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Eight years after Kodak energized the marketplace by outsourcing major components of its information systems (IS) function, the information technology (IT) out-sourcing services industry is booming. IT is central to business initiatives such as reengineering, knowledge management, the creation of electronic channels of distribution, and the development of digital business strategies.3 Why are companies outsourcing the activities of their IS departments at such an unprecedented rate when IT has never been more critical to business success? The motivations for outsourcing are evolving from a primary focus on cost reduction to an emerging emphasis on improving business performance.
While many companies still follow the traditional out-sourcing model, several innovators are developing new models. When Xerox Corporation recognized the pressing need to extend IT’s contribution to critical business processes, outsourcing was a key component of its strategy.
About the AuthorsAnthony DiRomualdo is a principal, CSC Research Services.Vijay Gurbaxani is a professor and associate dean, Center for Research on Information Technology and Organizations, Graduate School of Management, University of California, Irvine.
We thank all the sponsoring organizations of the CSC Foundation research program that participated in our research on outsourcing. Tech Savvy: Reinventing Work With Virtual RealityWhat’s happening this week at the intersection of management and technology.
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Peak shaving, as illustrated in the figure below, can be achieved by shedding load or by using onsite standby generation facilities during peak times.
When load on the distribution network is approaching its maximum, end users can enter into an arrangement with the distribution network service provider to ease congestion on the system and enhance network reliability.
By agreeing to a demand-side response clause with your retailer, you can shed load at times of high underlying spot prices in return for a pre-agreed compensation. By purchasing all, or part, of your energy requirements directly from the wholesale electricity market, and avoiding loads when the spot price exceeds a certain level, you can achieve a lower average cost for energy.
In the gas market, by having a fixed price retail energy contract, end users can re-sell unused energy created by load shedding back into the spot market, either directly or through a demand-side aggregator. Oxford Cold Storage manages demand using the thermal mass of their cold storage facilities.
By switching off freezer units, Oxford Cold Storage is able to halve its load within 15 minutes.
Oxford Cold Storage has also successfully implemented measures to reduce maximum demand charges. Because lighting is not a weather-dependent fixed load, replacing high-bay lights with LEDs has enabled us to permanently reduce our maximum demand, which is a fixed monthly charge on our bill, by 280kW.


The traditional rationale of vendor economies of scale and specialization is becoming less convincing. Some firms outsource for strategic, not tactical, reasons, to exploit more fully the business benefits of IT.
CSC, “Critical Issues of Information Systems Management for 1996” (Cambridge, Massachusetts: CSC, March 1997), pp. John Cross, “IT Outsourcing: British Petroleum’s Competitive Approach,” Harvard Business Review, volume 73, May–June 1995, pp. We also want to acknowledge Anne Pappenheim for her immense help in writing this article and to thank the CSC Foundation Research Team for providing encouragement, inspiration, and challenge to our ideas. Peak shaving can realise a range of benefits when it coincides with peak demand, and therefore peak prices, in the wholesale market.
When reducing usage at peak times, it can enable you to stay within your contract’s maximum demand and can optimise network and retail tariff costs. These types of arrangements should be discussed with your retailer however to ensure changes in your demand profile do not impact adversely on their energy supply arrangements and result in you paying higher energy prices because your load appears to be more volatile. This approach requires very careful assessment of the opportunities and risks, investment in suitable monitoring and control systems and very thorough training of production staff and management personnel. The duration of the downtime depends on a range of factors, such as how well insulated the individual freezer unit buildings are, the number of times and duration that doors are opened, and the ambient outside temperature. However, once a freezer has been switched off for some time, it is sometimes necessary to increase energy use above normal operating levels to return contents to the appropriate temperature. This strategy, together with our other energy efficiency measures such as variable speed drives , will enable us to ask our network provider to reduce our existing maximum demand of 5,616kW to around 5,200kW.
Companies such as Dupont, British Petroleum Exploration, Lufthansa, Swiss Bank Corporation, and J.P.
They are pursuing entirely new roles for IT outsourcing and pioneering new paths for IT outsourcing relationships.
Wallington, from presentation at the CSC Index Summit Working Session, Atlanta, Georgia, 13–14 February 1996. Caldwell, “Outsourcing Megadeals: More Than 60 Huge Contracts Signed Since 1989 Prove They Work,” Information Week, number 552, 6 November 1995, p. We also thank Microsoft for its NetMeeting product, without which we would still be writing this paper.
Louis Magazine2010 Platinum List Best Floral Designer Ladue News and At Home Magazine2011 Platinum List Best Floral Designer -Ladue News (among the Top 3 in St. As the market matures, numerous companies routinely outsource large components of their IS activities. Morgan, with well-run, innovative IS departments that are large enough to accrue the same scale and specialization benefits as a vendor, are nevertheless engaged in significant outsourcing deals.
Lacity, “The IT Outsourcing Bandwagon,” Sloan Management Review, volume 34, Spring 1993, pp.
Jensen, “Separation of Ownership and Control,” Journal of Law and Economics, volume 26, June 1983, pp. Nolan, “How to Manage an IT Outsourcing Strategic Alliance,” Sloan Management Review, volume 36, Winter 1995, pp. Furthermore, as the growing role and importance of information and communications technologies become widely recognized, companies frequently confront a wide disparity between the capabilities and skills necessary to realize the potential of these technologies and the reality of their own in-house technology capabilities and skills.


IT outsourcing is playing an increasingly prominent role in strategies designed to close this gap. Louis Homes and Lifestyles Magazine October 2013 issueSuper Floral Retail Magazine?    ??SCOTT HEPPER HAS BEEN VOTED BEST ST. LOUIS FLORAL DESIGNERAwarded as an Individual Floral Master Designer-All within the same year period!.ST. Feeny, “IT Outsourcing: Maximize Flexibility and Control,”Harvard Business Review, volume 73, May–June 1995, pp. Sviokla, “Exploiting the Virtual Value Chain,” Harvard Business Review, volume 73, November–December 1995, pp.
It first differentiated itself with its fine meats, explains Trip Straub, vice president of William A. Today, the company’s signature item remains high-quality meats hand-cut by its staff of 25 butchers. None of the selection, which includes USDA Prime cuts and Kobe beef, is prepackaged or previously frozen. Straub says the company’s combination of high-quality employees and products is in keeping with its “best of the best” philosophy. Through “marketing, merchandising, ordering and spending 12 hours a day, not doing any prep work in the back, but literally staying on that floor up front, making contact and introducing myself.” (See more about Mr. Hepper’s marketing efforts in “Marketing Success” on Page 26.)      He also has radically changed Straub’s floral offerings. Hepper reduced the number of products the departments stock and replaced lower-priced items with seasonal, high-impact florals that “nobody else has.” The resulting European-style floral departments are more in tune with the tastes of Straub’s customers. The store expects to top $300,000 this year, with floral contributing 4.5 percent toward total store sales.
Hepper’s philosophy of differentiation, the floral departments don’t sell ready-made bouquets. Customers favor “Martha Stewart-style” arrangements with dense florals and few filler flowers. He keeps the floral cooler fully stocked with designs ranging in price from $50 to $100 but no bud vases, asserting that their low prices aren’t worth his labor costs or cooler space. Hepper has become the face of Straub’s florals, turning public appearances and charitable donations into opportunities to tout the company’s florals and draw customers into the stores. Here are just a few of his marketing successes: • He donated altar pieces for a local parish’s cathedral for Christmas one year, and for Easter the congregation paid him to decorate the entire building.
In addition, his floral creations have been featured in the church newsletter, and he now gets work from the parish for weddings, funerals and other events. Louis Art Museum, one year, and the next year, the museum asked him back to give a floral demonstration for 400 people. Straub says the size will allow the store to expand on the best of Straub’s, including floral. It has a circular counter—“almost like the concierge at The Ritz-Carlton”—and is centrally located.



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