In 1995, Johnson&Johnson (J&J), a large pharmaceutical, health-care, and medical devices firm, wanted to offer its key customers a single point of contact. This was a real challenge for the decentralized company with 150 companies that generated operating revenues of ฿15 billion. Internal and external analysts attributed the company’s previous success to an autonomous management structure that held managers accountable for the financial results of their independent operating companies. The focus of these managers was on making their operating companies run as efficiently as possible, and not on making the customer’s life easier. J&J’s customer had to take it upon themselves to deal with multiple invoices, multiple sales calls, and multiple contracts with the operating companies.
Presenting a single face to the customer translated into massive IT changes. The IT support had been developed around the decentralized operating units. To change IT’s focus from the operating unit to the global customer entailed major technology changes. It also meant that everyone in the firm now needed to think about IT in terms of the corporate level as well as the operating level.
J&J realized that it needed to realign IT with its new corporate strategy. J&J began by training its IT staff about the need for integrated systems and common standards. The early groups who went for training found this thinking quite foreign to the operating company environment to which they had become accustomed. The later groups, though, needed little convincing about the value of standards, which became obvious with the implementation of a single global network and desktop configuration.
Before 1995, IT initiatives had been funded by the operating units. However, with the new one-face-to-the-customer strategy, J&J found it necessary to provide corporate funding for the costs of establishing an IT infrastructure to fit its strategy. This funding strategy stimulated standardization and helped management learn how to assess corporatewide IT investments.
J&J has continued to evolve its enterprise architecture. It did not dismantle the operating companies. Rather, its strategic objectives fostered the operating companies while leveraging cross-company IT capabilities where appropriate. J&J created committees to establish and monitor necessary technical standards. New formal organizational units called sectors were created to link operating companies with shared customers and markets. Some sectors sponsored information system development to support the exchange of data across their operating companies. Thus, over time, J&J has aligned its business strategy, IT infrastructure, and technology management practices.