Hardware and Software in the Enterprise - Pearson …

1 CHAPTER 6 ObjectivesAs a manager, you ll face many decisions about using Hardware and Software to improve the perform-ance of your firm. After completing this chapter, you will be able to answer the following computer processing and storage capability does our organization need to handle its infor-mation and business transactions? arrangement of computers and computer processing would best benefit our organization? kinds of Software and Software tools do we need to run our business? What criteria shouldwe use to select our Software technology? what new Software technologies should we be aware? How would they benefit our organization?

2 Should we acquire and manage the firm s Hardware and Software assets?Dirt Bikes :Analyzing the Total Cost ofOwnership (TCO) of Desktop Software AssetsElectronic Business Project:Planning and Budgeting for a Sales ConferenceWEB | Internet Connection:Evaluating Computer Hardware Vendors | InteractiveStudy Guide | Additional Case Studies | InternationalResourcesCASE STUDIESO pening case:Nor-Cargo Revamps Its ITInfrastructureWindow on Management:The Case for LinuxWindow on Technology:ApplicationIntegration to the RescueChapter-ending Case:Zurich North AmericaHunts Down Its IT AssetsHANDS-ON PROBLEM SOLVINGA pplication Software Exercise:Spreadsheet Exercise.

3 Evaluating Hardware andSoftware OptionsHardware and Software in the Enterprise |FOCUS ON THE FEATURES000191 Nor-Cargo started out in 1920 as asmall cargo services company that ranships up and down the coast ofNorway. About 15 years ago, it beganexpanding, acquiring dozens of otherfirms. Today Nor-Cargo is the largesttransportation company in Norway,with $ billion in annual revenue. Nor-Cargo operatesfrom the Arctic Circle down to the European continentwith eight areas of business, including package trans-portation, air and sea freight, freight forwarding, andthird-party growth did not come without a price.

4 Nor-Cargo s information technology (IT) infrastructure waschallenged by all of its acquisitions, each with theirown technology platforms; business processes; andapplications for payroll, accounting, and a centralized IT strategy, Nor-Cargo sufferedfrom operational inefficiency, redundant resources,high Software development costs, and limited coordina-tion between all of its companies. Nor-Cargo had toomany different operating systems and too many serversin a distributed environment, underutilizing its datastorage capacity by 50 percent. All of these disparatesystems forced Nor-Cargo to maintain separate informa-tion systems staff for many of the cities it serviced andprevented the company from responding rapidly to mar-ket changes.

5 |Nor-Cargo Revamps Its IT Infrastructure Develop Enterprise - wide standards ECOS tructure blueprint Cisco Hardware & Software Oracle e-business Software Business processes Acquisitions Rapid expansion Decentralized IT Infrastructure Analyze company- wide data Provide online package tracking Roll out new applications Reduce costs Improve customer service191 Nor-Cargo management wanted to reduce the size ofits information systems workforce by 20 percent eachyear. It also wanted a coordinated IT infrastructure thatwould allow it to consolidate data in a single used ECOstructure blueprints created by CiscoSystems, EMC, and Oracle Corporations to provide secureand new storage, networking, and Software architecturesthat could accommodate growing computing require-ments in the from Rubik Consultants performed a totalcost of ownership (TCO) analysis showing that Nor-Cargoshould move from a distributed architecture to a central-ized one where it could standardize on one applicationfor each area of the company and take advantage of lead-ing-edge logistics systems.

6 The consultants recommendedNor-Cargo adopt a standardized network and IT platformas a common framework for its mission-critical provided an integrated e-business Software plat-form accessible to Nor-Cargo employees, suppliers, andcustomers through a Web interface. Cisco provided net-work security and management Software and implementing the new infrastructure, Nor-Cargocould aggregate data from multiple sources, giving man-agers the ability to analyze the data. For example, man-agement can now examine truck traffic patterns and usesuch data to make truck trips more cost efficient. Nor-Cargo can quickly roll out new applications over theinfrastructure, including a Web-based bar code system192 Part II |Information Technology InfrastructureNor-Cargo found that its efficiency and compet-itiveness were hampered by poorly managed Hardware andsoftware technology that lacked the functionality for runningits business.

7 The company found it could lower operatingcosts and provide better services to customers by improvingthe selection and management of its Hardware and order to consolidate Hardware and Software assets andselect appropriate technology, Nor-Cargo s management hadto understand the capabilities of computer Hardware and soft-ware technology, how to select Hardware and Software tomeet current and future business requirements, and thefinancial and business rationale for its Hardware and softwareinvestments. Computer Hardware and Software technologiescan improve organizational performance, but they raise thefollowing management challenges:1.

8 The centralization versus decentralization long-standing issue among information system man-agers and CEOs has been the question of how much tocentralize or distribute computing resources. Shouldprocessing power and data be distributed to departmentsand divisions, or should they be concentrated at a singlelocation using a large central computer? Should organi-zations deliver application Software to users over net-works from a central location or allow users to maintainsoftware and data on their own desktop computers?Client/server and peer-to-peer computing facilitatedecentralization, but network computers and main-frames support a centralized model.

9 Which is the bestfor the organization? Each organization will have a dif-ferent answer based on its own needs. Managers need tomake sure that the computing model they select is com-patible with organizational application in computer soft-ware have not kept pace with the breathtaking productiv-ity gains in computer Hardware . Developing Software hasbecome a major preoccupation for organizations. A greatdeal of Software must be intricately crafted. Moreover, thesoftware itself is only one component of a complete infor-mation system that must be carefully designed and coordi-nated with organizational and Hardware components.

10 The Software crisis is actually part of a larger systems analysis,design, and implementation issue, which is discussed indetail later. Despite the gains from fourth-generation lan-guages, personal desktop Software tools, object-orientedprogramming, and Software tools for the Web, many busi-nesses continue to face a backlog of two to three years indeveloping the information systems they need, or theymay not be able to develop them at Challengesthat lets customers track packages. Even though Nor-Cargo has not finished rolling out all of its applications,it has realized savings from improved communications,smaller information systems staff, and reductions in thenumber of its servers from 150 to :Cisco Systems, Case Study: Nor-Cargo Brings All Shipsinto One Port, Maximizing the Data Center,2003; Eric J.