Johnson & Johnson: Building an Infrastructure to Support Global Operations Analysis

Intellectual Property: Johnson & Johnson have the rights to many products including: JOHNSON’S® BEBE® PENATEN® PRIM’AGE® JOHNSON’S® BEDTIME™ JOHNSON’S® SOOTHING NATURALS™ DESITIN® NATUSAN® NEUTROGENA® SHOWER TO SHOWER®PIZ BUIN® AVEENO® LUBRIDERM®AMBI® SKINCARE VENDOME® CLEAN & CLEAR® PURPOSE® ROC® ROGAINE® BAND-AID® Brand Adhesive Bandages BENGAY® CALADRYL® PURELL® NEOSPORIN® CORTAID® SAVLON® COMPEED® TUCKS® DAKTARIN® LISTERINE® EFFERDENT® LISTERINE® WHITENING REMBRANDT® REACH® STAYFREE® MONISTAT® CAREFREE® e.p.t.® K-Y® O.B.® TYLENOL® SUDAFED® ROLAIDS® DOLORMIN® MOTRIN® MOTILIUM® MYLANTA® ZYRTEC® and ZYRTEC-D®12-HOUR® BENADRYL® IMODIUM® PEPCID® NICORETTE® SPLENDA® LACTAID® BENECOL® SUN CRYSTALS™ VIACTIV® VISINE® ACUVUE® CONCERTA® REMINYL® /RAZADYNE® TOPAMAX® HALDOL® RISPERDAL® INVEGA® RISPERDAL® CONSTA® DORIBAX™ PREZISTA™ INTELENCE™ RETIN-A MICRO® LEVAQUIN®ORTHOCLONE OKT-3® REMICADE® DURAGESIC® AXERT® ORTHOVISC® ULTRAM® ER Tylenol® with Codeine DITROPAN XL® TERAZOL®ORTHO TRI-CYCLEN®ELMIRON® ORTHO-CYCLEN® ORTHO TRI-CYCLEN® LO ORTHO EVRA® ORTHO-NOVUM®RhoGAM® DACOGEN® PROCRIT® DOXIL® VELCADE® LEUSTATIN® ACIPHEX®/PARIET® REGRANEX® NATRECOR® REOPRO®. They also have the patents and copyrights to a wide array of drugs and medical equipment.

In the recommendation portion of this case analysis, I will be suggesting that the best way for J&J to become more centralized yet not completely decentralized would be to rely on clusters of companies rather than on continuously spinning off and making more and more decentralized autonomous sub-companies. My "cluster" approach would bunch together companies that are similar in nature, working on similar goals, performing similar functions and have similar customer bases.

that upholding the highest standards within our company will result in the optimal value for our customers, employees, company, and stakeholders

Like many of its most profitable competitors, Alcan has grown quickly through insightful series of mergers, acquisitions and rapid product development and launch strategies throughout the major markets it sells into. The company has settled on a highly decentralized divisional business model that has to the point of the case study served them well. Their IT systems are showing signs of massive overduplication of expense, with a $500M level of spending on enterprise applications with SAP being the majority. There are further signs of massive waste in their highly diversified organizational structure. There are 400 systems in the company all dedicated to pricing, a massive duplication of costs, time and effort on the part of IT across the five divisions. There are also over 1,000 concurrent enterprise-class IT systems being used throughout the company at any point in time. Conservatively speaking the company is spending 20% of their total enterprise software spend on maintenance costs alone. This is forcing the CIO, Robert Ouelette, to re-evaluate both the organizational structure and IT systems supporting it. The goals of this analysis are to evaluate the advantages and disadvantages of the existing application or IT management structure. An analysis of the proposal by Robert Ouelette is also provided along with an assessment of it potential effectiveness in solving the challenges is facing today.

The company has decided to use different applications instead of using a single ERP system, which in turns would make their operations smoother. They have chosen to do this in order to be cost efficient and to focus on the specific need so each department uses a different application. That is connected by middleware that they don’t fully understand on how to operate, and are afraid that if they attempt to change it, it would crash all of their system. This in turn makes their operational capabilities not the strongest as it relates to their business model. On the other hand, some of the challenges that they face is that they will not be able to complete all orders or be able to implement improvements due to the increase volume of request that need to be processed during this time. Some of the IT related issues are those that are associated with the different applications that are being used. If an applications crashes then it would hold them up significantly in completing all orders and having them be delivered on time. Primarily the lack of staffing and the lack of IS improvements puts them at a disadvantage against their competitors who more than likely have significant more sophisticated IS infrastructure.

The Cisco philosophy regarding IT was simple: As long as someone was willing to pay for it, the IT department would work on whatever process/project specified. This is not only a waste of money, but it also creates problems when trying to work across teams. If two teams use two different processes to come

Ubisoft has different production, marketing, administrative and Internet teams in different countries. As each department uses different IT systems, managers have an initial problem of whether the IT centres should be centralised or decentralised. Centralisation has its advantages as it offers a rapid system response, it can save money through avoidance of duplicated activities and offers better security. Its disadvantages include if the central unit fails then the entire system will collapse and they might lose touch with the goals of major IT departments.

The mini-case starts with “IT is a pain in the neck,” which is a wrong notion that most of the business managers have in an organization. The history of IT-business relationships in most of the organizations shows that there is a huge gap between both sides which is getting better over a period of time. Today, managers know the fact that it is the people, technology and information that realizes the value of a company and everytime IT cannot be blamed for everything. The days have gone when IT was looked at as the sole responsibility for a company’s growth or downfall. IT processes along with the

Currently their information system (IS) is not fully centralized and this is causing a lot of problem in their expansion and cross-company

It might not be in the retailer’s best interest to perform such upgrade, as the new system will replace three of the existing legacy systems in terms of ordering and fulfillment. The IS department will perceive such upgrade as a radical move and is expected to show high resistance in response to it. Even though Zara has a decentralized decision making process, the retailer’s IS department exercises absolute autonomy on the IT infrastructure and design. The fact that “only one person had left the department” in the past 10 years further confirms that the retailer is suffering from cognitive and action inertia, and thus creating a huge barrier for such

The IT department could outsource some activities to reduce some of the workload. They could also centralize some IT decisions to better align IT with the business strategies and provide more support to the affiliates.

“To serve others: to provide customers a better life, shareholders a chance for a superior return, and employees respect and opportunity”

Changing the IT infrastructure however would prove problematic. Cisco had a policy of centralized IT yet the company had several legacy systems that had become siloed, and lack of integration to them was slowing down sourcing, supply chain integration to manufacturing and also drastically slowing down revenue recognition as exemplified with the many problems with general ledger and other core transaction processing applications. Making matters worse, Cisco has deliberately created system workarounds to circumvent their legacy systems that had been causing the slow-down in core manufacturing and accounting system.

Johnson & Johnson was founded in 1886 by a New England Druggist named Robert Wood Johnson. Robert had his ingenuity inspired when Joseph Lister revealed that infections in the operating room were caused by airborne germs. Robert joined with his brothers, James and Edward, and started producing dressings in New Brunswick, New Jersey in 1886. They started with only 14 employees and were situated in an old wallpaper factory. Johnson and Johnson became incorporated in 1887. (Johnson & Johnson)

The wrong IT can lock you into yesterday's practices, in effect 'fossilizing' your business. Many companies outsource in order to open up their IT to new levels of flexibility and adaptiveness. At Cap Gemini Ernst & Young, our global experience spanning all significant technologies and all business sectors empowers us to match your IT support to your ongoing business needs, however far and fast they might evolve.