BayState Realty is one of the largest and most successful real estate agencies in the Commonwealth of Massachusetts with over 370 agents, a headquarters in the Back Bay of Boston and 12 regional offices across New England. The offices in Boston accommodate 280 employees on two floors, including both agents and all of the firm's administrative and operational functions, like accounting and information systems. Each HQ employee has a wired workstation running on a local area network (LAN). The LAN allows office access to common services and to share high-end printers, computer projection systems, and local data-back-up servers. Employees also use a variety of wide-area networks (WANs) to access a rich body of documents stored on BayState's servers that are hosted at the off sight, BayState Realty Data Center.
As part of day-to-day operations, the firm employs a customer relationship management (CRM) system to maintain information on its high-end corporate and residential clients as well as potential clients. The firm also maintains large, multi-media files of photographs, floor plans, and video tours for all of the properties it represents for its clients. In addition, the firm operates an Internet site to market its services to the public, an Extranet site for the management of its commercial real estate business in collaboration with corporate partners and affiliations across the globe, and an Intranet site as a knowledge repository for selling best practices and as a gateway to many other firm-wide information resources. The culture at BayState is fast-paced but highly collaborative which means that timely information sharing is essential for success.
Sally Smith is the chief information officer (CIO) for BayState. In this role, Sally must ensure that firm employees have access to all of the software required to enable BayState's core business processes - i.e. working with customers around the buying and selling, or the leasing and renting of either commercial or residential real estate. Though this software is essential to transacting, managing, and innovating within the firm, it is also viewed as an overhead cost. Therefore, part of Sally's job is to manage the total cost of the firm's software ownership (TCO). To this end, Sally focuses on the procurement and deployment of a limited set of well-established, off-the-shelf products in line with the needs of the organization.
For example, in terms of system software, BayState employees use only Dell laptop, desktop computers running Microsoft's Windows operating system. BayState (Dell) servers also run Microsoft operating systems. Cisco and Symantec software products are uniformly deployed to manage BayState networks and to protect the firm's hardware platforms from unauthorized intrusion, malware, and computer viruses. For general purpose software, Sally has again settled on Microsoft Office as the firm's suite of personal productivity tools, Internet Explorer for Web browsing, Microsoft Outlook for e-mail, and Microsoft SharePoint for Intranet and Extranet collaboration. These choices allow Sally to negotiate favorable licensing terms with Microsoft for the initial acquisition of products, to standardize and minimize implementation costs, and to limit firm investments in ongoing staff training and product documentation and support.
For the specific business functions of the firm, Sally's information technology team has worked closely with their line-of-business colleagues to select best-in-breed application specific software. These software products include the CRM system mentioned previously as well as an Accounting System, a Human Resource Management System, a Real Estate Sales Documentation and Management System, a Rental Property Management System, and many others process-enabling application systems. In making these choices, the firm has focused first and foremost on the "fit" of each application specific product to ensure that it complements the firm's ongoing business process. Sally and her colleagues have resisted the temptation to customize these software products to better fit with the business. Instead, they have adapted their business processes to make the best use of the software in question and in so doing better control the TCO for that software.
More recently, the BayState IT team has taken a number of steps to expand the software standards for the firm. As employees have asked for smart phone and tablet computers, Sally's team has worked to identify products that fit best within the overall embedded base of BayState's existing hardware and software acquisitions, thus minimizing integration costs for these new products. The IT staff members operating the firm's data center have begun the implementation of Linux (an open source software product) as the operating system of choice for servers running shared applications, like Accounting, HR and CRM. Finally, Sally found that it made more sense for the firm to outsource the hosting of its Web sites to a third party because the hosting firm was better equipped and enjoyed greater economies of scale in operating and maintaining the Web site platforms required by BayState Realty.
Questions:
1. Use a table to identify the software products sited above that fall within the following categories of software:
a. system software
b. general purpose software
c. application specific software
2. Use a second table to identify and explain the various elements in the total cost of software ownership and then list the steps taken by the CIO to limit the firm's software TCO expenditures.
3. List the reasons why BayState Realty chose to go with off-the-shelf software instead of developing their own software packages in house.
4. List the reasons why it makes sense to go with Linux in the data center. Be sure to include how this particular use of open source software mitigates the risks typically associated with the choice of an open source software product.
5. Compare the advantages and the disadvantages associated with outsourcing the hosting of the firm's three Web sites.