Information technology at hungary's largest pharma

1. RICHTER: INFORMATION TECHNOLOGY AT
HUNGARY’S LARGEST PHARMA

2. HISTORY
 Started in 1901 by Gedeon Richter by the name Sas.
 Company known for its innovation.
 From 1901 to the end of war, 86 patents were done.
 By the 1960s, Richter was the prominent supplier throughout the Soviet Union.

3.  First oral contraceptive in 1966.
 Cavinton, a cerebral oxygenation enhancer for the CNS in 1977.
 In the early 1990s, it faced tough competition.
 Eric Bogsch focused on the company’s specialty and brought many reforms.

4. RICHTER IN 2007
 Hungary’s largest pharmaceutical company.
 It sold drugs to nearly 100 countries.
 Three major categories of products:
Generic Drugs
Company Developed Compounds
Licensed-in products
 Two domestic production facilities, at Budapest and Dorog.
 Active manufacturing capabilities in 4 countries.

5. ORGANIZATIONAL STRUCTURE
 Functional Structure
 Each head responsible for its function
 Given Importance to IT as Functional Department

6. HISTORY OF IT AT RICHTER
 No Integration among different functional domain
 Improper IT infrastructure
 No centralization
 No proper goal measurement in system.

7. SAP-FIRST WAVE
 Implementation Module:
1. Finance and accounting-Financial data becomes more reliable.
2. Asset Management
3. Controlling-More integration among functional department
4. Sales and Distribution module

8. SAP-SECOND WAVE
Reasons:
 Y2k problem
 Expansion of Web
 Internationalization
New Modules:
 Material Management
 Production Planning
 Cross functional team structure to integrate system.
Problems:
 Record tracking
 Different bussiness process in SAP module

9. MAJOR IT INITIATIVES FROM 2000-06
IT Department installed different software applications:
 Document Management System
 SAP Business information Warehouse
 Additional SAP Modules in Hungary
 Rollout of SAP in Romania and Poland

10. DOCUMENTUM: DOCUMENT MANAGEMENT
SYSTEM
 Purpose: Managing paper requirements in seeking regulatory approval on drugs. Main
objective was to allow researchers and regulatory lawyers to find millions of documents
through different search functions
 Run off an SQL database
 Customized by Richter’s IT Staff and external consultants

11. CHALLENGES
 Getting all the old data into the new database without even a single record being missed
out
 To regulate the level of customisation.

12. SAP BUSINESS WAREHOUSE (BW)
 Required to ease the consolidation of Richter’s various legal entities and to give Richter a
wider planning capability
 Went live in 2005.
 Replaced a 100 MB excel spreadsheet containing financial information.
 Helped in reducing the time required to consolidate all the financial data to less than a
day.
 BW’s close integration with other SAP basic financial modules gave it a competitive edge
over other business intelligence products.

13. SAP EXPANSION
 2002: SAP financial modules (FI, CO, AM) launched at Romanian affiliate (Armedica)
 2003: A dedicated team of 12 SAP specialists added new modules QM, APO, HR to
Hungarian operations.
 2005: Dedicated servers for Romanian operations were moved to Romania because of
inconsistent network connectivity.
 SAP expanded into Polish affiliate.

14. SAP EXPANSION TO POLAND
 Richter’s IT team setup 10 servers for 4 SAP Modules (FI, CO, AM and SD)
 Servers later shifted to Poland upon completion
Challenges:
 Language Barrier between Poland and Hungary caused inconsistency.

15. Snapshot of IT Governance as of 2007
IT Governance
IT Infrastructure
Technology
Network
Hardware
Software &
Procurement
IT’s support of
business processes
Organization of IT
department at
Hungarian head
office

16.  IT 1- year plan, which was presented in June every year.
 Developed by: Szucs + other IT specialists.
 Focus: “How IT would support Richter’s business
processes by stipulating ongoing maintenance
projects, investments and changes to infrastructure
& staffing”.
 Major infrastructure decisions: Szucs
 Affiliate level: Plans were presented by affiliate’s CEO during
June of each year.
 For larger projects
 Steering Committee = Head of each dept + Szucs + IT Specialist
+ External consultant

17. INFRASTRUCTURE
 Entire company connected via VPN (Virtual Private Network).
 Formed major policies to reduce misuse of Internet.
 Total 130 servers
 110: Located at company’s HQ in Budapest
 20: Affiliates
 120 servers (Windows) + 10 servers (Unix)
 Over 6000 PCs
 Warehousing trucks with bar code technology.
 No mainframe

18. BUSINESS PROCESS SUPPORT
 Senior management decides the implementation of SAP modules for major projects.
 Several weighted factors were considered:
 Cost
 Projected savings
 Improvement to processes

19. IT ORGANIZATION

20. QUESTION 1
 Expansion of infrastructure, servers and database.
 Problem of increased sales volume.
 Outsourced the help desk.
 Outsourcing the new technology ???

21. QUESTION 2
 Centralization of IT in Hungary
 IT infrastructure in Romania
 Cost and Benefits of IT infrastructure
 Failure and Risk Management
 Expansion of Company with Centralization???

22. Thank you