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Case Study: IT Infrastructure Outsourcing At Schaffer Free essay! Download now

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Case Study: IT Infrastructure Outsourcing At Schaffer

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Case Study: IT Infrastructure Outsourcing At Schaffer


Case Study IV-4 : IT Infrastructure Outsourcing At Schaffer

Situation: Schaffer Corporation is a manufacturer, which began by making small farm machines, but now has spread to make diverse machines. Originally founded by Frederick W. Schaffer during 1877, it was his three son-in-laws who led the corporation to new product lines and divisions within the company. These divisions were called the Colbert division, the Kinzer division, and the Reitzel division; each of which has its own manufacturing plant with the exception of the Reitzel division, which serves as a financial service provider. While the first two divisions mentioned above have shown a steady growth, the Reitzel division is the one with most potential with growth due to its dynamic and well-spread services that touch on ten European countries. This, as well as the fact that Reitzel contributes to 80% of total profits for Schaffer Corporation, is more than enough reason to examine the option of improving the system further (Brown).
Very ambiguous goals were set in place once the decision was made to focus on the Reitzel division for the growth of the corporation. These goals included a ten percent growth in revenue and a fifteen percent growth in profit for Schaffer Corporation in the next five years. Outsourcing the information technology was the idea suggested by the Vice President of Human Resources, Pedro A. Moreno, which sat well with some but did not with others. It is an important decision that Schaffer Corporation had to face with time on their side for proper planning and research. Schaffer Corporation is presented with options as to which vendor they want to use for their outsourcing, and must now decide which fits better for their dynamic and growing division.
Target: Recognizing one’s own weakness is an important quality that every company should posses if it intends to stay around and be consistent in its performance. Schaffer recognizes that information technology is not one of their core competencies and decides to outsource these kinds of activities. Other than improving the quality of service, this outsource should save the corporation money even when they are expanding into new areas. These strategies would potentially lead Reitzel to achieve their targets, which include the expansion into new counties, along with an improvement and depth of their product line. Outsourcers have the capability of expanding the corporation’s reach with a work force that is very capable and well trained to address such issues.
The Reitzel division has a far more complex application infrastructure than the one found in the Colbert and Kinzer divisions. It is a more dynamic system that needs more attention, both due to its complex infrastructure and its fast growing success: “Reitzel ...

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