Strategic Grid for IT

Knowledge Center

Definition Strategic Grid for IT? Meaning.

The Strategic Grid for IT from McFarlan, McKenney & Pyburn ('83) is a tool that can be used to assess the current operational dependence on information systems (low, high) versus the future potential strategic impact of information systems (low, high). Combining the 2 views in a matrix results in 4 possible combinations:

1. Support (currently low, low in the future too). IT has little relevance and simply supports some processes. Firms or systems in this quadrant will place the least amount of emphasis on IT (planning) in terms of senior management concern and involvement.

2. Turnaround (currently low, high in the future). IT will be a key feature of future strategic planning. Significant top management involvement in IT (planning) must be established.

3. Factory (currently high, low in the future). It is important in terms of day-to-day operations but it is not felt that there are any major IT developments on the horizon that will fundamentally alter the nature of the business. The level of senior management involvement is decreasing.

4. Strategic (high, high). IT Strategy is very important ands plays a critical role in the formulation of the overall business strategy. High level of involvement of top management in IT strategy.

One can use the McFarlan Grid to analyze the impact of information systems as a whole for an organization or for a division or department of an organization. But the strategic grid can also be used to analyze the dependence and impact of individual IT applications or systems.

Any organization would be wise to have an IT Strategy, even if it is in the support quadrant.

According to Professor Earl, there are nine reasons as to why any organization should have an IT strategy:

1. IT involves high costs.
2. IT is critical to the success of many organizations.
3. IT is now used as part of the commercial strategy in the battle for competitive advantage.
4. IT is required by the economic context (from a macro-economic point of view).
5. IT affects all levels of management.
6. IT has meant a revolution in the way information is created and presented to management.
7. IT involves many stakeholders, not just management, and not just within the organization.
8. The detailed technical issues in IT are important.
9. IT requires effective management, as this can make a real difference to successful IT use.

Forum New Topic Forum about Strategic Impact of IT. IT is a Value Enhancer for Any Organization Clear business objectives should drive the IT solutions necessary for the organization. Often companies get the latest t (...) 11   1 comments Where is the Value for the Customer in the Strategic Grid for IT? This model seems a very internal (within the company) discussion. Should value for the customer not be more pronounced?< (...) 11   Insufficient IT Knowledge at C Level Lack of knowledge of the CEO (and the rest of the board) about the role of IT for their business is a big issue (not eas (...) 10   3 comments Model for Moving to the Cloud and Outsourcing Strategy This is indeed an interesting model that can be aptly used in decisions like managed outsourcing or moving to the cloud: (...) 7   1 comments Usage of the McFarlan Grid The McFarlan Grid is a useful tool for IT planning. IT executives have failed to provide a solid "risk analysis" to the (...) 6   🔥 NEW Great Questions to Assess the Strategic Impact of IT What are the right questions at a time when digital technologies are beginning to disrupt industries and mastering these (...) 5   4 comments IT in Support Quadrant of McFarlan's Strategic Grid Over four decades ago the IT/computing/data processing drive was to develop an IT hierarchy and knowledge/experience bas (...) 5   Start a new forum topic about Strategic Impact of IT Share your opinion, knowledge and experience or ask a question (sign up for free first)

Best Practices Sign up The top-rated topics about Strategic Impact of IT. Here you will find the most valuable ideas and practical suggestions. Assessing the Relationship Between Business and IT Key factors to assess the relation of IT with the Business should also include: * Relevance - does IT want to be a (...) 23   27 comments

Expert Tips Sign up Advanced insights about Strategic Impact of IT. Here you will find professional advices by experts. Characteristics of Organizations with an IT-driven Business Transformation Strategy IT-driven Strategy, IT-led Strategy, Competitive Potential, Innovation Accelerators, Disruptive Innovation Today organizations need to move quickly through a wide range of business transformations, often caused by new and compl (...)

Information Sources Sign up Various sources of information regarding Strategic Impact of IT. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops. How Businesses can Use Information Technology (IT) in Strategic Ways Strategic Management, Information Technology This presentation looks at Information Technology from a strategic point of view. In other words, it discusses in what w (...) Project Management of Information Technology Projects Project Management, Information Technology, Three Sphere Model This presentation provides information about project management, thereby especially focusing on a context of information (...) Information Systems in Today's Organizations Information Technology, Objectives, Information Systems, Management Information Presentation about Information Systems in the world of today. The presentation includes the following sections: 1. Role (...) Introduction to Cloud Computing Initial Understanding of Cloud Computing This short video explains what Cloud Computing is and why it's faster, safe, less costly. (...) Benefits and Risks of Cloud Computing Initial Understanding of the Benefits and Risks of Cloud Computing In this video Jesse Lindmar gives an overview of the Risks and Benefits of Cloud Computing 1. Ensuring Security 2. A (...)

Research Links Sign up Automatically jump to further useful sources regarding Strategic Impact of IT. News Videos Presentations Books More

Compare with: Strategic Alignment  |  Impact/Value Framework  |  Strategic Thrusts  |  TDC Matrix  |  Chief Information Officer

Return to Management Hub: Knowledge & Intangibles  |  Strategy

More on Management  |  Return to Management Dictionary

This ends our Strategic Grid for IT summary and forum.