*SIM Paper Competition:* Reducing Data Processing Costs Through Centralized Procurement
This article describes the approach taken by First Interstate Services Company to reduce data processing costs by centralizing the procurement of hardware, software, and services. Because this functional centralization was counter to First Interstate’s decentralized culture, its formation and development required careful planning and implementation to gain acceptance. Over time, beneficial innovations and significant, well-documented cost reductions generated acceptance and support for this centralized function. This article identifies key factors for successful centralization of data processing procurement in organization and describes future challenges facing the function.
|James R. Taylor and Charles C. Tucker
|Centralized procurement, cost avoidance, DP contracts, volume purchasing