THE TOUGH DILLEMAS: WHY
THE OBIVOUS IS SO
DIFFICULT
COMPANY AUTOMATION
CHANGES



Manufacturing Automation (Process without human
intervention)
“White-Collar” automation / Second Industrial Revolution
Focus: Facilitating decision making, innovation & service
Goals: Decrease Human Intervention, Faster Response
Time, Reducing Internal Inconsistencies.
Reorganization Reengineering (New Workflow Systems)
Objectives: Smooth, uninterrupted flows to assure
efficiency, service and quality
OPERATING CAPABILITY AND PROCESSES
(Order fulfillment, New product development &
Integrated supply chains)
Data Processing and Information Flow
(The work of computers)
 Core competencies on critical processes,
not : functional specialization.

OUTSOURCERS TO THE
RESCUE
PROBLEM :
- Technology costs soar exponentially
- Complexity and rapid changes characteristic of
information technology (increase of new h/w &
s/w, rapid obsolescence, incompatible of new
systems)
 Outside specialized IT service providers offer
the convenience of “one stop” purchasing:
predictable costs.
OUTSOURCERS TO THE
RESCUE


Outsourcing means for corporations: to
cut personnel, but still get the job done.
(Show lower head counts and smaller
asset base denominator for profitability
calculation).
Outsourcing avoid political decision on
merger company : to retain or to
terminate groups of IT groups.
OUTSOURCERS TO THE
RESCUE
Most senior management today, outsourcing inf.
tech. seems a “no brainer” an easy decision
 Information is the lifeblood of every organization
 Who gets what data, when and in what form has
impact on executive decision making
 Whoever controls communications linkages, data
and transaction processing, as well as decision
and service support functions directly, affects the
core operations of any business
 Management can’t delegate its responsibilities
MANY NEW INFORMATION SYSTEMS
PROJECT FAIL



Estimated 1/3 of computer application projects canceled
before completion.
> 50% of those cost more than 2x original estimates
< 10% completed on time and within budget
< 50% meet original proposed features & functions.
3/4 of all large systems are “operating failures”
(do not function / not used at all)
ASSIGNMENT : p. 20 – p. 21 : Greyhound, Andersen
Consulting, Denver’s New Airport, The London Stock
Exchange, US Government.
I.T. : THE MOST CHALLENGING
CHANGES MANAGEMENT FACES
RACE between : Rapidly evolving computer &
communication technologies AND The growing &
changing corporate demands for inf. systems
IMPACT : Outsourced operation & new systems
development
 Major systems integration projects need 5 to 10
years to develop & fully implement  Major
parameters or systems may have change.
UNREALISTIC MANAGEMENT EXPECTATIONS:
THE MYTHS AND DILEMMAS OF
OUTSOURCING





The Technology Myth / Legend :
Develop new technology is easy
The Prescient / Vision Client Myth :
Client aware of the performance requirements
The Project Management Myth:
Translate requirements into software code.
The Contract as Complete Guarantee Myth
The Prestigious Contractor / Outsourcers Myth
UNREALISTIC MANAGEMENT EXPECTATIONS:
THE MYTHS AND DILEMMAS OF
OUTSOURCING



The Easy Teamwork Myth
The Myth of Choosing Centralization /
Decentralization
The Myth that Partnering is Partnering:
Users need will change in any dynamic business
environment and as they experience a new
system capabilities and learn of still newer
technological resources. And it’s by no means
easy to change partners.