Downsizing at CBS/FOX Video

Driven by top management interest in cost reduction, IS downsizing is rapidly emerging as one of the most significant phenomena in information resource management in the 1990’s. Downsizing is a process of (1) migrating applications from a mainframe architecture to a mini- and/or microcomputer architecture, and (2) transferring responsibility for IS functions to line management. Firms recently downsizing their IS function report significant budget reductions and other benefits. This exploratory case study focuses on CBS/FOX Video, a half billion dollar a year firm in the home entertainment industry, that has received signficant attention for the magnitude of its IS downsizing efforts. CBS/FOX Video has reported steadily reducing its annual IS budget and staff. To implement its downsizing strategy, this firm: (1) migrated applications from a large mainframe to a mini- and three microcomputer networks; (2) transferred many information processing functions to user departments; and (3) outsourced application development. The objectives of this case study were to describe and explore a phenomenon (downsizing) that is not well understood and to verify reported cost savings.