If the compression, injectors, and ecm are stock then yes, water injection is necessary, and will work similar to a inter cooler,just not as efficient.
If you run a modified impellor, you could see boost between 6 to 7 lbs. If you run the small pulley, boost may go as high as 10 psi.
The above is for a 350 ci. With a 383 those numbers will fall a bit.
If your going with a Paxton, as I did, One of the most important improvements I've noticed is running cooler. Since the Paxton is self contained the oil just keeps getting hotter and hotter, this alo effects the air temperatures going into the engine. The cooler will help in two areas, help keep the blower cooler which will have a direct efftect on the blowers lifespan, and help keep the air temps down. I run a B&M plate style cooler, and used the old water injection pump, to pump the fluid.
Usually if the engine is mostly stock, the 24 lbs injectors will work with a bit more fuel pressure. If it's modified or a 383 or larger is being used 30 to 36 lbs injectors may be necessary. My combo is far from stock .I'm currently running a Haltech aftermarket ecm. I run 50 lb injectors which are right about 80% duty cycle, meaning more power and bigger injectors will be required. My fuel pump is the Bosh or now known as Accel big pump.
Since the sn 89 or for that matter an sn 2000 like I have will never make tons of boost, running 10 or even 11 to 1 compression is not out of the question. You just have to make sure the fuel requirement are right, and map the timming correctly. This is when a programmable ecm will become necessary.