MDCM is an international company which manufactures medical instruments. The company has countered serious competition despite its massive infrastructure composition. MDCM Company brought in foreign subsidiaries through acquisition, thus achieving tremendous growth in asset ownership and expansion of its operation. However, the company did not benefit from the improved economies of scale. As a result, the company embarked on a critical review to establish possible causes of poor performance. Company’s inefficiencies in both production and marketing caused massive losses. Therefore, the board of directors called for integration of the company’s operation with the IT strategies to reduce the operational costs. It is perceived that IT reduces operation costs, thus enhancing the company’s competitive advantage in the industry. Consequently, the most appropriate IT project should aim at reducing the cost of operation in the organization, which lowers the cost per unit of production. For this reason the board of directors appointed an IT team to develop IT project that will enhance company’s performance (Bonham, 2005).
ERP is the first IT project portfolio crucial for doubling the productivity of the firm. ERP software relies heavily on the website to provide adequate service to the company management. The software has integrated management functionality that gives managers an advantage to access a large pool of information at the least cost possible. ERP has various functionalities some of which include procurement, inventory management, finance, sales, management of asset management, and human capital. Therefore, ERP is a complex project because it has the required functionality to manage a large organization such as MDCM.
The second portfolio is the creation of intranet in the organization, which enhances the coordination of organizational activities at the lowest cost possible. MDCM is a large corporation with subsidiaries across the globe. Therefore, there is a need to develop a common intranet that would serve the organization in all locations. In addition, the use of intranet in organization helps to keep organizational secrets.
Third, the company should also invest in consolidating data center. This is pertinent to the survival of the organization in the current competitive industry. MDCM Company has many branches, thus there is a need to develop data center. This enables top management to control the operation of braches. Consolidation of data center allows the board to manage organizational activities. In addition, data consolidation enhances data security.
Group support system is the fourth IT portfolio required in MDCM Company. This is because as the organization grows, arranging meetings becomes challenging. Thus, the organization should put in place communication infrastructure that assists in easy communication and interaction between different people, groups, and leaders in an organization.
Enhancement of consumer support is essential in any multinational organization. This marks the firth IT portfolio. The portfolio aims at reducing the cost of operating service points all over the world. Thus by using electronic service points, the firm can significantly enhance its competitive advantage. This is because electronic service points increase the quality of customer service and reduce the cost of employing individuals for managing them.
The sixth IT portfolio is implementation of new supply management software. The software aims at improving the process of ordering and dispatching goods and services to clients at the right time while decreasing costs.
Finally, the company should implement data security system to guarantee security of the company’s activities. Security of the data concerning company operation is essential in safeguarding organizational trade secrets and maintaining company’s competitive power.
Portfolio Application Model Matrix
In an effort to rank the usefulness of the IT portfolio, the IT team relied on the Model Matrix to highlight the pros and cons of various IT portfolios. Thus, the IT portfolio discussed above was qualified as shown by the Model matrix.
High value but difficult to execute
High value and ability to succeed
• Creation of intranet;
• Consolidating of data center;
• Consumer support system;
• New supply support software.
Low value and high risk
• Data security system.
Low value and high ability to succeed
• Group support system.
The toughest and the most sensitive part is the selection of IT project from the listed portfolio. This paper relies on the method of Kraft Foods, who quantified ranking criteria. Kraft Foods used two measures: the value to business and the likelihood of success. This paper relies on these measures to make the choice. In addition to the measurement of value and success of the portfolio, this paper also considers the impact of the project on the future performance of the project. However, there is also some level of personal judgment involved in reaching a conclusion.
Therefore, taking into account three key measures of suitability of the IT portfolio, I would recommend MDCM to pick ERP portfolio. This is because the portfolio incorporates various elements that aim at enhancing organizational performance. Therefore, MDCM should implement ERP system gradually starting with propriety elements.
In conclusion, the implementation of ERP system is important for the placement of the company on the right track of competing well in the industry. The IT portfolio aims at solving current and future challenges facing the company. The ERP must go hand-in-hand with other measures so that the specified path is followed and objectives are reached. Nonetheless, MDCM must constantly look for new practices to remain relevant in a dynamic industry.