Background of the $1.4 Billion contract

Discuss about the Building Holistic Evidence for Social Media Impact.

As one of the world’s leading pharmaceutical companies, AstraZeneca signed a $ 1.4 Billion contract with IBM in July 2007. The contract was a seven year strategic sourcing and was signed to include 60 countries, 32 schedules and 90 clauses. The mistakes the company did was to forget that the business it was involved in changes rapidly, its IT capabilities are dependent on Research & Development, it terminated the SLAs and included similar infrastructures for all its global ventures. On the contract, AstraZeneca failed to cover relevant information related to any eventuality that led to contract termination(De Mari, 2009). When the contract was terminated, there was a fierce legal battle between the two companies where the court sided with AstraZeneca. In the specification based results that is continuous services between the vendors but did not take into consideration rapid change in business strategies and structure.

IBM made a $1.4 Billion contract with AstraZeneca because it is one of the leading pharmaceutical companies and uses information technology in its businesses. An agreement was made which is useful for outsourcing companies but the mistakes IBM did were as follows;

• There was termination of some obligations which should have been included in the contract
• It did not divide the outsource vendors
• IBM failed to cover the necessary information in the contract that led to termination of the contract(Keshari& Kumar, 2012).

IBM should have had prior information of the contract in place to make sure that it is not terminating its contract on outsourcing of vendors.

The difficulty associated in changing the way the outsourced vendors accrue profits makes it worthy for contracts to be set in the long term that is 5 or more years. In this case, the contract was set at 7 years(Schiesser, 2010). Since the services are set up and customized, vendors make their major investments in the first 2 years. The margins or profits are expected to be reaped in the last three years. Consequently, in order for the organization to have attained their strategic goals, the contracts must be made longer. However, there is need to put a flexibility clause for termination of the contract at a particular time or on notice(Spielvogel, Haworth & Hickey, 2011).

Poor assumptions made the two corporations, IBM and AstraZeneca to make the huge mistakes. They overlooked the important and necessary information when it came to signing of the $1.4 billion contract. They did not realize the impending variations which were dependent on the outsourcing contract that were being adopted(Spielvogel, Haworth & Hickey, 2011). Fundamentally, it is worthy to note that existing outsourcing organizations usually are restructuring, renegotiating and renewing the contracts at the same time as before. The activity is driven by the different changes in organization strategy, changes in the scope of sourced services, pricing related issues or even work practices and the introduction of new technology(Solli-Sæther& Gottschalk, 2010). The two organizations, IBM and AstraZeneca did not have clear knowledge in regards to preparation of basic contracts and outsourcing. To ensure that the contract was not terminated, the corporations should have incorporated all the aspects which were highlighted in the contract. These was to ensure that all the required components are considered before the contract termination.

Mistakes made in the contract

Looking at how the contract was set up, I think the 2007 SLA was doomed to fail. The issue was fix first, pay later. In this regard, if an urgent case takes place in relation to IT, AstraZeneca and the outsourced vendors should first corporate to fix the issues. It is in the contract to first fix the IT issue first before asking any question in relation to the cost incurred. In previous cases, the vendors may have checked the contract to confirm their responsibilities so that to protect their profit margins which consequently led to delay in fixing the problem. To have a fast solution, the company involved wanted a clause introduced with the option for fast payment of the vendors. Therefore, the 2007 SLA was doomed to fail at first due to the emerging issues at hand. Regardless of the previous contracts the contract would still end.

Numerous provisions in the SLA of 2012 have been put forward to protect the organization as well as the outsourced vendors. They are IT provisions which are closely related to SLA s such as cooperation policies and pricing. The policy contains 13 principles(Kendrick, 2009). The contracts cover the standard IT principles, including the fix first pay later. AstraZeneca agreed a higher payment for themselves and its vendors. In an event of conflicting contract, the parties can both go to appeal with an independent arbiter being the one to oversee the policy cooperation. Fast solutions required even faster payment upon fixing of the IT issues.

There are very many advantages of using an arbitrator instead of using the court of laws. The first is that it is speedier and takes less time to find a resolution than a court of law(Kendrick, 2009). The limited right to have an appeal after a decision has been reached eliminates all the delay that happens in court of law. The second advantage is that an arbiter is more flexible than a court of law. A court is largely controlled and determined by procedural and statutory rules. The parties establish the rules by themselves by mutual agreement. The third reason is that it is less costly than court proceedings and there are no expenses related to pre-trial processes. The judge or the arbiter are independent minded and will not be skewed to any one particular party. The arbiter also come with expertise in that field that a judge does not have(Rau, Sherman &Peppet, 2006). He or she is specialized in that field.  Appeal rights are squashed and the final verdict is what is taken as the correct position. Appeal rights are limited.

Importance of thorough contract preparation

This paper explores the negative and positive aspects of social media. By leveraging social media or social networking, everyone can communicate online, such as chats, news, and invitations. Even for those who find it hard to communicate in the real world are able to communicate by using social media. communication in social media is more effective than through a call or texting.

Well, it can not be denied that social media is needed in our daily lives, both in socialization activities, education, business and so on. Apart from that, many people think that the influence of social media is always synonymous with negative impacts even though social media actually offers many advantages and benefits. This paper also analyses the development of social media in the globalization.

In this day and age, the development of information technology increasingly affects human life. One of the most loved platforms of communication by people is social media. Social media has facilitated easier communication in the world. But unfortunately, the reality is that social media has got its negative effects (Hajli,2014). In fact, nowadays there are many people who have more fun with gadgets or accounts in the virtual world than social interaction in the real world.

The growing advancement of technology today is certainly an important factor in supporting globalization. Globalization tends to be often discussed because of its impact in the field of politics and economics, whereas in the field of culture its impact is quite large because of the rapid exchange of information. One that supports the emergence of globalization is certainly the rapid development of information technology, especially the Internet (Lange,et.al,2016). The Internet began to grow in the 2000s and began to be a basic need for some people who used the internet for various purposes in addition to accessing web pages as a source of information (Mergel, 2017).. Along with the development of the internet came the so-called internet-based social media platforms such as Facebook, Twitter, Instagram, Whatsapp among others. Facebook is a social networking site that is popular today. Founded by Mark Zuckerberg with his fellow Harvard University student Eduardo Saverin, it has revolutionalised communication in the world today (Sunstein, 2018). .

The existence of social media becomes a need for young people to interact with others. In the perspective of communication relationship structure, in general online social networking provides two types of social connection system, namely bi-directional and unidirectional. Bi-directional is a social connection system that requires confirmation between accounts that will be interconnected as “friends” or “followers”. Where the two interconnected accounts can access profile information with each other and communicate with each other.

Incorporating flexibility clause

Negative and positive impact using social media

Speaking of social media today is not new to our ears. There are lots of impacts both positive and negative that are derived by using social media.. The following is a positive and negative impact of social media.

An arena of multiplying friends With the use of social media, we can communicate with anyone, even with people we do not know even from around the world. These advantages can we use to add insight, exchange ideas, know each other’s culture and the characteristics of each region and others. It can also hone someone’s language skills (Westerman, Spence & Van Der Heide,2014). For example, learn English using the call or video call facility provided on social networking sites. Make it easier for us to promote a social action. For example we can raise funds for disaster through Instagram or twitter and also Facebook.

Each account can be a source of news, every account can also be a source of slander or successor slander. In social media there is no limitation of space and time, they can communicate whenever and wherever they are (Allcott & Gentzkow,2017). It can not be denied that social media has a great influence in one’s life. Someone who is small can be big with social media, and vice versa.If for traditional media such as television, radio or newspaper required a large capital and a lot of labor, then it is different with social media. Social media users can access using the Internet network without large fees and can be done alone easily.

Another positive thing aspect of social media is to inform the public and people in any world to participate in the action (Fardouly, Diedrichs, Vartanian,& Halliwell,2015).. As a means to develop skills both technical and social skills are a must-fulfill requirement in order to survive and be in the balance of competition in the modern era as it is today. It is easy to access information that is up to date ,Social media also allows us to explore all kinds of information that is up to date or information that has past (Hajli,2014).. Because not everyone will see news portals and will certainly more often check their social media accounts. It is also a vehicle for income. By utilizing social media, we can sell through  online platforms which of course the benefits are promising. In this way the business is able to tap into a broad market, not only target national and even international market.

Positive and negative impacts of social media

Addictions

Social media sites like Facebook or others can also be dangerous because they  triggers people to isolate themselves. Increased self-isolation can change the way genes work, confusing immune responses, hormone levels, arterial function and impair mental performance.

Often we hear of social media fraud. Some also use it for prostitution promotion online. There are other evil intentions  such as kidnapping that is due to Facebook, surveillance of a person to which can also lead to sexual harassment. Other social vices such as proportion of pornography is also a negative aspect of social media. It also causes a negative impact on body health. If our eyes  look to the smartphone screen too often, it will cause serious problems. In addition, too long playing gadgets can cause stress on the brain. This of course will affect the health of the body. If the brain stress then the body will be susceptible to various diseases.

References

Allcott, H., & Gentzkow, M. (2017). Social media and fake news in the 2016 election. Journal of Economic Perspectives, 31(2), 211-36.

De Mari, G. (2009). Five years of IT management improvement. Amsterdam: IOS Press.

Fardouly, J., Diedrichs, P. C., Vartanian, L. R., & Halliwell, E. (2015). Social comparisons on social media: The impact of Facebook on young women’s body image concerns    and mood. Body Image, 13, 38-45.

Hajli, M. N. (2014). A study of the impact of social media on consumers. International Journal of Market Research, 56(3), 387-404.

Kendrick, R. (2009). Outsourcing IT. Ely, U.K.: IT Governance Pub.

Keshari, S., & Kumar, N. (2012). IT infrastructure & management. New Delhi: I.K. International Publishing House Pvt. Ltd.

Lange, D. B., Yang, H. C., Zhang, X., Wheeler, G. A., Joyce, J. J., Moore, D. M., & Pandit, B. (2016). U.S. Patent No. 9,294,576. Washington, DC: U.S. Patent and Trademark Office.

Mergel, I. (2017). Building holistic evidence for social media impact. Public Administration Review, 77(4), 489-495.

Rau, A., Sherman, E., &Peppet, S. (2006). Arbitration. New York, NY: Foundation Press.

Sunstein, C. R. (2018). # Republic: Divided democracy in the age of social media. Princeton  University Press.

Schiesser, R. (2010). IT systems management. Upper Saddle River, N.J: Prentice Hall.

Solli-Sæther, H., & Gottschalk, P. (2010). Managing IT outsourcing performance. Hershey, Pa. [u.a.]: Business Science Reference.

Spielvogel, P., Haworth, J., & Hickey, S. (2011). IT operations management tweet. Cupertino, CA: THiNKaha.

Westerman, D., Spence, P. R., & Van Der Heide, B. (2014). Social media as information source: Recency of updates and credibility of information. Journal of     Computer?Mediated Communication, 19(2), 171-183.