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 - – increasing energy prices, challanges to central banks by blockchain based private currencies, there is backlash against globalization, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies,
geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, 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 -
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.
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.
Strong track record of project management
– Octo Telematics is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Octo Telematics in the sector have low bargaining power. Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Octo Telematics to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Octo Telematics is present in almost all the verticals within the industry. This has provided firm in Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
Training and development
– Octo Telematics has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
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.
High switching costs
– The high switching costs that Octo Telematics has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Innovation driven organization
– Octo Telematics is one of the most innovative firm in sector. Manager in Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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 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.
Skills based hiring
– The stress on hiring functional specialists at Octo Telematics has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Octo Telematics needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
Low market penetration in new markets
– Outside its home market of Octo Telematics, firm in the HBR case study Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment, is just above the industry average. Octo Telematics needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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 -
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.
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.
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.
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.
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.
Leveraging digital technologies
– Octo Telematics can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, 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.
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.
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.
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.
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.
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.
Buying journey improvements
– Octo Telematics can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Reshaping the IT Governance in Octo Telematics to Gain IT-Business Alignment suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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.
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.
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 .
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.
Shortening product life cycle
– it is one of the major threat that Octo Telematics is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Octo Telematics with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
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.
Regulatory challenges
– Octo Telematics needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Octo Telematics will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
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.