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 vi CONTENTS

The Business Context for Developing and Managing the Strategy 94

Establishing an Effective Process: Continuous and Flexible 97
Setting the Scope for the Strategy 104
A Framework for IS/IT Strategy Formulation 108
Other Deliverables from the IS/IT Strategy Process 119
Summary 122
Endnotes 123

4 IS/IT Strategic Analysis: Achieving Alignment with

Business Operations and Strategy 125

Understanding the Current Situation 126

The Business Operating Model: Processes, Activities and Key Entities 130
Organizational Environment 136
Examining the Existing IS/IT Environment 139
Information and Systems to Meet Current Business Objectives:
the Use of Balanced Scorecards and Critical Success Factors 146
Process Analysis 153
Redesigning Processes 158
Evaluating the Gap between Existing and Required
IS/IT Environments 161
Summary 162
Endnotes 163

5 Innovating with Technology, Systems and Information 165

Understanding What It Means to Innovate with IT 166

The Process of Digital Business Innovation 168
The ‘push’ and ‘pull’ of Innovating with IS/IT 173
Getting Management Attention for Ideas and Innovations 177
Joining the Dots: the Search for Ideas 180
Innovating by Leveraging Information: Exploration and Exploitation 184
The Big Data Challenge 188
Discovering Strategic IS/IT Opportunities from Information 191
Building an Analytic Capability 198
Summary 201
Endnotes 202

6 Exploiting Information Systems for Strategic Advantage 207

Achieving and Sustaining Advantages across the Value Disciplines 208

Exploring New Value Propositions: Informating Products and Services 210
Analysis of Competitive Forces to Identify IS/IT Opportunities
and Threats 216
Value Chain Analysis 220
Customer Life‐cycle Management and the Value Chain 228
From Value Chain to Value Network 235
The Internal Value Chain 239

ftoc.indd 6 3/1/2016 2:21:27 PM

 CONTENTS vii

The Uses of Value Chain Analysis 244

Summary 247
Endnotes 248

7 Determining the Business Information Systems Strategy 251

Business Strategy and IS/IT 252

Tools for IS/IT Strategy Formulation and Their Relationships 256
A Framework for Using the Tools and Techniques Effectively 258
Identifying how IS/IT Could Impact the Business Strategy 260
Establishing the Relative Priorities for IS/IT Investments 265
Large Organizations, Multiple SBUs and Strategy Consolidation 270
Summary 272
Endnote 272

8 Managing the Portfolio of Business Applications 273

Conclusions from Various Portfolio Models 275

Classifying the Applications in the Portfolio 277
Reconciling Demand and Supply Issues in the Portfolio 280
Generic Application Management Strategies 282
Portfolio Management Principles Applied to the Application Portfolio 291
Aligning Development Approaches to the Portfolio Segments 298
The ‘Special Case’ of Enterprise Systems 304
Managing Application Portfolios in Multi‐unit Organizations 306
Summary 309
Endnotes 309

9 Justifying and Managing Information Systems

and Technology Investments 311

Investment and Priority Setting Policies 313

Justifying and Evaluating IS/IT Investments 314
Justifying Business Applications 322
Justifying Infrastructure Investments 326
Assessing and Managing Investment Risks 332
Managing the Portfolio of Investments 336
Setting Priorities amongst IS/IT Investments 338
Organizational IS/IT Portfolio and Investment Management
Maturities 344
Summary 349
Endnotes 350

10 An Organizing Framework for the Strategic

Management of IS/IT 353

The Strategic Management Requirement 354

Positioning and Managing IS/IT in an Organization 356

ftoc.indd 7 3/1/2016 2:21:27 PM

 viii CONTENTS

From a Functional View of IS/IT to an Organization‐wide

Perspective – Capability and Competences 359
IS/IT Governance and Why It is Important 366
What Decisions Need to be Governed? 371
Creating the Organizing Framework for IS/IT Decision Making 374
Instruments of Governance 375
Summary 391
Endnotes 392

11 Strategic Management of IS/IT Services and

IT Infrastructure 395

Creating and Sustaining Business Change: Projects and Services 396

The Need for the Strategic Management of IS/IT Services and IT
Infrastructure 397
IS/IT Service Categories 400
Managing Operational and Value‐enabling Services 410
Strategies for Managing IT Infrastructure and Infrastructure Services 414
Understanding and Managing IT Risks 420
Sourcing of IS/IT Resources and Services 423
Business Process Outsourcing 434
Innovation and Outsourcing 436
Back‐sourcing and Switching Suppliers 438
Summary 440
Endnotes 441

12 The Strategic Management of Information Systems:

Quo Vadis? 445

The Evolution of IS/IT Strategy in Theory and Practice 447

A Brief Résumé of some Core Ideas 452
Building an IS/IT or Digital Capability 455
From Creating IS/IT Assets to Improving Organizational
Performance: Joining the Means to the Ends 458
Achieving Alignment: a Multi‐themed Perspective 459
The Co‐evolution of Business and Digital Strategies 463
The Opportunity for CIOs to Have a Key Strategic Role 466
Conclusion 468
Endnotes 469

Index 475

ftoc.indd 8 3/1/2016 2:21:27 PM

 PREFACE T O THE
FOURTH EDITION

Without doubt, information technology (IT) is one of the greatest disruptive forces
confronting organizations today. Organizations of all sizes from every industry,
including the public sector and not‐for‐profit, are being impacted by the inexorable
advances in technology according to research from the likes of IBM, McKinsey,
Deloitte, PwC, Roland Berger and BCG.1 While it might be legitimately argued that
these all have a vested interest in promoting this view, the impact of technology is
visible for all to see, not only in business but in the daily lives of the majority of
people across the world.
Over the last decade we have seen technological innovations fundamentally rede-
fine industries such as gambling, music, media, retail, travel and insurance. They
have also created new industries just not possible or commercially viable without
technology such as global auction sites (e.g. eBay – a globalized version of the car
boot sale), marketplaces for perishable services such as flights, hotel rooms and
restaurant reservations (e.g. Lastminute, Laterooms and TablePouncer) and daily
deal coupons with Groupon and Citydeals. New ‘platform’ companies like Uber,
Airbnb and Alibaba have harnessed information in novel ways to enter established
industries and carve out significant positions. Owning no taxis, real estate or mer-
chandise, they are now respectively the largest taxi company, accommodation chain
and retailer in the world. Uber and Airbnb are examples of organizations shaping
the so‐called ‘sharing economy’. Technology has also created new ways of compet-
ing in established industries, such as betting exchanges in gambling, and enabled
new business models in industries from aerospace to energy and automotive.
Actually, this journey of industry transformation began over 40 years ago – industry
leaders have always exploited opportunities provided by IT – but this has probably
accelerated since the turn of the century. Customer interactions and experiences are
increasingly shaped by technology. Business processes and supply networks continue
to be digitized. Companies are actively seeking out opportunities to harness so‐called
‘big data’ and social media, deploy mobile apps, create new business models and
‘informate’ their products and services. The public sectors of most countries are being
similarly transformed as more and more services are being delivered through digital
channels, taking out significant costs as well as improving their availability and access
to citizens. Indeed, citizens are increasingly likely to judge public sector service per-
formance against customer‐centric commercial experiences and channels.
‘Digital’ is now an issue on the agendas of most Boards of Directors, chief execu-
tive officers (CEOs) and their leadership teams, although they differ in how they deal
with it.2 It is not the first time IS/IT has held this pole position: in the last 40 years it has
happened several times, in waves, but each time executive interest waned quite quickly.
The first wave of interest was probably during the 1980s when some organizations

fpref.indd 9 3/1/2016 2:20:55 PM

 x PREFACE TO THE FOURTH EDITION

began to look for opportunities to gain a competitive advantage from IT. The busi-
ness re‐engineering boom of the early 1990s also elevated IT as a means of taking out
significant costs and improving efficiencies. The commercialization of the Internet
later in the 1990s saw another wave, particularly for developing websites and e‐com-
merce strategies and building electronic channels to customers and suppliers. The
impending ‘doom’ that Y2K threatened also ensured that IT attracted serious, if nega-
tive, attention in the years leading up to the new millennium. More recently, big data,
the cloud, social media and mobility, together with the Internet of Things and per-
haps even the revelations about NSA snooping, have again elevated information
technology to the top of the agenda. The challenge is to now keep it there.3
At the same time there have been mixed messages regarding the competitive
potential of IS/IT. Nicholas Carr’s 2003 article ‘IT doesn’t matter’, published in the
influential Harvard Business Review,4 had a devastating impact on business manage-
ment interest and involvement in IS/IT. Carr argued that investment in IT, while pro-
foundly important, is less and less likely to deliver a competitive edge to an individual
company. ‘No one would dispute that information technology has become the back-
bone of commerce,’ Carr says, but ‘The point is, however, that the technology’s poten-
tial for differentiating one company from the pack – its strategic potential – inexorably
diminishes as it becomes accessible and affordable to all.’ We would agree with him
that IT per se doesn’t really matter, but how an organization chooses to harness it is
critically important. But this is not how the argument was presented or, indeed, inter-
preted by many business leaders and it gave them the justification they needed to
take it off the agenda.
It is now 14 years since the third edition of this book appeared. And while many
things have changed, many others have stayed the same.
For one, we have changed the title of the book from Strategic Planning for
Information Systems to The Strategic Management of Information Systems. We flagged
this possible change in the concluding paragraph of the previous edition as it reflects
more accurately what is required to successfully leverage information systems and
technology (IS/IT). Success with IS/IT is only partly about having a comprehensive,
coherent IS/IT strategy and a plan for its execution. Success also requires a sus-
tained, strategic approach to managing all aspects of IS/IT from devising the strat-
egy, through investment justification, to implementation and then using information,
applications and technology effectively and beneficially. Even if an organization
does not intend to seek any competitive advantage from IS/IT, it will still require a
strategic approach to the management of IS/IT, if only to avoid being disadvantaged
by the actions of others.
On many occasions over the years, we have been asked by our academic col-
leagues when the ‘new’ edition is to appear. One of the reasons frequently given for
the question is that the references have become dated! We cannot deny it, but are
also somewhat concerned when we hear it. Take the discipline of mathematics;
some of its fundamental theorems and principles date back centuries, yet are as
valid today as when first derived. Similarly, some of the seminal models and frame-
works that we present in this book may date back decades, but just because they are
seemingly ‘old’, this does not make them irrelevant. Sometimes the language needs
to be modernized, but many of the basic messages and prescriptions remain as valid
as ever. You will see many examples of such proven frameworks, findings and ideas
throughout the book, as well as newer ideas and concepts.

fpref.indd 10 3/1/2016 2:20:55 PM

 PREFACE TO THE FOURTH EDITION xi

Others have pointed to the enormous advances that have been made in IT since
the last edition, especially for personal or social uses. We agree that the technological
innovations have been impressive: cloud computing, analytics, social media, machine
learning, the Internet of Things (IoT) and mobile are just some examples. But these
are just technologies; for most organizations this is not where the problems usually
lie. The challenge is, as it has always been, to harness these technologies in support
of enterprise objectives and to create new strategies. Where, when and how to invest
are the key questions that managers have to grapple with. This is why a digital or IS/
IT strategy is required. That in turn depends on having an appropriate organizational
environment that supports and promotes open, informed and effective conversations
between business management and IS/IT specialists.
Since the third edition, the term digital has gained considerable traction. Many
vendors, suppliers, analysts and consultants now promote their wares under the
label of digital and would have you believe that it is somehow different from IS/IT
of old. It is not. What most have done is simply replace what they previously called
‘IT’ by the ‘digital’ tag. For example, IT‐enabled business transformation from the
1990s has now become digital business transformation. But, as we illustrate early in
Chapter 1, the distinction between IS and IT (which is fundamental to our approach)
is actually very powerful in understanding digital: we argue that ‘digital’ has both IS
and IT components, and consequently throughout the book we use the labels IS/IT
strategy and digital strategy interchangeably. To reflect this, we have given the book
the subtitle Building a Digital Strategy.
The IT industry’s relabelling of concepts to present them as either different or
new is an irritating practice: data is now ‘big data’, decision support systems (DSS)
are now analytics and so on. In 1985, Michael Porter and Victor Millar wrote an arti-
cle in the Harvard Business Review titled ‘How information gives you a competitive
advantage’. In the piece they wrote about the impending data deluge which, if har-
nessed appropriately, could be a source of competitive differentiation. They didn’t
use the label ‘big data’ as it hadn’t been invented, but if it had been around then we
are sure they would have; instead, they used the label ‘information revolution’, a
label that was de rigeur during the 1970s. Yet the message of the piece resonates
with what is being written today about big data. The opportunities have increased
due to the developments in technology, but the issues involved in successful exploi-
tation have become no easier to resolve.
Since the third edition, much more has been learned about the practicalities of
managing IS/IT strategically and the factors that influence the success of the process
in both the short and the long term. This edition considers both the implications of
the developments in IS/IT and the most useful of the recent thinking and experi-
ences concerning both business and IS/IT strategic management. However, we
believe that there is still a significant ‘knowing‐doing’ gap; the knowledge of what
should and can be done is well established, but the evidence is that it is unfortu-
nately not followed in practice often enough.
Managing IS/IT successfully is perhaps even more difficult in today’s environment
of uncertainty, complexity and faster business change, combined with greater
choices in the supply of IT services and infrastructure, than it was when we wrote
the previous edition. The turbulence in both business and IS/IT environments may
explain why, despite the increasing criticality of IS/IT for business, surveys continue
to show that most organizations still struggle to deliver expected benefits from IS/IT

fpref.indd 11 3/1/2016 2:20:55 PM

 xii PREFACE TO THE FOURTH EDITION

investments. Many more are still concerned that IS/IT expenditure does not produce
demonstrable ‘value for money’.
As stated in the preface to the first edition, the following problems can and often
do still result from the lack of a coherent strategy for IS/IT investment, even some
25 years later:

● Business opportunities are missed; the business may even be disadvantaged by

the IS/IT or digital developments of others.
● Application and infrastructure investments do not support the business
objectives and may even become a constraint to business development.
● Lack of integration of applications and ineffective information management
produce duplication of effort and inaccurate and inadequate information for
managing the business.
● Priorities are not based on business needs, resource levels are not optimal and
investment plans are consistently changed. Business performance does not
improve, costs are high, solutions are of poor quality and value for money is low.
● Technology strategy is incoherent, incompatible options are selected and large
sums of money are wasted attempting to fit things together retrospectively.
● Lack of understanding and agreed direction between users, senior management
and the IS/IT specialists leads to conflict, inappropriate solutions and a misuse
of resources.

It is against this background that this book considers how digital or IS/IT strategic
management development can be brought about and then sustained. The intention
is to provide a structured framework and practical approach, expressed primarily in
the language of business and management. This can be used jointly by senior man-
agement, line managers and IS/IT professionals (and even suppliers) to combine
their knowledge and skills to identify what needs to be done and how best to do it.
Since new technologies continually come and go, the pursuit of opportunities
through IT must be driven not only by what is technologically feasible but by what
is strategically desirable. A key objective of this book is to provide this strategic
focus for IS/IT. Clearly, an IS/IT strategy is an increasingly important component of
the business strategy, which implies that IS/IT strategy development must become
an integral part of the business strategy process and it must be understood and
owned by the business management if it is to be implemented successfully.
Some companies, such as Uber, Facebook, Amazon and Alibaba, are born digital
and are adept at leveraging information and innovating business models and cus-
tomer experiences with technology. Usually, it is the more established companies,
sometimes with long and successful histories, that need to embrace digital if they
are to prosper in the future. Many still do not see information, systems and IT as
core to their business and some even still see them as an administrative expense
and a cost to be minimized. Consequently, they do not recognize the opportunities
or the disadvantages they might be suffering. Others acknowledge that they need
to manage IS/IT more strategically, but struggle to do it. This book is intended to
help established companies ‘embrace digital’ and we hope that some of the content
will also be valuable to the more technology‐oriented companies. This is not just a
book for CIOs and IT professionals and consultants; we see it as valuable reading
for executives and managers from all business disciplines and types of organization.

fpref.indd 12 3/1/2016 2:20:56 PM

 PREFACE TO THE FOURTH EDITION xiii

Indeed, a fundamental message of this book is that business managers must play a
central role if an organization is to be successful in managing IS/IT strategically.
We also know that the book is widely adopted in masters’ degree programmes,
as well as on MBA programmes and some undergraduate courses, and a range
of executive education courses. This has made it somewhat of a challenge to write
for two audiences. The former often do not have the same level of knowledge or
practical experience as business managers and professionals, whereas the latter are
often looking for frameworks and knowledge to make sense of situations that they
have experienced.
In general, practitioners do not find academic research accessible and useful.5
This is often because the style of writing and structure demanded by journals can
make it difficult to draw out relevant findings, transferable lessons and practical
implications. We have to admit that we also struggle to find the relevance of some
research that makes its way into journals! However, we have drawn extensively on
findings from academic studies, but tried to describe and explain them in a way that
it is both accessible and relevant. We recognize the contributions that these research-
ers and writers have made to the contents at appropriate points in the book. We
hope that we have been able to bring it all together in a coherent and readable
volume. Over the years, we have worked with hundreds of business and IS/IT
executives and managers. Their knowledge, insights and experience and their use of
many of the ideas, models and frameworks in this book have ensured that the
approaches described can be applied successfully in practice.
Although the book is focused primarily on the strategic management of IS/IT in
commercial organizations, and the language used generally reflects this, the majority
of the content is equally applicable to government agencies, the public sector and
not‐for‐profit organizations. As already mentioned, they are not immune from the
opportunities that IS/IT provides nor from the need for a more strategic approach to
IS/IT investments. While not operating in competitive marketplaces, they face many
of the same issues and challenges in respect of IS/IT. We do present some examples
and cases from the public sector; however, readers from non‐commercial organiza-
tions will sometimes need to interpret what we write for their particular context. For
example, usually when writing about ‘the business’, we are referring to organizations
in the general sense; often what is said about customers as users of products and
services can be equally applicable to citizens and patients in their interactions with
a governmental agency or healthcare provider.
While the overall structure of the book is similar to the previous edition, we have
improved the layout of the chapters and the index. We are aware that many readers
dip in and out of chapters rather than read the book from cover to cover. Some
readers may be interested in following up in more detail some of the points made,
models used or research findings drawn upon – the extensive chapter endnotes will
guide them to the original source. To help the reader navigate through the content
of the book, Figure 0.1 illustrates the overall structure.
The book is essentially split into two parts. The first part, Chapters 1–7, is con-
cerned with introducing and describing the content, context, nature and processes
of IS/IT or digital strategy development and the associated tools and techniques.
Chapters 8–11 address the issues involved in delivering operational and strategic
benefits through the execution of the strategy, including managing IS/IT investments
and risks in applications and infrastructure, organizing and governance, making
sourcing decisions and managing the IS/IT supply chain.

fpref.indd 13 3/1/2016 2:20:56 PM

 xiv PREFACE TO THE FOURTH EDITION

Chapters 2–3 Chapters 4–6 Chapters 8–9 Chapters 10–11

Corporate and
Organizing for
business Aligning IS/IT Managing the
the strategic
strategy and with business application
management of
the IS/IT strategy portfolio
IS/IT
implications

Chapter 1 Chapter 7 Chapter 12

A strategic
Business Key ideas and
perspective of Determining
innovation with the future for
IS/IT (or the IS strategy
IS/IT IS/IT strategy
Digital)

Searching for The strategic

Establishing an Justifying and
competitive management of
IS/IT strategy managing IS/IT
opportunities to IT services and
process investments
shape strategy infrastructure

Establishing a IS/IT (or Digital) Portfolio and Organizing,

strategic strategy: investment sourcing and
management tools and management infrastructure
framework techniques management

FIGURE 0.1 Overview of book structure.

Any organizational strategy needs to define ‘where we want to be in the future’

and assess objectively ‘where we are now’ in order to decide ‘how to get there’,
given the alternative options and resources available and the changes needed. The
first part of the book considers how an organization can assess where it is with
regard to IS/IT, in the context of the current economic, social and business environ-
ment, and what the organization wants to achieve in the future. The business objec-
tives and organizational issues must be interpreted, analysed and supplemented by
creative thinking to identify potential innovations, so that the IS/IT strategy not only
supports the business strategy but enhances it wherever possible and even creates
new strategic options.
Chapter 1 sets the strategic context for IS/IT. It briefly reviews the evolution of the
use of IS/IT in organizations and the impact it has had on industries, business
models and competitiveness, including contemporary examples of ‘digital disrup-
tion’, leading to the latest thinking on the strategic role of IS/IT in organizations*. It
provides a classification of the strategic uses of IS/IT as well as success factors in
their development. The chapter also introduces some basic definitions and models
that will frame the rest of the book.
(* For readers interested in more of the academic research on IS/IT strategy, it is
discussed further in the early sections of Chapter 12.)
Chapter 2 provides an overview of what is involved in strategic management and
the implications for IS/IT strategies, including sources of competitive advantage and
the role IS/IT can play in their creation. It considers approaches, tools and tech-
niques used in business strategy formulation and how they can be used to integrate

fpref.indd 14 3/1/2016 2:20:56 PM

 PREFACE TO THE FOURTH EDITION xv

business and IS/IT strategic thinking and analysis. Chapter 3 considers what is
involved in establishing an effective and comprehensive approach to IS/IT or digital
strategy formulation and planning. This includes delineating roles and responsibili-
ties, a theme which is picked up again in Chapter 10.
Chapters 4, 5 and 6 describe tools and techniques that can be used in the
approach, with the emphasis on their practical application. The focus in Chapter 4
is on achieving alignment between the business and IS/IT or digital strategies, while
Chapter 5 considers how organizations can build the capability to be innovative in
their uses of IS, IT and information. Chapter 6 then describes ways of identifying
opportunities to shape the business strategy through the application of IS/IT – how
to assess its potential impact on industries, business relationships and competitive
strategies. Chapter 7 is a summary chapter and brings together the ideas, models and
techniques introduced in Chapters 2–6 to show how the ‘demand side’ of the strat-
egy can be coherently developed and adjusted as circumstances evolve.
Chapters 8 to 11 consider how the range of requirements and demands can best
be satisfied in terms of ‘supply‐side’ strategic management. Chapter 8 describes ways
in which the current and future portfolio of IS/IT applications, both individually and
collectively, can be assessed in terms of their business contribution. The most appro-
priate means of managing each application and the mix required to manage the
whole portfolio can then be selected. Chapter 9 presents approaches to justifying,
evaluating and managing IS/IT application and infrastructure investments, including
setting priorities to gain the best overall return and realize the maximum organiza-
tional benefits.
Chapter 10 discusses the strategic management aspects related to structuring
and organizing resources and the governance of IS/IT. In particular, it addresses
the question of where IS/IT should best be managed from, in order to establish the
appropriate balance between centralized and devolved roles and responsibilities.
The aim is to produce a relevant set of management policies and principles and a
partnership between business staff and IS/IT specialists cooperating to achieve com-
mon goals. Chapter 11 reflects on some of the key strategic issues associated with
the management of IT infrastructure and the provisioning of the different types of IT
services needed to satisfy the organization’s application, information and technology
requirements. Outsourcing is discussed in depth as well as the management
approaches to address the risks associated with IS/IT.
The effects of IS/IT on every enterprise – its strategy, products and services,
operations, relationships with customers and business partners and even its organi-
zation structure and management processes – are continuing, steadily and inexora-
bly, to become more profound and complex year on year. Chapter 12 considers the
longer‐term implications of current trends and emerging issues, which will have a
significant influence on organizations’ future business and IS/IT strategies and how
they are managed.
The overall purpose of the book is to demonstrate why the strategic manage-
ment of IS/IT is essential to organizational success and that it is also feasible, even
in times of increasingly rapid change. To obtain the whole range of benefits avail-
able from IS/IT and avoid the potential pitfalls, every organization must manage IS/
IT as an integral part of its business strategy, to support that strategy and enable the
creation of new strategic opportunities. The approaches described in this book are
intended to enable greater understanding of both what needs to be done and how
it can be done.

fpref.indd 15 3/1/2016 2:20:56 PM

 xvi PREFACE TO THE FOURTH EDITION

While the core principles and precepts of building a digital strategy are enduring,
in the years between editions of this book we, and many others, continue to conduct
research and work closely with organizations to develop new ideas and expand
our understanding of the issues and challenges. Rather than have the reader wait
until the 5th edition of the book appears to make these available, we will use digital
channels to ensure this new content becomes accessible sooner. To this end we have
set up both a LinkedIn Group (https://www.linkedin.com/groups/8468959) and
a Facebook page (www.facebook.com/strategy4digital). We also hope that these
platforms facilitate an ongoing conversation both with and amongst our readers and
that together we will co-create content by posting relevant research, case studies
and insights and experiences from practice. Additional material to supplement the
book’s core content and themes will also be available from www.joepeppard.com

Endnotes

1. B. Brown, J. Sikes and P. Willmott, ‘Bullish on digital:
McKinsey global survey results’, McKinsey Quarterly,
August, 2013, 1–8; Ten IT‐enabled Business Trends for
the Decade Ahead, McKinsey Global Institute, May 2013;
M. Fitzgerald, N. Kruschwitz, D. Bonnet and M. Welch,
Embracing Digital Technology: A New Strategic
Imperative, MIT Sloan Management Review, Research
Report, 2013; High Performers in IT: Defined by Digital,
Insights from Accenture’s fourth High Performance IT
Research, 2013; The Great Software Transformation:
How to Win as Technology Changes the World, Boston
Consulting Group, 2013; and The Digital Transformation
of Industry: How important is it? Who are the winners?
What must be done now? A European study
commissioned by the Federation of German Industries
(BDI) and conducted by Roland Berger Strategy
Consultants, Berlin. Undated.
2. See J. Peppard and J. Thorp, ‘What every CEO should
know and do about IT’, under review at California
Management Review; The Customer‐activated Enterprise:
Insights from the Global C‐suite Studies, IBM Institute for
Business Value, New York, 2013.
3. For example, McKinsey has recognized this and
published an article about galvanizing the c‐suite behind
big data. See B. Brown, D. Court and P. Willmott,
‘Mobilizing your c‐suite for big data analytics’, McKinsey
Quarterly, November, 2013.
4. N. Carr, ‘IT doesn’t matter’, Harvard Business Review,
May, 2003, 5–12.
5. Despite all the IS strategy research that has been
published, it has been asserted ‘that practitioners largely
ignore academic literature and do not use it in support
of their SISP endeavors’. See R.A. Teubner, ‘Strategic
information systems planning: A case study from the
financial services industry’, Journal of Strategic
Information Systems, 16, 1, 2007, 105–125.

fpref.indd 16 3/1/2016 2:20:56 PM

 ABOUT THE AUTHORS

Joe Peppard is a Professor at the European School of Management and Technology,

Berlin, Germany and an adjunct professor at the University of South Australia. The
focus of his research, teaching and consulting is in the areas of leadership, strategy,
innovation, organization design and business value realization in the context of
digital technologies. Findings from his research have been widely published in aca-
demic and general business and management journals, including the prestigious
Harvard Business Review, and he regularly presents his work at international confer-
ences. Professor Peppard is also a Director of IT Alliance Group, an outsourcing and
managed service provider, and a member of Ireland’s eHealth Committee.

John Ward is Emeritus Professor at Cranfield University, School of Management. He was

previously Professor of Strategic Information Systems and was Director of Cranfield’s
IS Research Centre from 1993–2004. He has published many papers in leading academic
and business journals and is also co-author of Benefits Management: How to Increase
the Business Value of your IT Projects, published by John Wiley. Prior to joining
Cranfield he worked in industry for 15 years and he has acted as a consultant to
a range of major international corporations and public sector organisations. He is a
Fellow of the Chartered Institute of Management Accountants and served two terms
as President of the UK Academy for Information Systems.

fpref.indd 17 3/1/2016 2:20:56 PM

fpref.indd 18 3/1/2016 2:20:56 PM
 1 The Evolving Role of
Information Systems and
Technology in Organizations:
A Strategic Perspective
OUTLINE

◆ Information Systems (IS), Information Technology ◆ A Portfolio Management Perspective on IS/IT

(IT) and ‘Digital’ Investments

◆ ‘Digital Disruption’: The Impact of IS/IT ◆ What Is an IS/IT or Digital Strategy?

◆ A Three‐era Model of Evolving IT Application in ◆ From Strategic Alignment to Strategy Co‐evolution

Organizations
◆ Digital Strategies for the 21st Century: Building a
◆ A Classification of the Strategic Uses of IS/IT Dynamic Capability to Leverage IS/IT

◆ Success Factors in Strategic Information Systems

M ost organizations in all sectors of industry, commerce, not‐for‐profit, and gov-

ernment are now fundamentally dependent on their information systems (IS)
and information technology (IT). In industries such as telecommunications,
media, entertainment, gambling and financial services, where the product is already,
or is being increasingly, digitized, the very existence of an organization depends on
the effective application of IS/IT. Since the commercialization of the Internet, the use
of technology has become the expected way of conducting many aspects of business
and some businesses exist purely online. Governments and public administrations
have launched many digital services. The ubiquity of mobile devices and new forms
of social media are raising consumer demands for immediacy of access and speed of
response. The increasing pervasiveness of smart connected devices and ‘things’ of all
kinds is opening up opportunities for new products and services, further operational
efficiencies and new types of businesses and business models.
While organizations want to develop a more ‘strategic’ approach to harnessing
and exploiting IS/IT, most have arrived at their current situation as a result of many
short‐term, ‘tactical’ decisions. Many would no doubt like to rethink their invest-
ments, or even begin again with a ‘clean sheet’, but unfortunately have a ‘legacy’
resulting from a less than strategic approach to IS/IT in the past; many organizations
including banks, insurance companies and public administrations still depend on
systems first developed over 30 years ago. Even investments that were once seen as

Peppard-c01.indd 1 2/26/2016 7:57:29 PM

 2 CHAPTER 1 THE EVOLVING ROLE OF INFORMATION SYSTEMS AND TECHNOLOGY IN ORGANIZATIONS

‘strategic’ eventually become part of a costly and complex legacy. Learning from
previous experience – the successes and failures of the past – is perhaps one of the
most important aspects of strategic management. Much of the learning about the
capability of IT is experiential, and organizations tend to learn to manage IS/IT by
doing, not appreciating the challenges until they have faced them.
However, few organizations are likely to have been exposed to the whole range
of IS/IT experiences; nor is it likely that those experiences have been evaluated
objectively. This chapter provides an overview and appraisal of the general evolu-
tion of IS/IT in organizations, from which lessons can be learned for its future stra-
tegic management. This evolution is considered from a number of viewpoints, using
a variety of models, some of which are further developed and used later in the book,
when considering the particular approaches required in thinking and planning stra-
tegically for IS/IT investments.
A number of forces affect the pace and effectiveness of progress in using IS/IT and in
delivering operational and strategic benefits. The relative importance of each factor varies
over time, and will also vary from one organization to another. These factors include:

● the capabilities of the technology and the applications that are feasible;
● the economics of acquiring provisioning, deploying and maintaining the technol-
ogy: applications, services and infrastructure;
● the skills and abilities available, either in‐house or from external sources, to
design and implement the applications;
● the skills and competences within the organization to use the applications and
information;
● the capability to manage any organizational changes accompanying technology
deployments;
● the pressures on the particular organization or its industry to improve perfor-
mance or adapt to changing circumstances, such as a new regulatory environ-
ment or ‘digital disruption’.

This list is not meant to be exhaustive and could be expressed in other terms – but it
is presented in a deliberate sequence of increasing ‘stress’, as the complexity and criticality
of management decision making becomes more strategic. Most assessments of the evolu-
tion of IS/IT in organizations tend to focus on one or two aspects of its development, such
as organizational, applications, management of technology or planning, but in this chap-
ter these various perspectives will be brought together, as much as possible.

Information Systems (IS), Information Technology (IT) and ‘Digital’

Before considering a strategic perspective, it is important to have a clear understand-

ing of the terms information systems (IS) and information technology (IT) and how
they are distinguished. While IS and IT are often used interchangeably or even casu-
ally, it is important to differentiate between them to create a meaningful dialogue
between business staff and IS/IT specialists; this is essential if successful IS/IT strate-
gies are to be developed. Recently the term ‘digital’ is being used more frequently in
many organizations and in the practitioner and academic literature1 – so how digital
relates to IS/IT is also important to recognize.

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 INFORMATION SYSTEMS (IS), INFORMATION TECHNOLOGY (IT) AND ‘DIGITAL’ 3

Information systems (IS) existed in organizations long before the advent of infor-
mation technology (IT) and, even today, there are still many ‘systems’ present in
organizations with technology nowhere in sight. IT refers specifically to technology,
essentially hardware, software and telecommunications networks, including devices
of all kinds: computers, sensors, cables, satellites, servers, routers, PCs, phones,
tablets; and all types of software: operating systems, data management, enterprise
and social applications and personal productivity tools. IT facilitates the acquisition
and collection, processing, storing, delivery, sharing and presentation of informa-
tion and other digital content, such as video and voice. Sometimes the term
Information and Communication Technologies (ICT) is used instead of IT to recog-
nize the convergence of traditional computer technology and telecommunications.
Information systems (IS) are the means by which people and organizations,
increasingly utilizing technology, gather, process, store, use and disseminate infor-
mation.2 The domain of interest for IS researchers includes the study of theories and
practices related to the social and technological phenomena which determine the
development, use and effects of information systems in organizations and society. It
is thus concerned with the purposeful utilization of information technology, not the
technology per se. IS is part of the wider domain of human language, cognition,
behaviour and communication. Consequently, ‘IS will remain in a state of continual
development and change in response both to technological innovation and to its
mutual interaction with human society as a whole.’3
Some information systems are totally automated by IT. For example, airlines,
comparison websites, banks and some public agencies have systems where no
human intervention is required.4 Dell went further with its ‘build‐to‐order’ model for
its PCs, including an element of ‘intelligence’ to help the customer in making deci-
sions regarding the configuration of components, ensuring that ‘non‐optimal’ con-
figurations or configurations not technically possible are not selected. Once a
customer order has been confirmed, purchase orders for components are automati-
cally generated and electronically transmitted to suppliers. This enables Dell to
achieve a stock turn of 30.7 times per year (competitor Lenovo has a stock turn of
22.2).5 Dell also feeds real‐time data from technical support and manufacturing lines
directly through to suppliers on a minute‐by‐minute basis. This ‘suite’ of intercon-
nected information systems is underpinned by a variety of different technologies –
servers, storage, software, routers, sensors and networks.
People can find it difficult distinguishing between IS and IT because the technol-
ogy (the T of IT) seems to overwhelm their thinking, obscuring the business infor-
mation system that the technology is intended to support or enable.6 This perhaps
also gives a clue as to why organizations may fail to realize benefits from many of
their investments in IT. Technology investments are often made without understand-
ing or identifying the business benefits that could or should result from improving
the performance of activities by using IT. We have even heard stories recounted of
senior executives returning from business trips abroad, demanding that a new tech-
nology be purchased or a new application be implemented because they have seen
an advertisement in an airline’s in‐flight magazine! It is important to acknowledge
that IT has no inherent value – the mere purchase of IT does not confer any benefits
on the organization; these benefits must be unlocked,7 normally by making changes
to the way business is conducted, how the organization operates or how people
work.8 Achieving organizational change on any scale can be difficult, even without
the introduction of new technology.

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 4 CHAPTER 1 THE EVOLVING ROLE OF INFORMATION SYSTEMS AND TECHNOLOGY IN ORGANIZATIONS

Another term that is frequently used along with IS and IT is application, i.e. an
application of IT to handle information in some way. Essentially, an application
refers to software, or a combination of software and hardware, used to address or
enable a business or personal activity: for example, in businesses for general
accounting, production scheduling, patient administration, customer order manage-
ment or enabling collaborative working; or for an individual to book theatre tickets,
check in for a flight or pay for parking. Other examples include general uses of
hardware and software to carry out tasks such as word processing, email, preparing
presentation materials or conducting online meetings. They are usually large,
general‐purpose programs that can do many different things, built on top of operat-
ing systems.
These applications can be purchased, pre‐written software programs for a par-
ticular business activity or developed ‘in‐house’ to provide particular functionality.
Many applications for personal productivity as well as business use are now deliv-
ered via mobile devices of all kinds and increasingly they are being provisioned
from the cloud (see Box 1.1 for an overview of cloud computing). Some business
application software packages can be tailored or customized to the specific require-
ments of an organization. One of the key selling points of large Enterprise Resource
Planning (ERP) and Customer Relationship Management (CRM) software suites is
that they can be configured, to some extent, to meet the specific way in which an
organization operates.9

BOX 1.1
An introduction to cloud computing

Software has evolved from custom‐coded, proprietary
applications to pre‐packaged or off‐the‐shelf applica-
tions and now to the development of Internet‐centric
applications. The convergence of software and IT infra-
structure to an Internet‐centric environment has ena-
bled the concept of cloud computing to emerge. In its
simplest form, a cloud provider is a third‐party service
firm that deploys, manages and remotely hosts a pre‐
packaged software application through centrally
located servers in a ‘rental’, lease or ‘pay‐as‐you‐go’
arrangement. In exchange for accessing the applica-
tion, the client renders rental‐like payments. An early
example of a cloud‐based service, although it wasn’t
referred to as such at the time it was launched, is
Hotmail (www.hotmail.com), which provides an email
address with storage and access from any browser.
Individuals with a Hotmail account can access and
send email from any location as long as they are con-
nected to the Internet.
No matter how the cloud provider is structured, the
ultimate objective is a ‘seamless’ service, in which the
client interacts only with the cloud. The most signifi-
cant elements of a ‘seamless’ integration of services
include providing the hardware and software, integra-
tion and testing, a secure network infrastructure, relia-
ble mission‐critical data centre facilities and a highly
qualified team of IT experts managing the entire solu-
tion. The primary categories of cloud services provided
to date are (see the following figure):
◆ Applications provisioning – essentially providing an
information handling capability, either through
proprietary applications such as property manage-
ment, specialized healthcare patient record keeping

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 INFORMATION SYSTEMS (IS), INFORMATION TECHNOLOGY (IT) AND ‘DIGITAL’ 5

Servers

Application
Laptops Desktops

Monitoring Collaboration Finance

Content Communication

Platform

Identity Queue

Object Storage Runtime Database

Infrastructure

Phones Tablets
Computer Network
Block Storage

Cloud Computing

Schematic of cloud computing. Source: Sam Johnston, 3 March 2009, CC BY-SA 3.0.

or analytical/mathematical services, or widely used
software packages from the leading ERP and CRM
vendors. This is often referred to as Software as a
Service (SaaS).
◆ Infrastructure operations – which can include provi-
sioning the customer’s desktop environment, as well as
operating data centres to host the applications. Data
centre operations include the full range of hardware/
systems software management, provisioning services,
security and disaster recovery as well as the necessary
back‐office systems such as service usage, monitoring,
accounting and billing. This is often referred to as
Infrastructure as a Service (IaaS).
◆ A computing platform – typically including an oper-
ating system, programming language execution
environment, database, and web server. Application
developers can then develop and run their software
solutions on a cloud platform without the cost and
complexity of buying and managing the underlying
hardware and software layers. This is known as
Platform as a Service (PaaS). Some PaaS providers
like Microsoft Azure and Google App Engine offer
underlying computer and storage resources that
scale automatically to match application demand so
that the cloud user does not have to allocate
resources manually.
◆ Network connectivity – providing connections to
the Internet for end‐customers or the application
provider (essentially acting like an Internet service
provider (ISP)). Reliability, performance and security
of network communications are potentially weak
links in the chain.
◆ Supporting services – providing hardware installation
and maintenance services at customer sites or end‐to‐
end management services for all aspects of imple-
mentation and operations across the entire cloud
delivery chain for the duration of the service contract.
Services are accessed, via the Internet or a private
network, without having to pay for the installation, the
hardware or the software. Price per user per month
(PUPM) has emerged as the standard pricing method
for cloud services. The roots of this model stem directly
from user‐based licence pricing for applications and
the PUPM model allows providers to manage pricing
based on numbers of users as well as by categories of
users. User categories include designations such as
‘power user’ or ‘inquiry or casual user’, which refer to

Peppard-c01.indd 5 2/26/2016 7:57:31 PM

Another random document with
no related content on Scribd:
to let a week elapse before trying another journey, as there were
some mechanical changes he wanted to make in the car.
Then came the second round trip, the time being cut down a little,
but not enough to satisfy Tom.
On the third one he was so long delayed by a storm that his time
was a half hour more than on his first trip west. However, he was still
within the daylight stipulation, and Mr. Jacks announced himself
satisfied thus far.
“Three more round trips, and I’ll come in on a big scale,” said the
old millionaire. “It begins to look feasible, Tom Swift.”
“It is feasible, Mr. Jacks,” was the answer. “You’ll see!”
However, the millionaire came very near not “seeing,” for the
night before the sixth round trip was to start something ominous
happened out at the Long Island hangar.
Tom and his friends had gone to a hotel there, to be in readiness
for an early morning start. The young inventor had inspected the
machinery and found everything in perfect order. Koku and Eradicate
had been left on guard, their differences for a time being patched up.
Each one was proud of his part in the night’s work.
It was shortly after midnight when Eradicate, carefully marching
around his end of the plane, thought he detected a movement in the
bushes. The old man’s eyesight was none of the best, much as he
disliked to admit this, but he decided he would do better to summon
Koku, which he did.
“Maybe dere’s somebody ober dere, big man,” whispered
Eradicate, pointing.
The giant was like a cat—he could see in the dark. For a moment
he bent his gaze on the bush indicated by the colored man. Then
with a roar of anger the big fellow rushed forward, jumped into the
shrubbery and came out, dragging after him a struggling man.
“Let me go! Let me go!” cried this individual. He tried to get
something out of his pocket, but Koku held his hand until other
watchmen came with lights, and then it was seen that the prisoner
was Schlump. An ugly sight he was, too, his face inflamed with rage.
Koku pulled his hand from the pocket and found that Schlump was
clutching a deadly bomb with a time fuse which shortly would have
set it off. But some of the mechanics soon rendered the infernal
machine harmless, and Schlump was taken before Tom.
“So, we’ve caught you, have we?” asked the young inventor.
“So it seems!” Schlump snarled. “But you’d better try to save
yourself! The others are still after you! I’m not the only one! And you
haven’t got me yet—not quite!”
With an unexpected and quick motion he broke away from Koku
and ran off in the darkness.
 CHAPTER XXIV
TROUBLES AND WORRIES

Instantly the scene just outside the hangar where the plane and
the car were kept was in confusion. So quickly had Schlump given
his captor the slip that, for a moment, every one was stunned. Even
Tom Swift, accustomed as he was to emergencies, did not know
what to do. But this hesitation was only momentary.
“Get him!” shouted the young inventor. “We’ve got to get him!
Scatter and round him up!”
“Turn on the searchlight!” yelled Ned.
“By golly!” chuckled Eradicate, who had seen the man get away
from the giant, “dat big man ain’t so smart whut he t’ink he am.”
“Never mind that now, Rad!” ordered Tom, a bit sternly. “Forget
your fights with Koku and see if you can find this fellow! We want to
question him and see if we can’t get on the trail of the masked men
and others who are trying to queer my plans!”
“Yes, sah,” humbly answered the colored man. “I’ll cotch him!”
But this was more easily said than done. Though the big
searchlight was flashed on, its beams crossing and recrossing the
field about the hangar like a giant’s finger, the plotter was not picked
up. The chances were greatly in his favor, running off in the darkness
as he had, and after an hour’s search it became evident that he was
not to be caught.
“Come back,” Tom advised his friends and the workmen. “We’ll
have to let him go,” he added, as they made their way back to their
temporary headquarters. “We got the bomb away from him, and we’ll
take care that he doesn’t approach near enough the remainder of the
night to plant another. We’ll have to organize a patrol, Ned.”
“I guess that’s right,” assented the financial manager. “We can’t
take any chances.”
Reluctantly Koku gave up the search, for he felt it was his fault
that Schlump had escaped.
“Nex’ time I sot on him!” declared the giant.
“He’ll be like a pancake when you get up,” chuckled Ned.
 The rest of the night every precaution was taken to prevent any
damage being done to the plane or the car. Men walked about the
hangar in relays, and the slightest suspicious object or movement
was at once investigated. Nothing happened, and when the first
glimmer of dawn appeared, Tom made ready to hop off on what he
hoped would be the last trip before he would fulfil the conditions of
Jason Jacks.
“Those fellows must know that everything depends on my
completion of the six round trips, Ned,” said the young inventor as he
took his place in the car, while Meldrum and Dodge went to the
cockpit of the aeroplane. “They think if they can put me out of
business I won’t get the money to complete the patent work and
establish the line as a practical concern.”
“I suppose so,” agreed Ned. “But how do you think they know
that?”
“Oh, there has been a lot of talk over the financing of this thing.
You know that,” remarked Tom. “It isn’t extraordinary that some of
these plotters would get to hear about it. I wish we could have held
on to Schlump, though.”
“So do I! He might have given information that would help us
catch those other two—the ones you say wore masks. I wonder who
they could be?”
“I have an idea,” said Tom. “I’ll tell you later if my suspicions are
correct. But now we’ve got to get busy. I’m going to try to break the
time record this trip. If I do it will please the old millionaire. Then,
when we come back from San Francisco—if we do—and make it
somewhere near the sixteen hours, he’ll put in the rest of the cash.”
“And believe me, we’ll need it!” exclaimed Ned, in such fervent
tones that Tom asked:
“Why, is our bank balance low?”
“Well, it isn’t anything to boast of,” Ned answered. “You know we
had to dip into it pretty heavily to finance this thing—not only in
building the planes but in securing the landing fields and paying the
men who look after them.”
“Yes, it has taken a bit of money,” admitted Tom. “But then, after
we are successful, and I’m sure we shall be, we’ll get it all back, and
more, too.”
 “Yes,” agreed Ned. “Well, let’s go!”
He followed Ned and the others into the main compartment of the
car which had been clamped to the aeroplane in readiness for the
start. Though Ned did not tell Tom, the finances of the Swifts were in
a very precarious state just then. Of course the firm owned much
property and many valuable patents, but the Swift Construction
Company had drawn largely on its credit, borrowing from the banks,
and to raise more cash meant the stretching of the credit to a danger
point. By selling some of their holdings, cash could have been
raised, certainly; but no business man likes to sacrifice any of his
principle, and Ned was a good business man.
In order to keep the airline going, Ned had been forced to use
some of his own money which he had saved, though he did not tell
Tom this for fear it would worry him. And then, when it was found that
more cash was needed, Ned had spoken of the matter to Mary
Nestor, having already gotten all Mr. Damon could spare.
“Take all I have!” exclaimed the girl. “I’m glad to invest it in
anything Tom has to do with.”
“No, we won’t take it all,” Ned had replied. He knew she had quite
a large sum that she had inherited from her grandmother, and it was
in her own name. “But if you could lend a few thousands and not
worry if it was lost for a time, we could use it nicely.”
“Take it!” generously offered Mary. “But what do you mean about
being lost for a time?”
“I mean that even if this airline express project fails in the present
instance,” replied Ned, “that Tom will eventually succeed with it and
pay off his debts.”
“Of course he will!” said Mary proudly.
“And even if this is a complete failure,” went on Ned, “and we
must, as a business proposition, take that into consideration, Tom
will start something else that will pay big and he’ll get back all he
loses on this. So it isn’t as if I were asking you to throw your money
away.”
“Take all I have!” exclaimed Mary impulsively.
But Ned was content with a comparatively small sum. And it was
on this money and some of his own, together with what remained
from the original sale of stock, that the last two trips were financed. If
they failed—well, Ned did not like to think of that.
So in blissful ignorance of the sword of failure that was hanging
over his head, suspended, as it were, on a thin thread of dollar bills,
Tom prepared to make this last trip.
It was hardly daylight when they hopped off, careful watch being
kept by the men at the hangar lest, in the last moment, Schlump
might slip up and toss a bomb that would kill, injure, and destroy. But
nothing untoward happened, and soon the plane and its
accompanying car was speeding away over the New Jersey
meadows while behind the travelers the east grew lighter and lighter
as the sun slowly mounted in the heavens.
Aside from the anxiety of all on board to make the best time
possible on this trip, nothing unusual occurred during the first lap.
Tom had to stop a quarrel between Eradicate and Koku, for the
colored man could not refrain from taunting the giant over letting
Schlump get away. So infuriated did the big man become under the
taunts of Eradicate that he might have done the latter an injury had
not Tom sternly forbidden all further mention of the incident.
Chicago was reached safely, almost half an hour ahead of the
schedule, which fact, when Tom ascertained it, made him exclaim:
“Fine! If we can keep that up we’ll do better than sixteen hours to
the coast. We’re going to push the motors for all they’re capable of
from now on.”
“Better not strain ’em too much, sir,” suggested Sam Stone, who
was to pilot the Eagle part of the way on the second lap. “We don’t
want to break anything.”
“No,” said Tom, “we don’t want to break anything but records.
How has everything been here? Any signs of those rascals?”
“Well, there have been one or two suspicious fellows loitering
around the hangar,” reported the mechanician. “But we warned them
away. They didn’t blow us up, at any rate.”
“I’m glad of that,” said Tom. “They tried it on Long Island,” and he
related the Schlump incident. “He’ll probably wire his confederates
out here or in Denver or San Francisco to muss us up if they can—
anything to prevent this last trip from succeeding. So we must
redouble our precautions.”
 “We’ll do that,” agreed Stone.
The Eagle at first did even better than the Falcon, and it seemed
as if the hop between Chicago and Denver would be a record-
breaker. But slight trouble developed about halfway across the
plains, and though it was remedied, still they were forty minutes late,
which not only ate up the half hour they had gained on the first lap,
but cut ten minutes from the remaining time.
“But we’ll make it up on the last lap!” declared Tom, with
confidence. “Push her for all she’s got in her, boys!” he said to Dolan
and Wright, who climbed into the cockpit at Denver.
They got off to a roaring start, rose high in the air, and then
headed straight for the Golden Gate.
“I sure will be glad when the last trip is over,” remarked Mr.
Damon, who sat in the car near Tom and Ned.
“Why, are you getting tired of it?” asked the young inventor.
“No. But my wife doesn’t speak to me, and she says she won’t as
long as I take these crazy air trips. But I said I’d come on the last trip
with you, Tom, and I’m going to stick!”
“Well, I hope you don’t drop out now,” grimly joked Ned, as he
looked from an observation window to the earth, several thousand
feet below.
“Bless my feather bed, I should hope not!” cried the odd man.
Tom kept note of the distance traveled and the time used, and as
several hours passed and the figures grew a pleased smile came
over his face.
“It begins to look as if we’d make up all we lost and more too,
Ned!” he cried to his chum.
The whistle of the tube communicating from the car to the cockpit
sent out a shrill summons.
“Hello! What is it?” called Tom.
“You’d better come up here, Mr. Swift,” answered the voice of Art
Wright. “Dolan seems to be knocked out and the motor is behaving
very queerly. I’m afraid it’s going to die on us!”
 CHAPTER XXV
A GLORIOUS FINISH

“Stand by, Ned!” ordered Tom, in a low voice. “Get ready to follow
me up above,” and the young inventor made ready to ascend the
enclosed ladder to the cockpit overhead.
“What’s wrong?” asked Ned.
“I don’t know; but it looks like dirty work. I’m afraid they’ve got us,
after all!”
“How could they?”
Tom did not stop to answer, but quickly ascended the ladder.
Ned, in a few words, told the others the alarming news that had
come down from the cockpit, and then stood ready to carry out
Tom’s orders.
The young inventor, crowding into the narrow space of the after
cockpit, found Wright managing the machinery, for the planes had a
dual control system. In the forward cockpit Ted Dolan was slumped
down in a heap.
“What’s the matter?” cried Tom, when he reached Dolan’s side.
“I don’t know,” the mechanician answered weakly. “It’s something
I ate—or else I’ve been doped. My stomach seems caved in and I
can’t see. I’ll have to quit, Mr. Swift—sorry——”
“Don’t worry about that!” exclaimed Tom. “Ned and I can finish
the trip—if the engine’s all right.”
“But that’s just the trouble,” went on Dolan, in a weak voice. “She
isn’t acting properly.”
“Seems to be some obstruction in the oil feed line,” said Wright.
“Use the other,” Tom promptly advised.
“They’re both feeding slowly,” was the answer. “If the oil stops,
we stop too!” Tom well knew that.
“You get down to the cabin, Dolan,” advised the young inventor.
“Mr. Damon will look after you—he’s a traveling medicine chest. But
have you been eating or drinking with strangers?”
 “Nothing like that, Mr. Swift—no, sir! I only ate meals I was sure
of, and at the hangar too. I never drank anything but water—not
even sodas, for I know they can knock you out in hot weather. I think
somebody got in the hangar and doped my food.”
“It’s possible,” admitted Tom. “How about you?” he asked the
assistant.
“I’m all right—I can stick.”
“Well, we may need you later. You go down now with Dolan and
look after him, and send Mr. Newton up here.”
Having given these orders, Tom began looking over the
machinery. He was engaged in this when Ned came up to help,
reporting that Mr. Damon was looking after the ill mechanician.
“What’s wrong?” asked Ned.
“Oil feed supply,” was the short answer. “You run the plane, Ned,
and I’ll take the pipe down and clean it. We can run on one line while
I’m working on the other.”
It was a few minutes later, when Tom had the pipe uncoupled,
that he uttered an exclamation of anger and surprise.
“What is it?” cried Ned.
Tom held out a piece of cork. It had been stuffed into the pipe in
such a way that for a time enough oil would pass to keep the motors
running, but the cork would gradually swell and eventually would
completely clog the pipe, shutting off all oil.
Without oil an engine will soon heat up, until, because of friction,
the bearings, slide rods, pistons and cylinder walls may become red-
hot. When that occurs the engine naturally stops. And when the
engine of an aeroplane stops the plane falls. It is not like a dirigible
that can sustain itself.
“Dirty work!” bitterly murmured Tom, as he worked with all
possible speed to replace the pipe, for the secondary oil supply was
fast failing. The plane was losing speed rapidly.
“Somebody must have got in, put some sort of dope in Dolan’s
food or water, and also clogged the pipes,” said Ned.
“Right!” snapped out Tom. “But we aren’t beaten yet!”
And they were not. By hard work the young inventor got the other
oil line cleaned, and then the Osprey at once picked up speed.
However, much valuable time had been lost, and Tom was anxious
lest the motors might have been permanently damaged by running
without sufficient oil.
But they must carry on now, at all hazards, for they were within
striking distance of their goal. They at last settled down into the San
Francisco landing field after dark—a poor record, nearly twenty
hours having been consumed since starting.
“Lucky I’m not on a strict time limit for these six trips,” commented
Tom as, tired and exhausted from work and worry, he climbed out of
the cockpit, followed by Ned. “Jacks didn’t stipulate that we must
keep to the sixteen-hour schedule for these six trips. His only
condition was that we must fly continually from coast to coast, with
landings only at Chicago and Denver, and we’ve done that.”
“Through good luck and management,” commented Ned. “But
we’ve got to be mighty careful, Tom, on the last trip back. They’ll be
out to do us if they can and spoil our chances of getting that hundred
thousand dollars from Jacks.”
“You said it! Well, we’ll do the best we can.”
Extraordinary precautions were taken about the hangar that
night. Men continually patrolled the place, and even newspaper
reporters and photographers were looked upon with suspicion. None
but those with unquestionable credentials were allowed within the
enclosure.
Tom had intended starting back to New York about three days
after his arrival, but the accident to the oil line decided him to have
the cylinders reground and new pistons put in.
“We want to make the last lap a record,” he said.
The delay was nerve-racking but it could not be helped. Tom was
in communication with his father and Mary, and they, too, were eager
for his success. All was well at home, Mary reported, and close
guard was being kept on the Long Island hangar.
“They may try to blow us up when we make our last landing,” said
Tom grimly, to his manager.
“They’re equal to it,” was Ned’s answer. “What about Chicago
and Denver?”
“I’m wiring the men there to be on the watch.”
At last the overhauling of the Osprey’s motor was finished, and
after a test preparations for the trip back were made. Word that this
was to be the final test of the airline express had been broadcast,
and the papers all over the country were on the alert for news. It was
almost like a presidential election.
In the half-light of a cold dawn Tom and his friends took the air
from the San Francisco field. As they mounted upward Ned
happened to glance at a calendar hanging on the wall of the car.
“Did you know that, Tom?” he asked.
“Know what?”
“That this is Friday the thirteenth?”
“Well, what of it?” asked the inventor.
“Don’t you believe in luck?”
“Yes, when it’s with me!” Tom said, with a chuckle. “Not
otherwise. I saw a black cat as we were taking off, and I guess that
will neutralize Friday the thirteenth. Don’t worry!”
There seemed to be no cause for worry on the first leg of the final
trip. They got off very well, and under the care of Dolan, who had
recovered from his indisposition, the Osprey winged her way across
the mountains like the bird whose name she bore.
They were well ahead of their schedule when they landed in
Denver, and luck was with them on the second lap, when Stone and
his helper, with occasional relief from Tom and Ned, piloted the
Eagle on its eastern journey.
“Well, Tom, old scout, it looks as if we were going to come
through with flying colors!” cried Ned, as preparations to land in
Chicago were being made.
“I hope so,” was the answer.
There was a quick change of the car from the Eagle to the Falcon
at the Chicago field, and Tom was about to give the signal to take off
when a man with a reflex camera came dashing across the field.
There had been a score of newspaper pictures taken, as well as
many feet of movies, and Tom and Ned thought this man was a late-
comer.
“Just a moment, Mr. Swift—please!” he cried, as he ran forward,
his head almost inside the camera.
Tom was used to this plea from the hard-working newspaper
picture-takers, and though he was anxious to be off he delayed a
moment. He knew it might mean the discharge of a man if he came
back without a picture he had been ordered to get.
A reflex camera, as those interested in photography know, is one
with a focal plane shutter, exceedingly rapid in action. It is much
used in news photography. The operator raises a hood, which serves
the same purpose as the black focusing cloth in the photograph
gallery. To get sharp pictures it is necessary to focus up to the last
moment. In the reflex camera the operator can see the image of the
picture he is about to take on a ground glass. When the focal plane
shutter is released this ground glass automatically drops out of the
way.
Something in the actions of this man aroused the suspicions of
Tom. He looked at him keenly for a moment as the fellow ran
forward, his head almost inside his camera. Then, with a cry, Tom
leaped out of the window of the car, and, like a football tackler, threw
himself on the man. He knocked the fellow down, grabbed the
camera and threw it as far as he could in a direction where there
were no spectators.
“Look out!” yelled Tom. “It’s a bomb!”
So it proved, for when the “camera” landed there was a sharp
report and a puff of smoke, followed by a shower of dirt.
“I’ve got you, Schlump!” yelled the young inventor. Tom twisted
the fellow’s hands up on his own back as he rolled him over on his
face and sat on the scoundrel.
Schlump it proved to be. He had hoped to get close enough not
to be recognized by holding his face down in the fake camera. And
he almost succeeded, adopting the guise of a newspaper
photographer. The camera was but an empty black box with a fake
lens. Inside Schlump held a bomb with a slight charge of powder in
it. He dared not use much for he, himself, would be close when he
hurled it.
But Tom had sensed the danger in time, and by his prompt action
had saved himself and his friends from injury, if not death, and had
saved the plane from damage.
“Hold him! I’ll prefer charges against him after I reach New York!”
cried Tom, as police officers hurried up and took the plotter in
charge.
 “You’ll never get to New York!” boasted the prisoner.
But Tom did not let this threat worry him. Making a hurried
explanation to the police captain in charge of the squad of officers,
Tom saw the prisoner led away and then he took his place again.
“A narrow squeak, that,” commented Ned.
“Just a little,” admitted Tom, with a smile. “And now for the last
lap.”
The Falcon roared her way into the air amid the cheers of the
throng, and the final stage of the journey was begun. At first it was
feared lest some hidden defect might develop in the motor. But none
did, the machinery working perfectly.
“They didn’t get a chance this time,” Tom decided. “And from the
fact that Schlump tried so desperately at the last minute to disable us
with a bomb, shows, I think, that they have fired their last shot.”
But there was danger still in store for the daring aviator and his
friends. They had made exceptionally good time from Chicago and
were approaching the Long Island field. Tom was jubilant, for the
record showed the best time yet made.
“There’s the field!” cried Ned, from the after cockpit where he was
helping manage the plane. Tom had decided, as was his right, to
pilot the last stage of the journey himself.
“You’re right!” admitted the young inventor as he gave a glance
downward. “And there’s a big crowd on hand to welcome us.”
As they swung around into the wind, a puff of smoke was seen to
arise from the hangar.
“Look at that!” cried Ned.
“Fire!” exclaimed Tom. “They may be trying to burn the place!”
Lower and lower the machine dropped, and those aboard could
see the men in charge of the hangar making frantic signals for them
not to drop too close to the big building. Tom heeded this advice, and
swung down well away from the increasing volume of smoke. The
Falcon came to a stop, and the young inventor and Ned climbed out
of the cockpit.
“What’s going on?” cried Ned to some of the workmen.
“Two masked men set the place on fire,” was the answer. “But
we’ve caught them, and the fire will soon be out. We were afraid you
would come too close.”
 “Whew!” whistled Tom. “They’re keeping up the fight until the last
minute. So you caught the masked men, did you? Good! I’ll have a
look at them in a moment. But what’s our time, Ned? We’ve
completed our schedule and fulfilled our contract, but I’d like to know
what actual running time we made this last trip in.”
Ned did some rapid figuring. Then he uttered a cry of delight.
“What is it?” asked Tom.
“Fifteen hours and forty-six minutes!” was the answer. “The best
time ever made! You’ve broken all records, Tom!”
“I’m glad of it,” was the modest reply.
“And so am I!” cried a voice, and Mary pressed her way through
the milling throng to—well, what she did to Tom is none of your
business nor mine, is it?
“Well, young man, you did what you said you would,” came in the
rasping voice of Jason Jacks. “Any time you want that hundred
thousand dollars, or two hundred thousand, just let me know. I didn’t
believe much in this thing when you started, but you have proved
that you can run an airline express between New York and San
Francisco. There’s a big future in it, I believe!”
“So do I,” said Tom quietly. “And now I’d like to see who those
masked men are.”
When the men were brought before the young inventor and
stripped of black face-coverings, they proved to be none other than
Renwick Fawn and the man who variously called himself Blodgett
and Barsky—the men who had endeavored to steal Tom’s Chest of
Secrets.
“I thought so!” said the young inventor. “So it was you who were
back of this, with Kenny and Schlump. Well, we have both of them
and now we have you.”
“But I thought these two were in jail,” said Ned wonderingly.
“They either escaped or bribed their way to a parole,” returned
Tom. “But they’ll go back now.”
And back went Fawn and Barsky to the prison from which, by
means of political influence, they had been paroled. They had
wanted revenge and had also tried, by corrupting Kenny and
Schlump, to steal the airline express patents. But their plans had
been frustrated.
 “Did you really suspect, Tom, that the two masked plotters were
Fawn and Barsky?” asked Ned.
“Not at first,” was the answer. “Fawn has gotten over that queer
trick of throwing out his elbow that surely would have given him
away, and both men disguised their voices when they talked. They
wanted to escape recognition, for they knew they might be sent back
to jail on the old charges. Well, they’ll do double time now—on the
old charge, and for trying to kidnap me, as well as setting fire to the
hangar.”
“They played a desperate game,” commented Ned. “To think of
digging that tunnel and going to all that work to get your patents.”
“They didn’t dig the tunnel,” Tom answered. “It’s a natural one.
They just made an entrance to it near our fence—that much of the
digging alone was new. The rest was natural. I may find a use for
that same tunnel, too. It’s a good thing to know about. And now, Ned,
I’m going to take a little vacation.”
“You deserve it!” answered the manager.
Thus the last of Tom’s enemies were caught and sent away. Mr.
Jacks was as good as his word, and not only invested largely in the
new enterprise himself, but got his friends to do so, so that the
money Ned and Mary had put in to bolster the sinking fortunes at the
last minute was fully repaid them.
“I’d never have let you risk your savings, Ned, or you either, Mary,
if I had known it,” said Tom, when the story was told him. “Suppose I
had failed?”
“Oh, I knew you wouldn’t fail!” answered Ned.
“So did I,” whispered Mary.
And that’s that!

THE END

TRANSCRIBER NOTES
Misspelled words and printer errors have been corrected.
Inconsistencies in punctuation have been maintained.
 *** END OF THE PROJECT GUTENBERG EBOOK TOM SWIFT
AND HIS AIRLINE EXPRESS ***

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