Confirmation and Extension of a Strategy
Two strategic planners used Business Insight to analyze the strategy of the
very profitable Applications Business System division of IBM, a multi-billion
dollar unit. Their objective was to verify and if possible extend their current
strategy. After the analysis they said, "The software really gave us
insights we hadn't thought of!"
The two people who performed the study were responsible for market analysis and
strategy recommendations in the System Strategy Department at IBM in Rochester,
MN, home of the AS/400 minicomputer. The following are some excerpts from an
article written by them.
Armed with Business Insight, a new expert system for strategic
analysis, we analyzed the Applications Business System division of IBM, a
multi-billion dollar unit.
The product was able to synthesize an accurate and coherent strategic
plan. Based on our experience with other strategic planning tools, we believe that
Business Insight is breaking new ground in a wide-open market.
One question we skeptically asked ourselves when we began this
exercise was, "Will this software really give us any insights we hadn't
thought of?" (After all, the program is called "Business Insight.")
The answer is, surprisingly, it did. In addition to confirming several valuable
perceptions we had gleaned during our previous analyses, it also provided new
insights in the areas of competitive rivalry, upside potential for earnings and
advertising. So, indeed, it did live up to its name.
In small companies, where the planning process consists of the owner's setting
down and creating a strategy, the best use of Business Insight is as an expert
teacher rather than an answering machine. At a cost of $795, the tutoring the
program provides may be a bargain for managers who aren't familiar with the
concepts of strategic planning.
We suggest that larger organizations can best use Business Insight in one of
two ways. First, line executives could use it privately as a way to gain
confidence in their recommendations. Secondly, teams could use this software to
analyze their strategic environment.