Analysis
(Royal DSM N.V.: IT Enabling Business Transformation; CS #809-078)
Due on: 29/3/2012
1. What Challenges and opportunities do senior executives at DSM N.V. face in 2000?
In 2000, DSM senior executives were provoked with a dilemma to either continue on supporting the past business services that DSM used to offer – the core petrochemicals business – or make an eventually courageous investment in the future via growing the life sciences and performance materials businesses. Subsequently, when they decided to go for the latter and alter the company’s portfolio through divestitures and acquisitions in food and pharmaceutical sectors, DSM primary objective was to make the company concentrate on growth opportunities. In addition, DSM’s Information and Communication Technology (ICT) organizational infrastructure was absolutely decentralized. However, to serve the needs of a giant company that was going through rapid yet massive transformation, it was vivid enough to identify the essence of a complete transformation of ICT organization; that is a standardized ICT infrastructure (i.e. networks, servers, desktops, internet, service providers, and larger business applications such as SAP). In order for ICT organization to be a business-oriented management organization with service delivery skills, DSM had to outsource partners to facilitate the acquisition process and enable faster and smoother integration into the DSM organization. One more challenge DSM executives faced was the fact that they had to involve ICT in the acquisition of the Vitamins & Fine Chemicals Division from Roche, especially when they had underestimated the cost of disentanglement and integration by a factor of 20, which more realistic figures had then been taken into account. The integration and transformation of Roche Vitamins had been done simultaneously; thanks to the VITAL program (which brought on a huge advantage later on when EVITA was introduced). DSM executives learned that with ICT
Due on: 29/3/2012
1. What Challenges and opportunities do senior executives at DSM N.V. face in 2000?
In 2000, DSM senior executives were provoked with a dilemma to either continue on supporting the past business services that DSM used to offer – the core petrochemicals business – or make an eventually courageous investment in the future via growing the life sciences and performance materials businesses. Subsequently, when they decided to go for the latter and alter the company’s portfolio through divestitures and acquisitions in food and pharmaceutical sectors, DSM primary objective was to make the company concentrate on growth opportunities. In addition, DSM’s Information and Communication Technology (ICT) organizational infrastructure was absolutely decentralized. However, to serve the needs of a giant company that was going through rapid yet massive transformation, it was vivid enough to identify the essence of a complete transformation of ICT organization; that is a standardized ICT infrastructure (i.e. networks, servers, desktops, internet, service providers, and larger business applications such as SAP). In order for ICT organization to be a business-oriented management organization with service delivery skills, DSM had to outsource partners to facilitate the acquisition process and enable faster and smoother integration into the DSM organization. One more challenge DSM executives faced was the fact that they had to involve ICT in the acquisition of the Vitamins & Fine Chemicals Division from Roche, especially when they had underestimated the cost of disentanglement and integration by a factor of 20, which more realistic figures had then been taken into account. The integration and transformation of Roche Vitamins had been done simultaneously; thanks to the VITAL program (which brought on a huge advantage later on when EVITA was introduced). DSM executives learned that with ICT