Richter Information Technology

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Executive Summary

Richter is the biggest pharmaceutical company in Hungary and is preparing a global expansion in one of the quickest alternating markets- the pharmacy industry. The firm currently belongs to the worldwide market leaders and faces the chance of losing their top market position. As a result their current information system (IS) has to successfully assist the firm’s expansion plans in order to guarantee a top market leader position.

Currently the IS is not completely centralized and limits the speed at which Richter can expand. Obviously a significant require for information technology (IT) support exists, due to the organizational expansion. Currently the IT strategic plan covers a one-year stage, IT workers are not centralized and the present constructions are not exploiting overall efficiency and effectiveness of Richter.

This case analysis describes four possibilities, which Richter could take in order to develop a system that can supply an IT strategy associated with the firm’s long-term business strategy. The first alternative is simply to maintain the current status quo. The second option recommends developing a decentralized IT system. The third option could be to end the present SAP system and centralize IT with an in-house built ERP system which can be used globally and simply outsource the IT support. The last alternative, which this case analysis discusses, is that Richter should establish a more centralized IT system with all present SAP modules for all global members and have a complete outsourced IT support.

This case analysis proposes option four, because a more centralized IT system with global outsourced support can allow the company to set up and regulate their operations so that Richter can complete its global expansion plan more efficiently and effectively and at the same time preserve their competitive advantage.

Richter’s Current Situation

Richter is Hungary’s biggest pharmaceutical firm and consists of wholly owned subsidiaries in more than 10 countries around the world. The company generates its profits through sales and distribution of drugs and owns production sides in Romania, Russia, Poland and a joint venture partner in India.

The company’s lucrative expansion was mostly due to globalizing its business around the world and especially adopting international expansions in its long-term business strategy. Richter’s business strategy also consists of accomplishing larger reliability against materials and production planning. In the last couple of years Richter faced tremendous success in vertical integrating its business operations and therefore probably will also adopt this business model across all its global members.

Richter’s current information system is to a small extend incorporated with the installation of an enterprise resource planning (ERP) system, and a SAP across Romania, Poland and Hungary. One striking feature is that not all SAP modules, which are hosted by Hungary, are installed in all countries. Russia and India do not have a SAP system at all, although all members use Microsoft Windows operating systems on their Pc’s, which provides the basis for a SAP system.

Richter’s Information Technology Governance Model

The firm’s IT governance presently exists of three IT elements: infrastructure, business process support and IT organization. The IT plan is build with the help of IT managers and internal IT specialists. The main task of the plan is to ensure current maintenance projects, alterations to IT infrastructure and investments. Richter’s IT governance model will be clarified with the help of a Strengths-Weaknesses-Opportunities-Threats (SWOT) analysis.

12 SWOT Analysis

Strengths as well as weakness can be internally influenced by Richter; therefore the firm’s actions have direct impact on its strengths and weaknesses. However, opportunities and threats can only be influenced through external factors, which Richter...
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