W3 - Strategic Framework and eBiz

Source / Reference:
1)  "Systems Planning in the Information Age" by C H Sullivan 1985

2) The strategic Framework http://www.youtube.com/watch?v=Csi-dlHV6sw

3) SWOT analysis http://en.wikipedia.org/wiki/SWOT_analysis

4) PEST analysis http://en.wikipedia.org/wiki/PEST_analysis

Subject:
In Lect 3 - Why is strategic framework important?
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Response:

This blog post focuses on strategic framework and system planning. A brief introduction on strategic framework is given first, followed by a description and reflection of the reviewed paper. Then, comment on Sullivan's Framework is given and coming next is an illustration of SWOT analysis and PEST analysis by analyzing PARKnSHOP.

 
Strategic framework is necessary for all business no matter it is a small shop or an international business. It provides a border context within which the analysis techniques and tools are applied for strategy formulation. A clear strategic framework helps the organization to have a better system planning, especially in the Information Age. 

Description and reflection on the reviewed paper

The article examines and compares past and current systems planning practices such as stages of growth (SOG) and IBM's Business Systems Planning  (BSP). It also introduces the idea of information technology architecture planning and presents the results of empirical research. 

 

Sullivan has suggested a framework on system planning which consists of two major factors. One is infusion which means the degree to which information technology has penetrated a company in terms of importance, impact, or significance. The other one is diffusion which means decentralization, or the degree to which technology has been disseminated or scattered throughout the company. 

In the article, Sullivan said that the critical success factors planning apparently is best suited to the environment in which technology is more distributed than it is crucial -- high diffusion but low infusion.

In my opinion, this statement is quite correct. In early days, people usually treated Information Technology as a tool to accomplish basic tasks like financing, data processing, or calculation. They thought IT is crucial to complete these tasks only but not for the whole business strategy. However, I think IT/IS should be more distributed as Sullivan said. IT/IS is not only a tool to complete basic tasks but also an important component of the business which should be involved in every section of the business. In order words, technology should be scattered throughout the company instead of focusing on a basic function. For example, instead of using computer to record data only, company should translate those data into useful information to help the company to make more accurate decision. 

There are two widely used analysis techniques. Here I will use the PARKnSHOP as an example to illustrate SWOT analysis and PEST analysis.


SWOT Analysis

SWOT analysis is useful in understanding the Strengths and Weaknesses of a business, and pointing out the Opportunities and Treats a business faces. It examines the internal and external micro-environment.


Case study:
For PARKnSHOP, 

• Strengths: adequate resources, long experience, advanced technology, stable connection with suppliers
• Weaknesses: high labor cost, high operational cost
• Opportunities: customers are more interested in low-price product due to inflation
• Treats: competitors like Wellcome provide lower price

PEST Analysis

PEST analysis is useful in understanding the big picture of the Political-Legal, Economic, Socio-Cultural and Technological environment a business is in. It examines the macro-environment.

Case study:
For PARKnSHOP,

• Political-Legal factors: tax for plastic bag
• Economic factors: inflation
• Socio-Cultural factors: customers' interest on healthy food
• Technological factors: online purchasing

Conclusion
It is important to use different analysis techniques to examine the business and environment before and during planning business strategy. Because it helps the company to know more about itself and the environment so as to build the most adaptive and suitable framework. Strategic framework is necessary and essential for a business to succeed.