Boeing Corporation Software Procurement Case Study

The Boeing Corporation is the world’s leading aerospace company and the largest manufacturer of commercial jetliners and military aircraft combined. Additionally, Boeing designs and manufactures rotorcraft, electronic and defense systems, missiles, satellites, launch vehicles and advanced information and communication systems. As a major service provider to NASA, Boeing operates the Space Shuttle and International Space Station. The company also provides numerous military and commercial airline support services. Boeing has customers in more than 90 countries around the world and is one of the largest U.S. exporters in terms of sales.

Boeing has a long tradition of aerospace leadership and innovation. Their broad range of capabilities includes creating new, more efficient members of the commercial airplane industry; integrating military platforms and defense systems through network-centric operations; creating advanced technology solutions that reach across business units; e-enabling airplanes and providing connectivity on moving platforms; and arranging financing solutions for their customers. Headquartered in Chicago, Boeing employs more than 158,000 people across the United States and in 70 countries.

As one would expect, an organization of Boeing’s size, business process complexity, global reach, and technological focus employs a wide range of computer software. In making its software choices, Boeing has focused first and foremost on its information management needs and related business process and worker performance enhancement, and secondarily on the total cost of ownership (TCO) with regards to software procurement, installation, and maintenance.

Given the nature of Boeing’s business, the firm maintains a number of data centers across the United States. In its headquarters building in Chicago, Boeing operates a data center where its enterprise application-specific software runs, including financial and accounting systems, contract management systems, project management systems, human resource management systems, marketing and sales systems, and the like. In the Seattle data center, Boeing personnel operate all of the application-specific software required for commercial aviation production side of the business. Here one will find software tailored for the procurement of the raw materials and components that go into airplane construction as well as the manufacturing, control, logistics, and distribution systems associated with airplane production. At its high-security data center in Virginia, Boeing maintains similar application-specific systems that enable the transacting and management of its work for the U.S. Defense Department and NASA. Lastly, at a customer services center in Texas, Boeing employs call center management software, trouble-ticket management software, expert information systems, and large digital information libraries to address product problems, customer issues, and staff and end-user training for all its commercial product lines.

While almost all of the application-specific software employed by Boeing in managing the enterprise comes from commercial software development companies, including: SAP, Siebel (now part of Oracle), Computer Associates, IBM and others, some software, employed to design and manage the production of spacecrafts, missiles, and military aircraft for example, must be developed internally within Boeing. As a rule, Boeing does not employ any outsourced application software (a.k.a. software as a service (SaaS)) to fill in the gaps in its management software portfolio. If and when it has the need, Boeing has its IT services team search for and acquire any additional application software that will then run inside the company.

Where Boeing employs a wide range of application-specific software products within the firm, it has by contrast seriously limited employee choices when it comes to general purpose software. Here Boeing purchases Microsoft Office for personal productivity word processing, spreadsheet, presentation, and data analysis software; Adobe for digital media creation and editing, and AutoCAD for computer assisted design. Internet Explorer serves as the organization’s standard Web browser, and Outlook serves similarly as the standard e-mail interface. Anyone who wishes to use a product outside of the standard offering must obtain special permission from executive management.

In the area of systems software, Boeing also maintains a wide range of products. At the desktop, because of the use of standard Intel-based personal computers across the firm, the most current Windows operating system prevails. However for specialized workstations that run engineering applications and CAD systems, Unix operating systems are employed. By contrast, Boeing data centers run different operating systems, including Microsoft, Sun Solaris, IBM, and Fujitsu, depending upon the server or mainframe computer under discussion. Increasingly, these commercial operating systems are being replaced by open-source Linux systems as the standard for data center servers. Boeing also employs a number of heavy-duty information security products such as: network and Web firewalls products, intrusion detectors, anti-virus and anti-malware software, encryption software, user authentication software and so forth. Other system software tools at Boeing include network management and optimization, printing production management, and data storage management software.

Boeing Software Procurement Case Study Questions:

1. Why would a large and complex company like Boeing employ off-the-shelf application-specific software for accounting, human resources, supply chain management and other core business processes? And why do they choose to own, host and operate all of their own software rather than to for example outsource payroll to ADP Corporation or sales force management to Salesforce.com? [list]

In-house software acquisition:
← Context-specific
← Customizable
← Proprietary
← Strategic

2. On the other hand, why would Boeing develop in-house some of the software applications used in conjunction with its products? [list]

← Increase the efficiency through software
← Enhance the quality of product by using data analysis and operations
← Innovation on products through advanced technology ← Increase the network and communication

3. What are the pros and the cons for establishing a limited list of general purpose software products that employees may use within Boeing? [table] Pros Cons Special for customers inflexible Set detailed plans(not too board) Turn against to the long-term development Protect own properties Data and information limited

4. In terms of system software, Boeing employs a broad list of these, highly technical software products. The firm purchases some of these products from commercial vendors like Microsoft and Oracle; while others, like Linux, Boeing obtains from open source providers on the Web. Explain Boeing‘s reasoning for making the move to Linux in its data centers. [table – pros and cons] Pros Cons Maintain wider aspect of software technology New technology invades in current systems Encourage innovation Outsource of data/information, technology Build huge network and platform for companies to communicate andPrivacy of customers/ information cannot be guaranteed anymore exchange ideas.