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, redundant IT platforms established under different operating standards. As a result, “The right hand had no idea what the left was doing”, she remarked. It was now time to determine which IT functions were “core” and which “support” functions were. From this determination, Hudson and her team would setup the process for organizational change that would achieve the goals of her and her team. Hudson’s outsourcing decisions were based on this approach of identifying the core and support functions within the organization.

2. Do you agree with her philosophy and approach for selecting outsourcing partners and negotiating the agreements? What would you have done differently?

One area of the selection process I agreed with was choosing vendors, or “preferred partners”, with a focus on building long term business relationships, not merely a contractual relationship. This approach helps ensure you are choosing a company