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This report has been licensed for exclusive use and distribution by Cognizant Technology Solutions.
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Executive Summary
In the last decade, the Life Sciences (LS) industry has undergone structural
changes. These have been due to:
Declining productivity and long drug approval cycles that have brought
unprecedented focus on efficient spending and Return on Investment (RoI)
With ever increasing sensors, wearables and data (both internal, external),
there are opportunities to capitalize by developing product, markets,
consumer insights in real-time and accelerate business objectives
The above have had a significant impact on the way IT (especially, Infrastructure
Services) is being adopted by the LS industry. Infrastructure Services adoption in
the LS industry has been characterized by value-chain fragmentation. Despite
being business critical, it has not got any strategic impetus. Different Lines of
Business (LoB) such as R&D, manufacturing, and sales have traditionally had
their own IT outsourcing siloes, resulting in varying maturities of technology
enablement across the value chain. Hence, what we have as a result, is an
array of infrastructure redundancies, technologies, and provisioning metrics.
While the above may be true for large organizations across industries, it is the
LS industry that has to start thinking of it as a business transformation challenge.
The structural changes in the LS industry are forcing industry leaders to apply
the evolutionary paradigm of BC2BE (Business Continuity-to-Business
Enablement) to all aspects of operations, even Infrastructure Services. Hence,
CIOs need to think increasingly of the business outcomes that will be driven by
their decisions, right from service-level management and provisioning, down to
the boxes of servers, storage, and devices. Hence, there appears to be a
conscious thought process to move from the traditional IT Service Management
(ITSM) towards Business Service Management (BSM).
The challenge to achieve business-IT alignment in infrastructure services is
immense. This requires CIOs to make the various components of the
infrastructure consumption lifecycle not only easy to procure and manage, but
also easy to evolve. In-depth analysis shows that such a mandate would have to
be driven by the following tenets:
Technology transformation
Service transformation
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Functions
Adoption status
Value-chain drivers of
Drug discovery/
research
Laboratory Information
Management Systems
(LIMS)
Technology verticals
NOT EXHAUSTIVE
Business-information
management
Data analytics
Market informatics
Bio-informatics
Research portals
Collaboration wikis
Lab automation and
devices
Clinical and
pre-clinical trials
Manufacturing
operations
Method development
and validation
Plant automation
Batch review and
deposition
Quality testing, analysis,
& documentation
Compliance analysis
and reporting
High
Master-data
management
Medium
Limited
Datacenters
Horizontals
The illustration shows that Infrastructure Services is not just a brick in the wall
when it comes to LS business imperatives not just something hidden behind
the boxes of storage, compute, and network. Given the challenges being
faced by the industry and the scale of the global operations, CIOs will
increasingly rely on Infrastructure Services as one of the key enablers of
business imperatives, whether it relates to business agility, cost, efficiency, or
productivity.
Challenges facing the life sciences industry
The LS industry has traditionally relied on driving growth through blockbuster
drugs and products. This has brought it in direct conflict with increased scrutiny
and the efficacy mandate that FDA has been driving. The patent cliff faced by
(or facing) many of the blockbuster drugs has further exacerbated the problem.
These challenges have put R&D and clinical segments of the LS business under
pressure. The following picture illustrates the roller-coaster ride that the new
drug approvals have gone through, in the last 15 years.
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EXHIBIT
40
38
35
29
21
23
26
29
31
30
24
51
47
43
46
49
51
39
36
37
30
27
20
50
24
22
18
25
27
21
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
This picture illustrates that while the drug approval numbers have fluctuated, the
R&D investments have steadily gone up. This has put significant pressure on
downstream operations to improve margins and generate cash flow for business
and R&D reinvestments. Though not highlighted as much, downstream effects of
this challenging situation have impacted other elements of the value chain, such
as manufacturing, supply chain, and sales & marketing. With margins under
pressure, outlook for blockbuster drugs diminished, and a nimble, competitive
landscape consisting of generics manufacturers eating up market share,
competition embracing the big data, advanced analytics journey, the LS industry
has its task cut out drive costs down (improve profitability) improve process
efficiencies (productivity) and conduct business led technology transformation
(improve effectiveness). Hence, it is not without reason that CIOs in the LS
industry have their tail up. There is growing consensus among LS industry leaders
that technology has a key role to play in improving both, profits productivity and
effectiveness. And that is where the role of the LS CIO becomes critical.
CIO as the bridge between business and IT?
The growing focus on profits productivity and business relevance (effectiveness)
has driven the LS CxOs to persuade and enable all their business and operations
leaders to drive these mandates. Globally, Business-IT alignment as a concept
has been debated and explored for a while now. However, LS is only one of the
few industries (including banking) where CIOs need to think of business-IT
alignment as a Key Result Area (KRA). CIOs in the LS industry need to
contemplate driving this business-IT alignment by taking the profitabilityproductivity-effectiveness challenge head on. The following image illustrates the
paradigm that should be explored by LS CIOs.
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Profits
EXHIBIT
Drive outcomes
The profitability-productivity
industry
Costs
Variability in
provisioning
Unpredictability of
demand
Regulate
Enable
Automation
Integrated service levels
Domain centricity
Ease of consumption
Efficient and
committed business
service levels
Launch of products
and services by
reduced time-tomarket
Enable value-chain
mandates
Productivity
The above situation brings to fore how IT service levels can be meaningless if they
do not align directly with the business service levels. Since there is no direct linkage
and dependencies between the two, such situations are bound to recur. Hence,
any thought process on business-IT alignment has to consider services integration
in a manner that directly links it to quantifiable business outputs, such as customer
requests handled, safety data reports submitted to FDA, and drug orders
processed. Hence, it is not without reason that process innovations in Infrastructure
Services are increasingly leaning towards integrated Infrastructure Services
Business Profcess Services offerings. This integrated view can ensure that CIOs
have a handle on the entire spectrum of services levels, both IT and business.
However, CIOs thinking of business-IT integration as a KRA need to get the
following basic process improvements in place:
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Technology transformation
Service transformation
4
Cli
D
R&
Simplification
Automation
Manufac
turi
ng
in
y cha
ppl
Su
through transformation
Services transformation
nic
a
l
Technology transformation
EXHIBIT
Predictability
Sale
s & marketing
Following sections of this report go through the intricacies of how CIOs can
enable this value creation.
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EXHIBIT
Technology transformation
Business layer
Cloud-based
infrastructure services
Software-defined
infrastructure
Totally software-controlled
Linked to business applications
Standardized and simplified
Converged
infrastructure
Systems layer
Converged infrastructure
If CIOs have to enable business-IT integration in Infrastructure Services, they need
to orchestrate various Infrastructure Services services through an integrated view
of storage, servers and compute; all of which could be virtualized, automated, or
both. Converged infrastructure is based on integrated provisioning and
management of the entire infrastructure stack. The convergence of the storage,
compute, and network stacks help reduce redundancies in resource utilization
and people. The mandate has to be driven by intelligent provisioning and
resource allocation based on workload pattern and organizational policies.
The job for CIOs is pretty much cut out if they have to enable integration. They
have to persuade users to make a move towards self-service catalogs, which in
turn are mapped to application & business requirements and SLAs. This is the
level of traceability that CIOs need to achieve for business-IT alignment. CIOs
understand that this can be achieved only by promoting hyper automation and
proactive management across performance, capacity, and availability. However,
users of these services cannot be practically expected to understand and
appreciate these intricacies. This is where the role of software-defined
infrastructure comes into play.
Software-Defined (SD) infrastructure
Software-defined infrastructure is revolutionizing the Infrastructure Services
landscape. This trend builds on existing technology and tools. However, it
encompasses the entire IT consumption food chain, and goes beyond just
technical implementations such as virtualization. The SD concept is based on
introducing user-focused logic in managing infrastructure, through the use of
software.
In the LS industry, where the business service levels are driven by various valuechain elements, skills and software required for infrastructure management
services will have to invariably link back to these service levels. This is going to be
especially true in resource-intensive analytics that clinical trials and the helpdesk
services surrounding each stage of the trial require. It is not without reason that
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R&D and clinical services are going to be key areas to significantly define how
infrastructure services will evolve towards verticalization in the LS industry. One
of the aspects of this move towards software-defined datacenters will be the open
standards and APIs that will allow niche and innovative players in the key areas
of LS value chain to come and code for efficiencies in managing the
Infrastructure Services resources. As components become standardized and
simplified, Infrastructure Services management will evolve towards total
virtualization and software-driven control.
This will allow CIOs within the LS value chain, whether R&D, manufacturing, or
supply chain, to keep a tab on the health of their entire applications-cuminfrastructure portfolio through a single dashboard. Such an evolution would
create robust audit trails and visibility, linking all technology components directly
to the business components they are supporting.
EXHIBIT
Transitioning to a future of
software-defined infrastructure
Significantly virtual yet labor-intensive
Cloud is an
IT opportunity
Cloud is a strategic
differentiator
The key aspects that CIOs need to ensure are creating a demand map consisting
of the workloads (based on the requirements CIOs see emanating out from
various lines of operations/business
such as manufacturing operations, clinical
44%
56%
trials, CRM. This is required in order to create a workload-based cloud adoption
strategy. A public, private, or hybrid cloud strategy will then entail working
through these workloads and identifying the right cloud partner for each.
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While flexibility, scalability, and agility are the primary asks in any cloud
strategy, data privacy and security will be hygiene mandates that CIOs need to
drive in order to ensure a technology transformation that is both helpful and
secure. However, any successful technology transformation initiative will have to
be managed through the right tweaks in the services model.
Service portfolio
expansion
Service
integration &
management
LS value-chaindriven
Infrastructure
Services
of services, rather than paying for multiple resources (even though cheaper
on an hourly basis). The growing demand for integrated L1.5 utility model is
a case in point, where the same service providers are upskilling L1 resources
to take up a large portion of L2 requests also. This not only reduces
redundancies but also makes incident management more efficient from the
perspective of better SLAs and/or response times
Application-infrastructure integration: The disconnect between application
and infrastructure management has been one of the key hurdles in driving
business-IT integration. CIOs should actively look at service providers who
can host and manage the entire stack right from applications down to
infrastructure services, in a managed services model. In the LS industry, there
is a lot to be achieved when it comes to hosted application management, as
there is still a lot of work happening in the T&M model
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Limited
standardization across
tools and processes
Tackling challenges in
Comparing
performance across
providers
Divergence from
business objectives
environments
Challenges in
multi-sourcing
Assigning
well-defined
accountability
Significant
management
overheads
High cost of
governance
Poor business
satisfaction
Subscaled best
practices
Value leakage
In such a scenario, LS buyers are unable to extract maximum value from their
multi-vendor relationships due to lack of integration and limited visibility and
accountability in their portfolio. Large pharma, especially those with operations
across U.S., Europe, and APAC, face this big challenge. Service Integration And
Management (SIAM) provides an effective option to CIOs to granularly manage
the overall sourcing activity and strategy.
EXHIBIT
complexity
Management complexity
Preferred / best-of-breed
providers
Comprehensive
SIAM
implementation
Consolidate providers,
fragmented SIAM
Sole-source
Fragmented SIAM
Ad-hoc VMO
Past
Tipping point
Future
Present
Service demand
Management complexity
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Cost
Compliance
Documentation
Provider management
Service demand
Volumes
Technology
Agility
User experience
11
Pharmacovigilance analytics
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NOT EXHAUSTIVE
EXHIBIT
Drug discovery/
research
Clinical and
pre-clinical trials
Manufacturing
operations
Infrastructure Services as a
Cloud-based simulation
models
Electronic data-capture
systems
Social-media presence
and engagement
Model-outcomes testing
Pharmacovigilancedriven process
monitoring
Facilitate regulatory
compliance
Mobile clinical-trial
management
Unified planning, setup,
& execution of clinical
trials
Usage-based
Mobile apps
information management
Information
solutions
dissemination
Centralized batch
Behavioral marketing
monitoring
Context-based services
Finally, the key imperatives that CIOs need to drive in order to achieve the
above would be the following:
Draw a corporate roadmap for creating direct linkage and put in place an
audit mechanism to link Infrastructure Services service levels with business
service levels, and eventually, business service levels with growth parameters
Evaluate and identify strategic partner(s) who can not only collaborate in the
services and technology transformation but also understand the business
domain well enough to guide in the IT led business model and business-IT
integration journey
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