Technology at the Top: Developing Strategic Planning Support Systems
Townsend, Anthony M., DeMarie, Samuel M., Hendrickson, Anthony R., Whitman, Michael E., SAM Advanced Management Journal
While advanced technologies seem to be changing business markets and organizations on an almost daily basis, the strategic planning and decision-making functions in many organizations have remained strangely resistant to new applications of technology. These organizations continue to rely primarily on the experience and judgment of senior executives. Top managers are expected to correctly interpret a broad range of both qualitative and quantitative information and then, based on their experience, chart an appropriate course of action for the organization. This can be problematic given that markets in most industries are becoming more volatile and unpredictable.
Fortunately, new tools designed to increase the range and scope of planning efforts may allow managers to offset the problems related too by dynamic markets. These tools, labeled planning support systems, can be used to make organizations more flexible, and thus, better able to adapt quickly to changing conditions. In this article we outline the basic building blocks of strategic planning support systems and discuss how these systems may be customized to provide maximum value in the strategic planning function.
Changing Paradigms in Planning
Part of the reason technology has been slow to be integrated into the strategic management process is that so much of the process relies upon qualitative information and subjective judgment, neither of which has been easily supported by technology. Top executives are also somewhat responsible: for the first decade of the microcomputer revolution, information tools (such as spreadsheets and databases) have been used by the executive staff but not by the executive. Most top executives expected computer-generated reports but did not foray into the then-arcane world of information management. However, with the advent of friendlier computer environments, an increasing number of high-level executives have begun to realize that they can use information technology, and that the ability to manage and analyze data confers upon them a critical competitive advantage over those who cannot. The evolution toward an informationally empowered executive is clearly a direction for the future, as Alvin Toffler writes in Powershift:
Knowledge itself, therefore, turns out to be not only the source of the highest quality power, but also the most important ingredient of force and wealth. Put differently, knowledge has gone from being an adjunct of money power and muscle power, to being their very essence. It is, in fact, the ultimate amplifier. This is the key to the powershift that lies ahead, and it explains why the battle for control of knowledge and the means [for] communication is heating up all over the world. (Toffler, 1990, pp. 18).
Although individual executives increasingly have access to a variety of executive information systems, the next great opportunity for organizational evolution is to informationally empower the group processes of the top executive team. The development of a technological support framework for strategic activities creates the potential for a new level of sophistication in planning and direction. With the implementation of technology that is currently available and affordable, even smaller firms can enjoy the benefits of a strategic planning support system that would have been the envy of national governments only a few years ago.
Much of the impetus for planning support systems comes from outside the world of computer hardware and software. Recently, many organizations have recognized the value of scenario-based strategic planning models. As the pace of change in business environments continue to accelerate, predicting future conditions becomes more difficult. Scenario-based planning allows organizations to explore multiple alternative future situations and reduces the need for accurate single forecasts.
Scenarios are developed by blending intuition and creativity with data and analysis into a description of possible future conditions. …