McFarlan’s Portfolion Framework

Defination :Assess portfolio of IT initiatives & projects on 2 dimensions: Impact on business operations and impact on strategy .These implication are applied in the current and future strategy of a company , measuring how crucial ‘s IT Technologies ,equipment’s, or infrastructure acquisition for its success and competitive advantage.

Exhibit: MaFarlan’s Grib

Purpose:The following is the usage of how ,when and when McFarlan ‘s applied in an organasation.Four quadrants to guide IT project portfolio decisions – companies may move from one to another over time:

Support: low/low: Law firms invest in human capital, can live with IT down time
Factory: low impact on strategy, high impact on business operations (reduce costs, improve performance: NASDAQ has zero tolerance for IT downtime
Turnaround: low impact on business operations, high on strategy – designed to exploit business opportunities
Strategic: high/high –Charles Schwab depends on IT innovations

Exhibit 1: IT and Strategy


Even as illustrated in the above Grid Nasdaq and Charles schwad Companies already have implemented McFarlan’s strategy

Source: www.csupomona.edu/~llsoe/673/ppt/chapter1.ppt