Richter - It at Hungary's Largest Pharma

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Executive Summary

Richter’s CIO is facing two major decisions – is the current IT structure appropriate to meet the growing demands of the overall organization and to what extent should IT at affiliates be centrally controlled. This report will outline the current situation, provide alternative solutions, as well make a recommendation on the best alternative and implementation plan.

It is recommended that Richter’s outsource the more routine IT functions. The current governance model should be changed for decisions that relate to IT architecture, infrastructure and business application needs while the model for IT principles and investment should remain as is.

Current Situation

Each year the number of employees increases and as a result the number of PC’s the firm uses are expanding. With this increase comes an increase in the demand for support. At the same time, the databases sizes are also increasing, as are the storage needs. These increases are putting a strain on the IT department.

The Russian operations are also exerting pressure on the IT department as they feel they are not receiving enough support in the areas of IT governance and systems. The expansion into retail pharmacies in Romania has also created new sites to be managed.

The current IT governance structure is shown below.

|Current IT Governance Model at Richter's | |Decision |Archetype | | |IT Principles |IT Architecture |IT Infrastructure |Business Application Needs|IT Investment | | | | |Strategies | | | |Business Monarchy |  |  |  |  |  | |IT Monarchy |  |  |  |  |  | |Feudal |  |  |  |  |  | |Federal |  |  |  |  |  | |Duopoly |  |  |  |  |  | | | | | | | | |  |Day to day operation | | | | |  |Major decisions | | | |

IT principles - decisions about the broad principles for applying IT in the firm are currently made by both IT and senior management resulting in a duopoly governance model.

IT architecture - decisions about the organizing logic for data, applications, and infrastructure are made locally by each business unit for regular day to day business processes; this is a feudal model. However, major undertakings such as SAP are made by IT and senior management; a duopoly model.

IT infrastructure strategies - decisions about the main shared and enabling services used in the firm (such as networks and data centers) all made by the IT department; an IT Monarchy model. The exceptions to this are major changes which are typically part of the decision-making at the annual meeting – a duopoly model.

Business application needs - decisions that focus on specifying...
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