A president of a company with about $900,000,000 annual sales that produces supplies for hospitals, called you and asked to consult with you. He told you that currently they have a small IS department. They have a CIO and about ten more people who help the end users with their use of the information systems.

They us the IS especially for clerical purposes, like accounting, simple inventory management, and the like. The president told you that the CIO presented him with a wonderful plan to use the IS for competitive advantage. The CIO said that the company should use the IS strategically.

That is to say: the company should move from the support region on the strategic grid to the strategic region. He presented some ideas for using IS to provide unique services to the customers. He said that by doing so it is highly likely that many companies will prefer to leave their current suppliers ( our company's competitors) and conduct business with us.

The president told you he was excited about the plan. Then he asked the CIO how much this process should cost. The CIO told the president that in order to develop the software and to maintain it later, he would have to hire many systems analysts, designers, and programmers. It was obvious that this would cost a lot of money.

The president told you that he heard about a new approach that is called OUTSOURCING. He told you that many of his friends who are senior managers in other companies do use OUTSOURCING and told him they save alot of money. He aslo told you that some of his competitors are using OUTSOURCING aswell.

What will you recommend to the president to do about his CIO'S proposal? Justify your answer based on what you have learned in the course. (Minimum a paragraph)