Discussion of IT Projects and Consolidating Data Centers and Networks - Case Study Example

MDCM Part B Table of Contents Table of Contents 2 Introduction 3 Discussion of IT Projects 3 Score Card for Projects 7 Portfolio Application Model Matrix 9 Sequence of Execution of Initiatives 10 Conclusion 11 Work Cited 11 Introduction Information technology (IT) is vital in every multinational corporation and it can help businesses in several ways such as easy availability of appropriate information, less operational expenses, increased collaboration, which are the significant aspects for success. Thus, organizations spend heavily on improving the IT so that they can gain competitive advantage. The paper describes the implementation of IT projects in one of the biggest medical device and equipment manufacturer companies, MDCM which had suffered huge losses due to ineffective IT. The paper will discuss the recommended IT projects and compare the most suitable projects through using Portfolio Application Model Matrix which will be beneficial for MDCM. Discussion of IT Projects MDCM had confronted with several problems regarding IT and thus the company had prepared a list of IT projects which will be appropriate for improving the business performance. The objective of those IT projects is to increase value of the business and develop smooth information flow throughout the organization and lack of information was one of the major problems of MDCM. The following projects will be appropriate for MDCM in order to improve the profitability of business: Unifying Methodology and Technical Standards It has been observed that different standards in information systems have resulted in increased contradiction and at times the projects intersect with each other. The lack of synchronization among different standards cause imperfect outcomes which in turn lead to inappropriate forecasts, scheduling problems and overfilled inventories among others. Thus, there was need to reduce the numerous different standards throughout the company. The Unify Methodology and Technical Standards aim for minimizing the projects cycles and inspire knowledge distribution within IT development groups. This initiative is vital for developing the ability of information technology systems in MDCM (Jeffery, M. & Norton, J. H., “Strategic IT Portfolio Management). Consolidating Data Centers and Networks Consolidation of data center and networks is made in order to reduce the expenses. In today’s business environment, meeting up to the competition and complying with the regulatory measures are the driving forces for organizations such as MDCM to shift company’s network to virtual private network (VPN). MDCM along with the subsidiary companies had almost 37 data centers and 19 distracted networks globally. Data consolidation will help MDCM to expand the business swiftness and also would align strategic IT structure with business requirements. It will be more reliable for MDCM to develop new network and possible disruptions will be reduced (Jeffery, M. & Norton, J. H., “Strategic IT Portfolio Management). Standardizing Server Hardware and Platforms Standardization of server hardware and platform can provide the benefit of devising common hardware components, technical awareness, laid-back management and superior pricing from sellers. As MDCM had numerous hardware platforms, it could increase the difficulties for IT administrators for managing and maintaining properly. This project can help MDCM to decrease the maintenance expenses on sellers’ services which was calculated as almost 1.5 million USD per annum (Jeffery, M. & Norton, J. H., “Strategic IT Portfolio Management). Implementing Enterprise Resource Planning Apart from standardization of server hardware and platform, the implementation of enterprise resource planning (ERP) can provide several benefits due to having a combined view of sales, stock and receivable at the similar point of time. The other significant advantage that MDCM will get from ERP are better visibility, low operating expenses, consistent business procedures and enhanced compliance among others. The IT teams of MDCM view ERP implementation as a critical foundation of success (Jeffery, M. & Norton, J. H., “Strategic IT Portfolio Management). Creating Employee Intranet Portal As the businesses of MDCM has increased internationally, the requirement of better human resource management system has also increased intensely. Through developing employee intranet portal in MDCM, the employees can get instant access to organizations’ up–to-date benefit strategies, changes in plan, and other tailored benefit information which can satisfy their needs and requirements. As a result, employee intranet portal can increase confidence of employees and raise the efficiency (Jeffery, M. & Norton, J. H., “Strategic IT Portfolio Management). Managing the Supply Chain Through implementation of ‘Horizon 2000’ the numbers of suppliers had been minimized to increase the supply chain efficiency. This project is conducted as a part of reducing the delay in applying ERP system. Through implementing supply chain management system, MDCM can increase the refined diagnostic abilities. It can allow the rationalization of supply chain and thus makes simple for dealers to examine the demand and the supply of MDCM’s products in the market. This system will allow MDCM to share information regarding sales to every party in supply chain and accomplish good relationship with the business associates (Jeffery, M. & Norton, J. H., “Strategic IT Portfolio Management). Improving Collaboration System Several applications such as e-mails, knowledge management functions and discussion boards among others were present in MDCM, but they were extremely incongruent and underutilized. Consolidating those systems and applying them can help MDCM to accomplish higher performance, more responsive business, better cost efficacy, quicker income growth and smarter utilization of human resources (Jeffery, M. & Norton, J. H., “Strategic IT Portfolio Management). Beginning CRM/Creating Data Warehouse The CRM implementation in the French subsidiary company of MDCM was successful. Thus, there was a potential opportunity to implement it internationally. In order to do that there is need to merge information into data warehouses. By developing data warehouse, MDCM can improve the ability of data access and processing power of information (Jeffery & Norton, “Strategic IT Portfolio Management). Implementing E-Procurement System In order to gain benefit from high economies of scale, MDCM used to aggregate every material for purchasing. It had led to high amount of savings. Through implementing E-procurement system, MDCM can use the internet as a method for acquiring necessary materials which can increase the suitability of buying procedures and reduce surplus. E-Procurement system would act as alternatives of phone calls, e-mails, and faxes which in turn would minimize the extra expenses (Jeffery, M. & Norton, J. H., “Strategic IT Portfolio Management). Customer Self Service Portal The customer self-service portal could effectively minimize the administrative expenditures related with customer service. Though this system, customers of MDCM will be able to communicate with the executives, place orders, and can also check their order status. As a result, it can enhance customer satisfaction and increase the good relationship. Score Card for Projects Likelihood of Success (in%) Unifying Methodology and Technical Standards Consolidating Data Centers and Networks Standardizing Server Hardware and Platforms Implementing Enterprise Resource Planning Creating Employee Intranet Portal Managing the supply chain Improving Collaboration System Beginning CRM/Creating data Warehouse Implementing E-Procurement System Customer Self Service Portal Technical standards 25 24 24 27 20 25 20 24 23 20 Skills, capability and training 27 30 29 24 20 25 11 24 12 11 Scope and complexity 18 19 15 18 18 18 11 18 18 10 Business alignment 10 11 9 11 10 12 13 11 11 12 Risk 10 4 6 4 3 6 4 9 7 4 Total 90 88 83 84 71 86 59 86 71 57 Value to the Business (in %) Management capability 15 14 13 13 11 15 12 14 15 10 Financial return 14 15 14 14 11 15 13 14 14 14 Customer and consumer focus 10 9 8 9 10 10 10 9 9 20 Supply chain business benefits 10 10 11 11 5 11 11 9 10 10 Technology efficiency 20 19 18 19 5 15 12 10 15 9 Knowledge advantage 20 20 19 19 19 20 15 15 20 11 Work/life balance 4 5 4 5 9 5 5 5 4 6 Total 93 92 87 90 70 91 78 76 87 80 Portfolio Application Model Matrix The recommended projects can be compared through portfolio application model matrix. In this matrix, the upper left cell shows the projects which will provide high value to the business but have low ability to success and the lower right cell shows the projects which have higher ability to success but have low value to the business. The most important projects on which IT teams will concentrate will be on upper right cell as these are the projects with high value to business as well as high ability to success. High Value to Business Low Ability To Success High Value to Business High Ability to Success Consolidating Data Centers and Networks Beginning CRM/ Create Data Warehouse Standardizing Server Hardware and Platform Unifying methodology and Technical Standards Improving Collaboration Systems Implementing ERP Managing the Supply Chain Implementing E-Procurement System Outsourcing Non-Strategic IT Services Streamlining Design Systems Creating Employee Intranet Portals Customer Self-Service Portal Low Value to Business Low Ability to Success Low Value to Business High Ability to Success Source: (Jeffery, M. & Norton, J. H., “Strategic IT Portfolio Management). Sequence of Execution of Initiatives Each project includes a considerable amount of efforts, technology, skill, finance, time and risk. Therefore, MDCM needs to plan properly as to which project is going to be implemented according to a specified schedule so that it can fulfill the objectives of the company. The sequences for execution of projects are described below: Sequence Project Estimated Cost Estimated Time 1 Implementing ERP 30 million USD 1 year 2 Improving Collaboration System 9 million USD 5 months 3 Unifying Methodology and Technical Standards 13 million USD 9 months 4 Standardizing Server Hardware/Platform 6 million USD 4 years 5 Beginning CRM/Create Data warehouse 15 million USD 3 years 6 Managing the Supply Chain 12.3 million USD 10 months 7 Consolidating Data Centers and Networks 10 million USD 6 months 8 Implementing E-Procurement System 9.5 million USD 6 months 9 Creating Employee Intranet Portals 2 million USD 4 months 10 Customer Self-Service Portal 2.5 million USD 6 months 11 Streamlining Design Systems 3 million USD 7 months 12 Outsourcing Non-Strategic IT Services 5 million USD 1 year Source: (Jeffery, M. & Norton, J. H., “Strategic IT Portfolio Management). Conclusion The IT projects and initiatives are developed in order to improve production efficiency and business performance. It was observed that major problems for MDCM were insufficient networking, different systems, and lack of utilization of resources which had resulted in increased operational expenses. As a result, MDCM had suffered huge losses. These IT projects could help to develop smooth flow of information in the business operations and develop the supply chain management system which in turn would lead to lower operating expenses and the organization can gain competitive advantage. Work Cited Jeffery, Mark & Norton, Joseph H. Strategic IT Portfolio Management Kellogg School of Management, 2006. Read More