Eastman Kodak Co.: Managing Information Systems Through Strategic Alliances Harvard Case Solution & Analysis


The case analyzes outsourcing support activities of the organization that enables the management to tackle various resources that can be effectively utilized in providing edge to the core competencies. In the given case, the outsourcing of a support activity is to be dealt with various other scenarios. Firstly, the core competency that Kodak had edge in has been diluted due to the changes in industry and technological advancements; which has lead the management to redefine the core competency. This complicates the ongoing decision of outsourcing as the activities that need to be outsourced should support functions and provide the organization with certain benefits. Another complication in the given scenario is the contradiction of a century old tradition of the organization; which makes it difficult for the management to implement outsourcing decisions across the unit. The organization has taken pride in delivering quality through its activities, which has led in excessive vertical integration therefore in the outsourcing decision there is a need to provide reaffirmation on providing quality through its partner shipping with the alliances.

In the given case, Hudson finalized the decision to outsource the organization’s data centre operations, telecommunication services and personal computer services. This is due to various factors as the organization currently witnessed a change in its organizational structure where the business units were demarcated based on their geographical boundaries and the nature of industries with each unit solely responsible for its own corporate information systems. Later on, this was decided by Hudson to outsource in order to effectively target on the core function of organizations.

1.     Reasons for Changes in the Information System Management

There are certain reasons for outsourcing, depending on the deliverables and the organizational context; these reasons may differ variably in every organization. Hudson upon taking charge of the corporate information systems dedicated efforts in underlining the key activities that are essential to the organization. These lead to bring various changes that brought drastic shift in the organizational structure.

The changes are focused on two core objectives, which are to deliver the long associated quality driven performance that is the main characteristic of the organization and bring cost efficiencies in the information technology systems that are being implemented in Kodak. The cost trade-off cannot be done at the cost of compromising the quality of the services whereas; there should be cost benefit analysis in the activities pursued by the management in delivering the high performance and quality in the systems. In reaching the given objectives, Hudson implemented various changes on the following grounds that justified its activity to the management as well as employees who were directly concerned with the changes being implemented.

ð Syncing Organisational activities

It is witnessed that the organization has faced recent overhaul in all of its activities that encompass changes which divides the business on their industries and geographical boundaries. This is done to effectively gain control and monitor the activities that are crucial to the organization and outsource support activities that are not contributing to the value addition. This phenomenon is also implemented in the Corporate Information Systems (CIS) by Hudson as all of the corporate functions should be perfectly aligned in order to bring the desired results. In pursuing the new core competencies, the management had to closely focus on their industries and outsource any potentially support function. This is implemented by the CIS as well and the information system is assigned to their respective units with a central database working above them.

ð Loss of efficiencies

It is evident that in pursuing each activity in-house, the management is witnessing considerable loss in efficiencies; which has been denoted by the external research as well as internal audit. Therefore, in order to curb the loss of efficiencies and direct the activities in providing higher value to the management, changes like outsourcing and strategic alliances have to be made in order to remain productive and reap benefits of cost efficiency and emphasize on value driven activities.

ð New boundaries for management

Since the core competency has dried up, so the management has pursued to dilute its activity in various industries in order to highlight its core competency in the given scenario. The death of competent industry and rise of the technologically advanced industries has denoted the need of reformation across various activities. Since, the advancement has been indicated in the technological aspect therefore; it is important to analyze; which features are of key importance and contribute in delivering the superior value and which activities are considered as support activities. This lead to introduce changes in the structure of management as the support activities are being considered to be outsourced to partner firms in order to effectively ponder over value-driven activities.

ð Competitive landscape

The competition is intensified in the given condition. The changes are inevitable as the competition is striving hard in generating its own market. Kodak has a long history of presence in consumer mind; therefore, this can easily be capitalized through restricting of activities as the human and capital required in conducting........................................

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In January 1988, Colby Chandler, CEO of Kodak, created a Corporate Information Systems (CIS) and appointed Katherine Hudson head. It immediately became the first head of IT and the first woman, a corporate vice president. Throughout 1989 Hudson opened a number of organizational initiatives, which would not only dramatically changed the IT function at Kodak, but will rock the industry. She outsourcing data center operations, telecommunications, and personal computer support IBM, DEC, and business-to-Earth, respectively. The body is the difficulties in management of information systems in partnership. "Hide

by Lynda M. Applegate, Ramiro Montealegre Source: Harvard Business School 24 pages. Publication Date: July 30, 1991. Prod. #: 192030-PDF-ENG

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