Assignment: MDCM Report
Name of the Course: Information Technology Consulting
Batch: PGPM 2021-23
Group (No.) – 05
2101024
Pragnya Koya
2101032
Nikhil Gangwani
2101038
Ramakrishnan R
2101060
Vishal Singh
2101264
Varun R
Table of Contents
Topic
Page No.
Executive Summary
3
Analysis of Problem Statement
3
Methodology & Frameworks Used
6
Recommendations
10
2
1. Executive Summary
MDCM, Inc., is one of the largest contract manufacturers for medical devices globally, the firm
posts a revenue figure of $1.12 billion, however their quarterly loss of $33 million in the 2nd quarter
of 2002 was the 5th one in a row. Their losses were triangulated to be from inefficiencies in
operational practices and even through major reorganization of the company structure they failed
to derive the true potential from their numerous business units amounting to operational and cost
improvements. There is major scope for MDCM to align its business strategy with its muchneeded IT initiative. This document is to summarize how MDCM’s business strategy can be
supported with IT initiatives.
MDCM a company founded in 1972 which has decades of experience in end-to-end medical
device contract manufacturing & related services. They have business units dedicated to 3D
design using CAD, CAM software to assist customers with custom designing of parts for better
manufacturability and they are well known for manufacturing highly customized versions of such
equipment.
The business objectives for MDCM are to reduce cost of production, reorganization of subsidiaries
to share one brand, leverage their distributed global presence to maximize their revenue,
establishment of much needed IT capability and synergy of information flow. The existence of
various platforms & systems that handle information pertaining to financial, MRP (Material
Requirement Planning), sales, human resource, customs & duty inspection, logistics &
transportation, make it a challenge to network via various communication protocols, operating
systems & databases. MDCM needs better integration with its various systems and is looking for
a solution/solutions to improve its relationship with its customer, have a consolidated investment
& operations plan, to eradicate information lag & IT chaos and generate additional revenue while
reducing costs.
2. Analysis of Problem Statement
Business Objectives
3
a. To have all MDCM subsidiaries share one brand to enable it in becoming one global
company.
b. Hardware, software & systems standardization.
c. Improvement in customer service & retention.
d. Consolidation of numerous suppliers and material purchasing activities.
e. Incorporate MDCM’s worldwide SBU’s networks into a homogeneous network to aid in the
process of efficient information flow.
f.
Outsourcing the non-strategic IT services.
Identified problems/Challenges:
a. To reduce time spent for ordering & managing customer accounts.
b. There in limited connectivity between SBU’s within regions & between countries, lacking
an integrated worldwide secure network.
c. Reduction of costs pertaining to production & maintenance.
d. Reduce high system to system discrepancies in the information on legacy systems leading
to improper scheduling of the supply & manufacturing.
e. Reducing unnecessary inventory pileup, in-accurate scheduling & forecasting due to IT
chaos which causes lags in information flow.
f.
Reduce flawed best practices which inflate the costs & unify decision making process of
long-term planning & corporate IT budgeting.
Maxims - MDCM
Business Maxims
Provide the employee with
information he needs about
benefits.
Employee
functions
automated.
should
IT Maxims
the - Developing an Employee Intranet Portal
his
- Using CAD design solutions to automate the most
critical functions and minimize cycle time - Relying on
be an e-procurement system to shorten the
implementation period
4
Cost Reduction
- Implementing tried-and-true systems.
deployed by a French subsidiary)
(CRM
- Because very divergent and underused systems
were used, ROI can be enhanced by improving
collaborative systems.
Management unification (resolving the - Consolidate data centers and set up a VPN
dilemma of competing bids or
- Create a data warehouse for customer data and
contradictory corporate activity)
keep CRM up to date.
Create a user-friendly customer The consolidated database system centralizes all
service site for easy transactions.
client information as well as their assigned
management information.
Increase the number of suppliers to A proper supply chain system may be implemented
maintain the desired production level. by software vendor i2, a prospective partner.
We can use e-procurement to improve E-tendering portal infrastructure may be established
supply procurement.
to assist in obtaining product raw materials at lower
rates.
The entire system is being streamlined. IT infrastructure with sensors is developed in such a
way that no machine/factory is left idle owing to a lack
of raw materials/inadequate maintenance.
Hardware Standardization
This will minimize the cost of procuring spare parts in
the future and contribute to a significant reduction in
maintenance expenditures.
We can keep outsourcing non-strategic This will help to reduce the company's costs because
IT services.
the outsiders are performing at a lesser cost.
5
3. Methodology and Frameworks Used
A) IT Portfolio Model
1) Non-strategic IT services – Services such as help desk support & hardware maintenance.
2) Collaboration systems – Globally consolidate & run systems such as E-mails, discussion
boards, calendars & knowledge management applications.
3) ERP – Enterprise Planning System is a software that businesses use to manage day-today
enterprise
activities
(Procurement,
accounting,
project
management,
risk
management, compliance, supply chain management etc.), which would mean production
facility & suppliers need to reorganize to Horizon 2000.
4) Supply Chain Management – With Horizon 2000 MDCM is able to consolidate to a few
key suppliers.
6
5) Methodology of Technical Standards – Eliminating the myriad of differing standards & IT
methodologies across the organization, this would help reduce project cycles & encourage
knowledge sharing.
6) CRM – Consolidate customer data into a data warehouse for analytical and marketing
purposes.
7) Customer Self Service Portal – This internet portal would allow customers to communicate
with their account managers, place orders, check order status, be exposed to marketing
content, this would drastically reduce administrative overheads.
8) E-Procurement System – This would facilitate MDCM in provisioning & aggregate
materials purchasing at a global scale.
9) Design System – Design a custom built CAD system which would help in reducing design
cycle time & improve quality control even further.
10) Employee Intranet Portal – Creating a self-service platform for employees to aid with
human resource administration & employee benefits activities would reduce administrative
overheads.
11) Server Hardware & Platform – The standardization of server hardware & platform would
to decrease maintenance & support costs.
12) Data Center & Networks – Consolidating the data centers to 3 locations & switching the
companies network to a VPN managed by a telecom provider.
7
B) Portfolio Benchmarking Framework
More focus has been put on Business Strategy
because of the following reasons:
●
About 10-20% of the industry average
constitutes of the total IT as compared to the total
earnings (this can be seen in Exhibit 1, Case A)
and the total IT budget.
●
It was observed that since the beginning
Corporate IT was responsible for handling the IT
budget and no long term planning or proper long
term projects were observed throughout this time.
●
It is now a goal to reduce expenses because
many bad practices were used, which led to
unforeseen expenditures.
The following points were taken into consideration Concentrated on the Cost Focussed Model and it was mentioned that the budget was $ 175
million per year. IT would be between 10 and 20 percent below the industry standard. The
percentage of the budget will be as follows, according to the Cost Focussed Model:
Infrastructure made up 42% of the total, or $73.5 million, while transactional made up 40%, or
$72 million. Similarly, Informational made up 13% of the total or $22.75 million and Strategic made
up 5% of the total or $8.75 million.
C) Characteristics of Risk & Return
Under the four distinct categories of IT—strategic, infrastructural, informational, and
transactional—we had each project's risk-return characteristics specified.
8
D) Information Economics Framework
9
10
4. Recommendations
The following order for the project is to be followed:
11
Year 1:
●
●
●
●
●
The original objective of the twelve projects that were provided was to standardize the
company's information technology department's work procedures.
In the first half of year 1, the first step was to streamline all technical procedures and
standards that can exclude IT standards and processes that are not essential.
Standardizing the whole server systems and hardware was a crucial move that came
with many risks because the organization used several platforms. The initiative to
standardize server hardware and platforms should be implemented by the firm during the
first two quarters of the year.
The project to develop a portal for Employee interaction (intra-network) must be
executed in the first quarter in order to reduce the additional costs associated with
managing human resources and improve employee perks.
In order to administer the data centers globally after streamlining IT standards and
techniques, unifying the networks and Data Centers project was executed in the
second part of year 1
Year 2:
●
●
●
●
One of the main ways to reduce expenses associated with maintaining hardware and
handling client orders is through the outsourcing of services. The Nonstrategic IT
Services projects were outsourced and were executed in the second year, and it took
12 months to complete. This was done to provide a smooth flow of operations and
enhance cost savings.
To balance production and supply with the available resources was the company's main
task. Therefore, an Enterprise Resource Planning (ERP) project was practiced to
appropriately arrange the production and supply facilities.
A project for simplifying design processes was put into place to enhance the product
design process. Engineers employed CAD design technology, which improves the
company's ability to oversee the quality of its output.
The crucial step after standardizing data centers and while enhancing design systems was
to compile client data into a warehouse. To do this, the Launch CRM project was
undertaken, which required efficient CRM utilization.
Year 3:
●
●
In order to guarantee the project's success, an assessment of the ERP system's
deployment was carried out in the first quarter of year 3.
The key difficulty was maintaining a solid supply chain so that the business could fulfill
client demands and keep the production process moving in the right direction. This project
would be conducted following the implementation of ERP since improving the supply chain
12
●
●
●
would be necessary after reorganizing the currently followed procedure. As a result, the
Supply Chain Management project was carried out during the full year.
The organization of the company's workflow was followed by the cooperation of the
systems, and if feasible, an improvement in the level of collaboration between the
systems. Systemizing Collaboration in a better way was established to stop the
underutilization of various applications like message boards, emails, calendars, and apps.
The E-Procurement System implementation project was started because MDCM
observed that local managers may be given access to carry out internal purchases in order
to reduce internal expenses and enhance the internal purchasing process.
By giving clients access to an Internet portal, MDCM created the Self-Service Portal for
end-users initiative to cut down on administrative service costs. This not only lowers
expenses but also makes it easier for clients to explore the many goods offered by MDCM,
place and follow orders, and speak with account managers to receive answers to their
questions.
13