- Operational Decisions. These decisions are made by workers and their supervisors and are concerned with daily production.
- Managerial Decisions. These decisions are made by mid-level managers and are concerned with topics such as hiring, and motivating employees. Strategic decisions. These are different from operational and managerial decisions.
- Strategic Decisions are made by organizational leaders and are concerned about the mission and the re-organization of a firm. These decisions tend to be more unstructured, involve more searching of the environment and tend to occur less frequently than either operational or managerial decisions.
Strategic Information Systems help policymakers, executives, and planners decide on organization mission and strategies. Organizations make many different strategic decisions. Sometimes organizations make these decisions consciously, as when the firm engages in strategic planning. Other times decisions are made without being aware of the strategic importance of these decisions, as when the environment forces the organization to act in certain ways. It is difficult to know what issues will be strategically important for the organization. One way to understand organization’s strategic issues is to look at data needed in previous planning efforts.
Unfortunately, history is often not a good guide of future strategic issues. Because information systems help in articulating strategic issues, if the information system focuses on the wrong issue it could radically mislead the organization. How can we anticipate information needs of organizational leaders? The answer to this question is the focus of this section.
Though most readers think of systems as information inside computers, this need not be the case. In thinking about Strategic information systems, we must also consider non-computerized sources of information, e.g. reports and commissioned studies, experts’ advice, and informal communication networks. One should also think through the timing of information. In particular, should the analyst collect and analyze the information hoping that it will be used or should the analyst wait for organizational leaders to articulate the need and then collect the information. . In addressing the question of timing, the following two tradeoffs should be considered:
- Relevance versus timely availability. Data collected and analyzed after the need arises are more likely to be relevant to the decision-maker’s task, but because of delays in collecting information data may not be available when needed. Periodic or continuous data gathering. Collecting data as the need arises allows analysts and decision-makers to define precisely what must be collected. Regular data collection often leads to data categories that are too narrow or too broad.
- Periodic Collection – collecting data only when the need arises – allows us to assemble the most appropriate data but may not give us a basis for comparing trends.
By its very nature, building a strategic information system requires us to think through not only what is needed but when is it needed and how can information be organized. The analyst must specify the information needs, the data collection strategies and the analysis needed. At the same time, the temptation to collect data on every conceivable contingency must be tempered by recognition that collection is expensive. In practically every case, the minimum should be done.
What do you need? What do you want?
It’s not an easy challenge to design a Strategic Information System to meet the information needs and expectations of organizational leaders. Various obstacles prevent simple determination of information requirements. Dubois et al. (1982) have suggested three categories of difficulty in the determination of information requirements:
- A well-defined set of requirements does not exist or is unstable.
- The organizational leaders are unable to specify requirements.
- The analysts are unable to elicit those requirements and/or evaluate them for correctness and completeness.
The problems that users have in specifying their own needs can be traced to general cognitive limitations of all human beings. For example, people, even experts, are not aware how they make decisions and what information they use in those decisions. People think, but often do not know how they think. The process of thinking for the most part is an unconscious process.
Thus, when you ask someone how did they make their decision, they may list a number of pieces of information that they claim they paid attention to but in reality they may have made their mind up based on a much smaller set of information. As a consequence of this cognitive limitation, clients often will not differentiate true information needs from wishes (Tagart and Tharp 1977). When asked what do you need, they present a long wish list; including items which they do not use even if the information was available.
Another reason why organizational leaders may not be able to articulate their information needs is because they may have forgotten occasions in which they needed more information. When clients are interviewed about their needs, they have to remember how key information was missing in the past decisions. This is very unpleasant. No one is in a habit of remembering his or her failures or episodes in which their needs were not satisfied.
Unpleasant events are often forgotten, especially when you, yourself, are in charge. Interviewing organizational leaders about failures of their organizations to supply critical information is akin to asking you when did you make bad judgments. It is an unpleasant task that you rather forget. For some people it is so unpleasant that they may unconsciously distort the facts so not to remember the events. If managers and leaders forget their failures, if they prefer not remember how they failed to gather necessary information, interviews will not be very useful. If the manager has a good memory for these instances, the analyst will have a good basis for specifying the information requirements.
Various other severe and systematic cognitive biases also impair the ability to define information needs (IBM Corporation 1981). But it is not just cognitive limitations that create havoc in assessing information needs. Clients’ lack of expertise and knowledge is a also a common obstacle to formulating and stating true needs (Ellis 1982; Hogarth 1981). Many decision makers do not realize how their own needs change over time and how these needs are affected by external events. Many are not aware of new technological possibilities and keep projecting future needs based on their existing expectations from current information systems. In short, many do not know what they want.
Finally there is the problem of distinguishing between what clients’ want and what they need. Sometimes organizational leaders get what they want but not necessarily what is good for the organization. Information systems cannot be serving the needs of individuals and ignore the needs of organizations. Sometimes individuals’ cognitive styles prevent them from examining information presented in different formats.
Clearly, information systems should help individuals see beyond their own limitations. Sometimes differences in time horizons, personal career objectives, and internal organization politics prevent some organizational leaders from seeing the emerging changes around them. Information systems cannot rubber stamp the status quo. They need to engage leaders in thinking about the emerging future and assist them in making it a reality. Information systems are intended not only to serve clients but also to enhance and improve their decision making. By focusing solely on what clients want information systems may do them a disservice.
This is not to suggest that analysts can identify users’ needs better than clients themselves. Analysts who do not involve clients risk the possibility of planning systems that are not used. Information system analysts are often ignorant of the subject matter. Planning without engaging the client may lead to wasted effort.
We suggest that information systems should play both roles: give clients the information they are asking for but add to it information they may need but not have asked for. To do so, analysts and clients must collaborate to determine information needs. How could this be done?