Strategic risks due to non-competitive IT capabilities IT full potential framework based on IT Diagnostics and IT Strategy definition Swap to new core IT system driven by realigned IT governance Expected annual run-rate benefits are 2% of revenue IT capability transformation Problem: PharmaceutiCo's IT functionality, technology, and delivery model is experiencing gaps along several dimensions vis-à-vis best demonstrated practices for IT organizations. Major functionality gaps in terms of bar-coding/workflow, data warehouse, and customer connectivity Complex technology OldSystem, current technology platform, starting to experience signs of architectural fragility Lack of alignment of IT resources with business priorities Limited economic benefit from IT investments Sub-optimal resource management and use of outsourcing As a consequence, PharmaceutiCo's IT functionality is behind competitive benchmarks in areas critical to PharmaceutiCo's strategy. Although PharmaceutiCo is currently pursuing a number of IT initiatives, these are unlikely to close the relevant gaps within the context of the current IT delivery model. Bain team was asked to advise on the following issues: How effective is PharmaceutiCo's IT group? How can the IT group best support the business strategy of achieving competitive parity on operational productivity and best-in-class performance on customer relationship management and retention? How can PharmaceutiCo accelerate existing IT projects? Which core application package should be used? Should PharmaceutiCo outsource any part of its application development or maintenance? How should PharmaceutiCo's IT function be organized?