Extended Neubauer & Solomon Environmental Analysis

1. INFORMATION TECHNOLOGY MANAGEMENT資訊技術應用 Session 06 Extended Neubauer & Solomon Environmental Analysis Sheu

2. Three Levels Of Concerns Business Strategy & Policy Potential Tools External Environmental Impacts N&S Analysis Internal SWOT/5-Force Strategy/ Policy Business plan (HP 10-step) Hoshin Plan Program/ Project Discrete Program/Project Identification Program/Project Plan Program/Project Execution Sheu

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4. Where to look for External Impacts • Consider from 6 categories of environments: • Natural Environment • Social/cultural Env. • Technological Env. • Economic Env. • Political Env. • Infra-Structural Env. Sheu

5. Strategic Postures • Strategic postures include: • Missions • What needs to satisfy ? • 滿足什麼產品或服務之需求? (providing what products/services) • Whose needs to satisfy ? • Who are your target customers?/clients? 定義客戶對象 Be specific. • What value provided (by your product/service) ? • Eg.: • Product: car => Value: transportation (bicycle could also for trans.) • Product: PCs => Value: computing (Notebook, PDA may substitute PC) • Strategies • Policies • For simplicity, we will do missions & strategies only. • recomm. to include policies in the formal exercise for your firm • Overview of what N&S analysis can help us? (Fig. 1) Sheu

6. Objectives of Extended N&S Analysis • (Figure 2) • Provide a structured way of environmental analysis • Identification and analysis of relevant trends, constituent expectations • Provide a forum for discussions on shared missions/ strategies. • Provide a framework for assessing the external impacts on the firm thus extending to the impacts on the missions/strategies. Providing clues for the needs to change firm's strategy - even missions. • Help firm to identify potential threats and opportunities systematically. • Help firm to assess firms readiness to respond to change and identify strategic actions needed. • Systematic way leading to identification of IT Opportunities for org. competitive adv. The above objectives are best achieved thru teamwork and apporpriate participants for correctness/completeness. Sheu

7. Environmental & IT Opportunity Analysis Sheu

8. E. Neubauer & Solomon Analysis (1) <Figure 3> • Step 0: Briefly review Co. profile and industry status. • Step 1: Deduct Apparent Missions* • Whose needs satisfied ? • What needs satisfied ? • What value does the company provide? • Step 2: Identify Perceived Strategies* • long-term impact • crucial to survival & development • broad in scope • difficult to reverse • involve significant commitments • maybe different from stated strategies. * If there are differences between perceived/apparent strategic postures and proclaimed ones, explain them in footnotes and comment on what should be done. Sheu

9. E. Neubauer & Solomon Analysis (2) • Step 3: Trend Analysis • Industry-related trends (4) • General trends (4) • Both considered from all 6 categories of environments • Step 4: Constituent Analysis • Look for constituent's expectations • ref only: 3 demands from 3 major stakeholders. • Step 5: Establish Scoring Criteria (0-5) • Consider impacts on: • company financial / survival • customer population / satisfaction; market share • organizational change • co. public image; etc … Sheu

10. E. Neubauer & Solomon Analysis (3) • Step 6: Determine impacts of trends/expectations on strategies and missions. (-5_0_+5) < fig. 6> • +X / -Y / Z (0 < X, Y, Z < 5) • +X (Opportunity): The extent of positive impact the org could gain if certain change is made to the subject mission/strategy • -Y (Threat): The extent of negative impact the org could suffer if the subject mission/strategy is not changed. • Z (Confirming): The extent of positive impact the current mission/strategy could bring about if it is implemented as intended. Z represents the goodness of the current mission/strategy w.r.t. the trends or expectations. Sheu

11. E. Neubauer & Solomon Analysis (3a) • Keep BOTH + & - numbers. • Explain all high-impacting items ( >= 3). • Adding numbers separately in vertical & hoz. directions. • identify highly impacted strategies & missions • suggesting these strategic postures may deserve closer review. • identify high impacting factors. • Suggesting company may need to allocate more resource to gather data to enhance understanding of the factors. • Normally, most points will be 0. Sheu

12. Neubauer & Solomon Analysis (3b) • Ref guidelines for negative impacts (-Y) : <examples of - impacts> • On missions: reduce/eliminate/change our population of stakeholders in undesirable way. reduce/eliminate the needs we are trying to satisfy reduce/eliminate the value of our product/service (in a grand scale) prevent us from satisfying our stakeholders. reduce/eliminate our ability to satisfy stakeholder's needs. • On Strategies: prevent us from implementing strategy increase risk associated w/ implementing strategy increase resources required to implement strategy suggest that some strategies no longer appropriate. Sheu

13. Neubauer & Solomon Analysis (3c) • Ref guidelines for positive impacts (+X) : <examples of + impacts> • On missions: suggest opportunity if our population of stakeholders is modified. suggest opportunity if the set of needs we are satisfying is modified. suggest opportunity if the set of values we are providing is modified. (must be consistent w/ firm's long-tem capability/competency) • On strategies: suggest a new opportunity if one or more strategies were changed w/i the framework of existing mission. • Examples of confirming mission/strategy: • strongly support/reinforce our existing strategies w/ no need for change of strategies. • increase the likelihood of our being able to implement strategy as planned. • increase the confidence in the chosen strategy. Sheu

14. E. Neubauer & Solomon Analysis (4) • Step 7: Describe nature of key threats and opportunities. • Understand/describe what makes this force a threat or opportunity? • Step 8: Review highly impacted missions & strategies. • Recommendations for possible changes <R1> • Identify desirable (changed) strategies & missions, if any. • Identify potential new strategies & missions. • What might/should our missions be? • Whose needs, what needs, what value. • When missions are in trouble, company may be in a wrong business. • What might/should our strategies be? • Factor in company's competitive edge and core competency. Sheu

15. E. Neubauer & Solomon Analysis (5) • Step 9: Evaluate organizational readiness to change • What responses are needed/desired? (company viewpoints) • What are key factors/pre-conditions needed to enable effective responses? (functional viewpoints) • What additional resources/efforts are needed? magnitude? • How ready are the resources? (What's our current status?) • "snowflake diagram" - magnitude of additional efforts/resources. (Example of Figure 7.) • How do we address those additional needs? • => <More recommendations emerge - driven by external factors> <R2> Sheu

16. E. Neubauer & Solomon Analysis (6) • Step 10: Revise strategies and/or missions – if needed. • Revise existing strategies per previous analysis. • Add new strategies if needed. • Revise mission if there is a series problem with existing mission. • Step 11: Test appropriateness of new strategies and/or missions – if needed. • Test modified strategies against revised missions. Check potential cascading changes onto strategies. • If needed, repeat steps 6, 8, & 9. (=> more higher Zs, less -Ys) • <recommendations emerge - driven by internal reviews> <R3> • Step 12: Summarize recommendations linking from Steps 8, 9, 10 & 11. (=> R4) • Including strategic and possibly operational level. (Next stage would be a business plan on how to implement recommendations toward revised strategic postures: missions/strategies/policies) Sheu

17. E. Neubauer & Solomon Analysis (7) • Step 13: Identify opportunity of using IT to more effectively achieve: • The integrated recommendations in STEP 12 (R4), incl: • strategic changes (mission/stratgies/organizational changes) • Operational changes. • Step 14: Write down the detail system requirements of the Information system identified. • Extent: You can give the doc to outsource the ITS impl. • What functional requirements (user view) are to be achieved? • What are the system external/interface constraints? • H/W configuration / S/W configuration / • Database (high level) plan / Telecommunication / Internet architecture / Budget / deadline • Normally leave out the design specs. Review examples in class packet. Sheu

18. Implementation Notes (1) • Law of "Garbage in garbage out" holds. • Do faithful and serious discussions for evaluations. • Recommend using Delphi brainstorm for assessments. • All 5 categories of ext. env. are to be examined. • Other aspects could impact tech. strategy. • tech. strategy should support business => good to have a broader perspective. • Results from multiple persons' discussions. • Avoid only single person's opinion => whole team's discussions. • Involve stakeholders in the discussion/ review helpful. (Ask company people's opinions if possible.) • Model to resolve conflicting viewpoints • Consensus / voting (averaging) / compromise Sheu

19. Implementation Notes (2) • Get industry/company reviews whenever possible: • ID of strategic postures / trends / constituents' expectations. • assessment of impact matrix • determining of organizational responsiveness. • Use abbreviated sentences for strategic postures & trends/expectations (see Impact Matrix Example) • instead of M1, S1, T1, E1, etc. • Items explained sufficiently and in proper order in the report. (ref. MOT example) • Summary of N & S analysis: Figure 3 & 7. • Impact matrix example Sheu

20. Some techniques for consideration • On giving points: (Delphi approach) • 1) Each one grades individually. • 2) Every one presents grade to the group and the ones with extreme points explains the reason for the grade. • 3) Allow everyone to re-grade after listening to other's opinions. • 4) Average out the grade as final score. (Alternative: could repeat 2)-4) until the spread of the grades is acceptable.) • On getting recommendations: • Nominal group technique • Leader explain problem/issue & ask for ideas • Allow some quiet time for members to think and write down ideas. • One by one, members report their ideas to the group. List ideas in front of the group. • Members continue to add ideas possibly stimulated by the reported ideas. • It is OK to skip a turn if no idea to report. • Continue to report and list ideas in rounds until all ideas are reported. • Go to next stage of evaluating/discussing the ideas. Eventually identify some feasible solutions. Sheu

21. HW & Common Pitfalls Homework 2: (up to step 8) Do an extended N&S analysis. • Due in 3 weeks. (combine groups into super group: 5 persons) • 20 min. oral report of your HW. Mission/Strategy/Key impacts. Final report: complete all steps of ENS. Common Pitfalls for N&S Reports • Missing Co. profile • Unclear missions. • Must be specific to define who your customers are; what product/service; What value, etc. • Confuse mission w/ strategy • Did not explain the missions/strategies • Did not explain the impacted cells (score +- 3-5). • Unclear linkage: • High impact items => recomm. Changes => Org. responsiveness => IT opportunity Sheu