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Globalization of Background1926 Holding Company Multi-national, 140 countriesCollection of independent affiliates

Originally American Home Products -- Diversified (Drugs, Household Products, Foods, etc)Early 90s: Focus on Health Care Products

Global, research based pharmaceutical company$16 billion annual revenue53,000 employees100+ locations worldwide Established in 1926Formerly named American Home Products

2BackgroundEarly 90s: Business Model of diversified holding company no longer makes strategic senseDivesture of non-healthcare divisions

Meet your numbers and we leave you aloneMulti-national, but not GlobalGeographic vs. OperationalNeed for Business Globalization

Global SourcingNew ProductsR&DManagerial InformationCurrent OperationsAnd in 90s: Original Scientific Discovery (Global R&D)Global MarketingNEED to market & manufacture new products on global basis, not localGlobaly Supply ChainLocal thinking, lack of integration Challenge of global inventory!Streamline ReportingCommon complaint: managers wanted timely and accurate informationDevelopment, Manufacturing, Distribution, Sales & MarketingKnowledge not well shared between parent and affiliates4

TextGLOBALIZATION PROCESS

Business Globalization Enabler/Barrier: ITGlobal Information Technology Platform catalyst for Business Globalization GLOBALIZATION PROCESSTop management knew the potential of IT, but didnt know how to implement globalization using IT5

Agreeing on definition of Globalization using IT

Re-Organizing Structure and Hierarchy ? Standardizing Processes ? Integrating Product Sourcing Solutions ?Business Globalization Enabler/Barrier: IT

We will see further along that they used a combination of all 3 definitions. 6Fragmented IT

Used for support, not core

Different systems with different features across affiliates

No integration, no sharingCOST reduction with SHARING services

Standardize applications and link businesses

Integrate systems

Role of ITPre-GlobalizationBusiness Globalization Enabler/Barrier: ITBenefits with ITEnterpriseR&DSourcingMarketingBut first, lets look at the role IT plays as a globalization enabler and the benefits it brings to the different parts of the organization.7Focused on local market and local dataOptimizing and accelerating speed of modeling and simulation

More data to work withRole of ITPre-GlobalizationBusiness Globalization Enabler/Barrier: ITBenefits with ITEnterpriseR&DSourcingMarketingIT solutions support Planning and Manufacturing for local affiliate and supplierPlan and manage production and capital on large scale

Complex network of commercial and supply partners --> Optimization Role of ITPre-GlobalizationBusiness Globalization Enabler/Barrier: ITBenefits with ITEnterpriseR&DSourcingMarketingIT solutions provide local data

Planning campaigns at market/channel levelBusiness analytics based on large amount of data -->Better targeting, impact measurement, proactive responses

Role of ITPre-GlobalizationBusiness Globalization Enabler/Barrier: ITBenefits with ITEnterpriseR&DSourcingMarketingPlan for Globalization using IT as enablerGlobal IT UnitReorganize personnel to report to Henry Garcia

IM SpecialistsInformation Managers in charge of defining business concepts for IT

IT Global ArchitectureinfrastructureGlobal Warehouse & AS400 OutsourcingReporting, Cost

Global IT StrategyFormal system processes

Initial PLANPlanning Globalization using IT1997, central IT, 22 people, 3 million USD budgetBruce Fadem CIO, 1997They kinda tackled all three definitions of globalization using IT11Planning Globalization using ITRegulatory differencesNon-standardized dataPhysical and Cultural differencesResistance to help Control and job?Financial restrictionsBarriers and Challenges

Managers Workshop IT Globalization Team Relationship Managers Global Data Warehouse Globalization to Regionalization Resource Serving Center Visit to 40 countires RSC for Latin America Standard Processes Steering CommiteesImplementation of IT Globalization PlanExecutionERP (1997)SAP(1999)

Adapted message for mature businesses (e.g. Europe)Plan by 199813SuccessesData Modeling: 80% shared globallyImproved Reporting LinesStandarizing proceduresResultsIncreased budgetfor IT central (0.5 B USD & 1,800 ppl) Link between local centers (affiliates) and RSC (corporate)Servicing Latin America Region ERP, Global WarehousingFailuresResistance of mature businesses and processes Project time-line deffered every yearResultsRelationship Managers (Failure of IM position)AS400 ConsolidationChange in reporting lines for EUROPESelling globalization to EUROPEMore managerial Pressure, prioritization, compensation plans maybe ?15Insights

Globalization of Trusting ITGlobalization of PersonnelSynergiesIntegrationPlanningInternal adoption, barriersInfluenceIntegration vs. globalization consolidation and streamlining of global IT across difficult internal barriersCoordination of processes

16Thank YouQuestions ?