Strategic Business Planning Methodology

1. © Operational Excellence Consulting. All rights reserved. The guide serves as a framework for conducting a strategic business planning study and to map out an actionable plan for the business. Strategic Business Planning Methodology Step by step approach to strategic business planning

2. © Operational Excellence Consulting. All rights reserved. 2 Introduction to Strategic Business Planning Methodology § The pace of change has accelerated considerably as organizations enter the electronic age of the new economy. And because the world changes constantly at a “click” rate, strategic planning is the most essential and important part of a business cycle. § Strategic business planning is the process by which the guiding members of an organization envision its future and develop the necessary processes and operations to achieve that future. § The model of strategic business planning presented in this methodology will help the organization to plan and create its future. NOTE: This is a PARTIAL PREVIEW. To download the complete presentation, please visit: https://www.oeconsulting.com.sg

3. © Operational Excellence Consulting. All rights reserved. 3 About the Strategic Business Planning Methodology § The Strategic Business Planning Methodology provides a framework for conducting a strategic business planning study and to map out an actionable plan for the business. § As digital technology is increasingly making an impact to modern business models and value creation, IT transformation is an essential foundation and prerequisite for the digital transformation of the business. IT transformation planning is therefore integrated with strategic business planning as one seamless entity. § The methodology is organized into four phases.

4. © Operational Excellence Consulting. All rights reserved. 4 Overview of the Strategic Business Planning Methodology Business Strategy Implementation Business Strategy Formulation Business Visioning Strategic Business Review

5. © Operational Excellence Consulting. All rights reserved. 5 Strategic Business Planning Methodology PHASE DESCRIPTION Strategic Business Review To review the organization’s current state and external environment so as to establish the position of the organization with respect to the competition. Business Visioning To define the desired state of the organization so as to focus the development and implementation of business strategies in achieving the desired goals. Business Strategy Formulation To formulate business strategies based on the organization’s strengths and external opportunities to achieve desired state. Business Strategy Implementation To define the IT architecture and develop a strategic business implementation plan so as to serve as the blueprint for detailed implementation. The Four Key Phases of Strategic Business Planning Methodology

6. © Operational Excellence Consulting. All rights reserved. 6 The strategic business planning methodology provides a blueprint for achieving the organization’s future state vision Strategic Business Planning Methodology Strategic Business Review Business Visioning Business Strategy Formulation Business Strategy Implementation § Review current state § Identify areas of competitive advantage § Analyze industry trends and competition § Envision desired state § Identify and screen opportunities § Analyze opportunity gaps § Benchmark and make recommendations § Define blueprint § Identify programs § Define implementation plan

8. © Operational Excellence Consulting. All rights reserved. 8 Strategic Business Planning Methodology § Review current state § Identify areas of competitive advantage § Analyze industry trends and competition Business Strategy Implementation Business Strategy Formulation Business Visioning Strategic Business Review

9. © Operational Excellence Consulting. All rights reserved. 9 Phase 1 – Objectives § To review the organization’s current state and external environment so as to establish the position of the organization with respect to the competition.

10. © Operational Excellence Consulting. All rights reserved. 10 1.1 Review Current State § Review the organization’s current vision and mission. The primary questions to answer are: • Why does the organization exist? • What function does the organization perform? (What products or services does it offer?) • For whom does the organization perform this function? • How does the organization go about fulfilling this function? § Identify the major forces driving the organization. Examples of driving forces are products and services being offered (including online), methods of distribution, the market being served, growth, etc.

11. © Operational Excellence Consulting. All rights reserved. 11 1.1 Review Current State § Identify the organization’s distinctive competency – the quality or attribute that makes the organization different from its competitors. • For example, an organization may be the only educational institution to provide management education after work and on weekends in its geographical marketplace. • What is the organization especially good at? § Review the organization’s current values through a values scan. The 5 elements of a values scan are: • Personal values Ø Individual values of the executive and managers.

12. © Operational Excellence Consulting. All rights reserved. 12 1.1 Review Current State • Organizational values Ø Does the organization value profit more than growth, or how strongly is customer and quality valued? • Operating philosophy Ø What are the published and unwritten operating philosophies that employees understand? Are the assumptions in the operating philosophy valid and relevant? • Organizational culture Ø Organization culture is made up of the personal values, the organization values, the operating philosophies and the organization’s assumptions about the way the world works. What is the assumption upon which the organization culture is based and how has the assumption determined its values and norms?

13. © Operational Excellence Consulting. All rights reserved. 13 1.1 Review Current State • Stakeholders’ values Ø Individuals or groups who believe that they hold a stake in the organization’s future. Who are these people and how do they influence the business direction and strategy? § Review the organization’s strategic goals. • What are the organization’s strategic goals? • Have all the strategic goals achieved the targets set? • Understand why some targets could not be achieved and why others have met or exceeded the set targets.

14. © Operational Excellence Consulting. All rights reserved. 14 1.1 Review Current State § Understand the organization’s current business model. (a) Customers/Market Ø Which markets are the organization targeting? Ø How are they segmented? Ø What are the key requirements for the various segments? (b) Alliances Ø Who are the organization’s alliances and partners? Ø How committed and reliable are they? (c) Products & Services Ø What are the organization’s ranges of product and service offerings (including online) for the various segments?

15. © Operational Excellence Consulting. All rights reserved. 15 1.1 Review Current State (d) Financial Analysis Ø What is the cost and pricing structure for the products and services? Ø What is the revenue stream of the organization? Ø Which segment contributes the highest revenue to the organization? Which is the lowest? Ø Which products and services are most profitable, marginally profitable and not profitable?

16. © Operational Excellence Consulting. All rights reserved. 16 1.1 Review Current State § Analyze the following: • Organization’s strengths, weaknesses, opportunities and threats (SWOT) • Organization structure and functional units’ goals • Critical success factors (CSFs) § Conduct an organizational audit of the organization’s IT capabilities. • Review the existing processes, application systems and the IT infrastructure. Ø Internal perspective: business needs Ø External perspective: customers’ needs • Take inventory of the organization’s existing hardware and software.

17. © Operational Excellence Consulting. All rights reserved. 17 1.2 Identify Areas of Competitive Advantage § Identify the organization’s areas of competitive advantage by conducting a competitive assessment of the target market: • Who is the competition within this target market? • Who are the direct competitors (i.e. those providing the same product or service)? • Who are the indirect competitors within the industry (i.e. those providing similar alternative products or services which provide the same or similar benefits)?

18. © Operational Excellence Consulting. All rights reserved. 18 1.2 Identify Areas of Competitive Advantage • Who are the indirect competitors outside of the industry (i.e. those providing totally different alternative products or services which provide the same or similar benefits)? • What are the strengths and weaknesses of these competitors? • How does the organization compare on in terms of features/benefits of importance to the target market?

19. © Operational Excellence Consulting. All rights reserved. 19 1.3 Analyze Industry Trends & Competition § In the identified areas of competitive advantage, identify the data/information needed to detect trends and competition: • Industry level – financial trends, industry leaders, industry statistics, etc. • Organizational level – key customers, key competitors, key suppliers, etc. • Business process trends, changes, automation, etc. • Technological trends

20. © Operational Excellence Consulting. All rights reserved. 20 1.3 Analyze Industry Trends & Competition § Determine the sources of data/information collection for monitoring purposes, e.g.: • Employees with outside contacts • Suppliers and distributors • Vendors and suppliers of technology • Customers (current customers, former customers, competitors’ customers, prospective customers) • External consultants • Research organizations • Internet § Collect and analyze industry data/information to determine industry trends and competition.

21. © Operational Excellence Consulting. All rights reserved. 21 Phase 1 – Deliverables § Current State Report, consisting of : • Current business model documentation • Current process flow (high-level) • IT architecture, including inventory of existing hardware, software and network systems

23. © Operational Excellence Consulting. All rights reserved. 23 Operational Excellence Consulting is a management training and consulting firm that assists organizations in improving business performance and effectiveness. Based in Singapore, the firm’s mission is to create business value for organizations through innovative design and operational excellence management training and consulting solutions. For more information, please visit www.oeconsulting.com.sg

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