Bank on IT - Pharmaceutical Executive


Bank on IT

Pharmaceutical Executive

Jason Burke
Worldwide Director of Health and Life Sciences, SAS

You can't improve what you do not measure. IT organizations of all sizes are faced with cost containment and reduction on a daily basis. Yet many lack the discipline to actually measure those investments. They have to ask:

1: What IT assets are being under-utilized, and where is there an opportunity to consolidate?

2: Where do we see redundancy in capacity that, if reduced, could produce savings in both capital and operational charges?

3: How much of our IT budget is spent supporting tactical tasks with a limited lifespan (e.g., point-to-point integrations), as opposed to developing more efficient and robust enterprise capabilities (e.g., a formal data integration and management infrastructure)?

4: What projections can we make about future business and IT demands that would allow us to negotiate better terms with our IT providers?

5: What organizational processes are creating disproportionately high costs, and what process improvement and cost-arbitrage mechanisms could we use to improve them?

By institutionalizing IT asset and performance management into both periodic planning cycles and ongoing executive decision making, organizations can discover previously unknown opportunities for improvements that can deliver financial returns not just this year, but also in the years to come. In this way, IT cost reductions need not be seen as potentially harming the business—they become a tool to improve it.

Jon Winsett
Managing Partner, NPI Financial

Whether you know it or not, you and your IT department have been trained by your vendors to think rigidly when it comes to pricing. You pay for x amount of licenses or hardware units, and abide by a "rational" maintenance increase each year. However, IT pricing is not nearly that simple. In fact, it's pretty darn complex. Last year, SAP made 36 changes to their pricing. Do you know how that affected your SAP investment? Probably not. The reason why companies grossly overpay for IT is that pricing fluctuates so greatly and so often that it's impossible to keep up with it.

A remedy to this problem is to take back control of IT pricing—put it on your terms and make it flexible. The first thing you need to do is take a look at your existing vendor contracts, and explore ways you can inject more flexibility into these relationships. The key is knowing where to find the potential for flexibility. Every industry is suffering from a severe market contraction right now. This contraction has probably impacted how much server capacity you need, your network traffic, and the number or licenses being used within your organization. Rationalize and reduce the number of applications or licenses needed, and ask your vendors to consider transaction-based pricing models that allow you to pay only for what you're using. Or conduct a license audit to determine how many licenses for which maintenance is required. Lastly, challenge your vendor to reduce their purchase and maintenance fees. In this economy, the traditional rules of vendor pricing have gone out the window. It's time to make them work to your advantage.

Greg Jones
Chief Technology Officer, Oracle Health Sciences

The biopharmaceutical industry is undergoing a remarkable transformation. At the center of this much-needed evolution are new challenges specific to the increasing role of IT in enabling the new clinical development landscape.

Although technology is playing a significant role in supporting the biopharmaceutical industry's need for greater operational efficiency, the current environment also requires that organizations be strategic with their IT investments and manage the costs associated with them closely. Strategies that should be considered include:

1: Avoid expensive-to-build-and-maintain customizations by leveraging best practices supported by industry-specific, packaged software. Recent advances have made software more flexible, and this approach can help deliver new levels of efficiency and cost-effectiveness to organizations of all sizes.

2: Make reuse a priority. A service-oriented architecture (SOA) approach allows organizations to capitalize on reuse efficiencies at the component and code levels. Organizations can develop a service or code once and leverage that building block to continue to build out their IT environment—gaining speed and agility while reducing development costs and complexity.

3: Employ business process–driven integration. Organizations should drive their application integration strategy from a business process perspective and on a consistent, standards-based integration platform. This approach focuses prioritization around high value business processes, and has proven to help organizations significantly accelerate the return on their technology investments. Most importantly, it helps provide organizations with the agility they need to adapt rapidly to changing market conditions while still getting the support they need—and have come to expect—from their IT infrastructure.


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