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Information System Strategic Planning
Using IT Balanced Scorecard In Ward &
Peppard Framework Model
Awan Setiawan and Erwin Yulianto
Langlangbuana University
Karapitan Street 116, Bandung, West Java, Indonesia
E-Mail: awans2425@gmail.com and erwinyulianto@yahoo.com
Abstract - Not many organizations that utilize information systems and technology in the field of
business. Based on the evaluation of the organization's business processes with information
systems/technology that running, still perceived to be ineffective and inefficient, due to the lack of
strategic planning of information systems to improve productivity, performance, control, and
competitiveness of the organization. The method used in this paper is using a model of Ward and
Peppard strategic planning with approaches of strategic alignment and competitive impact. The stages
implemented are systematically arranged to start from internal and external business environment
analysis and information systems/technology environment analysis that processed into a business
information system strategy recommendations, information systems/technology management strategy,
and information technology strategy for the preparation of strategic plan and road map of information
systems/technology at an organization. The additional solution proposed in this research is a tool of IT
Balanced Scorecard as a measure forward in evaluating the results of implementing the information
systems strategic plan with it’s contribution to an organization, increased performance and productivity,
and application users feedback. Results of this research are knowledge-based IS Master Plan and Road
Map for the next five years that inline with the organization's business strategy plan.
Keywords: Strategic Alignment, Competitive Impact, Ward & Peppard Framework, SWOT Analysis, Critical
Success Factors, IT Balance Scorecard, IS/IT Master Plan.
1. INTRODUCTION
The main role of the information system for a business organization is to provide effective support to the
company's business strategy so it can provide a competitive advantage. Implementation of information systems
in an organization requires strategic planning of information systems that are aligned with the business strategy
of the company in order to achieve organizational goals [1, 7]. For example, technology that using cloud
computing based on Service Oriented Architecture (SOA) has some competitive advantage such as convert
initial investment cost from CAPEX (Capital Expenditure) into OPEX (Operational Expenditure), reduce
development time and immediately focus on core business, has high scalability for service upgrade/downgrade,
operational control, and safer data repository [1].
In the face of market challenges and consumers needs, it is not enough to have only a business strategy
planning, but it must be equipped with information systems strategic planning that is aligned with the vision,
mission, and organization’s business strategic planning. Information system strategic planning is an
identification process of application portfolio that will support organization to implement to the business plan
and realize the business goal through innovative technology [2, 5].
To improve the company's internal performance and answer the challenges of the market and consumers, it is
necessary to do a research which could answer the problem above by using the Ward & Peppard framework
combined with IT Balanced Scorecard [9]. IT-enabled business strategy to get competitive advantages, process
innovation, operational excellence, and new market. Business strategy must drive the decision for IT investment
[4]. IT Balanced Scorecard produce list of critical success factors to decide application portfolio which will use
in the organization [8].
ISSN (Print) : 2319-8613
ISSN (Online) : 0975-4024
Awan Setiawan et al. / International Journal of Engineering and Technology (IJET)
DOI: 10.21817/ijet/2017/v9i3/170903134
Vol 9 No 3 Jun-Jul 2017
1864
2. WARD & PEPPARD FRAMEWORK
Focus on technology or business aspects are not enough to bring success to overall strategic plan. The right way
to achieve strategic advantage from information systems/technology is concentrating or rethinking business
processes by analyzing current business issues, analyzing the environment changing and make information
technology as a solution [2].
Figure 1: Ward and Peppard Framework
Ward and Peppard Framework for IS/IT strategy formulation and planning process on Figure 1 covers several
phases as follows:
a. Internal Business Environment: mapping the current business strategy, the purpose (objective), resources,
processes, and culture of the organization. Analysis of internal business environment used to determine the
organization's business strategy, vision, mission and the goals of the organization, activities and business
processes of the organization, its resources, and information needed by the organization.
b. External Business Environment: mapping the economic conditions, industry environment, and competitive
environment where the organization operates. External business environment can boost the organization to
go ahead and compete, also can provide barriers and even a threat to organization survival.
c. Internal IS/IT Environment: the perspective of the IS/IT at the business process, it’s maturity, the scope and
contributions of business, skills, resources and technology infrastructure, current portfolio application and
the system that is being developed or already budgeted but not yet completed are also part of the internally
IS/IT environment.
d. The external IS/IT Environment: technology trends and opportunities usability/utilization generated by the
IS/IT of other parties, especially customers, competitors, and suppliers. This analysis is used to gain an
understanding of the development of the IS/IT outside the organization that may have an impact on the
organization's survival.
e. Current Application Portfolio: an information system applications that have been or are being used by the
organization. Identify the advantages and strength given by the application to confront the competition
climate faced by organizations.
The process output of Ward and Peppard Framework describe as follow:
a. Business IS Strategic: the mechanics of each unit or function that will develop IS/IT in achieving a business
objective, application portfolio, and overview of information architecture.
b. Information Technology Strategy: policies and strategies for technology management and human resources
experts.
c. IS/IT Management Strategy: include that common elements of the strategy that used by organization overall
to ensure consistency of IS/IT policy required.
Final output of Ward and Peppard framework is Future Application Portfolio, an application proposals that will
be developed by the organization in the future with the aim to integrate each organizational unit and adjust the
rhythm of technological development with organizations business development.
ISSN (Print) : 2319-8613
ISSN (Online) : 0975-4024
Awan Setiawan et al. / International Journal of Engineering and Technology (IJET)
DOI: 10.21817/ijet/2017/v9i3/170903134
Vol 9 No 3 Jun-Jul 2017
1865
3. IT BALANCED SCORECARD
Balance Scorecard was first published by Robert S. Kaplan and David P. Norton in 1992 in an article entitled
"The Balanced Scorecard - Measures That Drive Performance". In the article, Balance Scorecard is defined as a
set of measure that’s gives top manager a fast but comprehensive view of the business, includes financial
measures that tell the results of actions already taken, complements the financial measures with operational
measures on customer satisfaction, internal process, the organization’s innovation and improvements operational
activities measures that are the drivers of future financial performance [3,6].
In 1997, Van Grembergen and Van Bruggen adopted the Balanced Scorecard (BSC) for use at the Department
of Information Technology. They proposed IT BSC as a method of measuring the performance of the
Information Technology Department within an organization to do an evaluation that provides a comprehensive
view of core business as in Figure 2. IT BSC provides executive management a comprehensive framework
where the vision and strategy of IS/IT adapted from the vision, mission, and strategy of the organization
business [4,6].
Figure 2: IT Balance Scorecard
Some perspective in evaluating the performance of information systems/technology based IT Balance
Scorecard:
1. Corporate contribution a perspective, perspective that evaluates the performance of IS/IT based on the
views of executive management, directors, and shareholders.
2. User orientation perspective, the perspective that evaluates the performance of the IS/IT based on business
users/customers. The organization can identify customer and market segments which entered so it can
harmonize various measurements of the important customer such as satisfaction, loyalty, retention, and
profitability with customer acquisition and target market segments.
3. Operational excellence perspective, a perspective that assesses the performance of IS/IT based on IS/IT
management itself and furthermore is a party related to the audit and the policy maker.
4. Future orientation perspective, a perspective that assesses the performance of the IS/IT based on a view of
the implementer staffs, practitioners, and professionals inside the organization. In this perspective must be
prepared organization infrastructure that enables the objectives of three other perspectives can be achieved.
4. RESEARCH METHOD
A. Conducting data collection by literature review, interviews and field observations
1. Observations carried out to get an overview of how business processes are running at the moment and
what is information technology/systems is used.
2. Interviews, conducted to ensure the information got was truth and make a formal statement directly
from the source. Interview material includes Standard Operating Procedure, the technology used, as
well as the business needs toward of information systems development.
3. Literature Studies, understanding the concept of Ward and Peppard as an innovative solutions for the
business world environment.
B. Analyze internal and external environment of the business side and IS/IT side
1. Internal Environment Analysis, identify strengths and weaknesses that exist in the organization.
Information that can be discovered such as organization's business processes and activities,
organizational structure, the application portfolio, and information technology infrastructure towards
the vision, mission and organization IS/IT strategy.
2. External Environment Analysis, identify opportunities and threats such as determine the condition of
the political, economic, social, cultural, technological, industrial environment, and the IS/IT
organization competitive climate such as information systems/technology trends used by competitors.
ISSN (Print) : 2319-8613
ISSN (Online) : 0975-4024
Awan Setiawan et al. / International Journal of Engineering and Technology (IJET)
DOI: 10.21817/ijet/2017/v9i3/170903134
Vol 9 No 3 Jun-Jul 2017
1866
C. Mapping Critical Success Factors using IT Balance Scorecard
Based on the analysis above, created the internal and external environment mapping into an identification
of future application needs based on strategic alignment and competitive impact, then deliver Critical
Success Factors by mapping the four perspectives of IT Balanced Scorecard that have targets with
measurement adapted to the vision and mission of the organization.
D. Formulate suggestion of business information systems strategy, information technology strategy, and
IS/IT Management strategy based on CSF
After the critical success factors mapping is done, then proposed IS/IT strategic plan both from business
information system strategy, IS/IT management strategy, and information technology strategy for the
organization. The results that can be produced are the guide of initial preparation of information systems
development, information technology infrastructure, IS/IT organizational structure, and policy/procedure
that should be prepared.
E. Creating a future application portfolio proposal
Future application portfolio proposed based on all the results of internal and external environment
analysis using strategic alignment, competitive impact, and also critical success factors as well as the
formulation of the IS/IT strategic plan based on organization vision and mission.
F. Creating a Roadmap and IS/IT Master Plan
IS/IT Master Plan will be made for the medium-term planning of information system/technology
development in the organization with the way translate the desire of management (system owner), the
user (system user) as well as changes occurring inside or outside the organization.
5. RESEARCH RESULT
A. SWOT Analysis
In SWOT analysis we can identify the internal and external factors of the common organization. Analysis of
internal factors used to determine briefly and evaluate the strengths and weaknesses of the organization.
External factors analysis used to determine briefly and evaluate opportunities and threats from the
environment around the organization.
Internal and external environment strategic factors identified by making Internal Factors Evaluation and
External Factor Evaluation Matrix. IFE-EFE coordinate position on the matrix shows the ability of
organization to face internal and external factors. The total weighting of each question should not exceed a
total score of 1.00 divided by the number of items on the internal factors (strengths and weakness) and
external factors (opportunities and threats) as shown in Table 1.
Table 1: Internal and External Factors Evaluation Result
Strategic Factors Weight Rating Weight x Rating
1. Strength 0,573 3,45 1,98
2. Weakness 0,427 3,02 1,29
Internal Factors Evaluation 1 3,27
3. Opportunity 0,549 3,22 1,77
4. Threat 0,451 2,90 1,31
External Factors Evaluation 1 3,08
From the results of the internal and external matrix on table 3 above can be seen that total scores of internal
factors are 3.27 and the total scores of external factors are 3,08. Based on the calculation above, we can create
IFE-EFE matrix that describes on figure 3 below.
ISSN (Print) : 2319-8613
ISSN (Online) : 0975-4024
Awan Setiawan et al. / International Journal of Engineering and Technology (IJET)
DOI: 10.21817/ijet/2017/v9i3/170903134
Vol 9 No 3 Jun-Jul 2017
1867
Figure 3: IFE-EFE Matrix
Figure 3 shows that the condition of organization line in the first box (first quadrant) with IFE-EFE matrix
coordinates (3.27; 3.08), with the following explanation:
1. The organization has an ability to deal with internal and external factors is pretty good
2. Organization can still grow up with high concentration through vertical integration. That's mean the
organization may take over some of the work that used by the supplier, so in the future, the
organization can eliminate dependence on the supplier.
3. It is a very favorable position because the organization has more value of the power and opportunity
than the value of weaknesses and threats, so it can compete with some advantages such as work
experience, the uniqueness of the product, total assets, support of many parties, and reliability of
information systems/technology owned.
4. The strategy used is aggressive growth policy, for example, the expansion of business process,
marketing expansion, and system/technology development to support business processes.
B. Critical Success Factor Based On IT Balanced Scorecard
Critical Success Factors analysis is the key component that influences the success or failure of the
organization vision and mission. The purpose of Critical Success Factors is to interpreting the
objective/target more clearly to determine strategy alignment that should be done and information needed
so it could be the link between organization's business strategy with IS/IT strategy.
Critical Success Factors determined after identification of the vision and mission of the organization is
done. All candidates of Critical Success Factors above should be evaluated and identified so the selection of
the CSF can be monitored and measured. The next step is mapping the critical success factors candidates
based on IT Balanced Score Card, as showed on Table 2:
Table 2: Determined Critical Success Factor based on IT Balanced Scorecard
Corporate Contribution Perspective
No Objective Measures Critical Success Factors
1 Have cost and benefit analysis
about the development of
knowledge-based total solution
IS/IT with reliable infrastructure
and human resources.
IS/IT
Development
Budget
Investment funds
management for IS/IT
development both
internally, externally,
and software purchase
2 Have strategic information system
to help create decisions and
establish the phases of organization
business strategy
Requested
Database Query Create Digital Dashboard
System to enhance
business value of IS/IT
User Orientation Perspective
3 Increase the number of new
customers and old customer loyalty Number of
Visitors/Users Had IS/IT that provide
updated information and
free facilities to
customers
4 Carries information services to Number of Having informative,
ISSN (Print) : 2319-8613
ISSN (Online) : 0975-4024
Awan Setiawan et al. / International Journal of Engineering and Technology (IJET)
DOI: 10.21817/ijet/2017/v9i3/170903134
Vol 9 No 3 Jun-Jul 2017
1868
consumers regularly so it can
increase the business value of the
product/service
Information
Delivery
Services
interactive and
communicative IS/IT
5 Evaluate the results of user
responses to organization IS/IT User
Satisfaction
Survey Results
Provide IS/IT support
and maintenance
Operational Excellence Perspective
6 Streamline business process
performance and operational costs Business
Process Speed Increase automation and
eliminates routine work
dependence using
manual activity
7 Have human resource with
competencies and technical skills in
the field of information
systems/technology
Number of
Human
Resources That
Has IS/IT
Competency
Putting human resource
with appropriate job
description in accordance
with their competence
8 Improving the ability of
information systems in accordance
with company policy changes and
trends development of information
systems/technology
Full
Parameterized Developing
parameterized based
information system to
accommodate changes
Future Orientation Perspective
No Objective Measures Critical Success Factors
9 Increase human resource
competencies to become a
professional IT within organization
Total Training
of IS/IT Providing education and
training of IS/IT to
employees so they can
improve the quality and
competitiveness
10 Having competitive and innovative
products and services that trusted
by consumers
IS/IT Features Create IS/IT to inform
the development of
products and services in
real time
C. Strategic Recommendation
Ward & Peppard framework will generate three outputs, namely Business Information Systems Strategic,
Information Technology Strategy and IS/IT Management Strategy. All of the strategies above is arranged
based on internal and external environment analysis that mapped into critical success factors.
Business Information Systems Strategic
Implementation of information systems utilization to support the activities and business processes of
organization requires the right strategy because when we choose wrong information system strategy, it can
lead to problems in organization operational which has been running. Business information systems strategy
proposed based on the results of critical success factors above can be summarized into several categories,
business strategic alignment with IS/IT, competitive advantage, integration, development phases, data
warehouse, business intelligence, licenced software, single sign on, software security, maintenance &
support, and software migration.
Information Technology Strategy
Based on external and internal environment analysis that has been packed in Critical Success Factor, IT
architecture strategy design proposals can be made into six categories. There are hardware design and
network architecture, the operational strategy of local communication networks, interruption
recovery/disaster prevention strategy, internet network strategy, and hardware & network security strategy.
Recommended information technology architecture strategy design can be seen in Figure 4.
ISSN (Print) : 2319-8613
ISSN (Online) : 0975-4024
Awan Setiawan et al. / International Journal of Engineering and Technology (IJET)
DOI: 10.21817/ijet/2017/v9i3/170903134
Vol 9 No 3 Jun-Jul 2017
1869
Figure 4: Information Technology Architecture Strategy
Information Systems/Technology Management Strategy
The four perspectives of IT Balanced Scorecard illustrates that the competitive value obtained from the
IS/IT lies in the ability and information value gotten and used in business processes both operational and
strategic decision making through proper management, not based on the number of applications developed,
hardware, network infrastructure, and other IT facilities. This is following proposed information
systems/technology management strategy recommended for the organization:
1. Based on Organization Contributions Perspectives: focus on cost allocation plan, IS/IT Master Plan and
Roadmap aligned with organization internal business strategy so we can face competitive pressure from
outside.
2. Based on User Orientation Perspective: designing policies and procedures of change management for
implementing of the new information system/technology, creating a troubleshooting guide/consumer
complain in the form of FAQs, technical communication, and SLA commitments for each complaint
classification so it can increase the number of new customers and maintain existing customers loyalty,
making IS/IT Steering Committee as a form of executive management commitment to implementation of
IS/IT strategic plan, and periodically evaluate the results of user responses to the IS/IT through a
questionnaire of user satisfaction survey.
3. Based on Operational Excellence Perspective have updated complete and SOPs documentation such as
user guides, technical specification, installation manual, and parameter setting, designing procedures and
policies for physical and non-physical IT Security & Risk Management for all hardware, software,
networks, and peripheral devices, User ID and E-Mail Management based on access rights synchronized
with employee absenteeism list, and computing resources using monitoring and control based on capacity
planning/sizing that has been agreed with monitoring dashboard as a tools.
4. Based on Future Orientation Perspective: making standard operational procedure about Disaster
Recovery Plan, which provides disaster prevention and system recovery strategy for business continuity
and develop competency-based education and training programs both technical and nontechnical skills in
information technology field to grow the seeds of IT professionals.
D. Future Application Portfolio
This phase meant to map applications to be used as an IS/IT strategic solution classified into application
portfolio quadrant matrix based on requirement business process, technical complexity, and impact of risks
that arise if the application does not exist. The next step is to map all information system into the McFarlan
matrix by grouping applications category as in Table 3.
ISSN (Print) : 2319-8613
ISSN (Online) : 0975-4024
Awan Setiawan et al. / International Journal of Engineering and Technology (IJET)
DOI: 10.21817/ijet/2017/v9i3/170903134
Vol 9 No 3 Jun-Jul 2017
1870
Table 3: McFarlan’s Application Portfolio Mapping
No Future Application Questions (Y / N) *) Position
1 2 3 4 5 6 7
1 Management Information System Y Y Y Y N N N Strategic
2 Monitoring Information System N N Y Y N N N
Key
Operational
3 Marketing Information System Y Y N N N N N Strategic
4 Executive Information System Y Y N N N N N Strategic
5 Human Resource Information System N N Y Y N N N Key
Operational
6 Digital Library N N Y Y N N N
Key
Operational
7 Research & Development Information
System N N N N N N Y High Potential
8 Asset & Inventory Information System N N Y Y N N N Key
Operational
9 User Management Information System N N N N Y N N Support
10 Finance & Accounting Information
System N N Y Y N N N
Key
Operational
The mapping results of information system portfolio into McFarlan application management strategy matrix can
be seen in Figure 5.
Figure 5: McFarlan Application Management Strategy Matrix
E. Road Map and IS/IT Master Plan
Strategic planning roadmap is created by determining priorities which aim to sort the applications needed
by the organization by providing a value on the application proposal based on its contribution to the
business processes accordance with organization vision and mission. Application development roadmap can
be seen in Figure 6.
ISSN (Print) : 2319-8613
ISSN (Online) : 0975-4024
Awan Setiawan et al. / International Journal of Engineering and Technology (IJET)
DOI: 10.21817/ijet/2017/v9i3/170903134
Vol 9 No 3 Jun-Jul 2017
1871
Figure 6: Application Development Roadmap
Roadmap strategy applied to the organization for the next five years described as follows:
1. The first year, quick wins strategic theme, an easy and fast initiative steps to start IS/IT Master Plan
program. This year is an implementation of one of the IT Balance Scorecard perspective, Corporate
Contribution.
2. Second Year, Human Resource & Market Expansion strategic theme, focusing on competent and high-
quality human resources assets as well as the expansion of the national market. This strategy is the
implementation of Customer Orientation perspective
3. Third Year, Internal Foundation strategic themes, focusing on the internal foundation such as asset
management, equipment, tools, and other infrastructure that is integrated with the organization production
process. This strategy is an implementation of Operational Excellence perspective.
4. Fourth Year, Vertical Integration Growth, Computer Security, and Risk Management strategic theme, an
implementation of the SWOT analysis where the organization should be able to takeover/acquisition the
vendor to eliminate dependency. In addition, executive management can monitor internal performance,
create future business strategies projections, and accelerate decision-making. This strategy is the
implementation of Future Orientation perspective.
5. Fifth Year, Research & Development, Business Realization Analysis strategic theme, organization's focus
on the results of all applications evaluation that are already running in previous years and create an IS/IT
strategic plan for the next of five years. 6. CONCLUSION
Based on analysis result and discussion that has been done in previous chapters, the conclusions obtained from
this study are as follows:
1. Based on the analysis of internal and external environment obtained ten Critical Success Factors based on
IT Balanced Scorecard for first quadrant organization.
2. To support IS/IT Strategic Plan, organization require IS/IT department to be added into an organizational
structure with project & change management underneath so the implementation of IS/IT Master Plan can
be run well in accordance with the roadmap recommended.
3. IS/IT Master Plan & Roadmap are valid for five years with the evaluation process is carried out every
year and at the end of the fifth year, the organization must create Business Realization Analysis (BRA) to
restart the process of developing strategic plans, IS/IT for the next five years.
4. The commitment of executive management and the overall understanding of all the staff toward
organization vision and mission should be followed up with real activity.
7. REFERENCES
[1] Bittman, T.J., Server Virtualization: One Path That Leads to Cloud Computing, Gartner RAS Core Research Note G00171730, 2009
[2] Ward, John & Joe Peppard, Strategic Planning For Information Systems (3rd Edition), John Wiley & Son, West Sussex, 2002.
[3] Kaplan, R.S dan Norton, D.P., Balanced Scorecard: Implementing and Action Strategy, Erlangga, Jakarta, 2000.
[4] Van Grembergen, Wim; Amelinckx, Isabelle, Measuring & Managing E-Business Projects Through Balanced Scorecard, University of
Antwerp, 2006
[5] Setiawan, Awan & Ilman, Benie, Strategic Planning of Information System in Publishing Company with Ward and Peppard Method:
Case Study at Bandung Science Engineering Publisher, Jurnal Manajemen Teknologi, Volume 11 Number 3 2012, Page 308-325.
[6] Smith, R.F., Business Process Management & The Balanced Scorecard, John Wiley & Sons, Inc., Canada, 2007
[7] Alter, Steven, The Information Systems: The Foundation of E-Business (4th Edition), Pearson Education, Inc, New Jersey, 2002.
[8] Dobbins, James H. & Donnelly, Richard G, Summary Research Report on Critical Success Factors In Federal Government Program
Management, Acquisition Review Quarterly 5, Winter 1998.
[9] Eckerson, Wayne W, Performance Dashboards: Measuring, Monitoring and Managing Your Business, John Wiley & Sons, New
Jersey, 2006
ISSN (Print) : 2319-8613
ISSN (Online) : 0975-4024
Awan Setiawan et al. / International Journal of Engineering and Technology (IJET)
DOI: 10.21817/ijet/2017/v9i3/170903134
Vol 9 No 3 Jun-Jul 2017
1872
