Most IT strategy contains a SWOT analysis. SWOT stands for strengths, weaknesses, opportunities, threats. SWOT analysis is one of the most commonly used tool to diagnose the state of an organization. But how useful are they?
Coman and Ronen (Ref 1. ) has studied strategies from various organizations and has found four issues with typical SWOT:
- 1. No standard methodology: Organizations don’t have a standard way to identify strengths and weaknesses.
- 2. Excessive number of items: Most plans have a laundry list of strengths and weaknesses and makes it difficult to assess the importance of each.
- 3. No causality: Organizations often confuse symptoms from causes.
- 4. One-time event: The SWOT is done once and no mechanisms exist to review it periodically.
They recommend that SWOT should be:
- 1. Concise: No more than four or five items.
- 2. Actionable: It should make clear the action to be taken.
- 3. Significant: The items in the lists should have a large impact or simply be removed.
- 4. Authentic: The lists should be authentic rather than wishful thinking.
It often boils down the inability of making choices. Of all the strengths and weaknesses, which are the ones that deserve the most attention? The ability to rank the key elements and ignore the others is a difficult but essential competency to get.
1. Coman, A. & Ronen, B., 2009. Focused SWOT: diagnosing critical strengths and weaknesses. International Journal of Production Research, 47(20), pp.5677-5689. Available at: http://www.tandfonline.com/doi/abs/10.1080/00207540802146130 [Accessed March 11, 2012]."