SteelCo is a large steel manufacturing company established several decades ago. Historically, SteelCo grew largely via mergers and acquisitions of smaller companies occupying adjacent or complementary market niches and underwent a number of corporate restructurings. Presently, at the highest level the company is split into two major divisions: Division Alpha and Division Beta. Both divisions are governed from the lean central head office and report their quarterly financial indicators to top business executives for their consideration. However, operationally these divisions represent essentially independent businesses with non-overlapping suppliers, products, customers and markets. Each division is managed by an appointed executive director reporting directly to C-level corporate leadership. Divisions are free to set their own agendas, pursue their own competitive strategies and make their own investment decisions, though major investments must seek approval at the corporate level.
Division Alpha is an established and large-scale, but highly centralized manufacturing shop. It specializes on fabricating a single line of products, which are distributed directly to a narrow circle of wholesale customers over stable supply chain network arrangements. The division has a rather conservative IT investment strategy intended primarily to achieve better automation of existing operations and enable smooth, uninterrupted and efficient business processes. It has a central division-wide IT department employing around 150-180 in-house specialists and also involving about 100-120 external contractors working on a full-time basis. The IT department is responsible for providing necessary IT support across all activities of Division Alpha’s value chain, e.g. production, warehousing, sales and delivery as well as various supporting activities including HR, finance and legal services.
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