This paper discusses the various aspects of IT planning at Modmeters Company which has two strategies of expanding globally and providing direct-to-customer sales. The role of IT is important in the expansion initiatives of Modmeters. The executives of various departments held a meeting to identify the budget requirements for the expansion. The plan is to establish new plants in Asia and Eastern Europe where the infrastructure facilities are not sufficient required for the operations at Modemeters. Brian Smith, CIO of Modmeters is worried about these two initiatives as the IT funding was very poor.
The company has never invested in reengineering the existing systems, instead, they always introduced new systems on top of the other. John Johnson, CEO wanted to change the name of the company as MM for this updated strategy. The current budget levels at the company are not going support the expansion initiatives. Surprisingly, only 2% of the revenue was allocated to IT. According to Brian, 80% of the IT budget was fixed for running the existing systems and fixing errors. The remaining 20% was allotted based on ROI, where majority of the budget was used by manufacturing department, Human resources and marketing departments having minor share. Brian believed that this kind of budgeting is not effective for their new business strategies (McKeen & Smith, 2012).
Brian explains the need to implement flexible systems to support the updated strategies. He stresses on the budget requirements to buy new infrastructure and problems with the existing systems. The systems are not integrated and use different terminologies in different divisions. IT needs investment for infrastructure, underlying processes and to manage the information. However, the outcomes of the budget meeting after having a long discussion were to prioritize the IT projects depending up on their contribution to the key objectives of the company and also how each of them
References: Mckeen, J. D., & Smith, H. (2012). Delivering Value with IT (2nd ed). New Jersey: Pearson Education, Inc. Ferris, B. (2012, June 12). How to Measure the Business Value of a Project. Retrieved February 17, 2015, from http://cobaltpm.com/measuring-business-value-of-a-project/