ATTACHED IS THE GUIDELINES AND RUBRICS FOR THIS PROJECT.ALSO I ATTACHED THE CASE STUDY THAT I PICKED.Guidelines for Submission: Your paper should follow these formatting guidelines: 2-3 pages in length, with double spacing, 12-point Times New Roman font, and one-inch margins. Submit your organizational profile to your instructor for approval and to move forward. Please see the feedback provided by your instructor and resubmit as needed.
it_550_final_project_milestone_one.pdf
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IT 550 Final Project Milestone One:
Organizational Profile Guidelines and Rubric
Remember: Your final project is the creation of an information technology strategic plan (ITSP). This plan is broken up into three milestone assignments that you
will be working on throughout the course: an organizational profile (the focus of this assignment), an IT department SWOT analysis, and a document of strategic
IT initiatives based on a case study that you will select below. These assignments should be tackled from the perspective that you are your department’s IT
director.
To begin this assignment, you must first choose and purchase one of the following case studies from https://hbsp.harvard.edu/import/599666:
Strategic IT Transformation at Accenture
Peak Experiences and Strategic IT Alignment at Vermont Teddy Bear
Richter: Information Technology at Hungary’s Largest Pharma
The case study you select here will be the focus of your final project throughout the course.
For this milestone, you will submit an organizational profile on your chosen organization. This organizational profile should give a brief overview of the company
you choose from an enterprise level and then start to focus on the IT department of that company. Below, you will see an outline of critical elements that must
be addressed.
The critical elements highlighted in yellow represent the critical elements that you should answer from the perspective of the company as a whole, from the
enterprise level. The critical elements highlighted in blue, and all of the subsequent milestone assignments, will focus on the IT department at your company of
choice.
Make sure that you craft a vision and mission statement for your IT department that is different from your company’s enterprise-level vision and mission
statements but that aligns with the greater company as a whole.
Feedback should be incorporated into the final project as warranted before final submission.
Specifically, the following critical elements must be addressed:
I.
Organization
A. Structure and Organization: Describe the current organizational structure and background information. How does the organization organize its
internal and external communication? What is the age of the organization? What is the organizational structure? Include the following:
1. What is the number of employees?
2. What is the organizational decision-making structure?
3. What kinds of technology are used in the organization?
B. Customer Profile: Analyze the customer profile of the company to determine possible competitive issues that could be IT-related. What is the
size and type of community? Who is the primary customer? What is the size of the customer/end-user base? What is the demographic profile of
the customer or end user?
C. IT Values: What are the IT values of the organization? Analyze the organizational values as indicated by policies, public releases, or noted actions
of the company. Some things to consider include:
1. How does the organization deal with intellectual property rights?
2. What is the privacy policy of the organization?
3. What is the technology usage policy?
4. How does the organization ensure the accuracy of the data it stores?
5. How does the organization ensure data accessibility, while ensuring data security?
6. What, if any, governance policies are implemented within the organization?
D. Internal Standards: What are the existing internal rules and standards for information technology governance? Describe the existing policies and
standards within the organization to establish a baseline for appropriate practice.
II.
IT Vision and Mission
A. IT Vision: What is the ideal vision of how your IT department fits into the overall organization? What is the role that IT plays in the organization?
Articulate your clear and reasonable ideal vision for the roles and responsibilities of the IT department (or IT subgroup) within the organization.
B. IT Mission: What is the IT mission of the organization? Craft an IT mission statement that represents your vision, represents the values of the
organization, and speaks to the impact of IT on business opportunity and competitive advantage.
You are encouraged to use this prompt section as a guide for how you should structure your response.
Rubric
Guidelines for Submission: Your paper should follow these formatting guidelines: 2-3 pages in length, with double spacing, 12-point Times New Roman font, and
one-inch margins. Submit your organizational profile to your instructor for approval and to move forward. Please see the feedback provided by your instructor
and resubmit as needed.
Critical Elements
Structure and
Organization
Proficient (100%)
Accurately describes the structure and
organization of the selected company
Customer Profile
Critically analyzes the customer profile of
the organization to determine
competitive issues or threats that could
be related to IT
IT Values
Analyzes in detail the values of the
organization related to IT, based on
available information and inferences
from company actions
Describes in detail the existing policies
and standards within the organization to
establish a baseline for appropriate IT
practice
Articulates a clear and reasonable ideal
vision for the role and responsibilities of
the IT department within the
organization
Internal Standards
IT Vision
IT Mission
Crafts a mission statement that clearly
represents the IT vision and the values of
the organization and speaks to the
impact of IT on business opportunity and
competitive advantage
Articulation of
Response
Submission has no major errors related
to citations, grammar, spelling, syntax, or
organization
Needs Improvement (70%)
Describes the structure and organization
of the company, but with gaps in
accuracy or detail
Analyzes the customer profile of the
organization to determine competitive
issues or threats that could be related to
IT, but with gaps in logic, detail, or
accuracy
Analyzes the values of the organization
related to IT, but not based on available
information and inferences from
company actions or lacks detail
Describes the existing policies and
standards within the organization to
establish a baseline for appropriate IT
practice, but lacks detail
Articulates a vision for the role and
responsibilities of the IT department
within the organization, but with gaps in
clarity or reasonable representation of
what would be ideal
Crafts a mission statement, but does not
clearly represent the IT vision or the
values of the organization or does not
clearly speak to the impact of IT on
business opportunity and competitive
advantage
Submission has errors related to
citations, grammar, spelling, syntax, or
organization that negatively impact
readability and articulation of main ideas
Not Evident (0%)
Does not describe the structure and
organization of the company
Value
15
Does not analyze the customer profile of
the organization to determine
competitive issues or threats that could
be related to IT
15
Does not analyze the values of the
organization related to IT
15
Does not describe the existing policies
and standards within the organization to
establish a baseline for appropriate IT
practice
Does not articulate a vision for the role
and responsibilities of the IT department
within the organization
15
Does not craft a mission statement, or
crafts a mission statement that does not
represent the IT vision or the values of
the organization nor speaks to the
impact of IT on business opportunity and
competitive advantage
Submission has significant and
distracting errors related to citations,
grammar, spelling, syntax, or
organization that negatively impact
readability and articulation of main ideas
Earned Total
15
15
10
100%
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907E21
RICHTER: INFORMATION TECHNOLOGY AT HUNGARY’S LARGEST
PHARMA
Jordan Mitchell, Gyorgy Drotos, Emma Incze and Gyorgy Vas wrote this case under the supervision of Professor Deborah Compeau
solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a
managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality.
Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. Reproduction of
this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to
reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of
Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail [email protected].uwo.ca.
Copyright © 2007, Ivey Management Services
Version: (A) 2008-11-28
INTRODUCTION
Throughout May 2007, Vince Szücs, director of information technology (IT) of Hungarian pharmaceutical,
Richter, was thinking about how he would present his department’s plans for 2008 to the company’s senior
executive team in June. Since assuming the position in 1993, Szücs had tackled a number of major IT
initiatives such as installing an SAP enterprise wide R/3 system and facilitating Richter’s expansion
throughout Eastern Europe.
For 2008, Szücs had two main considerations: Was the current IT structure appropriate to meet the
growing demands of the overall organization? To what extent should IT at affiliates be centrally
controlled? In preparing for his presentation to the company’s senior executive team, he wanted to ensure
that his plan addressed the overall question of how IT could best serve the rest of the company.
THE PHARMACEUTICAL INDUSTRY
Pharmaceuticals were one of the largest industries in the world. Globally, the market size equated to over
US$400 billion and was expected to grow five per cent year on year over the next 10 years due to the aging
population in North America, Europe and Japan. There were approximately 10 major global integrated
players that made up roughly one-third of the global market. The rest of the market consisted of thousands
of smaller companies. Most pharmaceuticals were involved in a whole range of activities with the key
focus being the “pipeline” – i.e., new drugs in the process of development. Major pharmaceuticals invested
approximately 15 per cent of their sales into research and development and pursued drug compounds that
had the potential to be a “blockbuster.” Developing a new drug took between eight to 12 years and usually
cost between $400 million to $1 billion per drug. It was estimated that only one in 10,000 ideas made it
from the initial concept stage to a salable drug.
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For the exclusive use of S. CAMACHO, 2019.
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9B07E021
Drug development was strictly regulated around the world, often with each country requiring its own
approval process. Pharmaceutical companies protected drugs from imitation by filing patents, which were
valid up to a maximum of 20 years. The pharmaceutical company could then market and produce the drug,
without competition, for the length of the patent. See Exhibit 1 for the drug development process.
After a drug was approved, the developing company (or companies) could sell it for the remaining time on
their patent. On average, companies usually had 10 years of full exclusivity during which they attempted to
recoup their development costs. About one-third of new drugs recovered their costs. As the patent was
nearing the end of completion, other pharmaceuticals decided whether or not they would produce the same
drug as a “generic” drug. It was customary that the price of the drug would fall by 20 per cent to 30 per
cent once the patent expired. In extreme cases, the original drug manufacturer lost 75 per cent of the sales
of the drug during the first year in which it became generic.
Pharmaceuticals that derived the majority of their revenues from selling generic drugs and generic active
pharmaceutical ingredients (APIs) were often called “generic drug companies.” Generic drug companies
sold either a packaged version of the drug under their own name or sold generic APIs to other
pharmaceuticals, who in turn packaged a generic version of the drug. All companies producing generic
drugs and generic APIs had to abide by strict national regulations and were required to show that efficacy,
safety and quality was the same as the original drug and/or API. The accompanying paperwork to the
authorities averaged two tonnes per drug. Pharmaceuticals engaged in the manufacturing of generics had to
weigh their desire to produce a particular drug against the resources that it could divert to attain regulatory
approval. Success factors of generic companies were seen to be low-cost production capabilities,
distribution networks and an ability to navigate through complex industry regulations. Once a company
was approved to market a generic drug or generic API, it had to submit applications every five years for
marketing reauthorization. Dr. György Thaler, development director at Richter, painted a picture of the
competitiveness of the generic and API industry:
The competition in generics is fierce. For a blockbuster drug whose patent is expiring,
there are usually over 10 companies releasing the same product in the same market on the
same day. The total supply may exceed actual demands by 300 per cent, and the
wholesaler decides whose product to buy. At 6 a.m., when the customs office opens, there
are 10 generic companies waiting with their trucks loaded with the generic drugs. The
minute that the expiry is up, it is an open market. And it truly is a matter of minutes.
HISTORY OF RICHTER
Richter’s history dated back to 1901 when Gedeon Richter started Sas (Hungarian for “eagle”) pharmacy
in Budapest, Hungary. Between the First World War and the Second World War, Richter became the
largest pharmaceutical factory in the Austro-Hungarian monarchy (leading up to the Second World War,
Richter set up 10 international subsidiaries and 40 representative offices). The company was known for its
innovation in the region due to its development of the original hormone drugs and its ability to produce a
wide range of compounds. From 1901 to the end of the war, Richter received 86 patents on original drugs.
After the war, Richter lost its international network in Western countries and the company was
nationalized. The company benefited from selling throughout the Eastern Bloc under the Council for
Mutual Economic Assistance among Socialist Countries (COMECON). By the 1960s, Richter was the preeminent supplier of pharmaceuticals throughout the Soviet Union. Edit Varga, who took the leadership role
of Richter in the 1950s, was credited for much of the growth due to her strong Soviet relations. Observers
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Hampshire University from Jan 2019 to May 2019.
For the exclusive use of S. CAMACHO, 2019.
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9B07E021
commented that the Soviet market was large, secure and had no pricing issues. Through the state-owned
pharmaceutical distributor Medimpex, Richter began selling outside of the Eastern Bloc in countries as
diverse as the United States, Germany, the United Kingdom, Japan and Mexico. Richter exported APIs to
foreign pharmaceutical companies who, in turn, used the APIs in the production of their own drugs.
Exporting APIs through Medimpex was seen to be positive for Richter as it ensured that quality standards
were on par with international levels. The company maintained research and development efforts toward
the creation of original drugs; results included the first oral contraceptive in 1966 and Cavinton, a cerebral
oxygenation enhancer for the central nervous system, in 1977.
At the beginning of the 1990s, Hungary, along with several of the Central and Eastern Europe (CEE)
countries, shifted to free market economies. During the next few years, the Hungarian government
embarked on an aggressive privatization plan. As one observer explained, “When the market opened up,
domestic companies had great troubles as they had no marketing knowledge, and all of a sudden, they were
facing international companies with tremendous resources and product quality.” In 1992, Erik Bogsch,
who had managed the Medimpex Mexico unit for six years and the Medimpex England unit for four years
took over as Richter’s CEO. At the time, Richter was mired in debt (debt was equal to one year of sales)
and had minimal technological and financial resources. Bogsch focused the company on its specialty and
most profitable lines such as gynecological and cardiovascular drugs. Richter and Hungary’s other major
pharmaceutical, Egis, split the former state distribution company, Medimpex. Richter assumed the Western
distribution offices of Medimpex, and Egis took over the offices throughout the CEE. Medimpex gave
Richter a presence in the United States and in 15 Western European countries and Japan. Richter had
previously set up its own network throughout the CEE. To get costs under control, Bogsch reduced the
management team by half and cut the 6,000-strong headcount by one quarter. The company also took
major steps to modernize production and invest in research and development. By 1993, Richter turned a
profit and in, November 1994, listed on the Budapest Stock Exchange. A year later, Richter shares were
also being traded on the SEAQ international share market in London and on the Luxembourg Stock
Exchange.
Growing revenues and profits from the mid-1990s to the mid-2000s permitted the company to expand its
partnerships, research and development and manufacturing capabilities. Richter established a strategic
partnership to sell APIs to U.S.-based Barr Laboratories, Inc., and the company increased its generic drug
sales through multiple partners in the ‘traditional’ 15 countries of the European Union. The company
constructed a modern experimental laboratory in 1998 and acquired state-owned enterprises in Eastern
Europe: Armedica in Romania in 1998, and GZF Polfa in Poland in 2002. As part of its expansion plans,
Richter also set up a greenfield manufacturing project in Russia, established a joint venture with Themis
Ltd. in India in 2004, and purchased a number of retail pharmacies in Romania to distribute its drugs
directly.
RICHTER AS OF 2007
Richter was Hungary’s largest pharmaceutical company and was considered to be one of the region’s most
prominent producers of generic drugs and generic APIs. It sold APIs and finished drugs to nearly 100
countries, either directly or through distributor partnerships. Richter’s senior executive team classified
Richter as a “regional multinational” with geographic strength in the CEE and CIS Commonwealth of
Independent States (CIS) countries. Observers credited Richter with having a strong brand name in CEE
and CIS countries. In the 15 EU countries and in the United States, the company sold its products through a
number of partnerships and long-term agreements. Seventy-nine per cent of sales were derived from the
This document is authorized for use only by SANDY CAMACHO in IT-550 Management of Information Technology- Optional- 19TW3 taught by SNHU INSTRUCTOR, Southern New
Hampshire University from Jan 2019 to May 2019.
For the exclusive use of S. CAMACHO, 2019.
Page 4
9B07E021
export market, the three largest being: Russia (27 per cent of overall sales); the United States (11 per cent);
and Poland (six per cent). See Exhibit 2 for the company’s financials and sales by region.
Products
Richter’s therapeutic specialty was in gynecological produc …
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