Webb & Drye (WD) is a New York City law firm with over 200 attorneys. WD has a sophisticated set of information technologies— including intranets and extranets, e- mail servers, the firm’s accounting, payroll, and client billing software, and document management systems— that allows WD attorneys and their expert witnesses access to millions of pages of scanned documents that often accompany large class action lawsuits. Bev Piccaretto was hired at the beginning of last year to manage WD’s IT department. She and her staff maintain these various systems, but they also act as an internal consulting group to WD’s professional staff. They help the staff connect to and use the various IT systems and troubleshoot problems the staff may encounter.
The IT department is a cost center. Piccaretto receives an annual operating budget and believes she is accountable for not exceeding the budget while simultaneously providing high-quality IT services to WD. Piccaretto reports to Marge Malone, WD’s chief operating officer. Malone is responsible for IT, accounting, marketing, human resources, and finance functions for Webb & Drye. She reports directly to WD’s managing partner, who is the firm’s chief executive officer.
The fiscal year has just ended. The following table contains IT’s annual budget, actual amounts spent, and variances from the budget.

Malone expresses her concern that the IT department had substantial deviations from the original budgeted amounts for software licenses and salaries, and that Piccaretto should have informed Malone of these actions before they were implemented. Piccaretto argues that since total spending within the IT department was in line with the total budget of $ 1,657,000 she managed her budget well. Furthermore, Piccaretto points out that she had to buy more sophisticated antivirus software to protect the firm from hacker attacks and that, in paying for these software upgrades, she did not replace a staff person who left in the fourth quarter of the year. Malone counters that this open position adversely affected a large lawsuit because the attorneys working on the case had trouble downloading the scanned documents in the document management system that IT is responsible for maintaining.

Write a short memo analyzing the disagreement between Malone and Piccaretto. What issues underlie the disagreement? Who is right and who is wrong? What corrective actions (if any) do yourecommend?

  • CreatedDecember 15, 2014
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