Case study: SWOT and Porter's five forces analysis

Novartis: A Case Study on HRIS Implementation

Strengths:

The greatest strengths for Novartis rest in the companies expansive availability of resources. As the company profile and case discussion demonstrate, Novartis is among the largest pharmaceutical firms in the world. As such, it has no shortage of financial capital available to execute its HR and it visions. The case discussion notes that the company has been given full economic support and latitude by its board of global directors to implement such visions. Accordingly, the case reports that "the eight-member ECN (Executive Committee Novartis) had approved the CHF 78 million (Swiss Francs) capital appropriation request for the global HRIS project in September 2002, and the effort to create a computer-based system had begun." (p. 1)

Weaknesses:

Ironically, the same expansiveness that constitutes its strengths also presents Novartis with a major weakness to be overcome. Its enormity stretches across 140 countries of operation and historically, the HR policies of each branch had existed independent of one another and without central control. This means that the ambition cited in the case discussion to implement a company-wide and global HRIS system will be met with a tremendous logistical challenge. The absence of any streamlined systems or policy consistencies across countries are the two most significant weaknesses in the Novartis structure as they relate to the intended goals of HRIS implementation. The case sample notes that there is a necessity for Novartis to use its HR it systems to recognize managerial talent and advance personnel from within the company to fill leadership vacancies. The case reports that "closing this gap represented one of the central HR challenges facing the HR leadership team. Unfortunately, the existing it systems within Novartis were not up to these tasks. Given the merger of Ciba-Geigy and Sandoz and the fact that the company operated in 140 different countries, there had been little centralization or standardization of HR data." (p. 5)

Opportunities:

This denotes though that advances in it technologies in the years since the merger should create ample opportunity to redress the above-noted weaknesses. Particularly, it is increasingly possible to implement streamlined it systems the convey HR data in real-time without the limitations of time and space. Such it systems also carry the capacity to create standardized terminology, metrices and units of measurement across expansive companies such as Novartis. The expectation is that HRIS would improve efficiency by moving personnel more intuitively along proper career trajectories and by responding to HR challenges with greater expediency. Likewise, the administrative time that this would free up for HR personnel would be expected to improve the capacity of such personnel to function as real partners in business strategy and agents of change.

Threats:

The single greatest threat to the success of HRIS implementation is internal resistance. Evidence suggests that even in those contexts where such systems have been implemented, adoption has been difficult to impose upon both HR personnel and personnel on the whole. As is often the case, early implementation trials have show that personnel feel threatened by new technologies overhauls and will generally attempt to passively prevent the success of dramatic organizational change.

Porter's Five Forces:

Rivalry:

In spite of the threat of resistance, it is important for Novartis to remain aggressive in its pursuit of modernization. The improvements in efficiency are necessary in the face of a challenging. The pharmaceutical business is fiercely competitive. Greater efficiency means a wider availability of resources for research & development. Thus, Novartis selected SAP as its it provider, drawing on the firm amongst its rivals for the resume of successes already reported. Consideration of Swiss Post, Schlumberger Limited and Saudi Aramco denoted that SAP has been selected and performed well for other very large accounts.

Threat of Substitutes:

Still, the threat of substitutes remains high, and is directly correlated to the impending danger of overall implementation failure. As the project expands from one country to the next, it has been confronted with clear obstacles, particular in the form of national policy and culture differences. The case assessment tells that "it is important for the project team not to lose momentum when determining how each country, region, business unit, or function does things (the 'as is'). It is also important to recognize that, at some point, this process must end and a standardized, global process must be defined." (p. 8) Until that point, the threat that this contract may be deemed unsuccessful and alternate plans may be executed does exist.

Buyer Power:

Novartis is identified in the case assessment as having conducted roughly $20.9 billion in sales in 2002 through its two divisions of Novartis Pharmaceuticals and Novartis Consumer Health. As a world leader in research and the development of medical products, Novartis has an expansive and unrestrained buying power. This is further dictated by the generous budget granted to the project for HRIS implementation.