A Medical Device Contract Manufacturer - Case Study Example

MDCM Table of Contents Table of Contents 2 Overview 3 IT Projects for MDCM 4 Unification of IT Standards and Methodologies 4 Outsourcing of Non Strategic IT Services 4 Consolidation of Networks and Data Centers 4 Server Hardware and Platforms Would Be Standardized 5 Implementation of Enterprise Resource Planning 5 Employee Intranet Portal Would Be Created 5 Supply Chain Management 5 Streamlining the Design System 6 Improvement of collaboration system 6 Creating a Data Warehouse for Customer Relationship Management (CRM) 6 Implementation of E-Procurement System 6 A Self-Service Portal for Customers 7 Portfolio Application Model Matrix 8 Projects in the Upper Right of the Matrix 9 Projects in the Upper Left of the Matrix 10 Projects in the Lower Left of the Matrix 10 Projects in the Lower Right of the Matrix 10 Sequence for Executing the Projects 11 Reference 14 Overview Strategic objectives of an organization look for the scope of improvement and competitive advantages in an organization. They ensure the long term sustenance of the organization. Strategic objectives revolve around market segments, products, customer groups and geographic markets (Blazey, 2008). MDCM, a medical device contract manufacturer, needs to implement IT projects that would complement the strategic objectives of the company. An IT Portfolio Management Executive Committee has been set up with the purpose of prioritizing IT projects. The challenge for the ITPM executive committee is to develop an IT portfolio of investments that will complement the corporate strategy of the company. The IT audit conducted by the CIO Shawn Atkins resulted in a report on the state of IT at MDCM. The report dealt with investment decisions, budgeting decisions, standards and inventory of systems at MDCM for the last five years. The report further reinforced that the IT system in MDCM was in total shambles. The poor IT investment decisions and the shortcomings on the part of the managers was the reason for this condition. The IT audit revealed that the IT budget would have to be increased to $175 million every year over the time span of the next three years. A target for remodeling MDCM’s IT within the time span of next thirty-six months was developed. IT Projects for MDCM The IT projects that were identified to be appropriate for MDCM were the following: Unification of IT Standards and Methodologies Shawn Atkins and his team decided that it was essential to establish common IT standards across the company. Outsourcing of Non Strategic IT Services Atkins had decided on outsourcing certain IT services. It was assumed that hardware maintenance and help desk support could be outsourced. Consolidation of Networks and Data Centers According to the IT team’s estimation consolidation of the data centers around three locations; and establishing a virtual private network (VPN) would save $1.1 million. Server Hardware and Platforms Would Be Standardized The standardization of server hardware and platforms would decrease support and maintenance costs. The cost of vendor services would be reduced. Implementation of Enterprise Resource Planning A reorganization effort called ‘Horizon 2000’ had started the implementation of enterprise resource planning. It was expected that it would help in the reorganization of suppliers and production facilities. Employee Intranet Portal Would Be Created The development of an employee intranet portal for HR administration would improve the efficiency and would also help in reducing the number of employees. Supply Chain Management The company is required to have better coordination with its suppliers. Although vendors had been selected, yet the project was delayed due to the delay in ERP implementation. Software vendor i2 had been selected to help in the implementation of supply chain system. Streamlining the Design System The custom built CAD system could be used across all design groups. Improvement of collaboration system Consolidation of emails, discussion boards, knowledge management applications would require great effort on the part of the IT system. Creating a Data Warehouse for Customer Relationship Management (CRM) The data related to the customers had to be complied into a data warehouse. Implementation of E-Procurement System The implementation of an E-Procurement System would help in cost saving by consolidating their internal purchasing. A Self-Service Portal for Customers Administrative expenses could be reduced by setting up a customer portal. Customers could directly contact account manager, place orders, track the orders and learn online; everything that is pertaining to the company. Portfolio Application Model Matrix High Value and High Risk ERP (Enterprise Resource Planning) Customer Self Service Portal Consolidating Data Centre and Network CRM (Customer Relationship Management) Management of Supply Chain High Value and High Probability of Success E- Procurement System Streamlining Design System Setting Up Employee Intranet Portal Unifying Methodology and Technical Standards Standardization of Server Hardware and Platform Low Value and High Risk Improvement of Collaboration System Low Value and High Probability of Success Outsourcing of Non Strategic IT Services 0 50 100 Projects in the Upper Right of the Matrix This unification of methodology would help in reducing project cycle and enable sharing of knowledge across various teams. This project will provide high long term value and has the potential to succeed. The company would get great benefit in the form of savings in maintenance costs through standardization of server hardware. The cost on vendor services, which is about $1.5million each year, would be reduced. The Employee Intranet Portal would help in the automation of HR practices such as employee benefits will ensure increased efficiency and would reduce the need for more employees. Streamlining the Design Systems through the application of CAD across all design groups will reduce the design cycle time. It will also help in quality control. The implementation of E-Procurement system will help in great cost savings and can be implemented in just six months. Projects in the Upper Left of the Matrix A cost saving of $1.1 million can be established through the consolidation of data centers. Disruptions in network services can make the project execution difficult. It would also involve all the networking staffs for six months. ERP implementation would be completed in twelve months and would require $30 million. The project will be very useful but the cost is high and it is a risky project. A customer self service portal would reduce the expense of customer service but the outdated data centers would make execution difficult. CRM implementation is a costly affair requiring $15 million. It would take nine to twelve months for implementation. The implementation of supply chain management was being postponed due to the delay in ERP implementation. It would take about nine to twelve months for its implementation. Projects in the Lower Left of the Matrix The consolidation of the collaboration system has low value but high risk. Projects in the Lower Right of the Matrix Outsourcing of non strategic IT services may not yield much value but can be easily implemented. Sequence for Executing the Projects Project Time Required Benefit Employee Intranet Portal 3 months HR related administrative expenses can be reduced. Increase efficiency and quality control Streamlining Design system Not much time is required Customized CAD design system can be applied all throughout the departments. E Procurement 6 months Huge cost savings and long- term benefits Customer Self service portal 6 months Administrative expenses reduced Consolidating data centers 6 months Huge cost savings of about $1.1million Standardization of server hardware This project may require little more than 6 months for completion. The support costs and maintenance costs would be reduced. Unification of methodology and technical standards The project may require more than six months for completion. This will help in reducing project cycle time and will help in sharing of knowledge across teams. ERP 12 months ERP implementation would be extremely useful in terms of the reorganization of suppliers and production facilities. Supply chain Management 9-12 months This would enable in better coordination with suppliers. CRM 9-12 months The benefits from CRM cannot be realized before 3 years from its implementation. The project would require more than $15 million. Outsourcing Non IT services 12 months The project would result in cost savings. Improvement of collaboration system This project may take more than 12 months. This project is extremely difficult and a lot of internal sources are required. The project is not feasible at the moment. In the table, the sequence of the projects has been discussed. The projects that help in cutting costs through electronic transaction processing have been prioritized. The projects that require less time and bring enormous benefits can be started earlier. The time consuming projects which yield high benefits in the future can be started later. Reference Blazey, M. L., (2008). Insights to Performance Excellence 2008: An Inside Look At the 2008 Baldrige Award Criteria. American Society for Qualit. Pg-60. Read More