Chapter 13 • Leading the Information Systems Function 539may disrupt plant managers, division heads, and decision
making by senior leaders. Further, with the advent of
applications for not only internal operations but also
interorganizational operations, an IT service delivery
failure may also have a direct impact on the company’s
customers or suppliers. Today’s information “utility” is
like electrical power—if it goes out, everything comes to a
halt until service is restored. For example, problems with a
bank’s network can affect those customers who enter trans-
actions into the bank’s ATM system, and problems with an
airline traffic control system at a major hub can create
havoc for travelers and business partners worldwide.
Technology decisions about the type and physical
location of IT equipment, the choice of a new PC operating
system, or a new security application involve different kinds
of trade-offs that can affect IT service delivery. Some exam-
ples are summarized in Figure 13.3. Although these types of
trade-off decisions require IT expertise, business manager
input is frequently required so that the best decision is made
from a service delivery perspective.
In addition, today there is a growing interest in
identifying “green” computing solutions. Data centers in
particular are power hungry and most electricity genera-
tion produces greenhouse gases, which have been associat-
ed with global warming. Computers also generate a lot of
heat, and some data centers reportedly spend as much to
run their data centers as for cooling solutions to reduce the
temperatures in the facilities that house them. In the United
States, the Department of Energy (DOE) has established
an industry goal to reduce data center energy usage by
10 percent by 2011, and in Europe, a voluntary Code of
Conduct on Data Center Energy Efficiency defines best
practices and commitment goals for industry and govern-
ments (Babin and Nicholson, 2009). Carbon footprint met-
rics have therefore also now been added to the IT trade-off
decisions (see the box “Green Computing”).Shared Services at a Multinational Firm
British American Tobacco (BAT), a global competitor now more than 100 years old, delivers IT services
via a Shared Services model to its highly autonomous country markets in three world regions: Europe,
North America, and the Asia-Pacific. By consolidating data center operations and hosting SAP instances
for smaller-end markets, economies of scale are achieved at the regional and country-level profit cen-
ters. Service Level Agreements (SLAs) are used to ensure responsiveness to their end-market customers.
The regional centers also offer project management and application design and implementation servic-
es to end markets in their own regions as well as to other BAT regions, based on competitive bidding.
[Based on Brown and Vessey, 2003]Green Computing
Today’s IT investment decisions are becoming greener. Industry leaders Google and Microsoft are building data
centers with smaller carbon footprints by taking advantage of hydroelectric power. The annual costs for elec-
tricity for data center servers jumped from $1.3 billion to $2.7 billion in the United States and from $3.2 billion
to $7.2 billion worldwide between the years 2000 and 2007, and cooling costs have also helped raise the
average annual U.S. utility bill of a 100,000 square-foot data center to $5.9 million. Server virtualization tools
can also reduce the number of servers required to run applications, reducing equipment costs as well as power
consumption. Greener solutions for microcomputers are also on the rise. Verizon Wireless replaced 1700 PCs
in an Arizona facility with thin clients by Sun Microsystems, and its power consumption went down by one-
third. Hewlett Packard (HP) is working to replace copper wiring on microprocessors with light pulses, and
today’s microcomputers with enhanced sleep modes may draw as little as three to four watts of power versus
100 watts for an idle machine not in sleep mode. New legislation by governments in North America are also
addressing environmental concerns about e-waste. Under the Waste Diversion Act in Ontario, Canada, com-
puter equipment buyers pay an up-front disposal fee, and California has a similar e-waste recycling fee. More
than 18 other U.S. states have also passed legislation mandating e-waste recycling programs.
[Based on Babin and Nicholson, 2010; Laudon and Laudon, 2010]