com-
petitive advantage and IT strategic goals were aligned with
corporate goals (a factor that had improved over the past 5
years). The majority saw SISP as essential to organizational
performance (48.3% very essential/24.1% crucially essential),
although the effectiveness of SISP was slightly lower (62.1%
saw it as satisfactory).
58
Negocios.
In terms of major benefits, enhances the competitive posi-
tion of the organization (79.3%) came out as the top ben-
efit, followed by quality of decisions arising from the process
(72.4%). The least perceived benefit was the need to do it to
survive (41.4%).
Discussion
Drawing on our results, which showed that the organiza-
tions sampled responded favourably regarding the effective-
ness of their SISP processes and outcomes, our final step
involved independently reviewing the data through the lens

of Segars et al.’s (1998) already validated six dimensions for
a successful SISP process. This revealed both strengths and
deficiencies in the 29 organizations.
Comprehensiveness
• Organizations sought to achieve comprehensiveness by ap-
plying several processes or methodologies to their SISP ac-
tivities in order to ensure coverage of organizational needs.
• Generally four methodologies were used by each to sup-
port their processes.
o Business Information Analysis and Integration Technique
was the least used method (with 3.45% of organizations
adopting it).
o Business Systems Planning was the most utilized (65.52%:
particularly in Banking, Government and IT).
• Banking and Government organizations differed, being the
only sector to use Information Engineering to support SISP.
• Manufacturing, Service, Insurance and several IT organi-
zations did not strongly prefer any methodology, but indi-
cated an absolute lack of use of 7 of the 11 stated methods.
Their choices varied from Business Systems Planning, Criti-
cal Success Factors, Strategy Set Transformation to Portfolio
Analysis.
• Critical Success Factors, Strategic Planning Grid, Portfolio
Analysis and Value Chain Analysis had the strongest prefer-
ence amongst the largest organizations (including many in-
ternational ones).
This shows sound evidence of evaluation of alternatives – a
key requirement of planning comprehensiveness.
Formalization
• Overwhelmingly the SISP was formal (55.2%) rather than
informal (27.6%).

• Those with informal SISP either didn’t have an IS mission
statement (that the respondent was aware of) or didn’t feel
the need for one.
• A small number (17.2%) of organizations in the financial
service/IT/IT and legal industry sectors indicated they didn’t
have a planning process.
• Most organizations had a formal (written) SISP (82.8% yes,
17.2% no), especially those in the IT and Banking sector.
• Whilst not all responded, of those who did respond, the
average time spent on SISP per year was 136.17 person days.
• There was evidence of formal planning techniques (used
by 55.2%, with 17.2% using a mixture of formal and infor-
mal), together with a corporate planning function (93.1%)
and centralized management of SISP processes and outputs
(89.6%).
Focus
• Organizations generally adopted an integrative approach.
• 89.6% submitted their final IS strategic plans to top man-
agement including the General Manager, Executive, CEO and
Managing Director.
• Corporate needs, business value and ROI were the most
common considerations in prioritizing decisions regarding
IS strategy (96.5%). Only one organization mentioned creat-
ing superior value for customers as a key consideration in
prioritizing IS strategy.
• Risks in IS projects were commonly assessed by evalu-
ating cost, loss and impact. This was a formal process for
86.2% of organizations, with the remainder having ad hoc
recognition of risk.
This reported emphasis on integrative approaches was
somewhat surprising given the endorsement of competitive
advantage as a motivation for SISP. Moreover there was no

information about control systems to manage variances in
outcomes. These may have been present, but were not com-
mented upon, although there was strong evidence of formal
IS strategic plans (by 82.8% of organizations).
Planning flow
• Support for this was evident in factors like commitment
of senior management and linking IS to organizational goals.
• Given successful application of SISP requires such support,
results indicate sound awareness of the requirements for an
effective SISP process.
• Support for planning is apparent from the long term com-
mitment to SISP (up to 16 years, with an average of 5.9
years).
Our results demonstrated a top-down rather than bottom-
up approach. This is unsurprising given the consistently for-
mal management style (41%) and management’s belief in the
viability of SISP being seen as a key factor in achieving ben-
efits from SISP (79.3% saw this as crucial and 10.3% as being
very important).
59
Negocios.
Participation

• Participants were principally senior corporate management
who were not part of IT units (89.7%), IS steering commit-
tees (79.3%) and major IS users (72.4%) in the SISP process.
• Only 24.1% involved customers as participants in SISP.
These organizations were almost entirely international, with
4 operating in the Finance and IT sectors.
• The emphasis in participation concerned involving and
gaining the support of top management rather than broad
participation, which would have ensured a comprehensive
scan of options and opportunities and/or commitment from
lower organizational levels.
• Of the people involved with SISP, the mean was 9.72
(range 1 – 50) and the mean organizational size was 3,121
employees (range 90 – 35,000). This indicated restricted
participation.
Consistency
• With respect to strategic planning cycles, the majority
(75.9%) conducted theirs annually, with a smaller propor-
tion opting for half-yearly cycles (10.3%). Practices in the
remaining organizations varied: one failed to respond (3.4%),
one conducted its planning cycle bi-annually (3.4%), one con-
stantly (3.4%), and at the other extreme one (a government
agency) conducted its every three years (3.4%).
• Regarding frequency of SISP committee meetings, common
responses were that they met either more frequently than
quarterly (27.6%) or annually (27.6%). Others met quarterly
(20.7%) or half yearly (13.8%), with three failing to respond
(10.3%) altogether.
• IT and Banking organizations met most frequently: Insur-
ance, Government and Media least frequently.
Regarding the ongoing evaluation of SISP, 58.6% had a formal
review and 37.9% either had none or an occasional one. This
may well relate to their equivocal appraisal of their own SISP

outcomes over the last 5 years where 51.7% saw moderate
benefit and 31% good benefits.
Reflecting on limitations of the study, given the sample was
restricted to Australian organizations, this affects generaliz-
ability of the results. Further, whilst the sample covered a
range of industry sectors and organizational sizes, only 29
organizations were involved. Despite these limitations find-
ings from this research still provide direction for research-
ers and practitioners.
Given the growth in interest in strategic business/IT align-
ment as a key component of corporate and enterprise gov-
ernance, there has been renewed interest in the relevance
of SISP. This study updates knowledge about such planning
and provides understanding about how SISP can be used in
the context of IT governance. Herein, future research could
explore the relationship between the frameworks that assist
with IT governance like COBIT, Val IT and SISP practices. It
could also document what assessment practices have been
used successfully to measure earlier SISP as organizations
move forward with planning cycles. Studies like this would
assist in reducing the risk of project failure and reinforce
the role of SISP in the effective overall governance of or-
ganizations. Likewise, given the evolving understanding of
the strategic relationship between business and IT, practical
understanding of managerial approaches to SISP would be
beneficial.
Conclusion
The results from our study demonstrate that comprehen-
siveness, formalization, focus, flow, participation and consist-
ency were conceptually relevant dimensions through which
to evaluate the merit of SISP as practised in our organiza-

tions. Herein, focus was more integrative than innovative de-
spite IT and SISP being regarded as a source of competitive
advantage. Segars et al. (1998) considered this focus in terms
of comprehensiveness and an emphasis on creativity. In our
study, the lack of innovative orientation may be attributable
to emphasis on the engagement of top management at the
expense of the broader organizational community, with out-
comes being evaluated in terms of ROI. Equally the lack of
an innovative component may in part be linked to a failure
to extend the parameters of participation to include peo-
ple like customers and suppliers. This issue could be further
compounded by the lack of external benchmarks for formal-
ly evaluating SISP: ISO/IEC 38500:2008 (that addresses cor-
porate governance of IT) and aspects of Cobit (ITGI, 2008)
would certainly add a component of independent criteria
that could be usefully employed to strengthen and refresh
the SISP process.
In summary, as a mechanism by which to plan investment
and application of IT to advantage the organization, SISP
would appear to have valued relevance in the organizations
that we studied. Given the ever increasing recognition of the
need for corporate governance of IT, wherein the strategic
alignment of business and IT objectives has a primary role,
the continued usage of SISP is possibly unsurprising. Our in-
sights gained by using the dimensions as proposed by Segars
et al. (1998) to investigate the effectiveness of the SISP pro-
cess do contribute new knowledge. Firstly, our analysis of
the effectiveness of the SISP process showed the continued
relevance of Segars et al.’s (1998) dimensions. This approach
gave fresh insight regarding how the organizations that we
studied could improve their SISP processes.
Secondly, given our organizations’ avowed desire for com-
petitive advantage from IT, the lack of their innovative focus

60
Negocios.
would appear to be partly related to the lack of broad par-
ticipation. Consequently, there may be merit in broadening
participation beyond the internal focus suggested by Segars
et al. (1998) to capture new insights and innovative opportu-
nities brought about by wider participation (customers and
suppliers etc.). In today’s dynamic global business environ-
ment, just as IT has evolved into a tool to link most facets of
business operations from suppliers through the supply chain
and business operations to consumers, so should participa-
tion in SISP be broadened.
About the Authors
Carla L. Wilkin is an Associate Professor of Accounting In-
formation Systems in the Department of Accounting and
Finance, Faculty of Business and Economics, Monash Uni-
versity, Australia. She holds a BCom (Hons) and a PhD from
Deakin University and a Grad Cert Higher Ed from Monash
University. Dr Wilkin’s major research interests concern:
governing IT; system use, appropriation, innovation, diffu-
sion and infusion; measurement of the value of IT; and risk
in business processes. She has published in outlets such as
European Journal of Information Systems, Decision Support
Systems, IT & People, Electronic Commerce Research, Jour-
nal of Information Systems, International Journal of Account-

ing Information Systems, Electronic Journal of Information
Systems Evaluation and Journal of Organizational and End
User Computing. Further, she is on the editorial board of
the International Journal on IT/Business Alignment and Gov-
ernance, Journal of Organizational and End User Computing,
and International Journal of Accounting Information Systems.
Narciso Cerpa is an Associate Professor in the Computer
Science Department, Faculty of Engineering, Universidad de
Talca, Chile. He holds a BEng from the Universidad de San-
tiago, Chile and a MCom and a PhD from the University of
New South Wales, Australia. He has held appointments in
industry and academia in both Australia and Chile. He was
Deputy Vice-Chancellor of Development at the Universidad
de Talca (2003-2006). His research interests include software
engineering, and electronic commerce. He is the Editor-in-
Chief of the Journal of Theoretical and Applied Electronic
Commerce Research. He is on the Editorial Review Board
of the Journal of Global Information Management (JGIM),
International Journal of Information Systems in the Service
Sector (IJISSS), and the Revista de Universidad y Sociedad
del Conocimiento (RUSC). He is also a member of the IFIP
Working Groups 6.11 (Electronic Commerce – Communi-
cation Systems) and 8.4 (E-Business Information Systems:
Multi-disciplinary research and practice).
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Abstract1. Introduction2. Literature Review3. Methodology4.
ResultsConclusionReferences

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