Smith's Information Service (Essay Sample)

Smith's Information Service has been facing the increasing budget spent on operation but not followed by the increased profit. To maintain the data center, the company should spend $2 million. However, this condition did not follow the creasing number of new customers. Therefore, this profit generated from this department was indicated to be flatted in the last two years. It impacted the corporate cost, and overhead were widespread.
Moreover, running an in-house data centre required personnel to maintain data 24/7. These expenses can be categorized as a monthly cost that could not be avoided. In addition, to maintain security, Smith's Information Services should purchase the new software and other equipment. For instance, the whole company indicated no growth over the last five years. Based on this condition, it is needed to investigate ways to reduce operational costs and maximize its profit.
Purpose
Smith's Information Service, Inc is exploring its option to replace their data centre with outsourcing servicing due to corporate overhead program. This analysis examines all the options in running the data centre.
Current Situations
Smith's Information Services is a $2 billion firm with sales in consumer information. It enjoyed high overall growth until fierce competition flattened sales and decreased profits sharply two years ago. Since then, corporate cost and overhead reduction efforts have been widespread. The CIO was in charge of the data centre and investigated the possibility of a business process outsourcing project that would move the data centre to the cloud.
The data center at Smith's Information Services was created in the mid-1980s and has grown very rapidly. Mainframes were installed first, followed by AS400s, and then rack mounted servers. Disk storage, at one time, was at a premium but has since gone down in price. Cooling for the data center has gone up as more and more servers, and disks were installed. This cost, along with the electricity cost to run all of the devices in the data center, has Bob Smith worried that the cost of doing business is getting out of control.
Along with the rising hardware and software costs, the number of employees needed to run this data center has grown considerably. The cost of running a data center 24/7 is becoming rather large, which is another issue that Bob Smith is concerned about. The growth potential for the organization is very positive, which means that more data will be stored, which will result in higher costs in all areas of the data center unless cost savings are found.
There are many options from which to choose, including a local data center, a well-known data center, and a data center located overseas. Each of these solutions has pros and cons, and one big issue is the security of the data. Other issues include service-level agreements that have to be hammered out, HR issues that will deal with the local and remote staff members, and other issues, such as informing or not informing the customer that Smith's Information Services will be outsourcing the data somewhere.