You are the vice president of infrastructure at BENNEB Corporation, a global manufacturer of scientific equipment. The BENNEB Corporation has revenue of approximately three billion dollars and operates in thirty countries, primarily the North America, Western Europe, Japan, China and Korea. The company employs approximately twelve thousand employees.
The CEO has just asked you to take over the management of all PCs for the corporation; he believes that this spending is out of control and needs management. The CEO estimates that the company is spending in excess of $20M a year in PC related costs. Currently there is no control over PCs and each department orders PCs from their prefer vendor on their own refresh schedule. This has been a problem for IT department for years because while some departments and individual buy new PCs every year, there are some clerical positions that have PCs that are five or more years old; many times these old PCs prevent IT from rolling out the newest version of an application or package. In addition, there is a wide variety of operating systems in existence ranging from Windows 2000 to Vista plus about 200 MACs. The corporation does have an Enterprise Agreement from Microsoft for Office and the vast majority of employees have Office 2003 with a few employees on Office 2007. The Enterprise agreement with Microsoft allows the corporation to run which any version of MS Office Suite. The annual cost of the maintenance related to the Enterprise Agreement is $1,000,000 per year (29% of the original purchase price).
The CEO has asked the accounting department to transfer all PC related assets to IT. You are surprise to see that the average age of the PCs in the inventory is 30 months and the average remaining value of the PCs is $215. All the PCs are currently being depreciated over thirty-six months. This does not include any PC that is explicitly labeled as a R&D PC that is located in one of the many research labs. In addition, there appears to be approximate 14,000 PCs for 12,000 eligible employees.
Since there are no standards currently in place, individuals are typical ordering a new PC with a monitor. Over ninety percents of the monitors currently in place are LCDs. In addition, those ordering laptops are typically ordering, a new monitor, travel bag (costs vary wildly) and a new docking station. In addition, there is a wide range of backup devices being order which since most are being expensed, the company has no record.
The procurement organization has estimated that the current purchase of PCs, on average, has the following profile (Figure 1).
| Items | Average Costs |
| Desk Top PC | $650 |
| LCD Monitor (17”) | $135 |
| Laptop | $1200 |
| Docking Station | $55 |
| Backup Device | $125 |
| Lap Top Bag | $60 |
Figure 1
Aside from the help desk, IT has approximately 90 employees around the world providing desk side support (Figure 2).
| Region | Nbr of IT | Avg Costs (USD) |
| US | 30 | $90,000 |
| Canada | 6 | $75,000 |
| Mexico | 4 | $45,000 |
| Western Europe | 30 | $120,000 |
| Japan | 4 | $130,000 |
| China | 10 | $45,000 |
| Remainder of Asia | 6 | $60,000 |
Figure 2
It is also estimated that the Help Desk has approximately 25 FTEs which work on the resolution of PC type of problems. The average cost of the Help Desk employee, who is located in the US, is approximately $75,000.
Currently, the laptop to desktop ratio is 80:20. The current break down of employees by job role are listed below along with the percentage of that class of employee that is either mobile or travels more than 20% (Figure 3).
| Employee Roles | Number | Travel |
| Sales | 1800 | 100% |
| Sales Support | 2000 | 80% |
| F&A | 575 | 10% |
| Marketing | 250 | 75% |
| Procurement/Supply Chain | 250 | 10% |
| HR | 450 | 25% |
| Customer Services Call Agent | 1250 | 0% |
| Professional Services Consultants | 1250 | 90% |
| Engineers | 1500 | 40% |
| Order Management | 500 | 0% |
| Product Management | 500 | 50% |
| Assembly/Machine Operators | 1000 | 0%/0% usage |
| IT | 500 | 25% |
| Legal | 150 | 90% |
| Management | 1000 | 50% |
| Executive Management | 25 | 100% |
Figure 3
Actions to be completed by the student:
1. Create a model that estimates the current total costs per year for PCs at the BENNEB Corporation.
2. In two pages or less describe your recommendation for the PC management program for the BENNEB Corporation.
3. Create a model that estimates the total cost of your recommended PC management program the first year and the second year.
4. Create a one page email to the CEO indicating the successes of your program after the first year.