IT-Enabled Globalization at Wyeth

Companies with multiple divisions require strong business processes to successfully integrate their core functions.  To develop an effective architecture, organizations employ a business model that can be centralized, decentralized, or a hybrid of both.  In any of these, Information Technology (IT) is an important tool that can support and integrate the firm’s core functions.  These approaches, however, are fundamentally different from an IT-enabled system.  For instance, while IT is an important component in both systems for information sharing, efficiency and cost-effectiveness, in an IT-enabled system, the information technology role is strategically aligned with the organization’s mission and vision.  It is a critical element to the success of the organization.

During the late 1990s, Wyeth launched an IT-enabled globalization strategy in an effort to create a globally integrated pharmaceutical company.  To do so, Wyeth needed to “transform its business processes by changing underlying systems and practices.”[1] This was made possible by a shift in systems thinking.  It required transitioning IT from its previous low priority support function to an enabler of Wyeth’s globalization vision.  At Wyeth, a mere centralization of the processes and structure would not achieve globalization.  To truly become global, the firm needed a comprehensive strategy with information technology at the centerpiece.

Top management recognized the potential of IT as a key enabler of its globalization strategy, and empowered IT to provide the fundamental platform for Wyeth’s global business operations.  According to the resources, processes and values (RPV) theory, “organizations successfully tackle opportunities when they have the resources to succeed, when their processes facilitate what needs to get done, and when their values allow them to give adequate priority to that particular opportunity in the face of all other demands that compete for the company’s resources.”[2] To achieve this type of competitive advantage, Wyeth committed to correcting the handicaps of its existing system and enhancing the overall IT function. It developed “formal systems processes such as application development, maintenance as well as IT governance mechanisms, business to IT valuation strategies and prioritization approaches.”[3] The company also invested in the “creation of information management (IM) specialists from the business staff who are responsible for establishing and implementing business requirements and processes.”[4] This would shift focus from technical aspects of the system to IT management.  In addition, processes were standardized to facilitate interrelation, connectivity, and information sharing among the business units.  These enhancements to Wyeth’s resources andprocesses would help to fulfill the needs of a globally integrated firm.

Wyeth’s centralized globalization strategy allowed the company to streamline and enhance its core business functions to effectively deliver value-added products and services on a global scale.  Its success in the move towards globalization was a direct result of its IT-enabled strategy, which is fundamentally different from a centralization strategy.  In essence, information technology was a vital catalyst that transformed Wyeth into a global corporation.

[1] Mandviwalla, M., Palmer, J., The Globalization of Wyeth, (London, Ontario: Ivey Publishing, 2008), p. 6.

[2] Christensen, C.M., Anthony, S.D., Roth, E.A, Seeing What’s Next: Using the Theories of Innovation to Predict Industry Change (Boston: Harvard Business School Publishing, 2004), p. 6.

[3] Mandviwalla, M., Palmer, J., The Globalization of Wyeth, (London, Ontario: Ivey Publishing, 2008), p. 6.

[4] Ibid.