Eastman Kodak Co.
1. Why did Kathy Hudson make such a major change in IS recourses management at Kodak? What factors contribute to her decision to outsource data center, telecommunications, and PC services to IBM, DEC, and BusinessLand?
Kathy Hudson was appointed to the newly created CIS unit in 1988 by CEO Colby Chandler with a directive to “overhaul the existing IT organization to promote the use of IT to improve the competive position of Kodak businesses while lowering cost.” At the time of her appointment, Kodak was suffering several serious business setbacks, along with rising competition and a Polaroid lawsuit. Jobs were cut and reorganization attempts did little to alleviate falling profits. Kodak needed an IT overhaul and it was Kathy’s job to see it implemented.
Kathy Hudson reviewed recent studies that were conducted by outside vendors which found the organization had separate entities that were managing diverse, ...view middle of the document...
This approach helps ensure you are choosing a company interested the success of your company and theirs. Often, firms based their business relationships strictly on contractual guidelines while losing sight of the long-term benefits of building lasting mutual business relationships.
On the contact building aspect of vendor selection, each company involved in the contract negotiation process will have different needs and frameworks that will require attention. The approach by Hudson and her team laying down a framework that focused on fluid and collaborative relationships was import for Kodak. The company had already suffered enough from a mismanaged IT and growing competition. Having the parties sit down and discuss their concerns before drafting a contract for services ensured that everyone had an understanding of what the important needs and outcomes were of the other parties.
There is very little I would have done differently as it relates to the selection process and contract negotiation process. When you look at the situation Kodak was in at that time, there was very little room for error. Selecting the wrong vendors for the outsourcing and entering into bad contracts could have killed the company. Hudson and her team keep the needs of Kodak, their employees, and her mission directive at the forefront of this process.
3. What advice would you give Hudson concerning long-term management of Kodak’s “networked” IS organization?
I would advise Hudson to continue analyzing company operations as relates to IT and look for changes to functions. I would constantly be reevaluating these IT functions for their “core” or “support” status. It’s possible in the future there would be more IT functions which could best be utilized by outsourcing. On the other hand, due to changing technologies and market conditions, some former outsourced functions could evolve to the point where it would be best to bring them back “in house”.