Transcript IT Strategic Planning

IT Strategic Planning
Models For Strategic Planning

Boston Matrix

McFarlane Matrix
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Porter’s Five Forces
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Porter’s Value Chain
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Zuboff’’s 3 Eras
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Networked Organisation
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Strategic Alignment
Boston Consulting Group
Product Portfolios
High
Wild Cat
or
Problem Child
Star
Market growth
Cash use
Funds
Cash Cow
Dog
Low
High
Low
Market share
Cash generation
Product Characteristics

Stars
- Best profit and growth potential
- High market growth potential, high market share
- High in cash generation but needing significant cash
investment

Cash cows
- Stars that become established and generate cash without
the need for significant new investment
- Minor changes may sustain the product in the market
Product Characteristics

Dogs
- Product becoming obsolete in the market
- New products erode market position
- Further investment may not be justified or considered
beneficial

Wild Cats
- High cash requirement with little cash return
- Cash flow from cash cows may support development
- Need to quickly divest “problem children”
Product Life Cycle
Net
cash
flow
+
Wild
cat
Star
Cash
cow
Dog
Mac Farlane Matrix
Application Portfolio
High
Turnaround
Strategic
Support
Factory
Strategic impact of planned
application development
Low
Low
High
Strategic impact of
existing applications
Mac Farlane Matrix
Application Portfolio

Strategic
- Current and future applications are critical for success

Turnaround
- Current applications beneficial but not critical
- Future applications may be of strategic importance

Factory
- Applications that are critical to sustaining existing business
- Development portfolio not vital to the organisation

Support
- Current and future applications improve management and
performance but are not critical to the business
Porter’s Five Competitive Forces
Threats from
new entrants
Bargaining power
of suppliers
Rivalry among
existing competitors
Threats from
substitutes
Bargaining power
of customers
Rivalry Among Existing Competitors
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Industry growth
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Fixed costs/added value
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Intermittent overcapacity
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Product differences
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Brand identity
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Switching costs
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Concentration and balance
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Informational complexity
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Diversity of competitors
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Corporate stakes
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Exit barriers
Bargaining Power Of Suppliers
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Differentiation of inputs
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Switching costs of suppliers
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Presence of substitute inputs
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Supplier concentration
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Importance of volume to
suppliers
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Cost relative to total
purchases in the industry
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Impact of inputs on cost of
differentiation
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Supplier goods make up a
large part of firm’s costs
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Supplier size v customer size
Bargaining Power Of Customers
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Buyer concentration
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Price sensitivity
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Buyer volume
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Price of total purchases
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Buyer switching costs
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Brand identity
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Buyer information
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Impact on quality
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Substitute products
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Impact on performance
Threats From New Entrants
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Economies of scale
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Proprietary products
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Access to distribution
channels
Brand identity
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Absolute cost advantage
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Switching costs
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Government policy
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Capital requirements
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Expected retaliation
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Number of existing rivals
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Existing patents
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Access to raw materials
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Skills required
Threats From Substitutes
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Relative price/performance of substitutes
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Switching costs
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Customer awareness of substitute products
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Buyer propensity to substitute
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Existing customer loyalty
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Customer sensitivity to value for money and ability to
compare
Porter’s Value Chain Model
Firm infrastructure
General management, accounting, finance, strategic planning
Human resources management
Recruiting, training, development
Product/technology development
R&D, product and process improvement
Procurement
Profit
margin
Primary activities
Purchasing of raw materials, machines, suppliers, services
Inbound
Logistics
Operations
Outbound
Logistics
Marketing
and sales
Services
(raw
materials
handling,
warehousing)
(maching,
assembling,
testing)
(warehousing,
distribution)
(advertising,
promotion,
pricing,
channel
relations)
(installation,
repair,
parts)
Zuboff’s 3 Eras
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Automate
- Basic transaction processing systems
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Informate
- Management information systems
- Decision support systems
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Transformate
- Changing the structure of organisations and industries
- Innovative uses of IT
Networked Organisations

Managing interdependence
-
Shared goals
Shared expertise
Shared work
Shared decision making
Shared timing and issue prioritisation
Shared responsibility, accountability and trust
Shared recognition and reward
Strategic Alignment Process
Global
Information
Technology
Platform
Competition and
Reconfiguration
Process
Competitive
Potential
Transformation
Business
Value
Organisational
Change Processes
And Human
Resource Issues
Organisational
Infrastructure
And Processes
Information
Technology
Strategy
Business
Strategy
Strategic
Alignment
Process
Technology
potential
Embedded
Technology
Information
Systems
Infrastructure
And Processes
Service
Level
IS Implementation
Processes, Tools
And Skills
Approach To Strategic Planning
Start
Project
establishment
Internal
analysis
Strengths and
weaknesses
External
analysis
Opportunities
and threats
Critical
success
factors
Business and
competitive
assessment
Mission and
strategic
direction
Critical success
factors
Overall plan
Main goals
General plans
for functional
units
Approach To Strategic Planning
Internal analysis
Marketing
Finance
Production
Organisation
External analysis
Society
Technology
Industry
Competitors
Customers
SWOT Analysis
Strengths
Opportunities
Weaknesses
Threats
Strategy Formulation
Business Idea
Strategic Direction
Main Goal
Critical Success Factors
Overall Plan
General Plans for Functional Units