From ‘Doing Digital’ to ‘Becoming Digital’ | Deloitte US has been saved
By Greg Reh, vice chairman, US and Global Life Sciences leader, Deloitte LLP
Digital transformation might be the buzzword du jour, but for life sciences companies it can be a critical imperative to succeed in a changing business environment. It’s one of the key themes at tomorrow’s Financial Times Digital Health Summit in New York, and it’s something we’re frequently talking about with our life science clients. (If you happen to be attending tomorrow’s event, my colleague Chris Zant will be leading a panel discussion on how digital technology can help pharmaceutical companies improve how they engage with patients).
While many biopharma companies are experimenting with digital, most have yet to make consistent, sustained, and bold moves to take advantage of the new capabilities. We recently assessed the digital maturity of biopharma companies based on a survey conducted with the MIT Sloan Management Review. We found that about 25 percent of biopharma executives are in the early stages of their digital journey and 55 percent are developing their digital capabilities. Only 20 percent of respondents say their companies are digitally mature. This indicates that the industry has a long way to go from simply doing digital to being digital.
Bringing digital talent from the outside in
Nearly 80 percent of biopharma executives from global organizations say new types of leaders are required to succeed in the digital age. Moreover, just 20 percent of these executives thought their companies were doing a good job of developing leaders who possess the skills needed to lead their organization into the digital age.
It’s no surprise then that some digitally maturing biopharma companies are looking outside of their industry—often to the retail and even fashion industries—for consumer-focused digital expertise. This strategy could bring some fresh perspective to an industry that tends to be conservative and risk-averse. Here are some recent examples:
- GlaxoSmithKline created its chief digital and technology officer position about a year ago and tapped the chief information officer from a national retailer to fill that new role.1 She is focusing on disruption and creating value through digitizing pharma end to end.
- Novartis’ first chief digital officer (CDO) was previously the CDO at one of the United Kingdom’s largest online retailers, and also held senior positions at Amazon.com. He now reports to Novartis’ CEO and is overseeing the biopharma manufacturer’s company-wide digital strategy. 2
- The CDO from another biopharma firm is leveraging his experience in the fashion industry to help redirect his company’s approach to patient engagement. He structured his team to mirror a magazine outlet, hiring editors, librarians, and copywriters to run a digital campaign.
What else are digitally mature companies doing differently?
Finding the right CDO to lead a digital transformation is important, but leadership alone likely won’t be enough to drive meaningful change. Change should be driven at all levels of the company. While 77 percent of executives from digitally maturing biopharma companies say leadership is driving change within the organization, nearly all of them (92 percent) said managers are also responsible for driving change. And nearly half of these executives said the employees are also facilitating change. Among companies in the early stages of a digital transformation, just 13 percent of executives said employees were involved in facilitating change.
Other lessons we’ve learned from digitally mature companies include the need to take a measured approach to digital and to foster collaboration. Digitally mature companies are likely to encourage feedback and share results from failed experiments in ways that facilitate learning across the organization. They are also increasing and encouraging collaboration internally and across functions, as well as collaborating externally with business partners and customers.
A framework to define your digital North Star
The North Star Metric is a term coined in the Silicon Valley that typically refers to the strategic direction of a company. A digital North Star could help guide biopharmaceutical companies to become more digitally focused. Digital transformation can help companies gain business advantages by applying innovation, design, process, and digital technology to existing and new business models. Based on our research and experiences, we have identified three categories that can help guide this digital transformation:
- Execute efficiently: Biopharma companies should consider how digital could help streamline and/or automate predictable processes and approaches. Digital technology could help streamline marketing approaches or simplify the processes involved in recruiting and training new employees. For example, one global biopharma company is experimenting with virtual reality in its manufacturing operations. By creating virtual training programs that mimic aseptic production environments, managers can cut training time in half and speed up the path to proficiency. Another biopharma company determined that up to 60 percent of its localized asset-creation activities were duplicative. Establishing a digital global marketing system helped that company reduce its marketing base costs by 20 percent.
- Engage effectively: Digital platforms can make it easier for biopharma companies to connect with patients, physicians, employees, and other stakeholders. Such strategies can create and deliver targeted interactions that address stakeholder needs, foster relationships, and improve engagement. For example, ConvergeHealth, by Deloitte’s Connected Patient Ecosystem, helps biopharma companies build partnerships with advocacy groups and providers to enhance the experience of patients who have complex, chronic, and terminal diseases.
- Innovate new products and services: Biopharma companies should determine if there are digital therapies, or digital-support systems, that can make a patient’s life easier, make a drug more tolerable or effective, or improve outcomes. There could be opportunities to improve the return on research-and-development costs by shortening drug discovery or otherwise lowering research costs.3 Using NORA, Science 37, a clinical research company, recruited patients for a rare-disease, phase-3 trial at its meta-site approximately 20–30 times faster than is possible through traditional recruitment methods. The team gathered medical records and screened patients from seven states in the country and covered a more diverse study population (30–40 percent were from minority groups, compared with the typical 2–10 percent).3
When it comes to digital transformation, many biopharmaceutical manufacturers seem to be a few steps behind entertainment, retail, telecommunications, and other consumer-centric industries. But pressure is building for them to become more customer-focused and digitally savvy, and if companies don’t act now, they may be left behind.
Endnotes
1 GlaxoSmithKline press release, July 25, 2017 (https://www.gsk.com/en-gb/media/press-releases/karenann-terrell-appointed-chief-digital-technology-officer-gsk/)
2 Novartis press release, August 24, 2017 (https://www.novartis.com/news/media-releases/novartis-appoints-bertrand-bodson-chief-digital-officer)
3 https://www2.deloitte.com/insights/us/en/industry/life-sciences/digital-research-and-development-clinical-strategy.html
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Greg Reh
DTTL Global Life Sciences Sector Leader
Greg serves as the Deloitte Global Life Sciences & Health Care Industry Leader. In this role, he advises life sciences and health care clients and practice leaders within Deloitte’s global network; and is responsible for the overall industry group that conducts research and provides consulting, advisory, tax and audit services to clients in the industry. The global life sciences and health care industry group is comprised of over 20,000 colleagues in more than 90 countries that work with pharmaceutical, biotech, medtech, payer, provider and government clients. Greg also leads Deloitte’s relationship with one the world’s largest health care companies, which entails enabling and coordinating client teams around the world. Prior to his current roles, he served as the US life sciences leader; and as the global life sciences leader. Greg’s experience over the last 27 years includes working with multinational pharmaceutical, biotechnology, and chemical manufacturing organizations where he led consulting engagements in support of regulatory, clinical, commercial and manufacturing operations. His engagements focused on technology strategy and solution development; business-technology enabled transformation and the management of change. Prior to his consulting career Greg held positions at a government research lab, where he led teams in the design and development of life support devices; and was a lecturer at the University of Pennsylvania. Greg holds an MS from the University of Pennsylvania, and a BSME from Drexel University.
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