Managing Information Technology Case Study Example | Topics and Well Written Essays - 2000 words

Managing Information Technology - Case Study Example Unfortunately IBM started to face a plunging decrease in its profit margins around mid 1980s. Some of the concluded reasons by analysts are, Bureaucratic and slow-moving setup. Reluctance in revamping of old business strategies. Wrong assessment of business risks etc. According to study conducted by Drucker (1993), The fourth of the deadly business sins is slaughtering tomorrow's opportunity on the altar of yesterday. It is what derailed IBM. IBM's downfall was paradoxically caused by unique success: IBM's catching up, almost overnight, when Apple brought out the first PC in the mid-1970s. This feat actually contradicts everything everybody now says about the company's "stodginess" and its bureaucracy." But then when IBM had gained leadership in the new PC market, it subordinated this new and growing business to the old cash cow, the mainframe computer. This stage came after a career IBMer John Akers took over the charge of the company in the year 1985. In his tenure several downsizi ng attempts from the administration of the company came as a result. The statistics related to downsizing can be observed in Table 1. Table 1: The IBM Timeline from 1970 to 1994. YEARS PROGRESS AT IBM. 1970s IBM owns about 70% of the computer market share. ... Louis V. Gerstner an outsider took over the control of the company after him as per the IBM board’s decision. Despite various attempt at downsizing the company was still going in loss. It had become essential that further downsizing of employees be done in order to secure the income of the company. The Gerstner early years witnessed a mild rise in the income but the trend was not consistent. The same is evident in Figure 1. KEY POINTS AND ISSUES: An account of the issues and problems facing by the company can be evaluated by reviewing its establishment in the State of Indiana. During the year 1992 Indiana reduced the number of its employees about 30%. The declining states of the company’s economy made Michael W. Wiley (General Manager Operations for the state of Indiana) foresee another cut in the number of employees at the organization. This however was not affordable, as the threshold of downsizing was already achieved and loosing competent workforce would cause bigge r losses to the company. In 1993 John Frank, then operations manager for IBM’s Indiana offices came up with the idea of substituting the reduction of personnel with the downsizing of real estate holding of the company at the state of Indiana. He proposed the idea of furnishing employees with the technology so that they can work from home. The idea was termed as TELECOMMUTING. TELECOMMUTING The idea of Telecommuting was new to the firm. While every other country office of the IBM was reducing staff Indiana was trying their hands at a new technique. The executive Vice president for Indiana Operations was the first one to empty his office from the Bank One Tower in Indianapolis. General Manager Operations Frank