McFarlan's Portfolio Framework

Definition: McFarlan developed this portfolio framework in 1984, which organization can analyze their mix of existing, planned, and potential information systems. Other than that, this framework can be applied to any type of application, including e-commerce, it can be categorized as a four-cell matrix. Applications are classified into High potential, Key Operational, Strategic and Support.

Purpose: The strategic grid model is an IT specific model that can be used to access the nature of the projects that the IT organization with the aim of seeing how well that portfolio supports in operational and strategic interests of the firm.

Example:

High potential - applications that may be important in achieving future business success for example in human resources planning.

Key Operational - applications upon which the organization currently depends for success such as inventory control, personnel duties.

Strategic - applications that are critical for future business strategy for example in enterprise resource planning, e-procurement.

Support - applications that are currently valuable and important for business purposes such as videoconferencing and multimedia presentation for meeting.