Executive Summary

Richter’s CIO is facing two major decisions – is the current IT structure appropriate to meet the growing demands of the overall organization and to what extent should IT at affiliates be centrally controlled.
This report will outline the current situation, provide alternative solutions, as well make a recommendation on the best alternative and implementation plan.

It is recommended that Richter’s outsource the more routine IT functions. The current governance model should be changed for decisions that relate to IT architecture, infrastructure and business application needs while the model for IT principles and investment should remain as is.

Current Situation

Each year the number of employees increases and …show more content…

Some affiliates are not happy with the current structure. Support demands will continue to increase and the current structure may not be able to continue to support these needs.
IT Governance / Centralization Alternatives

2. Maintain a decentralized IT structure for affiliates

Advantages – This strategy allows each affiliate the flexibility to quickly respond to local needs. They can customize IT needs to suit their operations.
Disadvantages – The Russian operations are also exerting pressure on the IT department as they feel they are not receiving enough support in the areas of IT governance and systems. If a decentralized strategy is maintained, they will likely not be happy with this. A decentralized strategy will also increase demands on the already pressured IT department as this plan will require support and development across a wider range of systems and programs. 3. Centralize IT for affiliates

Advantages - Centralizing IT might allow for greater integration, efficiency and consistency of cross company systems and processes while also increasing security. It might also lower total costs of current systems, allowing the firm to invest more in new and innovative systems. Another benefit is that it could lower training and support cost as all users would be on the same systems, following the same procedures and processes. Currently the international IT staff involved in SAP report directly to the