IT Strategic Analysis

The starting point for the process of strategic analysis in the area of IT technology should be the goals and general strategy of the company, expressed in answers to the following questions[1]:

• Where (in what markets), how (with what tools) and with whom does the company intend to compete?
• In which market segments does the company want to be (be present)?
• What are the needs (requirements) of customers in particular market segments?
• What criteria (preferences) do customers use in their purchasing decisions in particular market segments?
• What key success factors do the company’s main competitors use?
• What competitive strategy should the company adopt in each of the market segments served?

After determining the anticipated/desired situation on the market, it is necessary to determine the technological needs (including in the IT area), which should be the purpose  of a technological audit of the company. Generally, an audit is used to assess, carried out by a competent and independent audit team, whether the entity subjected to the assessment meets certain patterns and standards, expressed in previously codified requirements. A technological audit should include[2]:

• audit of technological potential (with particular emphasis on IT technology resources),
• audit of applied procedures,
• audit of the company’s technological needs.

The subject of the technological potential audit should be individual IT technologies as well as groups of related IT technologies. The assessment should be based on the current degree of utilization of the capabilities of the IT technologies (including, m.in. technological devices, server rooms, external IT services), with a focus on those IT technologies that directly affect the level of competitiveness of existing products, including quality, costs, execution time, consumption of energy, materials, environmental pollution, etc. Usually, the possibilities of IT technology at the company’s disposal are not fully exploited. The identified gap can be mitigated through a variety of improvement measures, including improving the use of IT technology (through organizational changes) or modernizing it (which requires investment).

The assessment of the technological potential of a company’s IT is also related to determining the extent to which it has mastered the ability to use IT technology. It is expressed by the competitive position of the entity, which can be:

• leading (obvious leader) – when the company determines the pace and directions of technological development, being recognized as a leader in the industry,
• strong – when the company is able to undertake independent technical actions and set new directions,
• satisfactory – which means the position of a market player, able to maintain technological competitiveness and/or leadership in technical niches,
• defensive – when the company is unable to set independent directions, being constantly in the position of catching up,
• Poor – refers to a company unable to maintain the technical quality of work compared to its competitors, focused on short-term “fighting fire”.

The so-called portfolio methods can be helpful in the analysis and assessment of technological potential. They consist in the analysis of a set (portfolio, set) of IT technologies used or required for the production of specific products. One of the leading methods of portfolio technology analysis is the A.D. Little model (Figure 1). Individual IT technologies are presented in the form of circles, arranged in a matrix, in a position corresponding to the technology assessment on the following scales:

• opportunities for competitive technologies and
• competitive position of the undertaking.

The third criterion is the size of the resources involved in a given IT technology, symbolized by the size of the diameter of the circle. In the example presented in Figure 1, the IT technology portfolio (and thus the company’s competitive position in the field of technology) can be described as positive. This is evidenced by its favourable position in key technologies. The low commitment to future-oriented technologies may be worrying. Hypothetical decisions, shown in Figure 1, serve to maintain or strengthen the company’s technological potential in the IT area, thanks to which the competitive position in various market segments will be strengthened or maintained.

Figure 1. Example of the A.D.Little model of portfolio analysis of IT technologies used in the enterprise
Source: Based on K. Santarek (ed.), Technology transfer from academia to business. Creating Technology Transfer Mechanisms, PARP, Warsaw, September 2008, p. 25.

The audit of the applied procedures goes far beyond technological issues and covers the areas discussed below (after: P. Głodek, M. Gołębiowski):

• Business management, including organization and organizational structure, objectives and strategy, management of investment projects and projects related to innovation and technology transfer.
• Human resources, including human resources, motivations, staff development instruments (courses, training, internships, etc.), training needs, way of working.
• Operational activities, including the structure of production processes, material flows, production automation, maintenance organization, occupational safety, bottlenecks.
• Research and development activities, including the objectives and strategy of R+D activities as well as their scope and forms, procedures used, product life cycle analysis, pro-innovation projects.
• Quality, including the organization of quality management functions, standards, control procedures used.
• Marketing and sales, including marketing goals and strategy, marketing functions carried out in the company, market shares, competitive position of the company, distribution channels, areas of use of information technologies.

The result of the review of IT technology resources and technological potential, as well as the identification and evaluation of the procedures used, should be the determination of the needs in terms of the necessary IT technologies and knowledge, as well as the ways to acquire them and strengthen the technological position of the enterprise. For this purpose, you can use internal, external and combined sources, discussed by us in our previous article. Among the channels of acquiring IT technologies that can be used, we can m.in mention:

• purchase and implementation of ready-made IT solutions,
• courses and trainings,
• employee takeovers,
• purchase of research results,
• consulting companies,
• intermediary institutions in technology transfer,
• patents and licenses,
• strategic alliances,
• other business solutions (m.in. joint ventures, acquisitions, etc.).

The choice of the source and method of obtaining technologies depends on their availability on the market, their importance to the company and its capabilities. Examples of ways of acquiring technologies of various importance for the competitiveness of the company’s products are presented in the Figure 2.

Figure 2. Exemplary channels of IT technology acquisition by the company
Author’s own elaboration based on: K. Santarek (ed.), Transfer of technology from universities to business. Creating Technology Transfer Mechanisms, PARP, Warsaw, September 2008, p. 27.

[1] K. Santarek (ed.), Transfer of technology from academia to business. Creating Technology Transfer Mechanisms, PARP, Warsaw, September 2008, p. 19.

[2] Prepared on the basis  of K. Santarek (ed.), Transfer of technology from universities to business. Creating mechanisms for technology transfer, PARP, Warsaw, September 2008, pp. 19-27; P. Głodek, M. Gołębiowski, Technology transfer in small … Op. Cit. pp. 22-23.

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