Riordan Amended It Budget

Introduction

Riordan Manufacturing was founded by Dr. Riordan in 1991. The goal of the company is continued leadership in the plastics industry through the use of polymers to provide quality solutions to clients and to achieve and maintain “reasonable profitability to assure that the financial and human capital is available for sustained growth” (Apollo Group, Inc. 2013). Riordan Manufacturing, Inc. has manufacturing facilities in Hangzhou, China; Albany, Georgia; and Pontiac, Michigan. The corporate headquarters in San Jose, California, provides research and development for the company. Riordan's major customers are beverage makers and bottlers, automotive parts manufacturers, the Department of Defense, aircraft manufacturers, and appliance manufacturers (Apollo Group, Inc. 2013).

The purpose of this proposal is to provide a summary of Riordan Manufacturing’s information technology budget and propose an amendment to increase spending in the areas of hardware, software, and outside IT support services while decreasing the overall IT budget. This amendment must align with the strategic management goals of the company. The amendment includes changes in hardware virtualization, IT staff, and software licensing.

Strategic Management

To achieve any goal, all businesses need a set of decisions and actions that will result in the building and implementation of plans. According to Pearce and Robinson, these plans include nine critical tasks. Within these tasks are the company’s mission statement, analysis, long-term objectives, short-term strategies, and the implementation of the strategic choices “by means of budgeted resource allocations in which the matching of tasks, people, structures, technologies, and reward systems is emphasized” (Pearce & Robinson, 2013). The amendment of the Riordan budget will take these tasks into consideration.

Current Budget

The chart below shows the current IT budget for Riordan that includes a line item of $150,000 for a special project (described in the notes area). Making a few key changes will enable Riordan to invest more in hardware and vendor use while reducing the entire budget by 2%.

(Apollo Group, Inc. 2013)

Proposed Changes

The proposed changes include amendments to the following areas: compensation, contracts, hardware, software licenses, training, and travel (noted in red in the chart below). Even though there are increases in a few of the line items, the overall budget is reduced with explanation provided below.

IT Staff

Overall, Riordan Manufacturing has approximately 300 employees with an average turnover rate of 10.8% (Apollo Group, 2013). To