iP 6-20: Webb & Drye Webb & Drye (VD) 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. WEBB & DRYE IT Department Budgeted and Actual Expenditures and Variances from Budget Last Year 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 because 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 page 261 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. Salaries Benefits Software site licenses Hardware leases Travel Supplies Training Occupancy costs Total Budget $ 350,000 140,000 143,000 630,000 59,000 112,000 28,000 195,000 $1,657,000 Actual $ 336,000 134,400 168,000 635,000 57,000 110,000 20,000 198,000 $1,658,400 Q Variance $ 14,000 5,600 (25,000) (5,000) 2,000 2,000 8,000 (3,000) $ (1,400) Fav/Unfav. F F U U F AA F F U U "40% of salaries. Required: 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 you recommend? 1 260 1672 :

P 6-20: Webb \& Drye Webb \& Drye () (DD) is a New York City law firm with over 200 attomeys. WD has a sophisticated set of information technologies-including intranets and extranets, e-mail servers, foe firm's accounting, payroll, and client billing software, and document management systems-that allows WD attomeys 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 TT department. She and her staff maintain these various systems, but they also act as an internal consulting group to WD's protesrional 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. Piccareto 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, Malope 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 ehief executive officer: The fiscal year has just ended. The following table contains IT's annual budget, actual amounts spent, and variances from the bodget. Malone expresses her concern that the IT department had substantial deviations from the original budgeted amounts for software licenses and sularies, and that Picearetto thould havo informod Malone of these actions before they were implemented. Picearetto argoes that because total spending within the IT department was in line with the total budget of $1,657,000 sbe managed ber budget well. Furthermore, Picearetto points out that she had to bay more sophisticated page 261 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 eace had trooble downloading the scanned documents in the document management system that is responsible for maintaining. WEBB \& DAYE IT Department Budoeted and Actual Expenditures and Variances from Budaet Last Year 40% of salaries: Recuired: Write a short merno analyzing the disagrecment between Malone and Piccaretlo, What issues underlie the disagecment? Who is right and who is wrong? What corrective actions (if any) do you recommend