Strategic Grid for IT

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Strategic Grid (McFarlan)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.

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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?
At one side you have the needs/values/expectations of the customer. At the ...
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 technology solution without assessing the organization policy. In todays knowledg...
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 easy). Mis-plotting the situation in the McFarlan Grid will lead to severe problems...
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:
- Applications which are in the support and factory quadrant are the ideal...
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 business model, which is why B & IT relationships fail. The 2007 Standish Group ...
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 technologies may be the key to long-term survival and success?
1. How will...
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 base whereby the top IT level were fully conversant with business issues, impact et...
🔥 NEW Cloud Adoption Strategies
Technology shifts have always been instrumental in shaping the way we live and also the way we run a business. The latest information technology shift is cloud computing. The "Cloud" refers to the int...

Best Practices

The best, top-rated topics about the 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 key business partner, and a strategic part of the plan? Or are they simply a sup...

Expert Tips

Advanced insights about the Strategic Impact of IT. Here you will find professional advices by experts.

Who Assesses the Impact and Status of IT in your Corporation?

IT Strategy, IT Transformation, Strategic IT Impact, IT-Business Alignment
Be careful who you ask for the impact IT has (so far) on your organization... It could well be that your technology/IT ...

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

Various sources of information regarding the 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...

What is Cloud Computing? Introduction

Initial Understanding of Cloud Computing
This enthusiastic video explains in 3 minutes what Cloud Computing is and why it can be simpler, safer, and less costly ...

Risks, Threats, and Vulnerabilities in Cloud Computing

Cloud Computing, Cloud Strategy, Cloud Services
Discussion of the risks, threats, and vulnerabilities that organizations face when moving applications or data to the cl...

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...

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

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