On The Impact of Strategic Planning on Mandatory IS Investments

Prior research demonstrated that firms invest in IS to create competitive advantage. Nevertheless, many firms are forced to invest in IS to comply with government regulations, regardless if the investment promises competitive advantage or not. A recent example is the Sarbanes-Oxley Act, which required many firms to upgrade their systems. Surprisingly enough, firms sometimes realise that such mandatory investments create competitive advantage. This paper analyses reasons for this phenomenon. We hypothesise that the creation of competitive advantage from mandatory IS investments is facilitated through strategic IS planning (SISP). Our empirical investigation demonstrates that two of three selected SISP methods enable the creation of competitive advantage from mandatory IS investments. The method that does not facilitate competitive advantage differs from the other methods in terms of its scope. Thus, we conclude that the adequacy of SISP methods to unlock competitive advantage from mandatory investments depends on the scope of the methods.