Strategic Planning

Strategic Planning is a formal methodology that a corporation uses to decide where and how to invest its time and resources. Several patterns exist for Strategic Planning.

This is also TheViewFromSeventyMilesUp.

I include StrategicPlanning in this Wiki to give you perspective... sometimes programmers question, for example, why a project was cancelled after a couple years of futility. It was part of the strategic plan. Sometimes a SystemAnalyst wonders why it seems like a ConstantUphillBattle? to get anything done. Again, a side effect of the Strategic Plan. Strategic Planning is what a company does to determine how it is going to spend its resources and its employees' time. Most often this is conducted in secret by the senior management, as the decisions from this process are often not in the best interest of the employees.

A BusinessSystemsAnalyst may sometimes be involved in implementing a Strategic Plan by way of guiding projects through an IT department.

Overview

During the lifecycle of a company, it faces various competitive pressures. At the same time, it finds itself in a field that gradually moves from leading edge to maturity. The leftmost column lists the maturity of a company's product or services, the rightmost column lists its competitive position within the industry. Draw a line between the two columns - where the line intersects the middle column gives you an overall strategy for the company:

 Development                  Build         Top Company
 Growth                       Maintain      Contender
 Competitive Adjustment       Harvest       Struggling
 Maturity                     Divest
 Decline

This is, of course, oversimplified, and indeed a company may find that it is a Contender in certain geographic areas and Struggling in others. But you get the general picture. The main point being that there is nothing that requires the management to Build the company - they may well be interested in the residual value of the company's assets.

-- JeffChapman

Ensuring Success - the domain of BPM

StrategicPlanning often involves the application of ScenarioPlanning to develop alternate environments where the companies concerned may wish to have predeveloped BusinessModels. BusinessProcessManagement (BPM) provides the StrategicManagement tools to ensuring there exist a suitable pathway to the new BusinessModel.

StrategicManagement goes further than StrategicPlanning by developing capability and expertise in ChangeManagement.

I include the following quote from http://horizon.unc.edu/courses/papers/Scenario_wksp.asp

"continually adjusting competitive strategy, organizational structure, and modus operandi as the marketplace demands"

See Some examples of processes and success stories at http://www.pharmexec.com/pharmexec/content/printContentPopup.jsp?id=95096

CompetitiveStrategy?

Decades ago, there were classic examples where deployment of clever technology resulted in competitive advantage for a long time, e.g. American Hospital Supply, American Airlines.

Over the years, as technologies change and deployment become more affordable, the competitive edge offered by being first is very limited, but the risk of staying at bleeding edge changed little.

M. Porter have analysed many cases and arrived at the conclusion that in order to have lasting edge, the organization must have additional factors in its favor. One of these is "fit" or "alignment" between various processes and activities the firm undertakes.

Porter has a widely used Five Forces model for an organization to assess its own position in the marketplace. These are:

rivalry within the industry
entry barriers
buying power of consumers
supplier power
substitute products

An example of good alignment of its own processes and philosophies is TheToyotaWay, which is said to be complemented by traditional cultural customs practiced in Japan. Apparently from the book there is a successful FordProductionSystem. There are also discussions of other companies attempting to transplant Toyota processes without much success.

StrategyExecution?

Example of a Realtime Strategic Change process at http://www.improve.org/nhaarticle.html

ComplexityManagement aspects

Stafford Beer, who authored a 1979 book titled "The Heart of Enterprise", laid the foundations of a discipline called Management Cybernetics. His GeneralSystemsTheory? oriented BusinessModeling method is called ViableSystemsModeling?. In the 2006 Metaphorum conference, a submission was made applying this method and POSD (related to IDEF) together, towards the case study for a UK Probation Service. (see http://www.metaphorum.org/metaphorum%20paper%20v3.doc ). This has interesting perspectives as I am searching for material that links up StrategicPlanning and BusinessProcessManagement.

DoesItMatter?

Gartner analyst is said to confirm the arrival of UtilityComputing in May06. Quoted by Nick Carr, the following was mentioned at the http://www.roughtype.com/archives/2006/05/cios_flee_it.php blog.

" ... (the current scene will) accelerate the number of organizations who conclude "this is a commodity and I don't need you to do it."

If IT is being commoditized, perhaps EnterpriseArchitecture does not matter much any more. A revised BusinessModel (for the organization) will need to be developed to ensure the IT support activities are properly placed.

When it becomes an organization-determined priority to apply ChangeManagement processes to implementing the new IT paradigm, be it UtilityComputing or another form, there may even be a surge in resource and funding for IT related activities. At the moment, it appears the bulk of the companies are on the sidelines, waiting for the others to make a move.

Strategic Planning is a formal methodology... [From initial sentence on this page]

Could anyone provide a reference of strategic planning as a formal methodology?

Resources

Managing Business Performance at http://www-128.ibm.com/developerworks/webservices/library/i-bpm1/ covers a range of related topics, including aspects of BusinessProcessManagement, CorporatePerformanceManagement, ScenarioPlanning, etc. The material is "friendly" to vendors product offering, but the contents have high quality.

Graphics on strategies http://www.maaw.info/StrategyGraphicsMain.htm

CategoryManagement CategoryEnterpriseComputingConcerns CategoryPlanning