Information Technology Infrastructure │ Case Study │ BBA Notes │ MIS │ 3rd Semester │ TU │ Digital Firm

Information Technology Infrastructure




Management Decision Problems


1. The University of Pittsburgh Medical Center (UPMC) relies on information systems to operate 19 hospitals, a network of other care sites, and international and commercial ventures. Demand for additional servers and storage technology was growing by 20 percent each year. UPMC was setting up a separate server for every application, and its servers and other computers were running several different operating systems, including several versions of UNIX and Windows. UPMC had to manage technologies from many different vendors, including HP, Sun Microsystems, Microsoft, and IBM. Assess the impact of this situation on business performance. What factors and management decisions must be considered when developing a solution to this problem?


--> The University of Pittsburgh Medical Center uses information systems to operate 19 hospitals, a network of other care sites, and international and commercial ventures. They demand additional servers and storage technology by 20 percent each year.

They were setting up a separate server for every application. Also, they had to manage technologies from many different vendors, including HP, Sun Microsystems, Microsoft, and IBM.


The impact of this situation on business performance are as follows:

  • UPMC must look at capacity planning and scalability.

  • UPMC should also make sure it understands the total cost of technology assets.

  • UPMC must invest more and more every year to maintain increasing storage.

  • They must hire technical and skilled manpower.

  • They must have regular maintenance of servers.


The factors and management decisions that must be considered when developing a solution to this problem are as follows:

  • To reduce costs and simplify its IT infrastructure, UPMC could go to one vendor and select it as its primary server and storage technology provider to reduce UPMC’s IT infrastructure spending.

  • The management should consider their line of authority for networking.

  • They must have the required manpower for the maintenance of their application software and servers.

  • Since they are running on an online system, they must maintain tight security and privacy.

  • Also, management must develop a proper strategy and a good relationship with vendors to track the best quality products.


Hence, using their own servers for a company can help diversify an organization's working system. And also can help to have powerful computing for any work with its own ownership of super and mainframe computers.



Management Decision Problems │ Case Study



2. Qantas Airways, Australia’s leading airline, faces cost pressures from high fuel prices and lower levels of global airline traffic. To remain competitive, the airline must find ways to keep costs low while providing a high level of customer service. Qantas had a 30-year-old data center. Management had to decide whether to replace its IT infrastructure with newer technology or outsource it. Should Qantas outsource to a cloud computing vendor? What factors should be considered by Qantas management when deciding whether to outsource? If Qantas decides to outsource, list, and describe points that should be addressed in a service level agreement.


--> Yes, Qantas Airways should outsource to a cloud computing vendor. As they are trying to reduce the cost of customer service and increase quality, it’s better to outsource than manufacturing themselves own self. Because it can reduce costs and save time.


The factors that Qantas should be considered to outsource are as follows:

  • Competitive forces model.

  • The total cost of ownership of technology assets.

  • Tools and technologies that they are going to use for the project and how capable are they of handling all their outsourcing needs.

  • The ability to meet the deadline by the vendor.

  • Minimal supervision of outsourced tools and technology by the vendor.

  • Also, they have good communication and collaboration between them and the vendor.


The SLA (Service Level Agreement) is one of the most crucial documents when talking about outsourcing partnerships. This will help to avoid any kind of confusion or ambiguity especially about the quality of the services that will be getting.


The points that should be addressed in a service level agreement are as follows:

  1. Context Setting Information: Context Setting Information “sets the table” for the SLA. It explains the purpose and scope of the agreement, the parties involved, and the agreement’s underlying assumptions.

  2. Description of Service: The Description of Services also helps “set the table’. It discusses the services provided and the services not provided. This helps clarify things in cases where agents might assume the availability of certain services. This section needs to be clear and specific.

  3. Service Standards: Including standards for call center services ensures that both parties share a common understanding of the conditions under which the stated services will be provided.

  4. Service Tracking/Reporting: Service Tracking/Reporting information identifies how service effectiveness will be accessed and communicated. Tracking/reporting information includes a good set of metrics. They should reflect the project’s major objectives.

  5. Periodic Review: This section ensures ongoing communication between the two parties and formal systematic attention to service adequacy. When things are going well, managers sometimes fail to hold periodic reviews. Hold reviews at the appropriate times even when things are going well.

  6. Change Process of Service Level Agreement: The Change Process section provides a formal tool for modifying the agreement to address changing service needs and priorities. Accordingly, a good SLA provides a mechanism for periodic reviews and modifications as needed.


Finally, the organization should have a lawyer that is familiar with the organization's legal and regulatory requirements who review the Managed Security Service Provider (MSSP) contract.

This will usually end up with a co-developed Service Level Agreement (SLA) that meets all of the organization's security and service needs.


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Extracted From:

Laudon, K. C., & Laudon, J. P. (2012). Management Information Systems: Managing the Digital Firm (Twelfth). Pearson.



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