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Brown-Forman: Profiting on Corporate Com...

Allen, Brandt R., ...

Case

Brown-Forman: Profiting on Corporate Computing

Allen, Brandt R.; Lennon, Richard

IT-0011 | Published September 12, 1996 | 27 pages Case

Collection: Darden School of Business

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Brown-Forman installed a profit-center control system for its information services department (IS) in 1991. The results were dramatic: costs were flattened, backlogs disappeared, and cooperation improved. Subsequent events raised more concerns: mainframe volumes dropped as applications moved to less costly platforms and new technologies became available, but there was no money to pay for them. To avoid cross-subsidization, all profits were remitted to users. IS requested new "investment funds" from the company's Executive Committee. The request raised the question: Is this the way profit centers are supposed to work?