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ANSWERED Bob Smith, CEO of Smith’s Information Services, Inc., was studying the replacement of the company’s data center by an outside service. Smith’s Information Services, located in Lexington, Massachusetts, was in the midst of a corporate overhead reduction program. As part of this program, Bob had been assigned the task of reviewing opportunities in outside sourcing for data center services. He was expecting a report on this issue at the next executive meeting in 3 days.

Bob Smith, CEO of Smith’s Information Services, Inc., was studying the replacement of the company’s data center by an outside service. Smith’s Information Services, located in Lexington, Massachusetts, was in the midst of a corporate overhead reduction program. As part of this program, Bob had been assigned the task of reviewing opportunities in outside sourcing for data center services. He was expecting a report on this issue at the next executive meeting in 3 days.

Individual Case Study 1 Overview (Weeks 2 and 3)

TABLE OF CONTENTS

Overview

The Individual Case Study 1 assignment is a comprehensive assessment that highlights the preparation that will precede the procurement and contracting process. The scenario of outsourcing a corporate data center is one that is very current, and this decision is being made daily. You will prepare a document to be presented to the executives that will be comprehensive and easy to use to decide if the company will outsource or not. By the end of your analysis, you should have touched on all aspects of the contracting process, from plan purchases and acquisition stage through the select sellers stage.

*Make-or-Buy Analysis. The process of gathering and organizing data about product requirements and analyzing them against available alternatives including the purchase or internal manufacture of the product.

*Make-or-Buy Decisions. Decisions made regarding the external purchase or internal manufacture of a product.

 IMPORTANT NOTES

  • The weekly lessons and assigned readings serve as starting points. Please be advised that considerable relevant material is also available on the Internet, so you might want to conduct a search for some materials that may yield insights into the procurement process that you will be undertaking. Remember to properly cite any outside information that you use.
  • This Individual Case Study 1 assignments are due in Weeks 2 (paper) and 3 (presentation).

Background Information

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BPO and Cloud Computing

Bob Smith, CEO of Smith’s Information Services, Inc., was studying the replacement of the company’s data center by an outside service. Smith’s Information Services, located in Lexington, Massachusetts, was in the midst of a corporate overhead reduction program. As part of this program, Bob had been assigned the task of reviewing opportunities in outside sourcing for data center services. He was expecting a report on this issue at the next executive meeting in 3 days.

Smith’s Information Services Cost Reduction Program

Smith’s Information Services is a $2 billion firm with sales in consumer information. It enjoyed high overall growth until fierce competition flattened sales and decreased profits sharply 2 years ago. Since then, corporate cost and overhead reduction efforts were widespread. The CIO was in charge of the data center and has been investigating the possibility of a business process outsourcing project that would move the data center to the cloud.

Data Center

The data center at Smith’s Information Services was created in the mid-1980s and has grown very rapidly. Mainframes were installed first, followed by AS400s, and then servers that were rack mounted. Disk storage, at one time, was at a premium, but has since gone down in price. Cooling for the data center has gone up as more and more servers and disks were installed. This cost, along with the electricity cost to run all of the devices in the data center, has Bob Smith worried that the cost of doing business is getting out of control.

Along with the rising hardware and software costs, the number of employees needed to run this data center has grown considerably. The cost of running a data center 24/7 is becoming rather large, and this is another issue that Bob Smith is concerned about at the moment. The growth potential for the organization is very positive, which means that more data will be stored, which will result in higher costs in all areas of the data center unless cost savings are found.

Outside Services

The CIO has felt that this was coming sooner or later and has already been quietly investigating the idea already. There are many options from which to choose, including a local data center, a well-known data center, and a data center that is located overseas. Each of these solutions has pros and cons, and one big issue is the security of the data. Some of the other issues include service-level agreements that have to be hammered out, HR issues that will deal with the local and remote staff members, and other issues, such as informing or not informing the customer that Smith’s Information Services will be outsourcing the data somewhere.

critical appraisal

Deliverables

Individual Case Study 1: Paper (Due Week 2)

Create the paper in MS Word format. All sources including the eBook need to be cited in your document, including links to relevant websites. Your document shall be written as an executive summary or bulleted list and tables clearly identifying your purpose, relevant data, decision-making and thought process, and conclusion. Your document will be your go-to plan for your outsourcing process. You need to quickly and succinctly understand the steps that you’ll undertake for contracting. This means having minimal paragraph-style text, and instead, introducing a variety of tables, graphs, and charts.

Although this report should be fashioned as an executive summary, it does encompass the entire contracting process. As such, it shall be between five and eight single-sided pages in length, using 10-point Times New Roman font, and 1.5-in. line spacing. The page requirements do not include any cover sheets that you may include with your report.

Individual Case Study 1: Presentation (Due Week 3)

Create the presentation in Microsoft PowerPoint. All sources including the eBook need to be cited in your presentation, including links to relevant websites. The presentation length should be 5-15 minutes. You need to help management quickly understand your recommendation and the steps that you’ll undertake for contracting. Presentation audio should be recorded on your slides. Make sure to review the rubric for the presentation to understand the required sections (Design, Delivery, Business Content, Technical Content, Wrap-Up).

Grading Rubrics

The Individual Case Study 1: Paper and Presentation are both worth 100 points for a total of 200 points. Points for each will be allocated per the rubrics below.

Individual Case Study 1: Paper

CriteriaPoints
Correlation of the assessment with the COs and material covered through Week 210
Compliance with format requirements outlined above  10
Assessment of how each of the three outsourcing alternatives impact your business decision and also whether or not it might be helpful or detrimental to your core business (local data center, well known data center or overseas data center)20
Assessment of any issues that may arise (both in the short term and long term) for each outsourcing alternative 10
Assessment of the type of contract chosen for each outsourcing alternative; provide a rationale for your choice10
Assessment of the evaluation criteria used to rank the proposals; again, include a rationale for your choice 10
Strength of argument on the number of vendors selected to provide the services20
Assessment and identification of the difference in time line (if any) between the three outsourcing alternatives10
Total100

Individual Case Study 1: Presentation

CriteriaPoints
Design: Flow, slide usage, and other items on the appearance and construction of the presentation20
Delivery: Presenters speaking, clarity, sound quality, and confidence; length is also considered—credit lost for over 15 minutes20
Business content: Convincing presentation of business benefits of recommendation20
Technical content: Clear presentation of appropriate, nondetailed technical information20
Wrap-Up: Closure and wrap-up (must have at least one slide on this); leave your audience with the reasons to support your recommendation20
Total100

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