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Saturday, November 26, 2016

SWOT Analysis and IT Strategic Planning

If you have been through a management course you would have certainly come across the 4 management functions: planning, leading, organising and controlling.

IT managers who are primarily focussing on the technical aspects of the job will fail in their primary role,  which is to manage the team. It is therefore important they know what their management functions are and how to perform them.


Planning

Planning is the process of looking forward in order to develop activities in advance. It encompasses defining goals, establishing a strategies to achieve those goals and developing a detailed plan to achieve a set of objectives. Planning is a vital part of the organisational and departmental strategic process, it establishes coordinated effort, reduces uncertainty and establishes goals and standards to use when reviewing organisational performance.

Organisations operate in two environments, internal and external.  Effective planning should include both, the internal and external, environments.

The internal environment includes the organisation itself and its culture. The IT manager needs to know how to influence organisational / team culture in order to lead individuals towards achieving common organisational goals. Another important reason for IT managers to know their role with regards to organisational culture is the fact that IT managers are sometimes hired to change the culture of an IT department in order to increase effectiveness and efficiency. 

There are many perspectives of an organisational / team culture that the effective IT manager needs to consider in order to plan and lead his team. These perspectives include:

  • Attention to detail - degree to which individuals focus on precision, analysis and attention to detail.
  • Outcome orientation - degree to which managers focus on results or outcomes rather than the process on how these outcomes are achieved.
  • People orientation - Degree to which management takes into account the effects of organisational decisions on individuals in the organisation (hard or soft HRM, but this is for another post).
  • Team Orientation - organising work in teams rather than individuals.
  • Aggressiveness - cultivate a culture of aggressiveness and competitiveness in order to achieve organisational goals.
  • Stability - degree of which decisions and actions are focused on maintaining the status quo.
  • Innovation and risk taking - degree to which employees are encouraged to be innovative and to take risks.

The IT manager can work on any of these perspectives in order to manage  his team's culture. Take innovation and risk taking as an example. An IT Development Manager may take a critical look at the product developed and compare it to the market needs and other similar products. This exercise may include a Gap or a SWOT analysis. Once this is performed the manager can promote a culture of innovation to plan and position his product into the market and be the first to innovate in his niche and therefore achieve competitive advantage and potentially increase his market share.

With regards to the actual process of planning, there are a few tools that an IT manager can utilise to support the planning process. These include Gap and SWOT analysis. For the purposes of this article I will describe how a SWOT analysis can be performed to support the IT Development Manager in his planning process.

SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favourable and unfavourable to achieve that objective. The technique is credited to Albert Humphrey, who led a convention at Stanford University in the 1960s and 1970s using data from Fortune 500 companies.

A SWOT Analysis will include the following:

- Strengths: attributes of the person or company that are helpful to achieving the objective(s).
- Weaknesses: attributes of the person or company that are harmful to achieving the objective(s).
- Opportunities: external conditions that are helpful to achieving the objective(s).
- Threats: external conditions which could do damage to the objective(s).

The following table is an example of some topics to include in a SWOT  analysis for an IT Development Manager:



Plans can and should be periodically reviewed and adjusted should circumstances change.

In summary, planning is a vital activity performed by IT managers. It involves looking at the internal and external environments that an organisation operates in and devise goals and strategies to achieve organisational objectives.

In the next post we will discuss the organising management function.