Xerox established the corporate information management (CIM) unit in the early 1970s, which was primarily responsible for managing data centers and networks. However, CIM unit had not fully performed to develop the information technology (IT) strategy and implement in all the business units due to the critical factor that there was diffusion of authority in IT decision making. In terms of IT management organization, CIM was working in the General Services department under one of the Vice Chair that was located directly under CEO. In addition, Information Management (IM) was highly decentralized with autonomous information management organizations located with each division under President that was also located directly under CEO. Hence, there was no overall coporatewide management of IM, having led CIM to become just a peripheral player in the IT management. In 1993, in order to overcome this problem, organizational change of IM was taken place, having aligned IM structure straight under the direction of CIO. Although, the change had taken place, IM was simply unable to provide the data needed to support Xerox’s new divisions (Applegate, McFarlan, McKenney 579-81).

In mid 1993 CIM undertook a reengineering project called "IM 2000" to overcome IM problem and inefficiencies within Xerox’s broad infrastructure. First of all, CIM found Xerox was prevented from growth by a focus on support rather than innovation, which was mainly due to Xerox’s proprietary "legacy" systems. Furthermore, CIM learned that there were financial challenges as well as duplication of applications and processes across functional groups. These studies led CIM to recommend four strategies: reducing and redirecting IM spending through centralizing IM and phasing out the use of legacy system to fund new applications and infrastructure; establishing a more centrally managed infrastructure by implementing client/server environment; leveraging worldwide IM resources to share the same technologies worldwide; and concentrating on creating business process driven solutions. As a result of this IM 2000 reengineering project, Xerox was divided into three geographic customer-operations units and nine document-processing business divisions (Applegate, McFarlan, McKenney 582-83).

Currently, Xerox is thoroughly utilizing the benefits of new IT, which is much better than prior to the reengineering project. The benefits have been brought by outsourcing computer and telecommunications networks to Electric Data Systems (EDS) that is further discussed in question 2. Xerox has been revamping its manufacturing and distribution system, replacing 3270-based IMS system with Oracle’s Manufacturing Application running on distributed Sun systems and PCs. Xerox has also moved most of the users from Xerox legacy systems to Windows client/server computing, having installed more than 600 LANs. In the human-resources area, Xerox has a pre-Web internal network called Xerox Network Services. Employees can access, fill out Human Resource records in some cases and peruse job openings and training opportunities. In terms of communications, Xerox also has Xerox Wide Web, a corporate intranet with 500 content servers, mostly Sun servers, accessed by more than 25,000 employees using a variety of browsers (Knowles).

The critical reason to outsourcing was that Xerox would be able to provide information the business divisions needed and move towards the future more quickly by implementing IM 2000 project through outsourcing. IM executives felt they could successfully do the reengineering project by themselves, if they would have had long enough time. Unfortunately, the project required immediate implementation and improvement; speed was crucial. The other reasons were derived from benefits Xerox could appreciate through outsourcing. As the first benefit, Xerox could appreciate new system development and economies of scale/scope. Secondly, Xerox could manage the IT function more efficiently by applying the experience of outside vendor’s IT expertise. Thirdly, outsourcing allowed internal IM managers to focus on the development of a new IT infrastructure. And finally, outsourcing enabled Xerox to focus on the principal mission, which was developing applications to support new products and services, as "The Document Company." This focus contributed to Xerox’s shareholder value (Applegate, McFarlan, McKenney 585-86).

These reasons are appropriate for Xerox, which also give a great incentive to outsourcing. Outsourcing has become a prominent business practice that firms contract all or part of their business operations to one or more outside vendors. Ever since Eastman Kodak announced their outsourcing contracts with DEC, Businessland and IBM, large companies have found it acceptable to outsourcing even they have strong ability to control and develop IS as well as IT operations (Hirschheim). In addition, the ever increasingly competitive business world has accelerated companies�Eimplementation of outsourcing, either domestically or internationally, trying to acquire economic, technological, and strategic advantages. Xerox’s outsourcing was a phenomenal incident in terms of its contract size ($3.2 billion) and duration (10-year deal), combined with the fact the outsourcing would implement internationally in 700 locations across 30 countries ("Xerox makes changes in EDS contract"). The primary reason for Xerox to outsourcing was to concentrate on core competencies that provide high value and contribute to their bottom lines. This reason was agreeable and makes logical sense to survive in the current competitive and harsh business environment.

Global outsourcing, like Xerox has implemented, requires much more consideration than domestic outsourcing: success of global outsourcing is much harder than domestic outsourcing. The difficulties are numerous, starting with the tremendous differences in language, customs and even the pace of daily life. Some of the obstacles are the following:

• Language ~ The difference in language in an international collaboration would be the first obstacle companies face. This obstacle is not for global outsourcing, but also for every global business.
• Governmental Restrictions ~ There are some domains that are not allowed for foreigners to step into in the first place in developing countries as well as highly-regulated developed countries.
• Law ~ The differences in law, such as human resource laws and asset transfer laws, make global outsourcing much harder, requiring complicated expertise to outsourcing.
• Intellectual Property ~ Especially in developing countries, intellectual property rights are relatively weak. Protection of trademarks or copyrights is a necessity for outsourcing activity.
• Uncertainty in System Life Cycle ~ This inherently uncertainty is for both global and domestic outsourcing, however, it can be more significant if the project is developed overseas.
• Political/Labor Uncertainty ~ Political instability and labor disputes, both of them are out of control, undermine the outsource planning as well as the whole business planning (Chen, Lin).

It is worth mentioning that Xerox actually made changes of its outsourcing contract with EDS in 1996 regarding the area of desktop and laptop services. This was not a surprise for both of them given the contract’s massive size and scope, however, it was a surprise that EDS was suing Xerox over Xerox’s failure to its obligation to pay for certain infrastructure services in 1999 (Madden). This implies it is difficult to keep huge and long-term international outsourcing in a smooth track. As Xerox is facing some problems of its outsourcing, this does not mean companies should reconsider whether they should implement outsourcing or not. The key question is not "whether or not to implement outsourcing", but "when and how to implement outsourcing to gain competitive advantage" is the key question.

Colliers International Property Consultants (Colliers International) was created by the merger of two Australian and American real estate associations, Colliers and American Realty Services Group (ARSG), in 1984. Colliers had been one of the largest Australia real estate associations and ARSG had incorporated 22 independent commercial brokerage firms before both of them merged. Ever since Colliers International was created, it has been steadily growing, having become one of the few global real estate organizations with substantial coverage on six continents. Currently, 4,400 professionals are operating in 225 offices in 47 countries among the major trading blocs of North America, the Asia Pacific Rim, Europe and Africa. The organization is ranked among the leaders in North America by annual revenues and annually provides services and closes transactions valued at over 16.8 billion worldwide ("CyberMaster Cathy DuPre").

This success story hasn’t come true in an easy way due to the challenge in real estate industry, which started from the late 1980s. Since the activities of leasing and developing property were ubiquitous, occupancy rents became a major expense for corporate tenants. Companies that owned real estate became more aware of its value and more concerned with minimizing operating expenses. This made real estate brokers concentrate more on professional consultant than transaction orientation (Applegate, McFarlan, McKenney 708-09). Another challenge came from the changes in the real estate market. Two major changes are change in focus from local coverage to international orientation and change in competition that became more severe both domestically and internationally. Finally, the challenge came from the nature of organization, virtual organization, itself. As the Colliers International network expanded not only in the US but also in the world, the challenge was for members to adjust to sharing their knowledge and experience more broadly so that it can be passed on and multiplied in its use to other members ("CyberMaster C. Stewart Forbes").

Colliers International were able to overcome these challenges by implementing robust and widespread IT infrastructure; in other word, IT played the key role to overcome these challenges as well as to cover the geographical diversity and to boost the sales. In 1989, Colliers International electronically liked its offices worldwide, having enabled easy communication between members and facilitating global dealmaking. In 1995, Colliers International got connected with Lotus Notes, having given them access to each member and valuable organizational knowledge more smoothly and quickly ("Colliers International Milestones"). Colliers International also built its own powerful database within CompuServe, company’s large information system, which includes a profile of each member firm and information on more than 2,000 Colliers International transactions and corporate contacts throughout the world. This database is, of course, accessible from anywhere, anytime by all members (Applegate, McFarlan, McKenney 713). The primary benefits derived from IT is that IT provided the communications link that enabled all members to share client information, individual skills and experience whenever they are needed. This benefit is crucial to maintain the highly competitive position in global arena of real estate industry along with the aspiration to penetrate into the market profoundly as virtual organization.

Colliers International brokers and managers are using IT appropriately and effectively. When one of customers is seeking to find a land, which is located in other member’s operation place, the broker can find the right solution to the client by accessing to the company’s database. And also by using IT effectively, Colliers International enabled to mobilize individual professionals and integrate their strengths to deliver superior services to clients around the world. However, there are still some efforts to be done to fully appreciate the use of IT. The biggest obstacle can be found in the information sharing that some brokers are reluctant to share information to other brokers because they fear sharing expertise might make their firm less dependent on them and diminish their competitive advantage (Applegate, McFarlan, McKenney 717).