McFarlan’s Portfolion Framework (amir .sh)

Definition of the framework

In general, a framework is a real or conceptual structure intended to serve as a support or guide for the building of something that expands the structure into something useful.

Frameworks to guide strategic decision making in aligning IT and strategy:

• Strategic Grid by Warren McFarlan

• Strategic Alignment Model by Henderson &Venkatrame

The strategy grid by Warren McFarlan is constructed from two dimensions. One dimension is the impact of IT on business operations, and the other is the impact of IT on strateg.

Purpose:

Support: IT of little impact. Low spending. Invisible to senior management. Might have low-level office systems specialists. e.g. Cement Factory

Factory: Applications which are critical to sustaining existing business. Have on-line real-time systems for daily operations.Significant IT budget. e.g.. Steelworks, oil refinery

Turnaround: Education programs in place for senior management. Move from back office computing to center stage. e.g. Some retailers

Strategic: Applications which are crucial for future success.The business is shaped by the IT systems it uses. e.g. Banking, credit card companies, insurance.

Example:

Support: e.g. Cement Factory

Factory: e.g.. Steelworks, oil refinery

Strategic: e.g. Banking, credit card companies, insurance

Turnaround: e.g. Some retailers