The McFarlan Strategic IT/IS Grid

•The McFarlan is a much quoted and typical example of a 2x2 business analysis matrix.

•The strategic grid model analyses the applicability of IT as a strategic weapon on the industry level.

•The model classifies the industries according to their present and medium-range affectedness by thestrategic impact of IT applications.

McFarlan's IT portfolio matrix

High

^

|---------------------------------------------------------------|

|strategic | Turnaround |

Impact |---------------------------------------------------------------|

of IS/IT |Critical to achieving |May be critical to |

applications |future business strategy. |achieving future |

on future | (Developer) |business success |

industry | | (Entrepreneur) |

competitiveness |Central Planning | |

| |Leading Edge/Free Market |

|---------------------------------------------------------------|

|Critical to existing business |Valuable but not critical |

|operations |to success |

| (Controller) | (Caretaker) |

| | |

|Monopoly |Scarce Resource |

|_______________________ |__________________________ |

|Factory | Support |

|<---------------------------------------------------------------Low

High

The business analysis can be positioned under 4 classification:

• Support

– The impact of IS in existing / future application development is low

– IT/IS is used essentially for administrative systems to improve internal efficiency.

• Factory / Production

– IT/IS is critical to current operations but is not at the heart of the company’s strategic development

– Reliable information systems are required for administrative and process management.

– Future IT applications are not the critical factor for future business success.

• Turnaround

– IT is becoming more pervasive and is recognized as a tool for transformation

– The systems that have being planned and developed may be critical to the enterprise’s survival or growth

– However there is uncertainty as the capabilities of the company in terms of delivery and support are untested

• Strategic

– Some enterprise will be operating in conditions where IT is already a central and their future are depending upon and shaped by development in information systems

– Business operations are not possible without the use of advanced information systems.

– The products and services tend to be computer based.