Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment
The case shows how a technology services company shaped and reshaped - and reshaped again - its IT governance structure to better integrate the IT function with business clients. The company is a large Italian telematics provider - Octo Telematics - which is specialized in the provision of telematic services and systems for the insurance and automotive markets. During the period described in this case, the company was growing and globalizing rapidly. The desired alignment between IT and the business units is needed to promote behaviors consistent with the organization's mission and strategy. As Octo experimented with new processes, committees and reorganizations the company 'traveled' through several governance archetypes.
Swot Analysis of "Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment" written by Giovanni Vaia, Erran Carmel includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Octo Telematics facing as an external strategic factors. Some of the topics covered in Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment case study are - Strategic Management Strategies, Strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, increasing transportation and logistics costs, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic ,
there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Octo Telematics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Octo Telematics operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment can be done for the following purposes –
1. Strategic planning using facts provided in Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment case study
2. Improving business portfolio management of Octo Telematics
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Octo Telematics
Strengths Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Octo Telematics in Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Octo Telematics in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Octo Telematics is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Giovanni Vaia, Erran Carmel can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Cross disciplinary teams
– Horizontal connected teams at the Octo Telematics are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Sustainable margins compare to other players in Leadership & Managing People industry
– Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment firm has clearly differentiated products in the market place. This has enabled Octo Telematics to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Octo Telematics to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Octo Telematics is one of the leading recruiters in the industry. Managers in the Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Octo Telematics
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Octo Telematics does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Octo Telematics is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Octo Telematics is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Octo Telematics has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Octo Telematics to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Octo Telematics digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Octo Telematics has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Successful track record of launching new products
– Octo Telematics has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Octo Telematics has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to lead change in Leadership & Managing People field
– Octo Telematics is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Octo Telematics in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Octo Telematics has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment are -
High cash cycle compare to competitors
Octo Telematics has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners
– Because of the regulatory requirements, Giovanni Vaia, Erran Carmel suggests that, Octo Telematics is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
No frontier risks strategy
– After analyzing the HBR case study Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Products dominated business model
– Even though Octo Telematics has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment should strive to include more intangible value offerings along with its core products and services.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Octo Telematics supply chain. Even after few cautionary changes mentioned in the HBR case study - Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Octo Telematics vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Octo Telematics has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Octo Telematics is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Octo Telematics products
– To increase the profitability and margins on the products, Octo Telematics needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Octo Telematics has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Octo Telematics even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High operating costs
– Compare to the competitors, firm in the HBR case study Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Octo Telematics 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Octo Telematics has relatively successful track record of launching new products.
Opportunities Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Octo Telematics is facing challenges because of the dominance of functional experts in the organization. Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Octo Telematics has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Octo Telematics in the consumer business. Now Octo Telematics can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Octo Telematics can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Octo Telematics can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Octo Telematics can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Octo Telematics can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Octo Telematics has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Octo Telematics to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Octo Telematics has opened avenues for new revenue streams for the organization in the industry. This can help Octo Telematics to build a more holistic ecosystem as suggested in the Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment case study. Octo Telematics can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Octo Telematics can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Octo Telematics in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Octo Telematics can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Octo Telematics to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Manufacturing automation
– Octo Telematics can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment are -
Stagnating economy with rate increase
– Octo Telematics can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Consumer confidence and its impact on Octo Telematics demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Octo Telematics can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Octo Telematics in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High dependence on third party suppliers
– Octo Telematics high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology acceleration in Forth Industrial Revolution
– Octo Telematics has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Octo Telematics needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Environmental challenges
– Octo Telematics needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Octo Telematics can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Octo Telematics in the Leadership & Managing People sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Octo Telematics can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment .
Increasing wage structure of Octo Telematics
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Octo Telematics.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Octo Telematics business can come under increasing regulations regarding data privacy, data security, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Octo Telematics needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Octo Telematics.
Weighted SWOT Analysis of Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Octo Telematics needs to make to build a sustainable competitive advantage.
