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 August 1994.

Strategic Planning of Information Resources:

A Critical Examination of a New Intellectual Technology

John K. Christiansen, Ph.D., associate professor

and
Jan Mouritsen, Dr. merc. MA. , Professor.

Copenhagen Business School

Informatics and Management Accounting
Howitzvej 60
DK 2000 Copenhagen
Denmark

Phone +45 38 15 24 00
Fax: +45 38 15 24 01
E-mail: johnc@cbs.dk
jan.mouritsen@cbs.dk
 Included in the preceedings from:
The Second European Conference on Information Systems,
30-31 May 1994. Walter R. J. Baets (ed.)
Nijenrode University Press, Breukelen, 1994 - 4, pp.339-366. ISBN 9073314240

Second version. Submitted to European Journal of Information Systems, August 1994.

2
 Strategic Planning of Information Resources:
A Critical Examination of a New Intellectual Technology *)

John K. Christiansen and Jan Mouritsen

Copenhagen Business School

Abstract.
The role of information systems as “strategic” is a fast growing field of interest within
publication and research on Information Systems. A large number of articles and
publications have been produced, but is not always clear in the readings why and how
information systems should or could have strategic bearing. By examining one of the most
comprehensive works in the field - Michael J. Earl’s book from 1989 - we will try to
uncover the rationale presented in the field of strategic information systems. The
recommended process leading to strategic information systems often involves a form of
check list theory. The rationale for why and how information systems should be strategic
important to organizations will be critically examined. Writings on the strategic relevance
of information systems seem to focus especially on: the handling of uncertainty and a
rational planning process. Information systems are not independent of managerial
economics, and it could be seen as the strategy of the information systems community to
gain influence in modern organizations and to establish different forms of visibility.

*) We would like to thank three anonymous reviewers and Kristina Nilsson for comments
on earlier versions. Originally, the article was published in its first version in the Danish
journal, Økonomistyring og Informatik (1991) pp. 243-262. At the Second European
Conference on Information Systems in Nijenrode, 1994, it was presented in the first
English version.
1. Introduction.
When we look at factors such as development towards an information society and
information intensive companies, the growth of new IT applications, establishment of
derived research disciplines such as computer science and information systems and the
growing investments in IT raise several important questions about the actions of modern
companies and organizations. This includes the question of how to analyze and evaluate the
consequences of IT in relation to business operation and development.

From a business perspective, there has in recent years been a growing interest in IT. This is
clearly indicated by the massive increase in IT investments, and especially by the large
number of books, articles and conferences on management, development, application and
utilization of a company's information resources and/or IT. The “Information Resources
Management Association” will conduct their seventh conference in 1996. The air is thick
with topics such as “Information Resource Management” (IRM), “Information Technology
Strategy”, “Information Resources”, “Strategic Management Information Systems”,
“Strategic Information Systems” and “Management Support Systems” (Cash et al., 1992;
Earl, 1989; Frenzell, 1992; Gorry and Scott-Morton, 1971; Hussain and Hussain, 1985; H.
Lucas, 1978; Robson, 1994; Scott-Morton and Keen, 1978; Silk, 1991; Synnot and Gruber,
1981; Wiseman, 1988).

The meaning of all these concepts in relation to the strategic management of IT and the
strategic use of IT differs among authors, one of the most encompassing being the concept
of Information Resource Management. Jackson (1986) argues that the importance of
information as a corporate resource calls for an information resource management (IRM)
function reporting to top management. In the present paper we are not referring to the
organizational function suggested by Jackson, but to the whole concept or idea of
information technology (IT) and information systems (IS) as part of strategic information
resource management, i.e. the idea that information is a critical resource that must and can
be managed. This implies mostly a rational planning process and implementation of

2
strategies for IS and IT as stated by one of the newest textbook in the area (Robson, 1994,
p. 81):

“Despite a history of neglected planning, IS needs effective strategic planning as

much as, and perhaps more than, other functional areas. (...) Systems without
planning will mean, for most organizations, not only financial losses but additional
hidden, and often greater, costs such as lowered staff morale, missed opportunities,
continuous management fire-fighting, and customer dissatisfaction” (Robson, 1994,
p 81).

So without planning of the information resources and their use, organizations are expected
to perform badly! Michael Earl has summarized much of the conventional research and
thinking in the IRM area in his book from 1989 (Walsham, 1993, p 149), and he
distinguishes among three strategy areas: development or formulation of an IS strategy,
management approaches to its implementation, which he calls information management
strategy (IM strategy) and IT strategy, which is concerned with how to carry out the defined
tasks. The distinction between the (rational) identification of possibilities, the strategic
plans made and the implementation of the strategic plans is shared among the traditional
writers on information resource management.

In recent years, the various concepts related to the use of IS and IT as strategic tools have
often been used to signal a new field of interest for IT application, namely the relationship
between a company and its market, mediated through IT. “Progressive” IT applications are
apparently no longer a question of “merely” making internal procedures more efficient. It
also involves developing new business areas, ensuring stable sales channels and - perhaps
especially - organizational anchoring of the IT function as an independent organizational
element. Therefore, IT reflects both “market orientation” and “professionalization” of
information communication and interpretation. A professionalization exceeding pure
technological knowledge and entering the borderland between technology and
management. In a compressed form, the argument is: IT is more than a technological

3
(technical) phenomenon, it is also a phenomenon of strategic importance, and a profession
that management ought to take notice of and make room for in the boardroom (Earl, 1989,
pp. 37-38). The literature on IRM does not discuss to which extent information retrieval by
means of technology, data bases, etc. is used to signal rationality and symbolize rational
behavior (Feldman and March, 1981). Considering that literature has a very "rational"
understanding of companies and their behavior, cf. later in the discourse here, this is not
surprising.

Still, the discussions on IT-strategy and IRM are mostly based on common sense
consideration of interesting tasks - often unrealized - that technology may help to solve.
There are few analyses of how IT may be significant. In other words, IT is more often
discussed in connection with presumed benefits than in association with its empirical-based
value in organizations. Furthermore, there are no explicit discussions of what it means to
develop strategy. Therefore, it is unclear whether IT used for market purposes relates to a
market description or to the organizational issue of ensuring stability in a company's
logistic flow from suppliers to customers.

These reflections will be analyzed in the following. Concretely, they lead to a number of
questions concerning the present position of IRM in the theory of managerial economics.
The questions are as follows:

• What does it mean that IT is strategic?

• What are the content and nature of the theories within the field of IRM?

• What is IRM in an organizational context? Which forms of organizational strategies are

substituted by IRM?

• What is IRM in relation to internal company matters?

4
• In which sense is IT form and in which sense is it content? Does IRM provide a
solution to other economic problems, or does it involve a self-contained managerial,
economic complex of problems?

• How does IRM enter into reorganizing the distribution of power and influence in a
company? In which way is technology mobilized as a separate field of knowledge in a
company?

These questions will structure the following discussion.

2. Why Is IT Strategic?
Earl (1989, p. 2) presents nine general arguments for the strategic importance of IT. They
are: 1) IT is an activity in which large investments have been made, 2) IT plays a critical
role in many companies, 3) IT has turned into a strategic weapon, 4) IT is necessary in the
economic situation, 5) IT has an impact on all functions and all levels of management, 6) IT
constitutes a revolution in management information systems (MIS), 7) IT involves many
interested parties, 8) the technique is important and 9) IT management makes a difference.
These nine arguments are based upon a number of observations, which we will discuss
further in the appendix. We find that the observations might apply to IT, but also to many
other issues and functions in today’s organizations and companies.

Another perspective on the strategic importance of IT and IS was originally defined by

Wiseman (1988), who introduced the term Strategic Information Systems (SIS) :

“Strategic information systems are information systems in which the primary

function of the system is either to process predefined transactions and produce
fixed-format reports on schedule or to provide query and analysis capabilities. The
primary use of SIS is to support or shape the competitive strategy of the enterprise,

5
 its plan for gaining or maintaining competitive advantage or reducing the advantage
of its rivals” (Wiseman, 1988, p. 98).

The focus of Wiseman and his strategic information systems is the relationship between the
company and its environment, facilitated through the rational use of IT. The very first
version of Wiseman's work from 1985 holds the title “Strategy and Computers: Information
Systems as Competitive Weapons”. Thus, Wiseman can be placed somewhere close to the
rational planning school of strategic thinking.

The literature on IRM contains many examples (cases) of success stories about companies
that have gained competitive advantages by using new forms of existing information
systems or entirely new information systems (Earl, 1989, Wiseman, 1988, Porter, 1985 and
Cash et al., 1992). However, the explanation(s) of how companies have discovered these
pioneering systems are few or naive. In other words, the cases do not provide any
significant information about the organizational process on which the IRM is based. Who
recognized that the company should make a strategic IT system? How did the company
analyze the situation, and how was the system derived from the situation report? In the
literature, there are only few answers to such questions.

This is repeated in the central papers on IRM. Earl (1989) contributes with numerous
partial frameworks, each of which has an analytical point, but combined they give little
structure to the question of when IRM becomes a success. He merely points out that "each
framework is useful in the right hand at the right time for the right task" (1989, p. 62).
Wiseman (1988) focuses only on the external relations of the company. Millar and Porter
(1985) consider possible technology applications based on a logistic understanding of the
company. Finally, Rockart (1979) and Bullen and Rockart (1984) examine how sensible IT
applications can be developed through management's understanding of problems.

A review of some of the most used and cited cases in the IRM area shows that in only very
few cases did a formal planning process lead to the systems that were later announced as

6
strategic (Neo, 1988). In only three out of fourteen cases did formal planning play a
significant role, while some sort of “internal needs” played a very important role in eleven
cases. According to Neo’s survey some of the most cited cases actually show how such
factors as “extensive computer facilities”, “internal needs” and "request from customers for
specific services" play a far more important role than formal planning of IT.

The meaning of the term “strategy” or “strategic” is in general very unclear in the IRM
literature that we have reviewed. At present, most authors still find it is important to align
the IT and IS strategy with the overall business strategy of the company through some form
of formal planning and process (Robson, 1994 p. 83). Mintzberg and Waters (1985) found
that strategy is a process with both formal and informal aspects:

“Our conclusion is that strategy formation walks on two feet, one deliberate, the
other emergent (..) managing requires a light deft touch - to direct in order to realize
intentions while at the same time responding to an unfolding pattern of action
(Mintzberg and Waters, 1985, p. 271)

Mintzberg (1990) has found ten different schools of thought within strategic management
and labeled them as follows: the Design School, the Planning School, the Positioning
School, the Entrepreneurial School, the Cognitive School, the Learning School, the
Political School, the Cultural School, the Environment School and the Configurational
School. These ten schools indicate how difficult it actually is to define what strategy
means. Scholars and authors differ in the meaning they put into the concept of strategy. The
design, the planning and the positioning school are all based on the assumption that strategy
needs a formal planning process, and that implementation of a formal, strategic plan is the
best way to survive for an organization in the long run. These thoughts had a very dominant
position in the business environment in the late 60’s and early 70’s with terms such as
“Long Range Planning”, “Business Planning”, “Portfolio Planning” and “Competitive
Analysis”. It seems that these formal approaches (design, planning and positioning) are
very common in discussions and writings about making IT strategic and using IT as a

7
strategic weapon. The term “weapon” used by Wiseman signals a military and planned use
of IT.

Both Earl and Wiseman - and other writers in the IRM area - generally address three issues
in relation to the strategic use of IT: The need for alignment of IT planning with business
planning, and the view that the strategic aspects of IT are a result either of formal planning
processes or the competitive advantage of IT in supporting the overall business strategy and
general business processes. In the textbooks the focus is on the formal and deliberate
planned processes, while the emergent processes described in most of the successful cases
in the IRM area are hard to grasp for the rational planning approach.

2.1 The Importance of IRM for Organizations.

Among the books on IRM, it is presumably Michael J. Earl's Management Strategies for
Information Technologies (1989) that has the broadest dispositions. It more or less covers
all the other books in the sense that Earl attempts to integrate their messages in his general
system of frameworks. Therefore, it makes sense to use the thoughts of Earl as a point of
departure in a characterization and analysis of the form and content of the logic in the IRM
field .

We are aware of the fast growing literature in the IRM-area, and that new publications are
presented on the market nearly every month. Still, the frameworks developed by Earl and
his line of thought still seem to cover and even represent new publications such as Frenzell
(1992), Robson (1994) and Silk (1991). These new publications have been updated with the
most recent insight into the application of IT, but the underlying form of rationale in the
discussion and application of information technology as a strategic issue is well represented
by the work of Earl. New approaches in the area, such as the idea on “strategic alignment”
developed by Henderson and Venkatraman (1993), are basically grounded in a logic that
could be described as “the rational planning approach”, which we will discuss in the
following. The strategic alignment approach focuses on the alignment of several factors in

8
the organization, e.g. in the internal I/S function and on the external I/T marketplace (ibid.,.
p. 13). In addition, it suggests a kind of dual-focus on internal and external affairs and on
IT as the driver of changes or the business domain as IT driver. Other authors also stress the
need for alignment of business strategy with IT-strategy and organizational structure and
human resources (Scott Morton, 1991: p 20-22).

Earl's point of departure for discussing IRM is his observation that IT is becoming more
and more visible:

"What becomes clear is that more than ever before information

technology is a resource that has to be managed. It cannot be left to the
specialists and its management requires the extra dimension of
leadership. This is because for many organizations not only has
information technology become strategic but doing something about it
requires strategies for change" (1989, pp. 1-2, italics by Earl).

In this way, he upgrades IRM to a management discipline. IRM is strategic. It is not only
for specialists, although management of IRM requires technological knowledge.

According to Earl, strategies should be formulated through "frameworks" i.e., through a

range of partial, conceptual frameworks that together will ensure a coordinated IRM effort.
Earl notes in his explanation of the relationship between the three domains that a process
has to be established through which an information systems plan can be formulated.
Subsequently, the plan can be evaluated and lead to an IT strategy that, in turn, will lead to
an information management plan. Such a model for planning has traces of the detailed
inclusive plans for strategic development that were so popular in the 1960's, as for example
Ansoff's concept (Ansoff, 1965).

9
 Distinctor Data processing Era IT Era
Financial Attitude to IT A cost An investment
Business role of IT Mostly support Often critical
Applications orientations of IT Tactical Strategic
Economic context for IT Neutral Welcoming
Social impact of IT Limited Pervasive
MIS thinking on IT Traditional New
Stakeholders concerned with IT Few Many
Technologies involved with IT Computing Multiple
Management style Delegate abrogate Leadership involvement

Table 1: The data era and the IT era according to Earl (1989, p. 21).
However, Earl points out nine issues that focus independently on IRM. This implies a
restructuring of many different organizational matters as well as management of the
information systems function (cf. table 1).
.

Table 1 summarizes Earl's arguments for the importance of IT in the "new era" (see
appendix for a more detailed presentation and discussion of his arguments). Similar
arguments might be found in various versions, e.g. in “The Corporation of the 1990s”
(Scott Morton, 1991). Earl uses his list to discuss the implications of IT for organizational
restructuring of five areas (Earl, 1989, pp. 37-38). First, information systems management
(e.i. IRM) have to be an independent organizational function. At the same time,
information management has to be included in the activities of all other functions along the
lines of management of materials, personnel, machine application, etc. Second, IT has to
support the general strategy of the company and contribute to developing strategic
possibilities and competitive advantages. Third, there has to be an intentional planning and
management of the technological infrastructure to the effect that it harmonizes with the
organizational structure and management philosophy of the company. Fourth, IT has to be

10
viewed as a long term investment. And fifth, IRM leads to a need for changing the attitudes
and knowledge of management. Managers must be trained to work with IT.

In this way, Earl argues that application of IT is such a basic, organizational condition that
most other knowledge forms or managerial economic perspectives implicitly are reduced to
secondary phenomena. According to Earl, IT enhances both the efficiency of administrative
matters and the relations with customers and competitors. Consequently, it contributes to an
ideological change of explanations as to what creates a sound company.

2.2 Methodology for Application of IRM in an Organizational Context.

Earl's explanation of how IRM is mobilized concretely in relationship to IT and IS contains
four stages: frameworks must be developed (I) to create awareness, (ii) to create
opportunities, (iii) to locate special advantages of IT and (iv) to define the strategic
relations to a company's general situation. These frameworks are presented in “a framework
of frameworks”, as shown in the table below:

Framework/ Awareness Opportunity Positioning

attribute
Purpose Vision Ends Means
Scope Possibility Probability Capability
Use Education Analysis Implementation
Table 2: A framework of frameworks, from Earl, 1989, p. 40.

Frameworks for creating awareness. “The purpose of these frameworks is to demonstrate

how IT can be used for strategic advantages, help executives assess, by reference to general
models, the potential impact of IT in their business, and open up thinking and discourse on
the technology-strategy connection” (Earl, ibid., p. 40). The framework includes other
frameworks such as: refocusing frameworks, impact models and scoping models.

11
Opportunity frameworks. “[.. ] are explicitly designed to be analytical tools which lead to
firm-specific strategic advantage opportunities and/or clarify business strategies in order to
demonstrate options for using IT strategically” (Earl, ibid., p. 45-46).This tool-box includes
still other frameworks: systems analysis frameworks, application search tools, technology
fitting frameworks and business strategy frameworks.

Positioning frameworks. “[..] are best seen as tools to help executives assess the strategic
importance, the particular character, and the inherited situation of IT for their enterprise.
[...] to improve executives’ understanding of how the information system functions and
how IT should be managed in their particular organization.” (Earl, ibid., p. 59). The
framework includes other frameworks: scaling frameworks, spatial frameworks and
temporal frameworks .

The fifteen models or frameworks are defined by Earl and related to three levels of strategy
in IT planning: IS strategy, relating to the measures that must be taken in a company from a
purely business point of view linking business planning to IT planning. IT strategy,
referring to the technical applications that have to be used. IM strategy, (information
management strategy) that concerns development of the management dimension related to
management of the IT resources.

This indicates many partial and different angles for developing potential IT application
areas. However, Earl does not elaborate on how to consolidate and integrate these. The
whole set of fifteen frameworks brings into mind the elaborate corporate models developed
in the late 1970’s: the Long Range Planning.

2.3 Characteristics of Earl's Concept.

The above frameworks constitute Earl's concept for the development of IRM. It is
significant that his concept is a comprehensive model of not only potential IT application

12
areas, but also of a company's problems in general. It is a top-down concept in the sense
that strategy is implicitly defined to involve first and foremost the work areas of
management and perhaps the board. The concept has no clear indication of how the
organization should be mobilized to develop the elements of knowledge that it proposes.
Earl presents three approaches: A top-down clarification and alignment with overall
business strategies, a bottom-up evaluation of current IS investments and an inside-out
innovation to identify opportunities afforded by IT (Earl, ibid., p. 67-84). Even if these
methods are multiple and complex, they all seem to be based on a logical-rational
intervention of top management. For example, it is suggested that the inside-out innovation
processes should be carried out by think-tanks, brainstorming groups or using Delphi
techniques to help generate ideas, “but they must always be subjected to some sort of
feasibility and strategic validation” (ibid., p. 77). No experiments or technical innovations
should be carried out without the direct approval of the CEO or top-management. It is also
characteristic that the approach hardly considers the fact that companies exist in time and
over a period of time. The concept implies that it is possible “to wipe the slate clean”, and
that a company therefore can “start off with a clean slate”.

In the second place, the nature of nearly all of Earl's examples is market-based. He does
mention that internal effectiveness is important (ibid. p.8), but the impression is clearly that
strategy first and foremost concerns the relation to customers and competitors (ibid. 8-10).
The concept favors the definition of competitive advantages that involve development of
differentiation and/or niche strategies (Porter, 1985, Wiseman, 1988). The dual focus -
external relationships and internal effectiveness - is especially stressed in the introduction
to the book (Earl, ibid. pp. 8-10), but later on - as in many similar textbooks on IRM -
alignment of the business with the environment becomes the main issue. Furthermore, the
environment is taken for granted, neglecting the new social, constructivist approaches on
strategy that regard environment as part of a social constructed reality and focus on the
enactment processes that create the perceptions of environment (Berger and Luckman,
1969, Weick 1969 and Walsham, 1993).

13
In the third place, Earl's concept has the nature of a check list theory, as no formal
connection has been established between the individual frameworks. He has collected a
great many tools and presents them nicely in a toolbox, where they can be picked up and
used, as one sees fit. The many tools and frameworks are presented in a check-list form, but
with little or no directions on how and when to use them or how to combine them, although
some cases provide examples of application. They may be applied at your discretion to the
problems that appear in one way or another at a given point in time. There is no
“directions” on how a given management group has to initiate, develop or complete an IRM
project. A check list theory also requires that the user is well acquainted with the
professional area before using the theory. In a certain sense, the user is assumed to know
his/her preferences and the potential business application areas of the technology, because a
check list is only an aide-memoir. By themselves the applied frameworks offer little
information. This is shown, for example, in the way that the four-field tables, repeated in
the 15 frameworks, all have two-point scales consisting of the variety “large/small
significance”. Such scales are subjective. They fail to give an adequate specification of the
necessary documentation for a given conclusion, which indicates a “scientific level” that is
unsustainable. Such scales can primarily be used as pedagogic tools for facilitating
communication. Yet, it requires that all communication parties are able to abstract from the
stability and objectivity intimated by such models. They may be misleading and
manipulative for the untrained user. Only for the trained and informed user can such
models stimulate creativity.

In the fourth place, Earl's concept is based on examples from his consultancy practice. It
may be very well and informative to document and publish the experience of active
consultants or people having that experience. (Checkland (1981) “Soft Systems
Methodology” is a good example.) However, it is a problem, when the only thing Earl has
to offer is that these "principles and theories have been found most useful" (ibid., p. ix). Not
one word about what the success involves, which problems may occur, which pitfalls exist
and - perhaps most essential - not one word about who can use the frameworks. For
example, it is important to know whether the interpretation has to be made through a

14
consultant, or whether companies can do it without any outside assistance. Also, it is
important to know whether any external consultants have a proselytizing or critical attitude
to IRM. As a result, the reader only gets a slight knowledge about the actual application
areas of the frameworks.

3. The Problem Solving Potential of IRM: Strategies for Handling Uncertainty.

Which strategic overtones does IRM contain? Which important choices are made within
IRM in order to describe the problems, focus of attention and potential solutions?

Through information flows IRM is generally concerned with reducing uncertainty about a
company's internal way of functioning and its relations to the environment. The reduction
of uncertainty is made through IT. Still, control of uncertainty and consequently absorption
of uncertainty is not by definition an IS problem. IRM's solutions are concerned with
ensuring closer and faster communication through technology, while they ignore other
types of solutions that focus on the organizational need for handling uncertainty.

Galbraith's (1977) general strategies for handling uncertainty, which by now are classical,
can be used to illustrate the focus of IRM, including the solutions that are not defined as
viable or “comme-il-faut”. It is a characteristic feature in Galbraith's strategies that
adoption of IS is only one out of a number of different ways in which companies can
improve their handling of uncertainty and their control of complex situations. Unlike IRM
advocates, Galbraith can easily imagine solutions that are not technological, but e.g.
organizational in nature. Introduction of slack, delegation, decentralization and direct
contact through for example a matrix organization are examples of strategies to handle a
great information processing need. IRM only focuses on Galbraith's last two strategies. One
of them is quite obvious, namely introduction of planning and communication systems to
expand organizational facilities for handling information. The other concerns the impact on
the environment, possibly through cooperation with suppliers or customers. IRM only
focuses on the bridging strategies that a company might engage in, while buffer strategies

15
are omitted in IRM literature. Scott distinguishes between two main types of strategies:
bridging and buffering (1987). Bridging involves setting up contact in one form or another
between the company and its environment. It may be negotiations, entering agreements, co-
opting (involvement in the process), joint ventures, associations, confederations (such as
the Confederation of Danish Industries) where agreements are made, or connections to the
central administration in order to control and/or influence regulations and central
legislation. Buffering includes strategies for classifying input (coding), building-up stocks,
harmonization of production/demand, planning (forecasting) or growth (to improve control
of the environment and/or benefit from economies of scale).

IRM combines the adoption of IS with the intention of making an impact on the
environment through application of IS. Especially, in questions concerning how companies
or suppliers monopolize marketing channels IS may prove valuable. A typical example is
the American Hospital Supply case. It shows how a supplier of hospital articles
“monopolizes” the market by setting up terminals at the customers, so they can order
articles directly through the company's order management system (Earl, ibid., pp. 41-42,
56, 67, Wiseman, 1988, pp. 124, 176, 255-158, 420, 424). This type of IS ties the customer
to the company. Only one supplier appears to be available, namely the supplier that appears
on the screen of the terminal in the purchasing department.

Wiseman (1988) differs from other authors in the field by pointing to the building of
alliances as an option. He enlarges the IRM field to include companies' cooperation
relations (piggy-backing), where several companies jointly solve one or several tasks (e.g.
production of articles and marketing of knowledge) by contributing independently with
information, which combined gives a competitive edge.

IT may lead to a stronger link between company and environment in other ways. For
example, just-in-time production systems often require that the company has a fairly good
control over suppliers and buyers in order to ensure stability for input and output of

16
materials and products (Mouritsen and Nielsen, 1989). Often the purpose is to avoid
competition and to make suppliers and/or buyers dependent on the company (Pfeffer and
Salancik, 1978, Thompson and McEvan, 1958).

The IRM literature often focuses on just one out of many possible ways in which a given
information processing problem can be solved. That application of, or synergy effects
through, some of Galbraith's other strategies often are presumed is a matter that frequently
is passed over quickly. In this way, IRM addresses a range of problems and solutions that
are without systematic relation to other possible strategies. In so doing, it “turns the blind
eye” on other generally accepted strategic options.

4. The Strategic Elements in IRM.

Authors such as Earl (1989) and Wiseman (1988) refer to the strategic importance of IS and
the need for IT strategies. Others refer to the application of IT in strategic management, i.e.
IT is part of a strategy specification (Anthony, 1965). Anthony's pyramid division of the
functional field of IS into three levels in companies probably presents one of the first
attempts at philosophizing over the application of IT from a company perspective.

The division into strategic, tactical and operational systems is based on a specific
perspective on the way decisions are made and implemented in a company. The perspective
distinguishes between strategic decisions on management/board level, tactical decisions
made by middle managers and the operational decisions on plant manager level, or the like.
Of course, the time horizon related to the consequences of decisions depends on the level of
decisions, as some decisions have irreversible consequences (strategic), while others have
reversible consequences (operational) in the short run.

Earl (1989, p. 40) also takes his point of departure in such a pyramid model. The strategic
systems are placed at the top, then the decision support systems follow and at the bottom
the transaction oriented systems are placed. But this definition only helps to confuse the

17
issue, as Earl throughout his book shows that both decision support systems and especially
transaction oriented systems easily can have strategic implications. For example, in the
American Hospital case the customers are tied closer to the company through an order
management system. To be sure, the terminal is located at the customer, but in fact the
customer in question is using an operational order system. Similarly, the terminals (e.g. in
an airline company) are only booking systems. Yet, they have strategic consequences in
terms of regulating competition in the aircraft industry. In a recent study Weil (1992)
found that “heavy transactional IT investment was significantly associated with stronger
firm performance”, but “there was no evidence of a relationship (from strategic IT
investment) to performance” (ibid.). Therefore, the strategy concept in IRM is rather
unclear.

However, we are left with the impression that strategy is post-rationalized rather than an
explicitly formulated approach to control organizational problem solving. As such, strategy
may often be a general indication of positive, unintentional consequences of sometime
tedious actions and processes. Strategy is here a process allowing management to transform
ordinary actions into myths about the organization's capacity. Of course, it is reasonable to
contemplate why decisions and measures that have proved successful, in fact have
succeeded. However, the IRM examples are often of such a nature that the post-
rationalization ascribes features to the management/organization that are very unlikely.
When IT success is linked with heavy IT-planning and lots of strategic processes in the
widely cited cases, it may appear as if it were an interpretation based on interviews with top
management in the companies. Therefore, post-rationalization represents an ideological
barrier to an understanding of what actually produces strategically important systems.
Moreover, it makes it difficult to learn from these stories. It does not show who initiated the
relevant changes, and - perhaps most significantly - it does not indicate the actual role of
management. (It is conceivable that management has influence on the IRM processes
without participating directly, but we do not know). How do innovative applications of IT
actually unfold and develop over time?

18
5. IRM as Development Process.
In several models the technological development is mapped out in a number of stages
(Lucas, 1978). This allows the traditional stage models from systems development ( e.g.
Yourdon's, 1989 “profit life cycle”) to be transferred to the development of the whole
organization's IT application. The stage theories of Cash et al. (1988) and Nolan and
Gibson (1974) have gained considerable ground. Earl (1989, p. 28) uses both theories to
define the development stage of an organization and the central management tasks in terms
of IT belonging to the stage. It means that different management tasks belong to different
development stages. The role of management becomes more intensive, the more
information resources acquire economic and budgetary importance. As Earl concludes,
"different management approaches are required according to the stage of adoption of the
technology" (ibid., p. 30). In other words, management consists of more than efforts to
encourage, control, manage and delegate; the central issue is the ability to predict when it is
time to move from one stage to the next.

Such a model involves a continued learning process in the company, which in turn will
become increasingly more successful in handling IT challenges. It is an interesting and
plausible observation. However, it is still unclear how a manager will have to act in order to
get the most benefit from technological innovation. It is not likely that innovative input will
go through the manager alone. Daft (1978), for example, has questioned how active a
manager in fact can be in controlling innovative processes.

In Daft's opinion, it is difficult to combine innovative processes and bureaucratic processes.

His dual-core model indicates that technological innovations often bubble up in
organizations, while bureaucratic innovations (such as planning) are top-down processes.
The dual-core model focuses on a number of basic problems in the company, namely the
link between different processes and different organizational units, and between the
specialist qualifications of different groups. Thus, the dual-core model addresses the

19
problem whether management through their strategic IT plan in fact limits rather than
assists the growth of new technological innovations.

Yet, this does not imply that management is not important. But it does mean that
management in general should refrain from getting directly involved in producing
individual innovations. It is the task of the manager to ensure conditions that allow the
employees to express their innovative abilities. According to Daft, the task of management
is to choose between existing innovative options. Management does not formulate strategy
positively. It ensures a negative delimitation of strategy by giving priority to the proposals
of employees. It is a question of a sound use of employees' attitude towards "we also have
to try that." In fact, it might be exactly such a development model that typical case
examples of strategic application of information resources have passed through.

Reexamining the empirical evidence Ciborra has found that innovative information systems
are not fully designed top-down (ibid., 1991). Innovative information systems are tried out
through prototyping, tinkering, local initiatives and organizational learning processes.
Organizations might not change the official strategy until way after the activities have
changed strategic direction - and the activities might even change business area completely
without any official announcement (Burgelman, 1994). The role of top management might
not be to manage or control the innovation activities - but to stimulate competing
innovation processes (Burgelman, ibid.).

Top-management's lack of control and insight has long been recognized by the users. They
have switched to self-assistance applying end-user computing and decentralized solutions
on local PC's. Formal planning and evaluation processes might not be the way to select the
right technology. A good example is the reported case of how Xerox failed when they first
invented, but later ignored the first personal computer in 1976 - 5 years ahead of Apple’s
Macintosh. At Xerox, formal financial evaluation criteria killed the project (Smith and
Alexander, 1988, p. 128).

20
Local organizational learning processes might be a more effective tool than formalized
strategic processes. Learning and change processes may come in various forms (March,
1981), e.g. by experiments, incremental decisions and adoptions, contagion from other
organizations or introduction of new actors with alternative perceptions. Taking an
interpretive approach to strategy and IT, Walsham (1993) presents the “formation of IS
strategy (..) as a process of continuous discourse” (ibid. p. 158). This approach recognizes
how strategy is a process where the outcome might have very little to do with the official
strategic plans or official decisions made during the process. We have to admit that in his
more recent research Earl has recognized part of this critique and concluded that an
“organizational” approach towards the use of IT strategically has proved to be the most
successful (Earl, 1993). An organizational approach implies a focus on organizational
learning and on emerging IT solutions instead of planned solutions. Moreover, there is little
focus on any specific method. Instead of, the process is driven by solutions created on the
spot to solve specific problems, and not strategic issues. This seems to give additional
strength to our point.

21
6. IRM and Organizational, Innovative Processes.
The above analysis indicates that it is not always possible or necessary to describe the
organizational context of IT by referring to the orientation and attitudes of management
alone. The question of how IT is developed, introduced, modified and effected cannot be
answered by merely referring to a general, formal strategy. It does not mean that the
introduction of IT cannot be linked to a general strategy. However, such a connection has to
be described and analyzed rather than presumed. The formal organization of a company
does not cover situations where it is difficult to delimit the organization from its
environment, or situations that are influenced by political processes involving conflicts and
various coalitions (Scott, 1987, Borum and Christiansen, 1993), or where 'the problem
cannot be defined concretely and without ambiguity (March, 1981, Rittle, 1972) or where
the informal network between actors in an organization plays a significant role in the
process (Borum and Christiansen, 1993).

Such wicked problems are characterized by a number of aspects. 1) There is a strong link
between problems resulting in by-products and relations to other areas and problems. 2)
The problems are not simple, but complicated, and they can be analyzed in various ways
and on various levels without any chance of determining the right solution. 3) There is
uncertainty concerning what the environment is, and what the competitors do, and 4) The
situation can be characterized by ambiguity, and it is altogether unclear how to define the
situation and how to establish or understand the links between intentions, solutions,
opportunities and problems.

Along the same line of thought Mintzberg (1994) describes three basic fallacies in strategic
planning assumptions: that discontinuities can be predicted, that strategists can be detached
from the operations of the organization, and that the process of strategy-making can be
formalized. Often the role of formal strategic planning seems to be far to optimistic.
Reviews of existing knowledge about the value of strategic planning seem to indicate a
number of “pitfalls of planning”. The process itself can destroy commitment, narrow a
company’s vision, discourage change and breed an atmosphere of politics (ibid.).

22
Earl is aware of this, and in a certain sense he allows for it. He proposes a strategy
development in three simultaneous stages: “top-down” goal clarification, “bottom-up”
evaluation of existing practice, and “inside-out” innovation (ibid., p. 69 ff.). By applying
“critical success factors” (Rockart, 1979, Bullen and Rockart, 1984) management evaluates
relevant targets and critical connections in a company's economy. At the same time, middle
managers evaluate how well existing systems and procedures function. And finally, but still
simultaneously, it is necessary to establish foresighted ideas that can solve identified
problems. In this way, Earl attempts very concisely to ensure that relevant problems are
defined and solved.

In a certain sense, Earl complies with Mason and Mitroff (1981), who propose a process
oriented and participant controlled model for handling the problems. By such a process they
assume they can avoid the problems connected with traditional planning, especially by
refraining from questioning existing “good manners”. This is also a model for IRM
development. Yet, the concrete content of IRM is solely the responsibility of management,
as reference to critical success factors entails that only management can define relevant
company matters. Critical success factors are developed through management's
interpretation of matters that are especially important to the company in terms of
profitability and development. Consultants who are connected to the process are process
consultants rather than professional field consultants, and as such they have no
responsibility. Or their responsibility is solely concerned with the contents of the process
compared to professional matters.

In other words, IRM takes no separate responsibility for a sound strategy development.
Although, IRM is said to be an organizational process, management alone defines the
problems of the company by drawing selectively on the 15 frameworks. As a result, broader
organizational problems might slide into the background.

23
7. IRM, MIS and Introducing Forms of Visibility.
Often, material from IRM examples addresses the relations of a company to the
environment. In a certain sense, the IRM discussion plays a small role in the internal
management of employee resources. Yet, it is essential to note that IRM-based internal
information systems (e.g. MIS and electronic mail) do not exist outside an organizational
context, in which information retrieval makes sense (Mouritsen, 1988, 1990). This indicates
a significant link between the general, economic management systems and other
information systems.

IT is important and organizational significant in IRM, as it provides an opening for

establishing a competitive edge. However, IT can also be significant in a very different
way. It is part of a range of options that organizations have to regulate organizational
problems, comprehension of problems and actions. By this, we mean that the implicit
knowledge and the decisional situations which form the basis for the specific ways a
company employs to register events, also contribute to the definition of viable decisions.
This applies to all decision models (Williams, 1987, Miller and Rose, 1990). It is important
to note that in most cases IT development is conducted in connection with establishing or
strengthening the management function in organizational systems.

IT does not merely represent a technical registration of a given organizational reality. IT is

instrumental in establishing and choosing the reality for the organization and its members.
It is based on a theory that justifies a special understanding of organizational problems,
organizational solutions and organizational parameters of action (Mouritsen, 1988, 1990,
Mouritsen and Bjørn-Andersen, 1990). In this way, information systems are double
significant. On the one hand, they define “reality” as something that can be divided into
manageable portions and subjected to management and control. It means that corporate
behavior can be calculated. On the other hand, they construct certain forms of visibility
through IS categories that can only be justified by referring to certain types of theories or
perceptions of reality.

24
As a result, IT is instrumental in standardizing organizational behavior in relation to the
established information model (Williams, 1987). It means that IT enables management
and/or central staff functions to manage the company at a distance from the concrete
actions. In this sense, IT deals primarily with regulation of internal matters with a view to
establish standards for good behavior, facilities for variance control to advance the
standards and finally, the opportunity to offer rewards on the basis of the established
standards. Of course, this applies in particular to such types of information systems as
accounting systems, purchasing systems, logistic systems, production management systems
and booking systems that are directly oriented towards measuring efforts and results.
Several studies have shown how information systems become part of organizational change
processes and influence behavior (Cavaye and Christiansen, 1995 and Hopwood, 1987).
Systems and technology that are integrated into products or used as parts of information
systems have an indirect influence and regulating effect on behavior.

An example of this search for normalization, visibility and management possibilities can be
found in Earl's use of Porter and Millar's (1986) value chain (Ginnerup, 1988). The value
chain links a model of a company's logistic arrangement (from supply over production,
order management, marketing and sales to service) to a specification of the four most
important functions in a company's techno-structure (planning and control, personnel,
technological development and purchasing management). Porter and Millar connect all of
these functions with IT and exemplify how IT can be used in each of these connections. It
is an abstract construction that indicates possibilities instead of making actual
recommendations on how to proceed in concrete situations.

Yet, it is a characteristic feature that the model's specification of options first and foremost
focuses on control possibilities, which they argue will result in increased internal efficiency
or productivity. E.g., Porter and Millar's main concepts focus on production management,
sales management, order management, etc. Therefore, when Ginnerup regards this as a
disclosure of "the unheeded IT potential" (1988, p. 288), it is a matter of activities in
relation to "costs and efficiency, and a matter indicating that all measures advancing

25
coordination between activities or at least assisting in adapting the necessary links will have
strategic interest" (1988, p. 229). In general, this means that any measure allowing a
reduction of costs over an extended period of time is strategic. Furthermore, it means that
all measures which increase labor and productivity of capital are strategic. Thus, all internal
control and management systems are of strategic interest. Or, in other words, economy and
resource management is always of strategic interest!

8. IRM: Form or Content?

Does IRM present an independent area of managerial economics? In a certain sense, Earl
regards IRM as a meta discipline that has the capacity to revolutionize the thinking of
managerial economics. The prospects promised by IT are so great that to go against it
would be considered Luddite fighting. But, it is important to remember that Earl's 15
frameworks “merely” are educational instruments to facilitate reasoning about IRM
problems. The IRM process can be instrumental in defining requests for types of necessary
systems. However, the systems do not comprise any actual contents.

For example, IRM may discuss the need for an inventory management system, but
principles of inventory holding, inventory methods, reordering principles, etc. are
completely left out. Perhaps, an IRM process would propose setting up a credit system, but
it probably would not suggest how a reminder procedure should be arranged. Perhaps, IRM
would be able to identify the need for a financial system, but it cannot define the criteria for
segmentation of turnover, principles for cost accounting or depreciation. These examples
illustrate that IRM, at least to some extent, focuses on form rather than content. It is
instrumental in making an outline for developing information systems. Still, such an outline
has to be filled out and made concrete. This task cannot be done through an IRM approach;
individual theories of managerial economics and decision models are still necessary. In a
certain sense, we can almost say that IRM is not really a professional field in its own right,
as professional knowledge of other disciplines of managerial economics is crucial for
developing competent IT-based systems. It is doubtful whether IRM can succeed solely by

26
means of concepts and general declarations of intent. Defining criteria for decision-making
is vital as well.

9. IRM as the IT Community's Strategy.

Earl elaborates on IRM's consequences for the IT community's organizational anchoring.
Actually, it is the only concrete way in which he treats organizational matters:

"One characteristic of the IT era is that IT or IS is regarded as a management

function alongside finance, production, marketing, and the like. (T)here may be two
sorts of directors required in organizations where IT is important. Besides a
corporate IT director, local IS directors may be required to direct the use of IT,
ensure that IS strategies are formulated and perhaps manage some IS development.
(T)he overall IT director is likely to require considerable social and political skill,
(and) the local IS directors who are expected to connect IT with business needs
must possess credible business knowledge" (1989, pp. 129, 146).

Here, Earl argues that IRM opens up for - and perhaps requires - a change in corporate
management structure and organizational build-up. It is emphasized that IT requires new
forms of knowledge, which are often difficult to deal with for those who organize data
retrieval in conventional companies. It means that members from the IT community
participate in the general competition about who will be allowed to define information
requirements, data registration and information processing. It is no longer only the
marketing and financial staff that can discuss who should make segment analyses and on
this basis interpret the situation of the company. The IT community is qualified as well.
Who will end up doing the task probably depends on the strength of their organizational
function as well as their ability to mobilize their interests in the most effective way (Cavaye
and Christiansen, 1995).

27
At least, this argument has been leveled in several connections (Armstrong, 1985,
Pettigrew, 1973). In such processes, different specialist groups mobilize their interests by
referring to their professional competence. Yet, the problem is that all groups comprising
professional specialist competence in a sense have a “right” to do so. All fields within
managerial economics focus more or less on analyzing the problems and future prospects of
a company. However, the various disciplines differ in the approach they take. As a result,
the competition will be between different theoretical frameworks of reference. The
competition will focus on which framework of reference enjoys the most attention.

For IRM it implies that the growing extension of all kinds of strategic plans for IT
development to a large degree must be viewed as a strengthening of the IT community's
arguments concerning corporate politics. The signal that “we have also strategic
competence” is used to justify the inclusion of members from the IT community in
management functions on all levels.

The IT community does not wish to be limited to perform technical support functions for
the actual users. It is no longer only marketing, product development or currency dealings
that are strategic. Technology has become strategic, and it is a serious matter.

Finally, the criteria for evaluating IT-projects may be changed by strategy justification.
Strategy justification has become a tool for securing investments in IT by circumventing
established organizational policies on evaluation of IT investment. Empirical evidence of
the effect of the strategy justification process is available (Powell, 1992).

10. Conclusion.
There is no doubt that IT brings new problems up for discussion in many companies and
organizations. IT is a medium through which a number of different, technological,
managerial or organizational problems arise. A characteristic feature of IRM is that it
redefines important corporate problems, their solutions and organization. A strong point in

28
favor of IRM is that it stimulates creativity in connection with solving corporate problems
in new ways that will increase productivity, profitability or service. Still, several problems
are inherent in IRM and limit its application potential and perspective.

First, IRM is a check list theory that merely indicates how IT relates to corporate problems.
IRM provides a “general concept” consisting of a number of intellectual models that may
stimulate creativity and be combined at random. Check list theories only develop creativity
in those who already have knowledge and training.

Second, IRM is a method that reduces the scope and nature of possible strategies which
may meet with organizational approval. The focus of IRM on technological solutions fails
to recognize other potentially important strategies. Only to some extent, does IRM permit
an actual evaluation of strategies based on internal organizational changes.

Third, IRM celebrates an unrealistic management model. It is doubtful whether IT strategy

can be formulated top-down. The experts' creativity is essential for the strategy formulation
process. By supporting parts of existing activities, the management task is more a question
of a negative delimitation of strategies than a positive top-down formulation of strategic
possibilities.

Fourth, in reality IRM fails to take professional responsibility for the developed strategies.
It is the task of management to define problems, to find options and to establish priorities
between them. Consultants - and the IRM concept - are process assistants who cannot be
held “accountable”.

Fifth, to a large extent IRM fails to recognize the strategic aspects of management systems
in relation to internal matters. In cases where IRM has tendencies in this direction, it is easy
to redefine problems to another line of managerial economics, e.g. management accounting.

29
This implies that it is doubtful whether IRM has an independent presentation of problems
in terms of managerial economics. It is a matter of form rather than actual managerial
economic contents. In a certain sense, IRM is a “meta discipline” that provides a range of
tools for stimulating creativity. However, IRM cannot by itself formulate decision rules,
including the model in IT's data records.

Finally, and in the sixth place, there is basis for stating that IRM is involved in a broader
organizational competition between professions with a view to establish organizational
visibility and thus acquire the “right” to define organizational problems, organizational
problem solving methods and organizational solutions. The IT community wishes a
platform for entering corporate management and boards. IRM represents a vehicle for
obtaining this goal.

Appendix:

Further Discussion of Earl's Arguments for the Growing Importance of IT.

Earl (1989, p. 2) has nine arguments for the strategic importance of IT. They are: 1) IT is an
activity in which large investments have been made, 2) IT plays a critical role in many
companies, 3) IT has turned into a strategic weapon, 4) IT is necessary in the economic
situation, 5) IT has an impact on all functions and all levels of management, 6) IT
constitutes a revolution in management information systems (MIS), 7) IT involves many
interested parties, 8) the technique is important and 9) IT management makes a difference.

Earl's nine arguments for working with IT as a strategic phenomenon (1989 pp. 2-21) are
based on various other types of arguments. Therefore, it is worth looking at the contents
and form of reasoning in more detail, and that is exactly what we will do in the following.

30
Re 1). The first argument that IT becomes strategic because of large investments in the
field focuses on the level of expenditure. The argument may just as well apply to cereals
that have captured enormous market shares in the Western world. Moreover, it is very
difficult to assess the distribution of expenditure in companies. On this item Earl says (p.
3), "the detailed argument is not that high expenditure on IT yields higher profits, but that if
appropriate levels of investment are made in IT (...) IT can yield leverage - or has a
multiple effect." We have two critical questions to this statement. First, what does
appropriate levels of investment in IT mean? Earl has no reply to this question. The second
question concerns the connection between expenditures on IT and other investments (such
as organizational development, marketing, cost awareness, etc.). Assessment of
expenditures on IT is difficult to perform, as there is a delicate connection in most
companies between investments in hardware and software and investments in “skills”.
Purchase and use of advanced IT equipment, or an intelligent use of IT - are based on skills
that are stored in the organizations and in individual employees. An assessment of
expenditures that only focuses on IT is both difficult to make and will only present one side
of the issue. As a matter of curiosity, we have noted that Earl (p. 4) assesses - contrary to
many previous predictions - that expenditures on “technique” have increased from 40 to 60
per cent of the total expenditures on IT from 1980 to 1986. This contradicts other
predictions that have assumed the share of technique to decline in proportion to investments
in personnel, training, etc.

Re 2). We realize that IT is a critical factor in many companies, when we cannot withdraw
money from our bank account or book a ticket because the IT systems have gone down. But
does it make IT strategic? According to the argument of McFarlan and McKenny - which is
often used - IT does not play an equally strategic role in all companies. This is shown in
their table on strategic IT in Cash et al. (1988 and 1992), which we will discuss briefly.

According to the table, two dimensions determine the strategic role of IT: Partly, the extent
of "strategic impact of existing systems" i.e., dependence on existing systems, and partly
the "strategic impact of applications portfolio" i.e., to what extent current/future projects

31
have strategic importance for the company. The table calls attention to four types of
situations (Cash, et al. ibid., p. 23). The problem is partly how to determine whether
technology plays a strategic role in the company, and partly whether IT will become a
strategic factor in future. For example, who considers “something” a strategic factor? Cf.
item 5 below.

Re 3). The idea that IT can be used as a weapon indicates how the arguments of Earl (as
well as many others concerned with “strategy”) are based on a perception of the world as a
large market, where all compete against all. Earl lists four possible applications of IT as a
weapon: a) To gain a competitive edge by applying IT as part of a product or a service or as
part of the distribution or supply chain. b) To improve productivity and performance by
applying e.g., CAD/CAM and Integrated/Flexible Manufacturing and MRP systems. c) IT
may improve organizing, e.g. by decentralization, job enlargement and job enrichment. And
finally, d) IT can be used to develop new fields of business, e.g., by application of
telecommunication and data base technology in companies. Such applications will allow
companies and environment to be linked in new ways, or information to be grouped in new
ways and sold as new products (information as a product or part of products).

Re 4). Earl argues that IT represents a demand derived from economic development and
development in the world market structures. Most likely this is true from the point of view
that companies today can benefit from using IT in many processes and in many ways. This
implies a need for information about development in the IT field, and therefore companies
are always scanning the prospects of using IT in their respective productions, etc. But
whether this factor will make IT strategic probably depends on the company in question, its
situation and the actors' view of the situation. For example, their understanding of the
competitive situation and the actual development on the world market.

Re 5). That IT has an impact on all management functions (areas) and levels in society
seems reasonably acceptable as an initial hypothesis. Earl argues that technology has many
aspects, is penetrating (contained in many forms), and that the IT rate of change is

32
accelerating (Earl, ibid., p. 13). Yet, at the same time, he mentions that it is difficult to
elaborate on any possible development and tendencies, and he concludes that it is important
to keep an eye on development! (ibid., p. 14). This points to a number of central questions
about the possibilities and problems involved in making strategic plans, which we
previously have discussed in detail. If something has strategic importance because it
involves everybody in an organization, then the power supply will also be strategic. When
we normally do not look at power supply in this way, it is most likely due to a very high
energy security. This shows a dimension that allows for qualitative differences, and which
Earl has not included.

Re 6). Earl bases his argument that IT revolutionizes "management information systems"
on the growing increase in different IT applications. He mentions spreadsheet, expert
systems, tele-conferences and management communication facilities (ibid., p. 15). Again, it
is difficult to understand how he can conclude so precisely that IT has changed the
management situation, and why it makes IT strategic. In reality, we know very little about
how IT has changed the content (quality) of decisions and their implementation in an
organizational context. Yet, we know a lot about the obstacles we encounter in IT
application. They include limitations in the systems, the quality and relevance of the data
contained in the systems, how the systems fit into work tasks, work situations, employees'
work form, psychology and decision style in addition to limitations in human perception
(Mintzberg, 1975).

Re 7). There is no doubt that IT involves many interested parties, when even 5-6-year old
children have an Amiga computer in their room, and the Danish Minister of Education
wants to increase computer studies in the primary school. But are they the interested parties
Earl (as well as other authors within IT strategy) has in mind? Of course, the many
interested parties in IT are not equally important for companies. Simultaneously, we know
from countless studies how difficult it is to implement IT in organizations and companies
(Lyytinen et al. 1987). But that many interested parties will endow IT with strategic
importance is not that obvious. Even in Earl's own argument (ibid., p. 19) it is stated that

33
"as IT becomes strategic" (...) it is necessary to consider how to handle the many interested
parties. Thus, it is assumed that IT is strategic, and not that the many interested parties
make it strategic. In other words, Earl undermines his own argument that IT is strategic
because of the many interested parties!

Re 8). Earl supports his argument - as the technique is important, it implicitly becomes
strategic - by discussing the need for strategic consideration in the acquisition of
technology. Earl uses a couple of examples which indicate that take-overs failed because
the IT systems of the companies in question were not compatible or insufficiently
supported (ibid., p. 20). The question is how such problems make acquisition of technology
strategic? Of course, IT has to be included as a factor on equal terms with other company
resources, such as product portfolio, employees' qualifications and skills, the condition of
the buildings, etc. IT has become a factor that has to be considered, but that does not
necessarily make it strategic.

Re 9). Earl bases his last point that IT management is important on studies made by
McCosh et al. (1981). Their results repeat a number of well known problems concerning
application and implementation of new technology (Borum and Christiansen, 1993). IT is
not always used to solve the right problems, management does not always support the use
of IT in the organization, the users are not sufficiently involved and the behavioral aspects
in IT application do not receive enough attention. These factors are well known in the
literature on new technology and can be called strategic factors for application of IT, but -
again - that they should make IT strategic is hard to see.

34
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