UPDATED 11:35 EDT / MAY 24 2013

Big Pharma Transforming IT to Support Strategic Business Shift to Service-Centric Model

Convergence (Cité de l'architecture et du patrimoine) by dalberaToday most big organization are in a transition, trying to find their way in a new business world that demands agility and harnessing new technologies to seize the business opportunities that will spell prosperity or just survival in the reality of the 21st Century. Big pharma, however is caught in a double transformation, KPMG Managing Director Ross Rexer & Eli Lilly Director of Service Integration TiJuan Limpkin told Wikibon Cofounder/Chief Analyst David Vellante in the Cube from the ServiceNow Knowledge13 conference. Just what that means, and how far along Eli Lilly is in this transition, was demonstrated by the vocabulary they used. While many IT shops are struggling with redefining their offerings and still talk about “infrastructure”, “servers”, “applications”, “solutions”, and “end users”, Limpkin and Rexer talked about “services” and “customers”.

The huge challenge confronting big pharma, Rexer said, is that the big blockbuster drugs that have provided the foundation of their businesses for 50 years are coming off patent. That means new competition in the form of cheap generics, and a transition to a new business reality. It means not just finding new traditional drugs faster but developing solutions that deliver better patient outcomes in novel ways. Those that don’t make that transition right now probably won’t survive.

Traditional big pharma was a huge drug R&D operation where everything was in-house, and that house contained many rooms with doors shut and minimal contact with other parts of the organization. Things moved slowly through development and trial to eventual licensing of the drugs that succeeded. A company like Eli Lilly would have large numbers of research projects in different rooms and various stages at any time. From an IT standpoint this was all supported by a hodge podge of systems run by different IT groups that often had no contact with each other. Just transferring a successful research project to a group to handle regulatory approval was a massive event. The result was huge waste and inefficiency as research groups constantly duplicated each others efforts, and no one had visibility into the organization.

Today the new reality is that big pharma must become agile. The new business model relies heavily on small outside service providers for everything from data analysis of past research results to weed out unsuccessful drug candidates before a research project starts  to all stages of drug development and management of the regulatory process. On the IT side all those incompatible old systems are being replaced by standardized services, some internal and some from the cloud, that run across the company and are based on a common platform. All those IT groups have been melded into a single organization that is focused on providing those services — not servers, networks, and storage — with maximum efficiency.

Standardization, says Limpkin, is the core of the new IT in several ways. First it allows IT to optimize its services, do more with less, across the organization. Second, it supports the new agile business environment by eliminating all the technical barriers to collaboration across the enterprise. Instead of working in isolated pockets, researchers can work directly with the regulatory process and financial people to develop drugs that have the greatest chance of success. Third, by simplifying the IT environment it allows IT to bring up & take down standardized services quickly at need. And that agility and structural simplicity makes it possible to support close collaboration with small subcontractors that could not support the complex infrastructure and procedures of the old Eli Lilly.

It also allows IT to focus on business services that enable the transformation of Eli Lilly’s business rather than spending 80-to-90 percent of its resources on keeping the lights on. And perhaps most important, it supports “single pane of glass” IT management and close collaboration with the large numbers of small research and other business partners that Eli Lilly relies on to fuel its new business model without overwhelming them in complex big pharma IT protocols and procedures. These barriers to effective collaboration are no longer part of Eli Lilly’s infrastructure.

Real visibility into operations “is something IT did for the business” with ERP, CRM, and similar “single system of record” solutions for various major parts of the business. It never did it for itself, says Limpkin. For IT that “single system of record” is the single service platform on which all the new business services are built, Rexer says. That platform allows the CIO to see data across multiple domains — operations, service levels, financial — across the entire enterprise as a single unified picture with standard analytics that provide the important business measures of how the IT organization and services are performing.

That is where ServiceNow enters the picture. Building everything on the one platform allows the CIO’s office to manage those services across the entire global organization for maximum effectiveness for the first time.

This kind of transformation is not a trivial exercise,warns Rexer. KPMG has a set of procedures for maximum transformational impact in minimal time, based on its 12 years of IT management performance, but still this kind of total redesign of the infrastructure and the organization takes time.

And as is always the case, the technology is the easy part. The organizational change I much more difficult. Success demands vision, commitment, total support from senior management, and buy-in from as many of the senior managers and rank-and-file as possible in both IT and the business as possible. “To truly change how I5 functions, runs as a business, do all these great things, you have to have the vision & understand that it is a series of building blocks that will get you value along the way,” Rexer said. “You may be focused on tactical changes along the way, but senior management must be willing to invest now in expectation of reward down the road. This is no quick product slam.”


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