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SE ADMINISTRATION Level
–V

LEARNING GUIDE # 4
Unit of Competence: Match web and database Needs with

the Strategic Direction of the Enterprise

Ethiopia
Module Title: Matching IT Needs with the Strategic

Direction of the Enterprise

LG Code: EIS WDDBA5 M04 0322

TTLM Code: EIS WDDBA5 M04 0322

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Competency: Matching Web and Database Needs with the

Strategic Direction of the Enterprise

LO1. Evaluate current business strategy

1.1 Analysing current strategic plan of organization to understand industry
environment and current organizational goal
Analyze strategy
The strategic plan of an organisation sets out the goals a business hopes to achieve within a
specified period of time. It also helps the organisation understand the environment within which
they operate, and the market forces that affect them.
An analysis of the current strategic plan enables you to understand the goals of your
organisation. However, in order to analyse the strategic plan, you first need to understand the
structure and purpose of a strategic plan. This topic describes the elements that make up a
strategic plan.
What is strategy?
A strategy is a plan for action that sets out to achieve a goal or several goals. In a business
context, we define strategy as having some sort of goal for the future.
What is strategic planning?
Strategic planning, then, can be defined as follows:
‘Determining long–term objectives by analysing the strengths and weaknesses of an
organisation, studying opportunities and threats in the business environment, predicting
future trends, and projecting the need for new products and services.’ Source: Schwalbe
(2002, p544).
‘Strategic planning is the process of identifying long term organisational goals,
strategies, and resources. Strategic planning looks beyond day–to–day activities and
focuses on a horizon that is three, five, ten, or twenty years into the future.’ Source:
Shelly and Cashman, et al. (2001, p2.2).
‘Strategic planning is the use of strategies to develop a plan of action.’ Source: Viljoen
and Dann (2000, p618).
Strategic planning is a task that all organisations perform. For smaller businesses, this may be a
very informal process. The manager or owner of the business may decide the goals and
objectives of the business.
Example:

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 The owner of a business may decide that the business needs to update its computer
hardware over the next ten months.
 The manager may decide that their organisation needs to have a presence on the internet,
either in the form of
o a brochure site such as http://www.bigw.com.au
o an e–commerce site such as http://www.ebay.com/
The strategic plan will set out how these objectives will be achieved.
Larger organisations approach strategic planning more formally. Strategic planning will usually
be performed by management and/or the board of directors in an organisation.
Strategic planning is not something that the organisation completes once a year or once every
three years. It is an ongoing and evolving process that does not finish once the strategic plan has
been written. An organisation should constantly be scanning its environment to gather
information about new trends, competitors and its industry surroundings.
Strategies are unique
It is very important that the circumstances of the organisation be fully understood when
developing a successful strategic plan. It is not enough to simply ‘borrow’ strategies from other
organisations.

Reflect
Take a few minutes to think about real life examples of where businesses have successfully
borrowed strategies from each other.
Many organisations have decided to have their own presence on the internet because that is what
their competitor has done. If the organisation is simply copying their competitor without
understanding their environment and the needs of their customers, however, then they are
wasting valuable resources.
Here is an example: PepsiMax differentiated itself from other sugar–free soft drinks by not
portraying itself as a diet drink. The success of the PepsiMax approach has resulted in attempts
by competitors to reposition sugar–free drinks to a younger, more active market through the use
of almost identical promotional strategies.
In Australia, supermarkets have teamed with oil companies to increase market share. Major
companies often copy or borrow strategies to ensure they are not being left behind.
The strategic plan helps the organisation to produce desirable outcomes. It does not call for wide
business diversification or acquisition of other businesses. It focuses on greater efficiency in
manufacturing, better provision of service, or greater effectiveness in marketing and
management. It calls for maximising returns from current technologies and markets and
extending the competitive advantage that the organisation has over competitors.

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Strategic planning
Strategic planning means being prepared to respond to the circumstances of the organisation’s
operating environment.
Here are two examples:
 Non–profit organisations must often respond to dynamic and even hostile environments
 Often businesses must respond quickly to changes in their environment, i.e. broken down
equipment, new legislation, competition (both new and old), interest rates, the value of
the Australian dollar, staffing problems, etc.
Being strategic means
being clear about the organisation's objectives
being aware of the organisation's resources
Incorporating both into being responsive to a dynamic environment.
In the strategic planning process, an organisation’s purpose, vision and values shape its mission
statement, which leads to goals, objectives, business operations, and results that affect the
stakeholders of the organisation.
Source: Shelley and Cashman, et al., (2003: pg 49)

Image: Strategic planning process: box with arrows from top to bottom: values, vision and
purpose boxes each have an arrow pointing to mission statement. Mission statement has an arrow
pointing to goals and objectives. Goals and objectives, stakeholders and IT each have an arrow
pointing to business operations. Business operations have an arrow pointing to business results
which is pointing to stakeholders.
Figure 1: Strategic planning process

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Pitfalls in strategic planning

Strategic planning is a very important process for every organisation, but there are many pitfalls
that should be avoided.
Problems with strategic planning
The following problems are encountered in organisations where strategic planning is not
regarded as an important activity, or not enough time has been put into the process:
Inability to activate new strategy
Implementing a new strategy usually requires the organisation to change its management
systems, culture, skills, resources or structure. If all of these had to be changed at the same time,
many managers might be unable to cope with the complexity of the situation. This might lead to
them not implementing the strategy.
Inability to develop a strategic response
In some cases, even if the organisation is aware of the trend, it may not be able to respond
appropriately. This may be due to an inability or an unwillingness to change the managerial
approach of the organisation. It may also be the result of structural or organisational inflexibility.
Allowing corporate politics to dictate priorities
Individuals in the organisation may be aware of future trends, but the information may not be
placed on the agenda because
Managers may be too busy with operational issues to give time to significant trends.
Managers may decide not to give the information to the organisation as a whole because they
value the power of their knowledge over others. This type of internal politics can reduce the
ability of the organisation to respond to environmental change.
Failure to see a strategic challenge
Many organisations do not look at their external environment carefully enough, and thus are
unaware of significant trends that will have an impact on future operations. This can be caused
by introverted thinking from top management or by focusing inwards too much to solve technical
or organisational problems. Such managers neglect to examine external environmental factors
such as the potential of new competitors.
Failure to understand the challenge
Although the organisation may identify the major trends in their environment, they may not
understand the magnitude of the issue or how to respond to it effectively.
Which strategic planning model is best?
Many books and articles describe how best to do strategic planning. In this resource, we will be
following a model that has four basic steps:

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Image: with four arrows pointing to the right. The words on the arrows are identifying,
diagnosing, conceiving, realising.
Figure 2: Strategic plan model
1. Identifying
Identifying involves looking at the organisation’s current mission and vision statements (if
available) in order to understand their core business.
Mission and vision
A mission statement is like an introductory paragraph. It must communicate the essence (ምንነት)
of the organisation to the reader. An organisation's ability to articulate its mission indicates its
focus and purpose.
A mission statement typically describes an organisation in terms of the following:
Purpose – why the organisation exists, and what it seeks to accomplish.
Business – the main method or activity through which the organisation tries to fulfil this
purpose.
Values – the principles or beliefs that guide an organisation's members as they pursue the
organisation's purpose.
The mission statement summarises the what, how, and why of an organisation's work, while a
vision statement presents an image of what success will look like, such as how the organisation
will effectively carry out its operations.
Vision is a less specific type of aim which is usually defined as a desirable future state where
details have not yet been determined. The vision statement presents a description of how the
organisation will or should operate at some point in the future and how the customers or clients
will benefit from the organisation’s products or services.

2. Diagnosing
Assessing the situation
Once an organisation has committed to why it exists and what it does, it must take a look at its
current situation. Part of strategic planning is an awareness of the resources available to the
organisation and an idea of future trends that may occur. This will enable the organisation to
respond to changes in its environment.
Situation assessment means obtaining current information about the organisation's strengths,
weaknesses, and performance (opportunities and threats). This information will highlight the
critical issues that the organisation faces and that its strategic plan must address.

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These could include a variety of primary concerns such as funding issues, new program
opportunities, changing regulations or changing needs in the client population, changes in
technology, problems with information systems, changing needs of customers, and so on.
The point is to choose the most important issues to address. The strategic plan should focus on
no more than five to ten critical issues.
Environmental analysis
Environmental analysis is the method used to perform situation assessment. The purpose of
environmental analysis is to identify significant characteristics that exist within the industry
environment. By identifying these characteristics, the organisation can make decisions regarding
which of these areas will be critical to their future success.
Here is an example:
Environmental analysis consists of two major components:
The external environment: An examination of the external environment will determine outside
forces that have an influence on the organisation.
The internal environment: An investigation of the internal environment will establish internal
factors that influence organisation strategy and sources of competitive advantage.
One of the major tools of environmental analysis is the SWOT analysis.
Role of SWOT analysis
A SWOT analysis helps to answer key questions and create a better organisational strategy by
answering the following types of questions:
 Does the organisation have internal strengths which an organisational strategy can be
built on?
 Which weaknesses does the organisational strategy need to correct?
 Do the organisation’s weaknesses disqualify it from pursuing certain opportunities?
 Which opportunities does the organisation have resources to pursue with a chance of
success?
 What threats should the organisation worry most about?
The internal environment
What is happening within the organisation and what are the effects?
Through an analysis of the internal environment, an organisation can determine what it can do,
or the actions that it can undertake based on the resources, core competencies and capabilities
available.
Resources
Resources are inputs from the organisation’s production process. Examples of resources include
the following:
 capital equipment

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 skills of individual employees

 patents
 finances
 talented managers.
Generally, an organisation has both tangible and intangible resources. Tangible resources are
assets that can be seen and quantified, including assets like production equipment, manufacturing
plants and formal reporting structures. Intangible resources include assets that are rooted deeply
in the history of the organisation and that have accumulated over time, including knowledge,
trust between managers and employees, ideas, the capacity for innovation, managerial
capabilities, and reputation. Intangible resources are difficult for competitors to understand and
copy.
Capabilities
Capabilities are the knowledge and skills of employees. This is seen as one of the most relevant
sources of competitive advantage for any organisation. They must find ways to share this
knowledge and skills with the rest of the organisation. Only when a capability is valuable, rare,
costly to imitate, and unable to be substituted is it a core competency and a source of competitive
advantage.
Core competencies
An effective internal environment analysis includes identifying both what are and what are not
the organisations core competencies. Core competencies refer to activities of the organisation
which create unique value. These activities are not necessarily those on which the organisation
spends the most time, but which have the potential to create sustained competitive advantage.
Competitive advantage
Competitive advantage is the ability of the organisation to outperform its competitors in key
performance areas. Competitive advantages may arise through the external environment, such as
changes in customer demand, fluctuations in prices, and the impact of advances in technology.
Competitive advantages may also arise as a result of internal activities, such as the restructuring
of the organisation.
Analysis of the internal environment helps to understand the strengths and weaknesses that face
the organisation.
The following table lists some of the questions to ask to determine the strengths and weaknesses
of the organisation.
Table 1: Strengths and Weaknesses

Strengths Weaknesses

What are our advantages? What could be improved?

What do we do well? What is done badly?

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What are our major strengths, and how What are our main weaknesses, and how can we
can we utilise them in the future? overcome them?

What must we do to strengthen our IT How should we address weaknesses in IT

function, including our people and resources and capability?
technology infrastructure?

A distinctive competence? No clear strategic direction?

Adequate financial resources? A deteriorating competitive position?

Good contacts/relations with clients? Low profitability because...?

Good competitive skills? Lack of managerial depth and talent?

Special expertise? Proven management? Missing any key skills or competencies?

An acknowledged market leader? Poor track record in implementing strategy?

Well–conceived functional area Plagued with internal operating problems?

strategies?

Innovative programs/services? Vulnerable to competitive pressures?

Good overall reputation? What should be avoided?

Access to economies of scale? Weak market image?

Insulated from competitive pressures? Competitive disadvantages?

Cost advantages? Below–average marketing skills?

Competitive advantages? Unable to finance changes in strategy?

The external environment

How do external factors like customers/ competitors affect the organisation?
An understanding of the external environment helps organisations to understand their current
situation and predict future trends.
Industry environment
An industry is a group of companies producing products that are close substitutes. An example of
this is the Web design industry which is made up of individual web design and development
companies, including ISPs. The industry environment has a more direct affect on strategic
competitiveness.
Competitor environment

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Competitor analysis enables an organisation to focus on each rival company and gather
information about them.
When doing competitor analysis, companies seek to understand the following:
what drives the competitor, as shown by future objectives
what the competitor is doing and can do, as shown by its current strategy
what the competitor believes about itself and the industry
what the capabilities of the competitor are.
Analysis of the external environment helps to understand the opportunities and threats that face
the organisation.
The following table lists some of the questions to ask to determine the opportunities and threats
of the organisation.
Table 2: Opportunities and Threats

Example

Opportunities Threats

What are our major opportunities, and how can What major threats do we face, and what
we take full advantage of them? can we do about them?

What IT plans do we have to support business What can we do to deal with potential
opportunities? threats to IT success?

What are the interesting trends? What obstacles do we face?

Changes in technology and markets? What is our competition doing?

Expand service line to meet broader range of Are the required specifications for our job,
client needs? products or services changing?

Are there changes in social patterns, population Is changing technology threatening our
profiles, lifestyle? position?

Will local events provide opportunities? Do we have bad debt or cash–flow

problems?

Serve additional customer groups? Likely entry of new competitors?

Enter new markets or segments? Slow market growth?

Changes in government policy? Adverse government policies?

Diversify into related services? Growing competitive pressures?

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Complacency among rival organisations? Vulnerability to recession and business

cycle?

Fast market growth? Growing bargaining power of clients?

Weak competitors? Changing client needs and tastes?

Lack of dominant competitor? Adverse demographic changes?

The outcome of the SWOT analysis is a series of lists, one each for strengths, weaknesses,
opportunities and threats.
3. Conceiving
Strategic analysis
It is important to first review the environmental analysis you conducted on the organisation. In
particular, you will need to review the opportunities and threats (from the external environment)
and the strengths and weaknesses (from the internal environment).
You are trying to find relationships between the elements of the SWOT analysis (i.e., strengths,
weaknesses, opportunities, threats) so that they can be grouped together.
Finding relationships
Relationships between SWOT elements may have two forms:
1. You can group together several strengths (or weaknesses, or opportunities, or threats) that
are about the same issue to form a single organisational strength.
2. When the elements relate to the same issue you can match:
a) Strength to Opportunity
b) Weakness to Opportunity
c) Strength to Threat
d) Weakness to Threat
Linking one of these elements may reduce the effect of the other. For example, by enhancing
weaknesses in the organisation we may be able to reduce threats.
Each of these groupings forms a critical issue that the organisation faces. The strategic plan will
have up to ten critical issues that are being addressed. The strategic objectives are created for
each of these critical issues.
Strategic objectives
“Strategic objectives are those objectives that refer to, and affect the entire organisation and deal
with the relationship between the organisation and its environment.” Source: Viljoen and Dann
(2000, pg 618)
Strategic objectives - like all objectives - should be SMART objectives. That is, the objectives
should be:

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 Specific
 Measurable
 Attainable
 Relevant
 Timely
In creating each strategic objective, you must come to a conclusion or response about what the
organisation will do as a result of the major issues facing them. This will be written in the form
of a goal, or what the business is hoping to achieve. For an example of strategic objectives look
at the: Telstra scenario (58 KB 2838_reading01.doc)
Performance targets
When setting performance targets, you take each strategic objective in turn and specify the
requirements which enable the strategic objective to be achieved.
The performance targets are written in the form of tasks that need to be achieved. For an example
of performance targets, look at the: Telstra scenario (58 KB 2838_reading01.doc)
4. Realising
Action plans
An action plan carefully lays out how the strategic goals will be accomplished. You will be
specifying activities and listing the expected results which enable the strategy to be implemented.
Action planning also includes stipulating responsibilities (who needs to do what) and timelines
(when). You should also include how you will monitor and evaluate the objective using
performance indicators. For an example of an action plan, look at the: Telstra scenario (58 KB
2838_reading01.doc)
Strategic planning is an ongoing process which allows an organisation to plan for future
development and the direction in which the organisation wishes to proceed.
By analysing the strategic plan of an organisation, we can understand the goals a business hopes
to achieve within a specified period of time. It also helps us to understand the environment
within which the organisation operates and the market forces that affect them.
1.2 Comparing Information related to current operational practices and
strategic plan to determine possible IT gap and improvement opportunities.
Compare information
An examination and comparison of the current strategic plan of the organisation and their
operational practices will enable an organisation to highlight information technology gaps and
improvement opportunities.
Current operational practices
The current operational practices of an organisation may include the policies they have in place,
the procedures they follow to complete tasks, or the system they use to perform day–to–day
processing. The system used by the organisation may be a manual or paper–based system; a

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computerised system that incorporates hardware, software and networking capabilities; or a

hybrid of the two: partially computerised with some manual processes.
Examine current strategic plan
The strategic plan of an organisation sets out the goals a business hopes to achieve within a
specified period of time. It also helps the organisation understand the environment within which
they operate and the market forces that affect them.
Examination of the current strategic plan enables you to understand the goals of your
organisation and how those goals will be achieved. The model followed in this resource presents
each critical issue with the following four elements:

Table 3: Example four critical elements

Four elements of critical issues

 Strategic Analysis: lists SWOT elements to highlight a critical
issue
 Strategic Objective: the goal the organisation wants to achieve
 Performance Target: ‘To do’ list of what the organisation wants
to achieve
 Action Plan: Specific activities that enable the strategy to be
implemented
For an example of this, see the Telstra scenario. (58 KB
2838_reading01.doc)

IT gaps between current practices and future goals

By examining the current strategic plan and current practices of the organisation, it may be
possible to see some gaps. The gaps may be in what the organisation currently does and what
they hope to do in the future. By identifying gaps, the organisation may be able to determine
improvement opportunities.
Here is an example:
An organisation currently has a database that has a table for customers, customer orders and
customer invoices. This database has been used successfully for the last two years. The following
may represent the results of a gap analysis performed for this organisation.

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Table 4: Gap analysis

Example: Gap analysis

Objectives: To evaluate the current database functionality, to determine processing

gaps.

Findings: An environmental analysis produced the following weaknesses and

opportunities:
Weaknesses
 The database does not capture information about our suppliers or our purchasing
patterns from different suppliers.
 We are unable to adequately compare suppliers to see if we are getting the ‘best
deal’ from each of them.
Opportunities
 A new supplier has approached us with cheaper prices and loyalty discounts.

Implications: There is a gap between what the databases can currently do and what the
organisation would like it to be able to do. Currently, no supplier data is recorded in the
database and all information is kept manually. This makes comparison between
different suppliers difficult.

Recommendations (if required): The organisation must create and implement a strategic
goal that enables expansion of the database to incorporate new features.

By comparing current organisation practices with the strategic plan, an organisation can
highlight improvement opportunities. Planning and implementation of those improvement
opportunities can then be started.

1.3 Reporting information regarding the impact of IT developments to

appropriate person(s)
Reporting
Reporting is an important process that allows the appropriate personnel - including line level
management or higher management - to examine the results from projects, surveys and research.
Types of reports
A report may contain all the details of a project you have been working on, or surveys or
research you have been conducting. Formal reporting may include a formal presentation to senior
management or a board of directors about your outcomes, conclusions and recommendations.
Alternatively, you may need to prepare a gap analysis, which will be included in a larger report.

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A gap analysis often has the findings of your examination, the implications of the gap, and a
recommendation for alignment.
Reports are a way of presenting a set of data in a specified format. There are many different
types and styles of report. They may be written reports, or presented verbally to a group of
people, management, a client or a board of directors. The following is a brief list of different
types of reports:
 organisation policies and procedures
 feasibility report
 evaluation report
 recommendation report
 technical report
 research report
 business plans
 technical specifications
 user manuals
 strategic plans
 test plans
 user documentation
 Progress report.
Summary
This resource has covered strategic planning, gap analysis and reporting. This resource should
have given you the ability to recognise a strategic plan, to perform a comparison of business
strategy with business operations, and the capability to determine IT gaps and improvement
opportunities.
Activity 1 – Mission statements
Review and compare the following mission statements from Microsoft and LPPL.
LPPL mission statement
‘To satisfy our customers' desires for personal entertainment and information through total
customer satisfaction.’
Microsoft mission statement:
‘At Microsoft, we work to help people and businesses throughout the world realize their full
potential. This is our mission. Everything we do reflects this mission and the values that make it
possible.’
Our values

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As a company, and as individuals, we value

 integrity and honesty
 passion for customers, for our partners, and for technology
 openness and respectfulness
 taking on big challenges and seeing them through
 constructive self–criticism, self–improvement, and personal excellence
 Accountability to customers, shareholders, partners, and employees for commitments,
results, and quality.
Which mission statement best conveys the what, how and why of the organisation?
Feedback
The LPPL (LaTeX Project Public License) mission statement lacks purpose and values and is
not clear on how it can achieve total customer satisfaction. The Microsoft mission statement
conveys its purpose and values clearly and demonstrates how the business is achieving its
mission.

Self-check
1. When evaluating the current business strategy, what is the primary purpose of analyzing
the current strategic plan of the organization?
A) To understand industry environment and current organizational goals
B) To develop new IT systems
C) To hire external consultants
D) To increase shareholder value
2. What is the purpose of comparing information related to current operational practices
and the strategic plan?
A) To determine potential marketing opportunities
B) To identify possible IT gaps and improvement opportunities
C) To streamline administrative processes
D) To develop new product lines
3. Why is it important to report information regarding the impact of IT developments to
appropriate person(s)?
A) To increase employee morale
B) To comply with legal requirements
C) To reduce operational costs
D) To expand the customer base
4. What does SWOT analysis stand for?
A) Strengths, Workflows, Objectives, Timelines
B) Strategies, Weaknesses, Opportunities, Tactics

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C) Strengths, Weaknesses, Opportunities, Threats

D) Success, Weaknesses, Objectives, Targets
5. Which of the following is considered an internal factor in a SWOT analysis?
A) Market trends
B) Economic conditions
C) Competitor actions
D) Company culture
6. An example of strength in a SWOT analysis could be:
A) Declining market share
B) Limited financial resources
C) Strong brand reputation
D) Technological obsolescence
7. Which category in a SWOT analysis explores external factors that could positively impact
the organization?
A) Strengths B) Weaknesses C) Opportunities D) Threats
8. Identifying potential risks and challenges in the industry is a part of which aspect of
SWOT analysis?
A) Strengths B) Weaknesses C) Opportunities D) Threats
9. What does a weakness represent in a SWOT analysis?
A) Internal factors that can be exploited
B) Areas where the organization excels
C) Limitations or deficiencies in the organization
D) External factors that pose a threat
10. Which of the following is an example of an opportunity in a SWOT analysis?
A) Declining demand for the product
B) Technological advancements
C) Increased competition
D) Poor reputation
11. What is the purpose of conducting a SWOT analysis?
A) To identify strengths and weaknesses of competitors
B) To develop marketing strategies
C) To assess the internal and external environment of the organization
D) To determine financial performance metrics
12. Which aspect of SWOT analysis involves evaluating potential risks or challenges that
could hinder the organization's progress?
A) Strengths B) Weaknesses C) Opportunities D) Threats
13. What is the primary goal of a SWOT analysis?
A) To identify areas of improvement within the organization
B) To eliminate all weaknesses of the organization
C) To capitalize on opportunities and minimize threats

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D) To increase market share and profitability.

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