Richter Case Analysis
October 13, 2010
Richter Case Analysis
I. Executive Summary
For many reasons including government regulations, market demand and varying core competencies, Richter’s affiliates face quite a wide range of unique business challenges. The problem has become facing these challenges with a centralized IT strategy that cannot address the critical idiosyncrasies of each unique affiliate market simultaneously. The net effect is that some affiliates have an excess of resources while others are stretched too thin. Unless resources are optimized per each location’s requirements, Richter can expect an overall lack of IT efficiency, which will not serve the overall enterprise very well.
Additionally, the double standard of having central IT decision-makers allocate resources for enterprise-wide SAP rollout while local decision-makers are tasked with everything else creates a major inconsistency that is inherently counter-productive.
Our group has identified three main problems as follows: * Disproportionate IT resource allocation among the Affiliates * Lack of Coherent Decision Making System for SAP * Inefficiency due to language barriers After a thorough analysis of the problems, our group recommends the following actions to maximize IT productivity at Richter: * Realign IT staff to reflect proportion of local sales volumes * Extend IT decision-making autonomy to each affiliate (within certain central guidelines) * Outsource language translation service
In summary, Richter is on the right track but could potentially optimize its IT operation by changing its policies as per above.
II. Overview
Operating since before World War I, Richter is a multinational pharmaceutical company. While the majority of Richter’s revenues are from generic drugs, the company has begun actively pursuing development of original drugs.
The company has two production sites in Hungary, which serve as the primary production facilities for the
Richter Case Analysis
I. Executive Summary
For many reasons including government regulations, market demand and varying core competencies, Richter’s affiliates face quite a wide range of unique business challenges. The problem has become facing these challenges with a centralized IT strategy that cannot address the critical idiosyncrasies of each unique affiliate market simultaneously. The net effect is that some affiliates have an excess of resources while others are stretched too thin. Unless resources are optimized per each location’s requirements, Richter can expect an overall lack of IT efficiency, which will not serve the overall enterprise very well.
Additionally, the double standard of having central IT decision-makers allocate resources for enterprise-wide SAP rollout while local decision-makers are tasked with everything else creates a major inconsistency that is inherently counter-productive.
Our group has identified three main problems as follows: * Disproportionate IT resource allocation among the Affiliates * Lack of Coherent Decision Making System for SAP * Inefficiency due to language barriers After a thorough analysis of the problems, our group recommends the following actions to maximize IT productivity at Richter: * Realign IT staff to reflect proportion of local sales volumes * Extend IT decision-making autonomy to each affiliate (within certain central guidelines) * Outsource language translation service
In summary, Richter is on the right track but could potentially optimize its IT operation by changing its policies as per above.
II. Overview
Operating since before World War I, Richter is a multinational pharmaceutical company. While the majority of Richter’s revenues are from generic drugs, the company has begun actively pursuing development of original drugs.
The company has two production sites in Hungary, which serve as the primary production facilities for the