IT Governance

Pragmatic Globalization: Wyeth, a case study

A company that is a conglomeration of far flung affiliates may be international but it is not necessarily a global company.  In order to qualify as such, corporate level managers require the means to assess the operational and financial performance of the various divisions, the ability to effectively direct the general strategy of the company and the ability to empower the affiliates to coordinate in a meaningful way with each other and headquarters in order to glean economies of scale and maximum efficiency, not to mention to project a coherent and recognizable international brand.  This level of communication in the complex entity that was Wyeth, especially one that did not grow organically but rather through the purchase of existing businesses, does not happen by serendipity.  As was the case here, the process is likely to be arduous and encounter stiff resistance.  The challenge was compounded by a paucity of funding.

This funding constraint can be said to have in some ways facilitated an optimal deployment of the global IT project.  It made it essential for the team to “justify” the value of the implementations to the client services and entities.  By being made to rationalize the process in this way, it became apparent where there was value to standardizing processes worldwide and where the flexibility of the local affiliates to respond to their local environment trumped the need for homogeneity.  The resistance of the local affiliates and the need to make a convincing case for the changes also helped.  The transparency which the team was determined to demonstrate as well as their willingness to give a fair hearing to the concerns of the local affiliates and, if compelling, to amend the plan as needed, likely proved in the best interest of the corporation as well as the divisions.

In addition, the team proved very resourceful in making a case for the economic value to some of the sectors as, for example, the reporting and analysis that would be possible once some of the projects were in place.  This was the case for marketing once they were able to assess global pricing.  In so doing the IT team was not only able to obtain funding to advance the project but also to accelerate the gleaning of the financial reward of going global to the corporation.   This bottom line substantial and demonstrable benefit to Wyeth was ultimately the major benefit of the project.

Besides this achievement, global IT was meant to reign in the fractured and haphazard way IT was being purchased, implemented and maintained by establishing standards and performance accountability metrics.   It also established Regional Support Centers for operations and application/systems support.  The pooling of resources into these centers of excellence raised the service the client operations were able to access exponentially from the previous localized set up.  They also facilitated the implementation of ERP and the establishing of data warehouses for the standardization and rationalization of transactional processes which made it possible to optimize sourcing, forecasting, inventory levels, pricing, etc.

In the environment in which Wyeth operated, with the varied requirements, legal, cultural, etc. of its affiliates, a full standardization of processes across the corporation would have proven less than optimal.  A hybrid system within which the functions which required significant interactivity between the divisions were rationalized but where the divisions were allowed to retain autonomy over functions which allowed them the flexibility to respond to their local conditions proved ideal.