Mdcm Inc Case Solution

Case Write-Up

ON

MDCM, Inc. (A): IT Strategy Synchronisation

And

MDCM, Inc. (B): Strategic IT Portfolio Management

BY

Arijeet Majumdar (1501005)

Priyanshu Nishad (1501093)

Sunil Kumar (1501109)

1. Putoukho (1501028)

Toshan Kumar Singh (1501050)

Course: IT Consulting

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Indian Institute of Management Tiruchirappalli

• Executive Summary:

• Problem Statement:

The company was facing long term problems with it IT infrastructure due to improper financial planning as well as wrong strategy in implementing the IT. Also the various corporate and business problem have arisen during the different phases of the company’s life and various method was implemented to solve, but the IT problems keep on adding with time since it was first introduced during early 90’s. So during early 2000’s, the new CEO, Mr. McMullen, saw the need to align the business strategy with much sophisticated IT capabilities. The following are some problems before they plan to restructure the whole system.

• The major proportion of IT budget was the corporate IT with very poor allocation, leaving behind the overseas projects, investment decisions, or long term planning.
  
• Also, 80 % of the budget was for the maintenance of presently working system, which shows the lack of interest of upper management to improve the technology even though it was evident that the rate of change in technology was very fast especially among the competitors.
  
• The system was highly fragmented as hundreds of platforms and standards were used in the organization. This led to compatibility issue among various system inside a single company.
  
• The overlapping and contradicting of many project was clearly visible due to inefficiency in process management and incompatibility among various systems.
  
• Inaccurate forecasting, scheduling problem and bloated inventories were triggered in chain reaction with the initial IT chaos.
  
• The movement of information between the organization and company’s partner is very slow which led to overtime cost and costly expedited orders. The brand image was degrading among the supplier and buyers.
  
• The negligence by top management had cost them a fortune over the period of time by losing the competitiveness which they initially gained with being an early adopter of the technology among the competitors.
  
• The total budget allocation of the company for IT was $56.5 million in 2001 and the number of employees in IT sector was 195, which was not good enough if the company had to restructure.

It was neither easy nor feasible to implement wholesome changes in single instance or very short period.

• MDCM’s Strategic Context and Infrastructural Services

• The Firm:

A geographically diversified medical device contract manufacturing company being the leader of the market, serving all over the world.

• Potential Corporate Synergies:

• All the different geographic subsidiaries synergies.
• Predominant value synergies: product standardisation but little tweaks based on local needs, product differentiation and intimate customer relationship

• Business Maxims:

• Continue being the market leader by sustaining the market share and slowly increasing it.
  
• Implementation of a global company under which all the MDCM’s subsidiaries will operate.
  
• Expedite in forecasting, procurement, scheduling, inventory management and supply chain logistics managements.
  
• Continue focusing on the company’s core competencies of the different subsidiaries and implement those in the overall company.
  
• Committing to reduce in operation costs and other internal costs to price its products more competitively than its competitors.
  
• Recommitting to its customers to repair the customer relationship which will lead to sustain growth.

• IT Maxims:

• Focus on running all the systems of the company in a single technological standard.
  
• Centralisation and standardisation of all the business information so that the information can flow to all the subsidiaries simultaneously.
  
• The ability to accurately forecast of the demands of the customers companywide.
  
• The ability to streamline the design, procurement, supply chain and logistics processes.
  
• Implementation of a standardised communication system which will connect all the business units of the company.
  
• The ability to better connect to the customers of the company.
  
• Focus on standardising the human resource administration companywide for better employee management.

• Infrastructure View:

• Enabling: Long term need for future flexibility and IT as a key component to fulfil the company’s overall strategic goals.

• Companywide IT Infrastructure Services:

• Development of companywide standardised IT infrastructure.
  
• Development and management of ‘shared services’ applications such as product forecasting, procurement, financial system, order processing system, human resource and employee management system.
  
• Implementation of the CAD system companywide which was implemented and being used by the company’s UK subsidiary to significantly reduce product development time to help the company introduce new products in lesser time compared to its competitors.
  
• Implementation of the CRM system companywide which was implemented and being run by the company’s France subsidiary to better cater to the customers of the company.
  
• Firmwide implementation of communication system such as standardised e-mail system, chat system, video conferencing system etc.
  
• Companywide security, disaster planning and business recovery services implementation.
  
• Implementation of executive management system (ESS) throughout the company.
  
• Implementation of centralised knowledge base from which everyone would get benefitted if they get stuck in any issue which was previously faced by someone in the company.

• Implementation of employee training and learning to make the employees be on track with the new unified systems and future technological know-how.

• Business Objectives:

1. Increase operational efficiency        
2. Reduce costs and Increase profit margins        
3. Increased information flow
4. Improve forecasts

• Proposed IT Projects:

1. Unify Methodology & Technical Standards
2. Consolidate Data Centres and Networks
3. Outsource Non-Strategic IT Services
4. Standardize server Hardware and Platforms
5. Implement ERP
6. Create Employee Intranet Portal
7. Manage Supply Chain
8. Streamline Design Systems
9. Improve Collaboration Systems
10. Begin CRM/ Create Data Warehouse
11. Implement E‐Procurement System
12. Customer Self-Service Portal

• Business Value Frameworks: (Non-financial measures)

1. IT System portfolio management:

MDCM has planning to have a portfolio of information technology investments to address different management objectives. Four different management objectives guide firms’ investment in IT resulting in four different categories. Each of these categories has a different objective and a unique risk-return profile. The proposed IT projects of MDCM can be categorized into different category as below: