One of these friends, a president of a company with about $ 900,000,000 annual s

Question

One of these friends, a president of a company with about $ 900,000,000 annual sales that produces supplies for hospitals, called you and asked to consult with you. He told you that currently they have a small IS department. They have a CIO and about ten more people who help the end users with their use of the information systems. They use the IS especially for clerical purposes, like accounting, simple inventory management, and the like. The president told you that the CIO presented him with a wonderful plan to use the IS for competitive advantage. The CIO said that the company should use the IS strategically. That is to say: the company should move from the support region on the strategic grid to the strategic region. He presented some ideas for using IS to provide unique services to the customers. He said that by doing so it is highly likely that many companies will prefer to leave their current suppliers (our company's competitors) and conduct business with us. The president told you he was very excited about the plan. Then he asked the CIO how much this process would cost. The CIO told the president that in order to develop the software and to maintain it later, he would have to hire many systems analysts, designers, and programmers. li was obvious that this would cost a lot of money. The president told you that he heard about a new approach that is called OUTSOURCING. He told you that many of his friends who are senior managers in other companies do use OUTSOURCING and told him they save a lot of money. He also told you that some of his competitors are using OUTSOURCING as well. What will you recommend to the president to do about his CIO's proposal? Justify your

Explanation / Answer

This is a very common phenomenon recently where organizations are actually planning to extending their IS (Information Solutions) department because that is the future and most of the processes in a business be taken care by the information technology, hence IS expanding although it costs quite a bit to the company. In this case I will recommend the president to look over the proposal made by the CIO because there is no substitute of IS today and that it will tend to grow and develop business processes in the future and in order to take care of the costs, it would be better if the organization outsource the department to an organization who is professionally involved in information technology because that will help the organization with better solutions and may be at a lower cost. There are various service based organizations based in India who are one of the best service providers and are doing it for many organizations of USA and can be hired by our organization as well. The deal can be either time and money or fixed budget depending upon the requirement of the organization and I believe that at this point setting up cost and implementing cost will be high instead outsourcing will be a better option which can be later on implemented gradually within the organization itself.

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.