Understanding Strategic Planning By Matthew Coppola-wetnwild

Would you all agree that it"s important for a BA to understand and clearly explain to stakeholders why their project is significant? Well it is very important, An understanding of the reason why a project is being undertaken boils down to the organisations strategic plan. So it"s a good for a BA to understand how their project aligns with the organisations strategic plans. Not only that, but executives look for individuals who have the ability to look at an organisation holistically and can articulate how day to day tasks support the big picture. Now BA"s may not be involved directly in creating strategic plans, but it is good to be aware of them and make sure that all of their work aligns with the plan. Part of the role of the Business Analyst is to interpret business strategies into proposed new business solutions and continual business operations by way of Enterprise Analysis. The strategic planning process provides the framework in which Enterprise Analysis is conducted. So today we will be looking at what strategic planning is and why organisations implement projects based on their strategic plan. We will also be drawing upon examples of strategy from golf, war, chess, Monopoly, a financial planning practice and many more then tying these to business strategy. Now, before we begin, could I have three volunteers to .e up on stage for a demonstration? _________________________________________________________________________ BALL GAME Invite 3 people up on to stage. Hand everyone 5 balls. Firstly explain the act to throw the balls to each other, but in no system. See how problems are occurring because no strategy is in place. Now we are going to try again, but this time with a strategy they can use. Secondly give them a strategy to use, and then they throw the balls. See these three individuals still have the same amount of balls, but with a co-ordinated system in place they are not dropping the balls. Now that, my friends, is strategy. Thanks guys for volunteering ___________________________________________________________________________ NEXT SLIDE (Explain contents) NEXT SLIDE How did you all .e here today? No doubt some of you may have used a road map or GPS if you took your car. A strategic plan is like a road map. It provides us with the big picture so we can plan our route from start till end. Unfortunately in business we cannot see that far ahead. So that"s why a strategic plan provides us with the big picture, helping us to choose the best avenue to take from a number of alternatives. Would a road map be good if it was in black and white and didn"t show the streets? Well no, A road map is very visual and colourful. It allows us to differentiate between streets, highways and freeways. It even shows us key landmarks and their names. Same with a strategic plan. A strategic plan allows us to "see" the organisation visually, including future projects to be initiated, marketing strategies, the financial position and recent changes in the organisation. So, what does a detailed strategic plan look like and what does it all mean? NEXT SLIDE 1.Introduction by the president of the board This is just a small cover letter introducing the plan from the director or president of an organisation"s board of directors. It"s simply a stamp of approval. NEXT SLIDE 2.Executive summary Most people are too busy and have very little time to read through a long document. It"s always a good read because it summarises the key points and what the main priorities of the organisation are. NEXT SLIDE 3.Mission statement & Vision The mission statement simply outlines the purpose of the organisation and why it exists. Take for example……..McDonald’s. McDonald"s brand mission is to "be our customers’ favourite place and way to eat." Next is the vision. The vision defines the key focus of the organisation. It"s critical for a successful plan to have a strong vision as this provides strategic scope for the organisation. For example…..Eagles. Eagles are well known for their extraordinary eyesight. The Bald Eagle for instance has two foveae or centers of focus that give birds the ability to see both forward and to the side at the same time. Having a good vision in strategy involves not only looking forward to the future, but looking at the present and how the strategy is in line with what the organisation is doing now. Like all birds, the eagle has colour vision, their eye is a little smaller than ours, but the sharpness of their vision is four times more than that of a person with perfect vision. Even an eagle flying at an altitude of 1000 feet over open country can spot its prey over an area of about 3 square miles from a fixed position. So a good strategy, be it an organisational strategy or even a personal strategy for yourself, should have a detailed and sharp vision of where to go. A blurry vision will only affect the end result. NEXT SLIDE 4.Organisation profile The organisational profile outlines how the organisation first started and its characteristics. Now the organisational profile is made up of the following 5 points: "who their previous clients have been, "what changes have been made in the .pany over time, "what products and services they offer, "what they specialise in and "past ac.plishments. A big annoyance of business executives is an external BA who is hired to .e in and help, without at all knowing the products or services the .pany is designed around. So it"s always good before starting any project or contract to do your research on the .pany. So how can we research an organisation we are working for? We can start off by looking at a .pany"s marketing materials and their website. Marketing materials say a lot about a .pany and how they want to differentiate themselves from .petitors. Websites are also good because they are continually updated with new information. I recently consulted and trained a hearing aid clinic in business process improvement. The first thing I did was look at the businesses website, read their brochures and marketing material I even researched information on business trends for hearing aid clinics and what is happening in the industry to improve processes. So after spending a couple of weeks learning about the business, following each employee around in their job, watching how they deal with customers and go about their routine activities, I gained not only an understanding of the business and its industry, but also the feel of what it"s like to be in their shoes. So it when it came to training and consulting management in ways they can improve business processes, I was able to .bine my knowledge and skills with a true understanding of how the business operates and its products. Remember, the more the BA knows about the marketing message that has been developed for outside customers, the better he or she will be able to .municate with business stakeholders about products and customers. NEXT SLIDE 5. Outline of core strategies This part explains the strategic thinking behind the plan. It"s the most interesting part of a strategic plan because it helps you understand why the organisation is making certain decisions. There are two parts to the business strategy "" firstly is an understanding of the business environment and secondly an analysis of the resources and capabilities that create a .petitive advantage. NEXT SLIDE Firstly we"ll look at the business environment. The surroundings of the business has a huge impact on the out.e of any strategy. Now an organisation may operate in a…..positive environment. But what if it is operating in a…..negative environment? Well then it may have detrimental effects to the business. An organisation would be a smart .pany if they took good note of their surroundings. Take for example….professional golf. (show golf ball) Professional golfers are not only good at accurately taking a swing and controlling the speed and height of the ball, but they also take into account how the environment affects their game. Pro golfers even look at the type of grass used on the golf course they are playing at. For example, certain types of grass will affect the size of a scuff mark or divot and your ability to create one. Divots are the amount of grass that shoots out after you hit the ball. It is very annoying to have to fix and also if your ball lands in someone else"s divot. Some grasses, such as bent grass, have a thinner and more delicate blade structure than most other grasses while their root structures are also more vertical. Together these traits mean that these grasses more easily produce divots. On the other hand, the Bermuda and fescue grasses that can be seen on a large number of golf courses in Queensland make it tougher to produce divots. These grasses feature wider and tougher blades. PEST Analysis (political, economic, social and technical) is a technique we use to analyse the business environment. But it can be very time consuming to do, and you would be forever finding new factors which may have little or no affect on your organisation"s strategy. So what we need to do is go back to the fundamentals: In making a profit, the firm needs to create value for customers. This requires an understanding of the customers: Who are they? What do they like? Why do they buy? In creating value, the goods and services are acquired from suppliers. So an understanding of the suppliers is required: Who do they also supply to? What do they supply? How can we develop a better relationship with them? Next, your organisations ability to generate profit from value creating activities depends on the .petition and how intense it is, this then relies on an understanding of your .petition: Who are they? What are they good at? What aren"t they good at? Who are their customers? Why are they in business? So your organisations business environment is formed by its relationship with three sets of players in the game: Customers, suppliers, and .petitors. This is its industry environment. So a key part in understanding the game being played is the ability to read your customers and know how to satisfy their needs depending on changes in the business environment. Professional golfers for example, read the grass by taking into account the characteristics of the putting grass used. This understanding enables them to be able to determine the "influence" on their ball "" that is, what factors will impact the direction and distance they require from a stroke. There are two factors which influence their ability to read the grass "" slope and grain Most greens are designed with some slope so they can drain away water and any green may include a number of slopes to influence your putt. Grain refers to the tendency of a species of grass to grow in a certain direction. Because greenkeepers rotate mowing patterns, a uniform pattern of grain generally is not established. Still, it"s valuable to understand the impact of grain. Grain has a tendency to run in the direction of the natural form of the land – away from hills and toward places where creeks and ponds naturally occur. Exposure to sunlight at only certain times is another factor. For example, Bermuda grass has a tendency to grow toward the sun. A professional will know whether they are putting the ball against the grain or not, and will change their style to suit. So the solution to the problem of environmental change is to understand your markets characteristics, that is, what are your customer"s underlying needs, rather than what are the specific products your customers need. Now we have just been talking about strategy and the external environment. Strategy is also concerned with matching the firm"s resources and capabilities to gain a .petitive advantage. NEXT SLIDE In a nutshell, a .petitive advantage is gained by having what .petitors don"t have and doing what .petitors don"t do. A .pany can gain a .petitive advantage by differentiating itself significantly to the extent that its products and/or services are a better offering in the customer"s product mindset than what the .petition have to offer. Take for instance wine. Why does chardonnay produced from grapes grown in the Yarra Valley taste different from a chardonnay whose home is in Burgundy, France? There are a number of ways a winemaker can change the taste of their wine. One way is by micro-oxygenating a red wine before bottling, which means introducing small amounts of oxygen which ages wine so that a young wine tastes like a mature one in 3 years instead of 10. But the answer to the unique taste .es down to soil and climate. With soil an expert winemaker will tell you that the best soils for growing grapes are the least fertile and rockiest soils. Soils filled with gravel drain easily, don"t hold water at the roots of the vine and so the grapes don"t be.e filled with water, diluting flavours. Like how different soils affect the taste of wine, in business strategy, a .petitive advantage is gained by being different, unique and having resources and capabilities that cannot be easily copied to gain the same advantage. By definition resources are the productive assets of the firm and capabilities are what the firm can do. A good strategy will have the right resources and capabilities to be different. For example to successfully play golf you need to know which golf putts are suitable for different scenarios Same with business strategy. Now resources are broken down into tangible, intangible and human resources. Tangible resources can be easily identified, such as financial resources and physical assets. Intangible resources are largely invisible, such as brand names, trademarks and intellectual property like patents and copyrights. Human resources are the productive assets that employees offer such as their skills and built up .pany knowledge. So let look at how we assess a .pany"s resources: NEXT SLIDE One way is to break down each resource by characteristics and the key indicators which show the strength of that resource in the .pany. RESOURCECHARACTERISTICSKEY INDICATORS TANGIBLE FinancialBorrowing capacityDebt/equity ratio, Credit Rating, Cash flow PhysicalSize and flexibility of plant equipment, raw materialsMarket values of fixed assets INTANGIBLE RESOURCES TechnologicalIntellectual property, trade secrets, patentsNumber and importance of patents, Revenue from licensing patents Reputation General standing and repute with the .munity, government, customers and suppliersBrand recognition, brand equity, Corprate reputation surveys "" Eg. Fortune HUMAN RESOURCESEducation and training of employees, loyalty of employeesAbsentee rates, employee turnover rates, professional qualifications of employees Once we have identified the organisations resources, we then ask two questions: Firstly what opportunities are available to economise on their use? It may be possible to use fewer resources to maintain the same level of business or use the same amount or resources to take on a greater level of business. For example an accounting system designed to improve the control of cash and receivables will allow a business to operate with lower levels of cash and liquid financial resources. A BA working on such an accounting system could then see how it relates to the organisation"s overall strategic plan and how with the new system it will be using less financial resources to support the activities of accounts receivable. Secondly can we capitalise on the existing assets? We might be able employ our existing resources better so that we get the most out of them. A good example is an organisation promoting an employee to a higher position as the previous position may not allow the employee to reflect their true potential. NEXT SLIDE To identify a firm"s capabilities, we can use a functional analysis. This is done by identifying organisational capabilities in relation to each of the principal functional areas of the firm: CORPORATE FUNCTIONS Eg. Strategic management of multiple businesses Exemplar "" Procter & Gamble MANAGEMENT INFORMATION Eg. MIS network linked to managerial decision making Exemplar "" Wal-Mart RESEARCH & DEVELOPMENT Eg. Innovative new product development A good exemplar is 3M Corporation This 108 year old .pany is still producing innovating products. One of their key innovation practices is by picking out the best ideas in a diverse range of technologies. So they"ll take one idea and apply it to another. For example they"ve used the technology that creates layered plastic lenses to make stronger, abrasive, more reflective signs and golf gloves that give you a tighter grip without squeezing as hard. OPERATIONS Eg. Continuous improvements in operations Exemplar "" Toyota (TPS – Toyota Production System using lean thinking strategies) PRODUCT DESIGN Eg. Design capability A good exemplar is Apple .puter Apple designers and engineers work together through every stage of product development. When Apple was building the Macbook Pro, they devised a way to replace all the different parts of a standard notebook into one. Which they call the unibody, a single piece of aluminium carved into an enclosure for the laptop. They also designed the trackpad to take into account sensitivity such as how much pressure triggers a click and the degree of friction over the surface, all to make sure their product was as ergonomic as possible and made operating the .puter smooth and easy. MARKETING Eg. Brand management Exemplar "" Procter & Gamble SALES & DISTRIBUTION Eg. Speed of distribution Exemplar "" Amazon.. NEXT SLIDE For a resource or capability to establish a .petitive advantage, two conditions must be present: Firstly, to what extent are they scarce? If a resource or capability is widely available within the industry, then even though it may still be fine to .pete, it does not qualify as a sufficient basis for .petitive advantage. So the harder the resources and capabilities are to obtain, the better the organisation will be able to sustain a .petitive advantage. Secondly, to what extent are they relevant? Resources and capabilities are more valuable to an organisation if they can be linked to one or more of the key success factors in an industry. Now how long a .petitive advantage can continue really depends on how strong the resources and capabilities are and whether rivals can copy the .petitive advantage they offer and their degree of Replicability. Resou The Advantages Of Using The Manufacturing Execution System By: Rosario Berry – Millions of factories around the world are making the use of Manufacturing Execution System for optimizing their industrial processes. Popularly known by its acronym MES, … Tags: Why Is The Use Of Pc Film And Sheet So Widespread? By: Rosario Berry – A lot of us, perhaps may not be familiar with the fact that millions of everyday objects are made from polycarbonate. 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