Technical Analysis and Strategic Projection

Transcription

1 Strategic Planning in a Software Company Professor Jyrki Kontio Software Business Laboratory Helsinki University of Technology SOFTWARE BUSINESS LABORATORY Helsinki University of Technology What is a Strategy? Definition of what we want to accomplish and how we plan to achieve it Consists of Situation and environment analysis Planning of future scenarios, visions Strategic intent we will be satisfied when... Definition of what it takes reach the strategic intent who are the customers, what is the product offered to them, how is it marketed, what is the added value the product provides, how products differ from competitors products Mission Concise statement of the purpose of the organization Date: 15-Feb-05 Jyrki Kontio Page: 2 1

2 Strategic Planning and Deployment Cycle Strategic Positioning Resources Environment Feedback and follow-up Business model Mission, Strategic Intent, Values Action Plan Deployment Objectives and measures Date: 15-Feb-05 Jyrki Kontio Page: 5 Strategic Positioning What business are we in and how do we differ from other players? Customers and markets Offering: products and services Sales and distribution channels Competitors Value proposition Differentiation from competition Critical success factors Revenue logic How does the money flow in? Strateginen asemointi Missä bus. olemme? Voimavarat Mitä voimavaroja tarvitsemme? Ympäristö Missä ympäristössä toimimme? Seuranta ja palaute Liiketoimintamalli Missio, visio, arvot Toimenpiteet Tavoitteet, mittarit Date: 15-Feb-05 Jyrki Kontio Page: 6 Jalkautus 2

3 Customer s value chain Value Proposition Product Offering Software Functionality Services Process capability Architecture and technology People HELSINKI UNIVERSITY OF TECHNOLOGY 7 Resources What are the resources needed to compete in the business? Capabilities Competences of personnel Processes IT-systems and infrastructure Position in the environment Position in the value chain Partners and subcontractors Other resources Company structure Financial resources Brand IPR Strateginen asemointi Missä bus. olemme? Voimavarat Ympäristö Mitä voimavaroja tarvitsemme? Missä ympäristössä toimimme? Seuranta ja palaute Liiketoimintamalli Missio, visio, arvot Toimenpiteet Tavoitteet, mittarit Date: 15-Feb-05 Jyrki Kontio Page: 8 Jalkautus 3

4 Capabilities and Competitiveness Large Impact on competitiveness Small Radical Capabilities Competitive Capabilities Basic Competitive Capabilities Support Capabilities Capabilities that create a radical, novel and new compatitive advantage. Usually through points of discontinuity. Capabilities that create a Competitive Advantage (CA) for a company Capabilities that are common to companies in the industry and satisfy the Basic Competitive Requirements (BCRs) in the industry. They are necessary but not sufficient prerequisities for being in the business Capabilities that have an indirect effect on competitiveness. Date: 15-Feb-05 Jyrki Kontio Page: 9 Includes process definitions and information systems that are used Management System Organizational structure Competencies existing in the organization Products and roadmaps Customer base and targeted segments Partners Operational model Processes/ Systems Organization/ Competence Products/ Customers/ Partners Execution Business/ product programs Customer Cases Demand/ Supply Chain Product development projects and programs Marketing and sales activities Manufacturing of products Inbound logistics Product delivery to customers Date: 15-Feb-05 Jyrki Kontio Page: 10 4

5 Management System Strategy/ Intent & Objectives Operational model Processes/ Systems Organization/ Competence Products/ Customers/ Partners Reviews Execution Business/product programs Customer Cases Plans Demand/ Supply Chain Actions Metrics Date: 15-Feb-05 Jyrki Kontio Page: 11 Examples of Capabilities Asiakastoimialan ja tarpeen ymmärtäminen Asiakkuuksien ja asiakastarpeiden hallinta Kokonais- tai ratkaisutoimituskyky Teknologian kehittämisen hallinta Tuotteistamisen hallinta Markkinoinnin ja myynnin hallinta Toimitus- ja palveluketjun hallinta Muuntautumiskyky Osaamisen hallinta Date: 15-Feb-05 Jyrki Kontio Page: 12 5

6 Analysis of the Environment What is the environment in our business? What factors and players influence our business? How do the changes influence our business? Competitors, current and new Bargaining power of customers Bargaining power of suppliers Threat of competing products Availability if complementary products Seuranta ja palaute Voimavarat Mitä voimavaroja tarvitsemme? Strateginen asemointi Missä bus. olemme? Liiketoimintamalli Missio, visio, arvot Toimenpiteet Tavoitteet, mittarit Ympäristö Missä ympäristössä toimimme? Date: 15-Feb-05 Jyrki Kontio Page: 13 Jalkautus Sources of Changes in the Environment Political changes Economic changes and trends Social and cultural changes Technology changes Legal changes The environment Industry changes Between industry Within an industry Date: 15-Feb-05 Jyrki Kontio Page: 14 6

7 Examples of an Industry Change Vertical Software Industry Structure ca s New horizontal industry structure ca Myynti ja jakelu Dealerit Vähittäismyymälät Superstoret Suoramyynti Myynti ja jakelu Sovellusohjelmistot Word Word Perfect ym. Sovellusohjelmistot Varusohjelmistot DOS ja Windows OS/2 Mac Unix Varusohjelmistot Laitteistot Compaq Dell Packard Bell HP IBM ym. Laitteistot Suorittimet Intel arkkitehtuuri Motorola RISCt Suorittimet IBM Digital Sperry Wang Andy Grove, 1996 Date: 15-Feb-05 Jyrki Kontio Page: 15 Strategic Intent Strategic intent describes the planned state of the firm Usually (or ideally) in terms of concrete, measurable objectives Fixed to a specific point in time Highlights the differences from the current state Often a stretch state, i.e., ambitious set of objectives Sometimes the term vision is used Strateginen asemointi Missä bus. olemme? Voimavarat Mitä voimavaroja tarvitsemme? Ympäristö Missä ympäristössä toimimme? Seuranta ja palaute Liiketoimintamalli Missio, visio, arvot Toimenpiteet Tavoitteet, mittarit Date: 15-Feb-05 Jyrki Kontio Page: 16 Jalkautus 7

8 Examples of Mission Statements Our overriding objective is to create shareholder value by continuing to be the world's premier entertainment company from a creative, strategic, and financial standpoint We will be the leading forest product company in the world. We take the lead in developing the industry. Customers choose us because of the value we create for them. We attract investors because of the value we create. Our employees are proud to work with us. We are an attractive partner for our suppliers To be the world leader - the customer's first choice - in construction services and project development. Date: 15-Feb-05 Jyrki Kontio Page: 17 What Is a Value? Collins and Porras (Built to Last): Core values are principles that describe the fundamental [good] beliefs and principles that are shared by all people in the company. Having good values correlates with long-term success of a company Date: 15-Feb-05 Jyrki Kontio Page: 18 8

9 Common Values (AMA survey) Q. What are the stated values of your organization? Customer satisfaction 77% Ethics/integrity 76% Accountability 61% Respect for others 59% Open communication 51% Profitability 49% Teamwork 47% Innovation/change 47% Continuous learning 43% Positive work environment 42% Diversity 41% Community service 38% Trust 37% Social responsibility 33% Security/safety 33% Empowerment 32% Employee job satisfaction 31% Have fun 24% Date: 15-Feb-05 Jyrki Kontio Page: 19 Why Are Values Important One of the most important management tools when managing dynamic business (Alahuhta) Some values correlate with research and creative work (Kanter; Rubenstein; Constantine; Humphrey): Open communication Trust Mutual respect Date: 15-Feb-05 Jyrki Kontio Page: 20 9

10 Whose values are these: Customer satisfaction Respect for individual Achievement Continuous learning Answer: Nokia A successful example of a company that applies values consistently Integrity Respect Excellence Communication Answer: Enron Enron turned out to be one of the biggest corporate frauds in U.S. business history Stated values and real values are not the same thing Empty or phony value statements create cynical and dispirited employees and undermine managerial credibility Date: 15-Feb-05 Jyrki Kontio Page: 21 Key Lessons (Lencioni) Understand the different types of values: Core: deeply ingrained principles that guide all actions and are part of the organization's culture Aspirational: values that are lacking, but are needed Permission-to-play: values that reflect minimum behavior and social standards for employees Accidental: Values that develop without being cultivated by management and reflect the common interest and personalities of employees Be aggressively authentic Own the process Weave core values into everything Date: 15-Feb-05 Jyrki Kontio Page: 22 10

11 Deploying Values Values must be authentic and specific to the organization Values should not be developed by building a consensus but they should impose a set of fundamental, strategically sound beliefs on a broad group of people. values should be developed by a small group, including any founders, the CEO, and a handful of key employees. This process should not be rushed. The authentic set of core values need to be integrated into every employee related process We all should constantly reminding employees that core values form the basis for every decision the organization makes Core values should be embedded into the system and continuously promoted and reinforced. Date: 15-Feb-05 Jyrki Kontio Page: 23 Strategy As an Intention vs. Outcome Organizations develop plans for their future They also evolve patterns out of their past Plans => Intended strategy Patterns => Deliberate strategy Changing environment => Emergent strategy Plans + Patterns + Externalities => Realized strategy Date: 15-Feb-05 Jyrki Kontio Page: 27 11

12 Kirjallisuutta Geoffrey A. Moore, Crossing the Chasm David B. Yoffie, Michael A. Cusumano, Competing on Internet Time David B. Yoffie, Judo Strategy John W Mullins, The New Business Road Test: What Entrepreneurs and Executives Should Do Before Writing a Business Plan Peter F. Drucker, Management Challenges for the 21st Century Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors Henry Mintzberg et al., Strategy Safari: A Guided Tour Through the Wilds of Strategic Management Date: 15-Feb-05 Jyrki Kontio Page: 28 12