EXECUTIVE SUMMARY

Royal DSM, a Netherland based company was originated from coal mining to a great

expansion into industrial chemicals, performance materials and life sciences products. DSM

highly balances itself in commerce and research on developing special products for food industry

and automotive industry. Lately began leveraging itself in producing chemicals and expanding

itself in plastics. DSM restructured its products through various acquisitions in a wide variety of

special chemicals and moved forward on a series of joint ventures with Asian manufactures.

In 1998, DSM acquired Gist Brocades, which was specialized in food ingredients and penicillin

followed by Roche Vitamins which are the biggest acquisition ever made by DSM.

Eventually, DSM possessed for a change to move away from the petrochemical business

and enter into the more stable and growing life sciences and performance material businesses.

DSM planned for a corporate strategy to alter its portfolio through divestitures and acquisitions

called VISION 2005: Focus and Value. In order to succeed in VISION 2005, executives

anticipated for a quick transition which would be complex yet wanted to accomplish. The main

biggest challenge for DSM was to upgrade the company Information and Communication

Technology to meet the new corporate strategy. In order to support this strategy DSM was also

needed to disentangle its acquired business from its parent company. DSM Information and

communications technology organization was having completely decentralized infrastructure and

no standardized technology across departments and businesses. A new acquisition like Gist-

Brocades by DSM was very much essential with ICT infrastructure to be successful. In further an

extensive discussion and recommendations are made on how DSM achieved its success and

further planned new strategies for future growth and enhancing its business profits.
Conclusive Analysis

DSM Dutch State Mines a coal and fertilizer producing company, slowly evolved to a

petrochemical industry and to performance materials and finally ended with life products and

biomaterials. DSM in a plan to move from petrochemical business to a more stable a growing

life science business developed a Plan to alter its portfolio by acquisitions and divestitures. A

term VISION2000: Focus and Value was named for the corporate strategy. On a transition the

most challenging part for DSM is to build an efficient Information and Communication

technology.

DSM Information and Communication Technology was completely decentralized, where

each business had its own systems and infrastructure on their site. There was no standardized

technology across business functionality, future acquisitions essentially required centralized and

consistent ICT infrastructure. In order to build ICT focused on three important concepts

1. Global standardization of ICT infrastructure and enterprise model

2. Service delivery oriented ICT organization

3. ICT organization

Global standardization involved standardization of ICT across organization with

respective to end user systems, programs and DSM business process. Eventually

standardization of the supply base on having reliable suppliers for hardware, software and

service. In this operation the ICT employees would themselves manage projects with

business unit professional and employees of both DSM and vendors. ICT standardization

would effectively facilitate easy integration for acquired new business process and

making them centrally available across the organization.

 Another important aspect in order to facilitate the divestiture and more accurate

information is to disentangling business systems of the petrochemical business from its

DSM parent, it was named as “carve-out”. The key reason for Carve out strategy was the

realization and standardization of business units on an SAP enterprise system.

Eventually, DSM’s acquisition on Roche vitamins doubles the size of DSM life

science business. DSM acquired this company with an intention of bringing in its

operational excellence and growth in bottom line. In order to develop DSM came out

with VITAL project which was the most complex project that DSM has ever

implemented. This project was performing both transforming and Integration

simultaneously during which everything from email, product labeling and packaging had

to be changed. At same time DSM created vital program to disentangle acquired business

from its parent company and integrate into DSM. This was done in a One jump transition

strategy where disintegration from the parent company and integrating it into the DSM

was done at same time.

DSM on standardizing DSM ICT standards developed an eVita program for

business applications. This program was to separate all DNP and Roche shared

applications either by cloning, installing replacement systems or even leasing through a

supplier and buyer relationship. On executing this program Global ICT service explained

their process in terms of cook books where they planned their activities day by day and

followed accordingly for what to do, what kind of problems and how to tackle.
 One of the key challenges faced by the CIO was the organizational differences, where he

quickly replaced employees who used to be against the transition plan. He categorized

employees into three groups. For the group who were against transition were immediately

replaced to move forward. To standardize infrastructure business groups have no idea of type of

network not type of desktop. This operation was very much successful and efficient where

business raised margins from 5% to 14% and business processes & data were completely

centralized.

On successful implementation of VISION2005 encouraged the company to set another

aggressive vision in building strengths, accelerating profits and innovative growth of company

portfolio. In the process of achieving this VISION2010 it identified key elements Market driven

growth and innovation, increased presence in emerging economies, operational excellence and

value creation. ICT was well enough to support new innovation and give support to new ventures

what he called as “the IT Greenhouse for innovation”. In a Greenhouse there is a IT System

backbone which supports for new starts, were they automatically learn new business processes.

ICT also built a virtual global ICT organization for supporting from different locations and

increase presence in Emerging markets.

Recommendations

DSM is a product developing and innovation company where it deals with lot of

customers, suppliers and partners to run their daily business. DSM on implementing Customer

Relationship Management software would be more beneficial in improving the efficiency. CRM

helps company to identify and qualify prospective partners & suppliers, at the same time

improve customer relationship using the Pull strategy.

Secondly, Improving the Information and communication Technology is one thing and

another important aspect to do is improve the effectiveness of each department thereby improves

productivity at work place by minimizing and eliminating waste. Introducing Six-sigma kind of

business strategy would definitely improve the efficiency of DSM’s business processes.