IP CEIT INICTEL-UNI

India Peru Centre of Excellence in Information Technology

PROGRAMA DE CERTIFICACIÓN PROFESIONAL

Strategic and
Operational Planning

Instructor - India Peru Centre of Excellence in Information Technology

 Index

• Concept Of Strategy
• Levels At which Strategy Operates
• Approach to Strategic Decision making
• Strategic thinking
• Replacing planning with strategic thinking
• Strategic management process
• Mission and Purpose, Objectives and Goals,
Strategic Business Units.
 Strategic Planning

• Strategic planning is an organization's process of defining

its strategy, or direction, and making decisions on
allocating its resources to pursue this strategy.
• It includes setting goals, determining actions to achieve
the goals, and mobilizing resources to execute the
actions.
• Strategy includes processes of analyzing ,formulation and
implementation and Evaluation.
• Defining Organizations boundaries and it’s area of
working .
 Strategic Planning

• Strategic planning is a process having inputs,

activities, outputs and outcomes.
• It is iterative, with feedback loops throughout the
process.
• Strategic planning provides inputs for strategic
thinking, which guides the actual strategy formation
• It includes diagnosis of the environment and
competitive situation, what the organization intends
to accomplish, and key initiatives or action plans for
achieving the guiding policy.
 Strategic Planning

• Michael Porter’s formulation of competitive strategy

includes consideration of four key elements:
– Personal values of the key implementers (i.e.,
management and the board);
– Company strengths and weaknesses;
– Industry opportunities and threats; and
– Broader societal expectations
 Strategic Planning Process

• Inputs
– Data is gathered from a variety of sources.
– Interviews with Stakeholders
– Primary Research & Resources
– Review of publicly available documents on the
competition or market
– Observing competitor places of business or
comparing price.
– These values may be captured in an
organization's vision and mission statements.
 Strategic Planning Process

Activities
– Meetings among the Management Board of the
Organization
– Meetings at the lower level in the organization.
– Working on the making the most suitable plan to
that environment.
– Working on the documentation.
 Strategic Planning Process

• Outputs
– Includes documentation and communication
describing the organization's strategy.
– How it should be implemented.
– The strategy may include a diagnosis of the
competitive situation, a guiding policy for
achieving the organization's goals, and specific
action plans to be implemented.
– A strategic plan may cover multiple years and be
updated periodically.
 Strategic Planning Process

• Outcomes
– Strategy implementation or execution of the
strategic plan produces Outcomes.
– Outcome decide the success or failure of the
strategic Plan.
– As the strategic planning is a iterative process.It is
in a continuous process to improve and change
your strategies from time to time.
Strategic Planning Process
Levels At which Strategy Operates
 Levels At Which Strategy Operates

• Corporate Level Strategy

– The highest level of strategic decision-making.
– Dealing with the objective of the firm, acquisition
and allocation of resources and coordination of
strategies of various SBUs for optimal performance.
– Top management of the organization makes such
decisions.
– The nature of strategic decisions tends to be value-
oriented, conceptual and less concrete than
decisions at the business or functional level.
 Levels At Which Strategy Operates
• Business-Level Strategy.
– applicable in organizations where there are different businesses-and
each business is treated as strategic business unit (SBU).
– to identify the discrete independent product/market in organization.
– Each product/market segment has a distinct environment, a SBU is
created for each such segment.
– For each product group, the nature of market in terms of customers,
competition, and marketing channel differs.
– corporate strategy usually applies to the whole enterprise, while
business strategy, less comprehensive, defines the choice of product
or service and market of individual business within the firm.
– business strategy relates to the ‘how’ and corporate strategy to the
‘what’.
 Levels At Which Strategy Operates
• Functional-Level Strategy.
– Relates to a single functional operation and the activities involved
therein.
– Deals with relatively restricted plan providing objectives for specific
function, allocation of resources among different operations within
that functional area and coordination between them for optimal
contribution to the achievement of the SBU and corporate-level
objectives.
– Below the functional-level strategy, there may be operations level
strategies as each function may be dividend into several sub functions.
– For example, marketing strategy, a functional strategy, can be
subdivided into promotion, sales, distribution, pricing strategies with
each sub function strategy contributing to functional strategy.
 The Essence of Strategic Thinking
• strategic thinking involves the generation and application of
unique business insights and opportunities intended to create
competitive advantage for a firm or organization.
• It can be done individually, as well as collaboratively among
key people.
• Group strategic thinking is required when there are critical
and complex issues in organization. This is regarded as a
benefit in highly competitive and fast-changing business
landscapes.
• more staff ,more projects and self growing is required in
organization. Lot of Challenges are involved in internal and
external of the organization.
 The Essence of Strategic Thinking

• Develop a clear analysis of the organizations' business position internally

and in the market place.
• Identify future consequences and trends ,business issues, problems or
opportunities
• Create cross functional thinking and action that improve strategy
development across the business
• Analyze and determine a specific call to action to address critical business
issues
• Develop a clear focus and directions to strategic plans and understanding
the inherent barriers and risk.
• Create a vision that mobilizes and inspires others by immediately applying
the skills learned to your own case and obtain feedback from the
organization's leaders
 Strategic Management Process

• The strategic management process means defining the

organization’s strategy.
• It is also defined as the process by which managers make a
choice of a set of strategies for the organization that will
enable it to achieve better performance.
• Strategic management is a continuous process that appraises
the business and industries in which the organization is
involved; appraises it’s competitors; and fixes goals to meet all
the present and future competitor’s and then reassesses each
strategy.
 Strategic Management Process
• Strategic management process has following steps:
– Environmental Scanning- The process of collecting, scrutinizing
and providing information for strategic purposes. It helps in
analyzing the internal and external factors influencing an
organization. After executing the environmental analysis
process, management should evaluate it on a continuous basis
and strive to improve it.
– Strategy Formulation- The process of deciding best course of
action for accomplishing organizational objectives and hence
achieving organizational purpose. After conducting environment
scanning, managers formulate corporate, business and
functional strategies.
 Strategic Management Process

• Strategy Implementation- Making the strategy work as intended or

putting the organization’s chosen strategy into action. Strategy
implementation includes designing the organization’s structure,
distributing resources, developing decision making process, and managing
human resources. strategy as well as it’s implementation meets the
organizational objectives.
• Strategy Evaluation- The final step of strategy management process. The
key strategy evaluation activities are: appraising internal and external
factors that are the root of present strategies, measuring performance,
and taking remedial / corrective actions. Evaluation makes sure that the
organizational strategy as well as it’s implementation meets the
organizational objectives.
 Major Component in Strategic
Planning

• Mission
• Vision
• Goals
• Objectives
• Initiatives
• Measures
• Targets
 Major Components of the
Strategic Plan / Down to Action

Strategic Plan

Action Plans
Mission Why we exist
Evaluate Progress

Vision What we want to be

Goals What we must achieve to be successful

Objectives O1 Specific outcomes expressed in

O2
measurable terms (NOT activities)

Initiatives Planned Actions to

AI1 AI2 AI3 Achieve Objectives

Measures Indicators and

M1 M2 M3 Monitors of success

Targets T1 T1 T1 Desired level of

performance and timelines
 Mission Statement

• Captures the essence of why the organization exists –

Who we are, what we do
• Explains the basic needs that you fulfill.
• Expresses the core values of the organization
• Should be brief and to the point
• Easy to understand
• Should define unique nature of your organization and the
role it plays that differentiates it from others
• Inspiring
• Short and Memorable
• What the company want to be remembered for.
 Vision Statement

• How the organization wants to be perceived in the

future – what success looks like
• An expression of the desired end state
• Challenges everyone to reach for something
•significant – inspires a compelling future
• Provides a long-term focus for the entire
organization.
 Guiding Principles and Values

• Every organization should be guided by a set of

values and beliefs
• Provides an underlying framework for making
decisions – part of the organization’s culture
• Values are often rooted in ethical themes, such as
honesty, trust, integrity, respect, fairness.
• Values should be applicable across the entire
organization
• Values may be appropriate for certain best
management practices – best in terms of quality,
exceptional customer service, etc.
 Goals

• Describes a future end-state – desired outcome

that is supportive of the mission and vision.
• Shapes the way ahead in actionable terms.
• Best applied where there are clear choices about
the future.
• Puts strategic focus into the organization – specific
ownership of the goal should be assigned to
someone within the organization.
• May not work well where things are changing fast
– goals tend to be long-term for environments that
have limited choices about the future.
 Developing Goals

• Cascade from the top of the Strategic Plan –

Mission, Vision, Guiding Principles.
• Look at your strategic analysis – SWOT,
Environmental Scan, Past Performance, Gaps . .
• Limit to a critical few – such as five to eight goals.
• Broad participation in the development of goals:
Consensus from above – buy-in at the execution
level.
• Should drive higher levels of performance and
close a critical performance gap.
 Objectives

• Relevant - directly supports the goal

• Compels the organization into action
• Specific enough so we can quantify and measure the
results
• Simple and easy to understand
• Realistic and attainable
• Conveys responsibility and ownership
• Acceptable to those who must execute
• May need several objectives to meet a goal
 Goals vs. Objectives

GOALS OBJECTIVES

Very short statement, few Longer statement, more

words descriptive
Broad in scope Narrow in scope
Directly relates to the Mission Indirectly relates to the Mission
Statement Statement
Covers long time period Covers short time period (such 1
(such as 10 years) year budget cycle)
 What are Action Plans?

• The Action Plan identifies the specific steps that will be taken to
achieve the initiatives and strategic objectives
• Each Initiative has a supporting Action Plan(s) attached to it
• Action Plans are geared toward operations, procedures, and processes
• They describe who does what, when it will be completed, and how the
organization knows when steps are completed
• Like Initiatives, Action Plans require the monitoring of progress on
Objectives, for which measures are needed

Objectives

Initiatives

Action
Plans
 Characteristics of Action Plans

• Assign responsibility
• Detail all required steps .
• Establish a time frame for the completion each steps.
• Establish the resources required to complete the steps.
• Define the specific actions (steps) that must be taken to
implement the initiative.
• Determine the deliverables in measurable terms
• Identify in-process measures to ensure the processes used to
carry out the action are working as intended.
• Define the expected results and milestones of the action plan.
• Provide a brief status report on each step, whether completed or
not.
• If you have several action plans, you may have to prioritize.
 Action Plan Execution
• Answered the Who, What, How, Where, and When
questions related to the project or initiative that drives
strategic execution
• Coordinate with lower level sections, administrative and
operating personnel
• Assign action responsibility and set timelines .
• Resource the project or initiative and document in the
form of detail budgets
• Monitor progress against milestones and measurements
• Correct and revise action plans per comparison of actual
results against original action plan
 Quantify from Action Level Up
in terms of Measurements
• Measure your milestones – short-term outcomes at
the Action Item level.
• Measure the outcomes of your objectives.
• Try to keep your measures one per objective.
• May want to include lead and lag measures to
depict cause-effect relationships if you are
uncertain about driving (leading) the desired
outcome.
• Establish measures using a template to capture
critical data elements
 Criteria for Good Measures

• Integrity – Complete; useful; inclusive of several

types of measure; designed to measure the most
important activities of the organization
• Reliable: Consistent
• Accurate - Correct
• Timely – Available when needed: designed to use
and report data in a usable timeframe
• Confidential and Secure: Free from inappropriate
release or attack
 Targets

• For each measurement, you should have at least

one target
• Targets should stretch the organization to higher
levels of performance
• Incremental improvements over current
performance can be used to establish your targets
• Targets put focus on your strategy
• When you reach your targets, you have
successfully executed your strategy