Hudson’s internal and external research showed that the company’s technology system was redundant and immediately needed help. Given Kodak’s business nature, importance of technology could not have been overlooked. The pressure to increase efficiency and decrease costs made Hudson take such drastic measures in the ISD. The outsourcing decision depended on two main factors. The first factor was whether a particular business would add value to the whole organization, and the second factor was whether that business was related to Kodak’s core business. In case, answers to both questions were “yes”, only then the company pursued that business; otherwise it outsources them.
1- Why did Kathy Hudson make such a major change in IS resource management at Kodak? What factors contributed to her decision to outsource data center, telecommunications, and PC services to IBM, DEC, and Business Land?
2- Do you agree with her philosophy and approach for selecting outsourcing partners and negotiating the agreements? What would you have done differently?
3- What advice would you give Hudson concerning long-term management of Kodak’s “networked” IS organization?