What Is a Strategic Grid?

Written by kay tang
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The strategic grid was introduced in 1983 by McFarlan, McKenney and Pyburn in Harvard Business Review's "The Information Archipelago -- Plotting a Course." Management can use the grid as a framework to evaluate the information technology (IT) portfolio within an organisation.

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Grid Structure

The strategic grid is two-dimensional graph. The horizontal or X axis measures how IT affects the organisation's strategy. For some companies, such as Microsoft, Walmart and FedEx, market positioning is contingent on IT initiatives. The vertical or Y axis gauges the impact of IT on operations. For other organisations, such as eBay, Amazon and AOL, survival pivots on robust IT operations. A brief interruption in IT-enabled service may be costly, if not crippling.

Four Quadrants

The grid created by the X and Y axes can be subdivided into four quadrants: "support" or low strategic and operational impact; "turnaround" or high strategic impact and low operational impact; "factory" or low strategic impact and high operational impact; and, "strategic" or high strategic and operational impact. While IT projects in turnaround cover new technologies that would exploit market opportunities, projects in support encompass process enhancements for unique users.

Use by Chief Information Officer

The CIO leverages the strategic grid to identify IT projects that can be outsourced, manage the governance of the IT portfolio and align IT initiatives with strategic objectives.

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