QMIS

Uarterly
E xecutive

Restructuring Information Systems

Following the Divestiture of
Carestream Health
Carestream Health was formed when Onex Corporation purchased Kodak’s Health Group
in 2007. As a part of Kodak, Carestream’s IS infrastructure had been designed to align
with a large and complex parent organization. This case documents how the company’s
IS organization was transformed to become more lean, agile and cost-effective, while
making a valuable strategic contribution to Carestream’s business.1

Heather A. Smith Richard T. Watson

Queens University (Canada) University of Georgia (U.S.)

The IS Management Challenge in a Divestiture 1

A divestiture—the change of ownership of a business unit via spin-off, equity carve-out,

split-up or sell-off—can be a highly disruptive event, especially when the IS resources of the
divested unit are highly integrated with other business units in support of the prior parent’s
strategy, scope and primary business. Thus, the CIO of a divested unit faces the challenging
task of untangling years of integration efforts to create a new IS infrastructure and a new IS
organizational unit that is aligned with the new enterprise.
Divestitures involve many complex legal, technical and personnel challenges. In this article,
we focus on the role of IS following the creation of Carestream Health, which was formed when
Onex Corporation purchased Kodak’s Health Group on May 1, 2007 (see textbox). Based on
interviews that we conducted during 2012, we describe how this divested unit restructured its
IS capabilities to create a lean, agile and cost-effective standalone IS organization over a five-
year period. We believe this case provides insights into how CIOs can successfully manage post-
divestiture challenges.2

IS at Carestream on Day One

“A top priority on Day 1 was to run as an independent business as quickly as possible,” said
Carestream’s CEO Kevin Hobert, who had been President of Kodak’s Health Group before the
1  This article is being published in MIS Quarterly Executive as a SIM-Sponsored report: it is based on research sponsored by the
Advanced Practices Council of SIM.
2  For a detailed case study of an IT project for a business unit carve-out, see Leimeister, J. M., Boehm, M. and Yetton, P. “Manag-
ing IT in a Business Unit Divestiture,” MIS Quarterly Executive (11:1), 2012, pp. 37-48.

September 2013 (12:3) | MIS Quarterly Executive 167

Restructuring Information Systems Following the Divestiture of Carestream Health
creation of the new company. “We were aware of
the challenges, and we had help from Onex, but
nevertheless the IS transition to independence
took longer than we first anticipated.” Since
Carestream didn’t exist legally until the actual
divestiture took place, contracts and service level
agreements (SLAs) couldn’t be implemented until
then. As a result, Carestream inherited a “mini-
Kodak” IS function on Day 1.
Carestream Health
Carestream Health is a worldwide provider of dental and
medical imaging systems and IS solutions, x-ray and medi-
cal printing film, and advanced materials for the precision
films and electronics markets. It holds more than 800
patents for medical and dental imaging and information
technology. Headquartered in Rochester, New York, in
2012 the company had over 7,000 employees, sales in 150
countries and $2.5 billion in revenue.
“We had a smorgasbord of technology,” recalled
Peter Hood, Carestream’s Director of Global IT
Operations and Infrastructure. All applications,
data and infrastructure were replicated to create
a parallel organizational structure. “We had one
of every type of machine Sun ever created,” said
Hood. “Our systems were not integrated and were
not designed for our type of company,” said Hobert.
Carestream inherited 150 locations
worldwide and a variety of global network
services contracts to support them. It also
inherited 300 IS people in 44 locations around
the world. The IS staff for the new company was
selected in a variety of ways. “In applications,
most positions were filled voluntarily,” explained
Cindy Donovan, a former Kodak IS manager and
now Carestream’s Director of IT Strategy, PMO
[project management office] and Governance.
“But in infrastructure, most came as part of the
divestiture agreement. We had people who were
strong on execution but who didn’t have the needed
solution architecture, strategy, technology design,
or contract negotiating experience. No one was
skilled in operations,” said Hood. Not only were
operations partly in-house (insourced) and
partly outsourced, but there was considerable
duplication and confusion between the groups.
However, the most challenging inherited
problem was the Active Directory, a foundational
technology that provides a central location
for network administration and security. It
168 MIS Quarterly Executive | September 2013 (12:3)
authenticates and authorizes all users and
computers in a Windows network and enforces
security policies for all computers and for
installing or updating software. Separating
Carestream and Kodak was contingent on
separating the Active Directory. This proved
considerably more difficult than expected. “We
had estimated six months and $25 million, and it
took three times that in both time and money,” said
Donovan.
The Transformation Mandate
Hobert knew he needed an experienced
and proven CIO to formulate a vision for a
transformed IS function. He hired a consultant as
acting CIO while he searched for the right person
for the job. The acting CIO assessed Carestream’s
current situation and helped identify appropriate
industry benchmarks to serve as goals for the
revitalized IS function. He also identified areas
of opportunity for consolidating applications,
infrastructure and people.
Hobert knew that the new CIO would face a
challenging transformation on multiple fronts.
“I hired a good search firm that specialized in
IS leaders. They helped me craft a detailed and
tailored CIO specification and then helped me find
the right person.” The leader selected was Bruce
Leidal, a career IS executive with demonstrated
skills in IS transformation. He joined Carestream
in August 2008.
“I knew during the interview process that
Carestream had three major problems,” recalled
Leidal. “First, we were still tethered to Kodak.
The plans to disconnect had slipped four or
five times, and there was now a major lack
of confidence about this separation. Second,
the inherited systems were outdated and not
designed for a company dealing with healthcare
products for medical practitioners. Our systems
had been designed to support Kodak’s primary
business, which was consumer fulfillment. Third,
our [IS] operations cost structure was too high
and unpredictable. We needed to get our costs
under control in order to free up funds for new
investments. We had 700 core applications and
needed 200-300 at the most. We had multiple
financial and email systems, no architecture
or standards and exact copies of every type of
infrastructure and application that Kodak had. It
was like the Wild West!”
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 Restructuring Information Systems Following the Divestiture of Carestream Health

Table 1: IS Transformation at Carestream Health, 2007-2012*

Primary Area Initial State Interim State Transformed State
IS Strategy Non-existent Engagement and Strategic framework for IS
visioning
Relationship IS as order-taker IS as solution provider IS as strategic partner
Management
Enterprise Architecture Non-existent Technology standards Comprehensive architecture
governance
Governance and the PMO Limited and overly New PMO and new IS Comprehensive governance
complex organization design framework
Application Development Too many disjointed, Consolidated Standardized processes, clear
and Support inappropriate systems development and responsibilities and
streamlined systems development strategies
Global IS Operations and Expensive, complex Simplified, predictable Costs below industry
Infrastructure and unreliable costs and improved benchmarks; high customer
service satisfaction
People Management Too many people, Upgraded IS skills and Talent management
many with the wrong improved productivity
skills
*Shaded cells indicate transformations still in progress in 2012.

“Bruce walked into a real challenge,” said
Hobert. “Our IS infrastructure and services
did not provide the information and capability
needed to operate our business effectively and
efficiently. We knew that IS was key to our future.
We believed that a strong IS organization would
provide capabilities and information that would
differentiate our company.” He was confident
he had hired a CIO with the right combination
of leadership and technology savvy who could
transform IS as well as sell the needed changes to
the business.
The IS Transformation
Carestream’s IS transformation took five years,
the last four of them under Leidal. The changes
have been evolutionary, but constant, putting
significant pressure on the IS organization in
every area. “This was a multi-faceted change,”
said Leidal. “The spin-off came from a very large
company with a very large IS group. I had to
reduce the complexity to something manageable.”
He identified seven primary areas of change: IS
strategy, relationship management, enterprise
architecture, governance and the PMO,
application development and support, global
IS operations and infrastructure, and people
management. Table 1 summarizes the initial,
interim and transformed states achieved (or
anticipated) for each of the seven areas, which are
discussed below.
IS Strategy
Engagement & Strategic
Non-existent → visioning → framework
“The day Bruce arrived, the entire data center
crashed,” recalled Donovan. “Our IS organization
was a minefield. Our tactical staff spent their time
firefighting, but it wasn’t working.” Leidal spent
his first few weeks gathering information and
listening to business leaders, trying to understand
their pain points. “Bruce made sure he understood
the issues and then grouped them into categories,
such as problems with prioritization, high costs,
poor service levels or the lack of an integrated
IS vision,” explained Hobert. “Then he engaged
our leadership team in resolving these issues
and developing a vision for IS.” The plan for IS
was much like any roadmap for new product
development in that it had an architecture,

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Restructuring Information Systems Following the Divestiture of Carestream Health
Figure 1: Carestream’s Strategic IS Framework
requirements and several phases of development
and commitment from the business. “Developing
commitment to a vision and a set of priorities
requires collaboration and cannot be forced,”
Hobert said. “Bruce refined and sold the vision
and then developed the credibility for continued
investment by delivering on what he promised.”
The strategic framework he developed for IS
had three major components:
●● Strategy development for both business
and technology
●● Execution, including an improved project
management office and applications
development activities
●● Ongoing operations to manage service
levels, infrastructure and operations.
To support this framework, new IS-governance
processes and people-management practices
were needed. Once the overall vision was
established, Leidal and his IS management team
undertook several phased initiatives to improve
and enhance each component. Figure 1 illustrates
how these components fit together.
With this strategic framework, “Bruce was able
to take the frustrated business community who saw
IS as a cost and give them a different perspective,
helping them see the potential value of IS. Then
he engaged them in envisioning the type of IS
170 MIS Quarterly Executive | September 2013 (12:3)
organization it would take to deliver on this vision,”
said Donovan.
Relationship Management
Solution Strategic
Order-taker → →
provider partner
Strong relationships were essential to building
a new and more valuable IS function. In addition
to building strong personal relationships at the
senior management level, IS needed to change
how it worked with the business units. “We had
to make a cultural shift from ‘do whatever the
customer asks’ to ‘plan and execute’ and ‘monitor
and control’,” explained Leidal. To accomplish this,
he established a portfolio-management process
that facilitated IS decision making, prioritization
and global portfolio management, and reshaped
the IT Council to include key business executives.
Through the IT Council, Leidal then led business
leaders through the steps needed for sound,
agreed-on portfolio decisions, gaining agreement
on IS’s strategies and confirming the business’s
direction.
To further strengthen business relationships
and better understand business strategy and
direction, Leidal appointed both a Director of
IT Relationship Management and relationship
managers for each of the business units and
functions. The relationship managers are the
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 Restructuring Information Systems Following the Divestiture of Carestream Health
face of IS to the business units and functional
leadership, as well as partners in delivering
solutions to help the business achieve its
strategies. Relationship managers have clear
accountability for solutions that deliver expected
results according to pre-established metrics.
Relationship management is also a high
priority for the future. According to Leidal, “We
need to do a better job of understanding what
the business wants and developing stronger
relationships.” To this end, he is hiring people
with management consulting backgrounds who
know how to build trusted relationships with
the business while the rest of IS acts as a delivery
engine.
Enterprise Architecture
Comprehensive
Non-existent → Technology → architecture
standards governance
Leidal first created an IT Architecture Council
staffed by senior IS leaders who collaboratively
developed guiding architectural principles for the
organization. These included:
●● Monitoring mega-trends and ensuring
Carestream is positioned to adopt new
technologies if desired
●● Guiding and maintaining IS standards
●● Establishing master data management
●● Ensuring that projects adhere to
architecture standards
●● Exploring the potential of new
technologies.
The Council identified specific projects,
such as creating a single sign-on capability
and developing the IS project portfolio that
would demonstrate the value of architecture
to the business. “We’ve pretty much put all the
architecture pieces in place now,” said Leidal.
“The only parts still missing are our global service
platform and online strategy.”
IS leaders are responsible for implementing
architectural principles in their own areas.
Infrastructure architecture and solutions
are implemented by architects in Global IT
Operations and Infrastructure, and solutions
architecture by staff in Applications Development
and Support. For example, Carestream now has
server standards and has implemented Global
SharePoint for document management, workflow
and collaboration. In addition, the IT Architecture
Council established a Master Data Management
Council with business participation to develop
strong standards for master data.
Governance and the
Project Management Office
Limited PMO; new IS Comprehensive
and overly → organizational → governance
complex design framework
Leidal soon found that the IS organization had
complex and ineffective governance. “I needed to
quickly set the tone for the future,” he explained.
Using the strategic IS framework as a guide,
Leidal created four core IS governance forums
for policy deployment, IS architecture, change
advisory and supplier management.
Although Carestream had inherited a PMO, it
was too deep in the organization to be effective
and was focused on IS internals only. “We needed
the execution discipline to successfully deliver
business value through IS portfolio projects
and programs,” said Leidal. In early 2009, he
appointed Cindy Donovan as Director of IT
Strategy, PMO and Governance. She was given the
mandate to develop the role and principles of the
PMO and establish the governance, standards and
best practices needed to deliver IS value. Over
the past four years, the PMO has been improved
with dedicated and certified project managers,
and new methodologies have been introduced to
streamline project delivery and enhance quality.
New processes and tools to monitor IS have also
been added for time tracking and billing, project
planning and reporting, financial planning and
tracking, and enterprise resource management.
Application Development and Support
The first step in improving application
Standardized
Disjointed, Consolidated, processes, clear
inappropriate → streamlined → responsibilities,
systems systems & development
strategies
development and support was to assess the
entire application portfolio of the divestiture
and the competencies of the inherited staff.
First, Leidal consolidated IS development staff
into three locations worldwide. Then he re-
evaluated Carestream’s sourcing contracts and
insourced application support to give staff more
incentives to resolve the root causes of problems.
In keeping with his strategic approach to change,
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Restructuring Information Systems Following the Divestiture of Carestream Health
Leidal established guiding principles for this
function, including use of industry best practices,
the creation of centers of excellence to improve
productivity, and adoption of commercial off-the-
shelf and industry best-of-breed solutions. He and
his team then targeted the number of applications
in the company. “We didn’t have a single one of
anything,” Leidal recalled. “We had 11 financial
systems alone!” After four years, the 700 systems
Carestream inherited were reduced to 400.With
this reduction has come less complexity and
greater ability to deliver business solutions. Major
new applications, such as ERP, CRM, contract
management and financial planning were also
introduced. New development methodologies,
tools, metrics and templates developed by
the PMO have improved productivity and
substantially reduced variance from development
schedule and cost estimates.
According to Leidal, “We still have a number of
applications to reduce. Considerable bloat remains
in our cost structure. Once we have reduced our
applications to 300 or fewer, there will be more to
invest in improved infrastructure. ... We want to
establish ‘the Carestream Way,’ where every part of
our business uses the same processes and the same
systems in the same way. We hope to be there by
the end of 2014.”
Global IS Operations and Infrastructure
Costs below
Expensive, Simplified, benchmarks,
complex, → predictable costs, → high customer
unreliable improved service
satisfaction
Carestream’s IS operations had two significant
problems when Leidal joined the organization.
First, Carestream and Kodak were still tethered
together through a joint Active Directory in spite
of several efforts to separate them. To counteract
a growing sense of hopelessness, Leidal
worked with his senior leaders to determine
dependencies and develop a plan for separation.
Then, he challenged his IS team to implement
it by October 2008, rallying IS staff with mouse
pads emblazoned with “Cut the Kord!” On October
20, 2008, Carestream operated as a separate
business for the first time. “It was a lesson that
we could push ourselves to accomplish a goal and
it was a first step in changing our culture,” said
Leidal.
The second problem was IS operations cost:
at 3% of revenue, it was significantly higher
172 MIS Quarterly Executive | September 2013 (12:3)
than the industry benchmark of 1.55%. Leidal
also hired a Director of Global IT Operations
and Infrastructure, Peter Hood, who joined
Carestream in early 2009 and had over 40 years’
experience in managing IS. Leidal mandated Hood
to sort out the people and costs in operations.
In spite of its high level of spending,
“Operations was in poor shape when I arrived,”
stated Hood. “We were partly insourced and
partly outsourced, and there were people in both
places doing the same job.” Hood made a quick
evaluation of the situation and developed clear
statements of work and lines of delineation
between Carestream’s operations and the
outsourcer. “We kept technical support for
SAP and database administration and moved
system administration and the help desk to the
outsourcer.” Inherited operations in 44 locations
worldwide were also consolidated into four
centers. Both of these changes enabled him to
reduce staff by almost 50% while improving
service levels.
Working with the outsourcer, Hood
established industry benchmark SLAs and ITIL-
based improvements in service and customer
satisfaction. “Previously, our service desk only
operated from 9-5 EST, Monday to Friday. With our
improved processes and metrics, thanks to weekly
monitoring and quality improvement initiatives,
we were able to get service levels to industry
norms within one year for both response time and
problem resolution,” said Hood.
He also attacked network costs by building
a global VOIP wide-area network, cutting the
networking budget from $8 million to $3 million.
However, in spite of these streamlining efforts, a
significant cost loomed ahead. “When Carestream
was set up as a standalone entity, the company
spent about $30 million to buy infrastructure,” said
Hood, “but no one considered the cost involved in
refreshing it in a few years’ time.” To address this
need, he engineered a capital lease program that
maintains a constant depreciation level with
continual built-in refreshes. Thus, instead of
spending $30 million every five years, $6 million
is depreciated every year and capital spending is
not affected.
These savings were enabled by improved
technology architecture capabilities that clarified
the company’s technical direction. For example,
creating a virtual environment eliminated over
200 physical machines by the end of 2011. As a
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 Restructuring Information Systems Following the Divestiture of Carestream Health
result, IS operations expenses had been reduced
from 3.0% to 1.5% of revenue by the end of
2011. “We now have predictable operations and
infrastructure costs that our business can count
on,” said Leidal.
By 2012, however, there was some concern
that keeping operations expenses at 1.5% of
revenues was too low. “That’s just a ‘keep the
lights on figure’. … We now recognized we need
to invest in our infrastructure as well as our
applications,” said Leidal.
People Management
Too many Upgraded skills
Talent
people, → & improved → management
wrong skills productivity
A strong team was essential to create the IS
organization envisioned by Hobert and Leidal.
Unfortunately, not all of the about 300 staff
Carestream inherited had the skills needed for
the new company. “Spinoffs are usually dirty
work when it comes to people,” said Leidal. The
first round of cuts was handled by the interim
CIO. Under Leidal, the IS staff was reduced by
about 40%, including some staff that went to
outsourcers. Others simply didn’t have the
necessary skills and needed to be retrained,
reassigned or laid off. “We had people who only
knew one [legacy] application and when that
application was retired, they were clearly in the
wrong place.”
Working with HR leaders, Leidal developed
a comprehensive talent-management strategy,
including a formal process for specifying new
job requirements, skill sets and competencies for
each job, and a new performance-management
system. Staff members are ranked relative to their
peers in the industry and against a set of formal,
measurable and attainable goals. Leidal also
established a college hire program, added general
competencies to the performance-management
process and developed detailed job expectations
for each job level. He has also invested $100,000
per year in training over the past three years and
made career-development planning a priority
for employees, emphasizing coaching and
mentoring, and developing centers of excellence
and communities of practice. “This approach has
worked well, even though change is tough,” said
Ralph Olney, Carestream’s Chief HR Officer. “We
now seek people who have more than technical
competencies.”
The textbox below lists some of Carestream’s
IS transformation metrics for 2007-2012.
●● Operating costs reduced from 3% of revenue to 1.5%
of revenue, below industry benchmarks
●● Operations locations consolidated from 36 to four
●● Service desk customer satisfaction improved: 4.5-5.0
●● Service levels improved to industry norms
●● Number of applications reduced from 700 to 400
●● Development locations consolidated from 36 to 3
●● Staff reduced from 300 to 170
●● Productivity improved
●● Cost and schedule variances reduced by 50%
Three Critical Success
Factors for Post-Divestiture
Transformation
According to Carestream’s leaders, the IS
transformation has been a success on many
fronts. The following three critical success factors
underlie that success.
1. Integrated Vision, Strategy, Roadmap
and Execution
Leidal took a holistic view of the IS
transformation but also provided a step-by-step
roadmap for getting there. According to Hobert,
“If you don’t have a solid vision, ownership and
the right plan and organization structure, it’s
impossible to measure performance and achieve
results.”
Leidal’s vision for the future of IS addressed
five key business concerns:
●● Applications and services that allow the
business to excel at its goals
●● Effective, reliable infrastructure provided
at a competitive cost
●● Data center capabilities available direct to
Carestream customers
●● A lean organization
●● An effectively managed IS function.
His next step was to articulate a set of
overarching IS strategies, including detailed
guiding principles for each to direct their
transformation and a framework showing how
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Restructuring Information Systems Following the Divestiture of Carestream Health
Figure 2: Carestream’s IS Governance Structure and Processes
these strategies fit together (see Figure 1). The
description of the IS governance transformation
below illustrates how change was designed and
executed for each of the components in Figure 1.
First, Leidal and his team established the IS
mission:
The IS governance mission is the
development and maintenance of effective
controls for management, execution and
measurement processes, which result in high
performance and low risk while ensuring
strategic alignment and maximum value for
the business.
Then, to guide the design and implementation
of this mission and to communicate the
responsibilities and expectations of governance
practices to others, the following principles were
established:
●● Ensure that core definitions, structures
and processes exist to shape all IS efforts
●● “Ensure” as opposed to “execute”—i.e., do
not just execute required activities, ensure
they are well carried out
●● Monitor the results of IS management,
execution and measurement processes as
an input for continuous improvement
174 MIS Quarterly Executive | September 2013 (12:3)
●● Oversee “course corrections” to guide
effective performance.
Next, a governance structure and set of
desirable practices were developed that indicate
how all parts of governance interact (see Figure
2).
With these foundations in place, Leidal and
his team were then able to create a roadmap
outlining specific new governance initiatives for
several years against which progress could be
monitored and reported.
2. Strong, Effective Processes
Today, Carestream’s IS processes are widely
regarded as important components of the IS
organization’s ability to deliver value to the
company.
“We are now viewed as process change experts
within the company,” said Leidal. “We have
the skills and capabilities, not only to make IS
better, but also to help the business operate and
innovate.”
The PMO transformation provides a good
illustration of how new IS processes have been
developed at Carestream. When Leidal arrived,
project managers were scattered throughout
the organization, portfolio management was
non-existent and PMO governance was only
internal. “Our ability to execute was weak,”
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 Restructuring Information Systems Following the Divestiture of Carestream Health

Table 2: Project Management Office Overview

Governance
Project execution oversight—
dashboards, scorecards and gate
reviews
Project risk assessments
Stakeholder management
Change management
Master planning
Benefits realization—post-project
review
Standards and Best Practices
Alignment with project
management body of knowledge
Project delivery methodology
Project management tools
Standards, best practices and
templates: scope management,
cost management, resource
management, quality management
Lessons learned cycle
Coaching, Mentoring and Training
Knowledge sharing
Project management community/
forum
PMO steward support
Training and certification programs
Project management expectations
Project management effectiveness
measures

recalled Donovan “And we had an overly complex
and outdated project-delivery methodology.”
Furthermore, project managers lacked the
necessary competencies to be successful. As a
result, the business lacked confidence in IS’s
ability to lead, plan and execute a portfolio of
strategic projects.
Together, Donovan and Leidal identified the
next steps that would be needed to develop these
disciplines:
●● Research PMO models and functions
●● Define the PMO mission, role and
principles
●● Identify process management methods
and tools
●● Drive process change and value over the
next three years and beyond
●● Measure value, assess lessons learned and
drive continuous improvement.
Digging deeper, Donovan identified three
foundational components of a PMO and their
associated processes: governance, standards
and best practices, and coaching, mentoring and
training (see Table 2).
As Donovan implemented the processes
involved in each component, the role of the PMO
changed. In 2009, it focused on establishing
standards. Over time, measurement was added,
and the PMO became a project auditor. By the
end of 2010, portfolio management was added,
and the PMO played the role of financial advisor.
Finally, by the end of 2011, the PMO took on
an enterprise focus, driving value from the IS
portfolio from inception to implementation.
These transformational process steps are
summarized in Table 3.
The PMO now trains employees across
Carestream’s business in project management
fundamentals. More than 75 business colleagues
have learned the process, concepts and basic
structure of project management in a series of
two-day courses run by IS. “Bruce has adopted a
model of introducing process change to the rest of
the company,” said Olney. “He puts together the
processes and tools and then leads the way for the
rest of us.”
3. Leadership
The depth and breadth of cultural
transformation that often accompanies a
divestiture requires a CIO who has depth and
breadth in leadership experience and ability.
Hobert invested considerable time and attention
in selecting the right person for the CIO job and
then gave him a clear mandate and stepped
out of the way. “I value IS and see it as a great
enabler,” he said. “It is essential to helping us
differentiate ourselves, but building effective
IS systems and business processes also requires
consensus and cooperation.” In addition to
monthly senior leadership team meetings, Leidal

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Table 3: Transformation of the Project Management Office at Carestream

2009 2010 2011

Portfolio • Established a project scoring
Management system and portfolio-
management process,
balancing risk, cost and return
• Created portfolio planner role
Governance • Standardized project status
reporting
• Established project risk review
process
• Defined project stakeholder
network
Standards and • PMO obtained certification
Best Practices • Improved project-initiation
and project-closure templates
Coaching, • Established project
Mentoring and management community
Training forum
• Launched PMO website
• Provided Microsoft project
schedule training
• Established project launch
(kick) process
• Improved project charter
process
• Improved estimating
process
• Improved stakeholder
network governance
• Established PMO monthly
projects review
• Introduced prototyping
project framework
• Delivered project
methodology makeover
• Improved lessons-learned
template and process
• Created PMO steward role
• Established project
management expectations
• Improved project
management forum focus
• Established resource supply
management foundation
• Improved change-
management process
• Moved gate-review
governance to business
steering team
• Improved monthly variance
cadence and reporting
• Created flexible paths
through project
methodology tailored to
business and project profile
• Automated project status
reporting and EVA metrics
• Launched public project
dashboard
• Project execution
fundamentals training
• WBS/schedule management
• Resource management
• Developed project
management career path
model

meets with Hobert one-on-one every three
weeks to work through the IS vision.
Cultural change and good communication
with IS staff are high on the IS leadership
team’s agenda. In addition to quarterly IS town
halls, where accomplishments are recognized,
questions answered and plans for the future
presented, Leidal holds a monthly two-hour
roundtable with between 8 and 10 non-
management staff from across his organization.
“This gives me an opportunity to hear what people
care most about and what they’re troubled about,”
said Leidal. At the end of the meeting, he always
asks them to write down and present what they
would change or do differently if they were in his
job. “Much of our transformation pace came out of
these meetings and our town halls,” he said.
Although the initial IS transformation goals
have largely been accomplished, Leidal faces a
new challenge: staff fatigue. “People are telling
me that they’re tired, so we have to find new ways
to work smarter, not harder. … With [a strong
master] plan now in place, we can view resource
pinch points for the first time. We’ve set some rules
in place so that people don’t have to take on too
many projects, and we know where to cross-train
staff or bring in new resources.”
Concluding Comments
Given the “burning IS platform” on Day 1,
change was inevitable. “It was much more difficult
than I anticipated,” Donovan recalled. “It was
a confusing time, and nothing went well. But
now, with five years’ of hindsight, I’ve come to
appreciate what a phenomenal transformation
we’ve been through, and I’m very grateful to have
been part of it.” Today, there is considerable
optimism about IS’s future at Carestream and
a strong desire to ramp up its strategic use now
that the initial transformation mandate has been
largely accomplished.

176 MIS Quarterly Executive | September 2013 (12:3) misqe.org | © 2013 University of Minnesota
 Restructuring Information Systems Following the Divestiture of Carestream Health

About the Authors

Heather A. Smith
Heather Smith (heather.a.smith.queens@gmail.
com) is Senior Research Associate with Queen’s
University School of Business at Kingston,
Canada. A former senior IT manager, she is
the author of five books on IT strategy and
management, the most recent being IT Strategy
(John Wiley) with James D. McKeen. She is also
Co-director of the IT Management Forum and
CIO Brief, which facilitate inter-organizational
learning among senior IT executives. Her
research has been published in, among others,
MIT Sloan Management Review, Communications
of the AIS, Knowledge Management Research
and Practice, Journal of Information Systems
and Technology, and Journal of Information
Technology Management.

Richard T. Watson
Richard Watson (rwatson@terry.uga.edu) is the
J. Rex Fuqua Distinguished Chair for Internet
Strategy in the Terry College of Business at the
University of Georgia. He is a former President
of the Association for Information Systems and
the current Research Director for the Advanced
Practices Council of the Society of Information
Management. In 2011, he received the Association
for Information Systems’ LEO award, which is
given for exceptional lifetime achievement in
Information Systems.

September 2013 (12:3) | MIS Quarterly Executive 177