Koh & Maguire Exhibit 7.4. Mini Case: Marks & Spencer In 2004, M arks & S pencer ruled o ut f ull-scale outsourcing o f its IT s ystems a s it began a "back to basics" restructuring programme that will cut $600 million in costs over t he n ext three years. T he r etailer stated t hat its immediate priority w as n ot t o outsource but to make b etter use of its existing IT systems. They believed that there were a l ot o f potential i mprovement a reas i n their existing i nfrastructure t hat could make I T more e ffective. T his led Marks and S pencer t o undertake a m ajor r e- evaluation of its IT. They have not ruled out outsourcing individual systems as long as there is a business case for doing so. Their priority was to simplify processes and to ensure efficient use of the company's existing I T systems before i nvesting i n new hardware. T hey believed that t hey had some good technology although some departments were better at using it than others. The company expected t o focus on u sing I T to i mprove m anagement of t he supply chain, which was criticised as being less efficient than rivals' systems, and building on other work with RFID tags. Process.innovation can take place by analysing the old processes or by designing