2. Management of information systems integration
2.2 Elements of IS integration management
With the vocabulary of IS integration in place, it is possible to approach the aspects of managerial concerns of IS in general and IS integration in particular. IS integration management can be seen as a subtask of IS management, and since hardly any research directly addresses IS integration management, it is a necessary starting point to first investigate IS management in order to elaborate upon the concept of IS integration management.
2.2.1 IS management
The business value of IS has been disputed for many years (Hitt et al., 1993). Some argue that the availability of hardware and software on an open market make impossible long term advantages towards competitors through IT or IS (e.g. Carr, 2003). In response, it might be contended that every instantiation of IS is unique to its organizational context, and although hardware and software might be obtained from
the market, competitive advantage may lie in the specific implementation and use of that technology (Hedman & Kalling, 2003). The distinction between the IT artifact and how it is managed and used has been emphasized in the concept of IS capability.
Capabilities represent a firm’s capacity to deploy resources using organizational processes to arrive at a desired outcome. They are developed by combining physical, human and technological resources (Amit & Schoemaker, 1993). IT capability was defined by Ross et al.
(1996, p. 31) as “the ability to control IT-related costs, deliver systems when needed and effect business objectives through IT implementations.” The authors argue that highly competent IT staff, a strong partnering relationship between business and IT management, and a reusable technology base are the three key IT assets that bring IT capabilities. In turn, IT capability will enhance an organization’s competitiveness. With the focus on IS rather than IT, an analogy is possible to be made in order to depict IS capability. The way Ross et al.
(1991) use IT, it suggests that IT can only contribute to organizational performance if it is used properly by the organization’s members and thus gains its value through contribution to the objective of the organization. Hence, although the authors use the IT artifact as focal point for their analysis, the argumentation is also valid for the IS as defined in this text.
Bharadwaj (2000) extends the traditional notion of organizational capabilities to an organization’s IT function, and defines IT capability as the ability to mobilize and deploy IT-based resources in combination or co-presence with other resources and capabilities. The IT-based resources are: IT infrastructure, human IT resources (comprising technical and managerial IT skills), and intangible IT-enabled resources (such as knowledge assets, customer orientation and synergy- the sharing of resources and capabilities across organizational divisions).
Peppard and Ward (2004) mention three interrelated attributes of IT capabilities: a fusion of business knowledge with IT knowledge, a flexible and reusable IT platform, and an effective use process (itself with two aspects: using the technology and working with information).
Based on the here applied view of IS as getting its value from how it supports the business of the organization, it can be conclused that the objective of IS management is to contribute to the organization reaching its goals. In other words, that is the IS’ raison d´être, and it is the managerial task to make sure this is the outcome. IS management is
thus about making decisions and taking action that leads IS issues in a certain direction. To be able to make decisions on direction, it must be known which alternatives are available and which decisions have to be made. IS management can thus be divided into two parts: 1) knowledge of alternatives and basic structural choices of IS and 2) how the choices affect the organization.
The field of IS governance (and IT governance) is closely related to IS management, even though some authors choose to make a distinction:
IT governance represents the framework for decision rights and accountabilities to encourage desirable behavior in the use of IT. […]
IT governance is not about what specific decisions are made. That is management. Rather, governance is about systematically determining who makes each type of decision (a decision right), who has input to a decision (an input right) and how these people (or groups) are held accountable for their role. Good IT governance draws on corporate governance principles to manage and use IT to achieve corporate performance goals. (Weill, 2004, p. 3)
According to Brown and Grant (2005), IS governance was initially introduced to the research community when Brown (1997) and Sambamurthy and Zmud (2000) began to refer to the notion of “IS governance frameworks” and then later to “IT governance frameworks.” However, what is described above as IT governance has long been discussed in the literature under different labels. IS governance can be seen as an attempt to collect works on: control of information services (Olson & Chervany, 1980), IS organizational structure (von Simons, 1995), IT standards (Kayworth &
Sambamurthy, 2000), IT decision making responsibilities (Boynton et al., 1992), IT management architecture and locus of IT decision making (Boynton et al., 1992), IS organizational role, and location of IS responsibility (Brown & Magill, 1994) under one unifying label.
The existing research on IS governance can roughly be divided into two streams. The first focus is on IS governance forms and the second on contingency factors for IS governance (Brown & Grant, 2005). More precisely, the first strand focuses on the basic structural options that exist for creating and developing organizational IS. The second stream acknowledges that there is not just one, universal best way of arranging
the available options, but the choices of appropriateness are instead dependent on a number of contingency factors.
So, why is IS governance introduced here when according to the definition above it is clearly separated from IS management? First, not all authors make such a clear cut distinction. For example, in introducing the IT governance track for Hawaiian International Conference on System Sciences in 2005, Van Grembergen defined IT governance as “the organizational capacity exercised by the board, executive management and IT management to control the formulation and implementation of IT strategy and in this way ensuring the fusion of business and IT” (Van Grembergen, 2005, p. 1). This definition approaches IS management as defined in this text as it talks about what management has to do to relate IT decisions to organizational goals, and also how to implement the IT strategy. Further, when discussing IS management in terms of how to manage or govern IS to a desired outcome, the very typical questions of IS governance, such as division of labor, responsibility and organization of the task, are tightly intertwined with the actual tasks carried out. Compared to the managerial discussion as being part of the IS capability domain, the similarity is striking. The task of IS management could (as explained earlier) be refined into understanding the options available for developing the organizational IS, and how the different alternatives relate to business objectives. One conclusion is thus that IS management and IS governance are two closely linked concepts. This is, however, not the most important conclusion here. More important is that both traditions have arrived at the same understanding that the role of IS management is to:
a) identify the different basic structural choices that exist for developing the organizational IS, and
b) make decisions upon an understanding of how the alternatives relate to organizational objectives.
IS management can be addressed on a general level in an attempt to relate IS strategies to organizational strategy. This task is commonly referred to as IS alignment. Research on IS alignment seeks to develop common models and frameworks that cover different organizational objectives, and then tries to link them to IS alternatives (e.g.
Hirschheim & Sabherwal, 2001; Silva et al., 2007; Chan Yolande et al.,
2006). Alignment of IS and business has also been focused on achieving specific organizational benefits, such as increased quality (Hilgers et al., 2004) and organizational transformation (Henderson & Venkatraman, 1992; Hilgers et al., 2004). As explained earlier, the borders between what to call management, governance and strategy are not clear-cut. If some distinction should be made, it is between formulation and implementation of plans, with formulation relating to strategy, and the implementation to management. But naturally, when discussing management there is always the need to understand the goals towards which IS should be managed. Weill and Broadbent (1998) argue that it is the role of the IS manager to adapt and direct the IS choices toward the organizational goals. There is no one single best way for IS management, but the appropriateness of IS choices are dependent on the choices of mutual arrangement and the arrangement to the organizational context (Weill & Broadbent, 1998).
The discourse of IS management touches upon several different conceptual levels and the task of management is to relate choices in each level to each other. It is foremost two levels that are prevalent: the infological (IS) and organizational. When discussing organizational goals the strategic level is also a concern. Strategy is yet another concept that can include everything from a plan on how to get somewhere to an abstract vision of the future. In this thesis a company strategy is treated as the organizational goal that helps managers in an orderly way to transform the daily choices that improve the organizational performance (c.f. Porter, 1980). One of these subtasks that includes both the element of identifying alternatives and understanding how they relate to the organizational objectives is IS integration management.
2.2.2 Integration issues
IS integration management can be seen as a subtask of IS management that is specifically related to integration of various IS. Not much is written about IS integration management, but the task is similar to what was concluded above about IS management in general.
To understand the managerial issues of IS integration, parallels can be drawn from the IS governance research. The two streams of research focusing on the basic, structural options and the contingency factors determine which options are appropriate during specific settings. Along
with the discussion of appropriateness of the options is the discussion of IS objectives, that is, to deem what is “appropriate” IS. With the view of IS as a resource that can be used by other resources in achieving competitive advantage, which is in line with the IS definition applied in this text, the appropriateness of IS is to be found in how well the organizational processes are supported. The contingency factors are in this case related to the integration context, that is, the organizational integration. Basic structural options are related to the integration alternatives that exist.
The economic rationality perspective applied in this thesis is in many ways limited, but at least it does have the advantage of having all tasks in the organization contributing to the economic value of the organization. In reality, however, it may be unfeasible to relate IS integration directly to financial figures due to complexity and contextual factors. If the value of IS is deemed by its contribution to organizational objectives to have some other, more traceable effects that are closer to the IS integration but can still be argued as contributing to organizational performance, it can be used to measure the contribution of IS. A parallel can be drawn to IS integration. Just as IS do not have any value on their own, IS integration doesn’t make anyone happy either. IS integration is resource demanding and too much integration is a waste of resources (Markus, 2000). If IS integration per se is not worth striving for and the impact on financial figures is difficult to isolate, then there remains the alternative of relating IS integration objectives of how the organization wants to design its business. IS integration can be regarded as contributing to organizational integration (Alsene, 1999).
The objective of IS integration management to direct IS integration in a way that it contributes to organizational integration has a logical parallel in IS management and its objective of contributing to the business of an organization. Similarly, structural options of IS management have parallels in IS integration management. The managerial task of choosing among alternatives of how to form the organizational IS is paralleled by the choosing among alternatives for IS integration. It lays within the managerial scope to understand which alternatives exist and how they affect the organization, and in the case of IS integration, it relates to the organizational integration. The question remains as to which alternatives need to be considered for IS integration.
IS integration is sparsely conceptualized in the existing literature.
Existing contributions have mainly been made in two streams: one focusing on the layer structure of IS, and the other on the possibility of linking one IS to another on a certain level. These options will be further elaborated upon in section 2.4. In the next section the second element of IS integration management, the IS integration objectives, will be addressed in more detail.