Dec 3, 2008 - Smart Sourcing: Transforming Big Pharma’s IT Organizations
-- Written by Lydia Petronino
Hosted by the HBA Metro Chapter Women in Healthcare IT (WHIT) Committee.
Fairfield, NJ, Sept 18th, 2008 - Outsourcing, out-tasking, off-shoring . . . even Big Pharma has been forced to seek alternative service delivery models which promise greater flexibility and lower operating costs. How can jobs outsourced to consultants or exported abroad improve your chances of promotion or actually be good for your career? The three panelists, LaVerne Council, Corporate VP & CIO of J&J, Mary LeBlanc, VP and CIO of Novartis Pharmaceuticals Corp., and Vicki Phelan, Life Science Practice Leader of Equa Terra, spoke at Novartis (host of HBA Metro’s IT Affinity Group event) which was moderated by Tammy Warner, Novartis Consumer Health. Based on their experience and their informed judgment on what lies ahead in outsourcing IT, they believe employees make the difference as organizations prepare for the transformation.
Here are their key points.
Determine what services are ready to be outsourced. Offshore companies have evolved in the last 10 years, and now offer a wider variety of services. It is therefore critical to determine with the Executive team which services should be sent offshore, and what the productivity metrics and SLAs should be, before engaging third parties. The leaders must decide on the core competencies to retain, focusing on those centered around building business value, and be prepared to shore them up. The definition and ownership of ”business values” resides with the internal board; they cannot relinquish this role to outside parties just to show savings.
As vendors come in with their business models and process flow charts, always ask the question, “What does this do for us?” with an open mind. Just as it is critical to reflect on what you want the vendor to do, it is equally important to consider the solution that will best suit the culture and values of the company. What balance of employees and contractors is acceptable to the Executive Committee and the Board of Directors? Align the outsourcing strategy with the corporate strategy. Understand your own corporate culture and learn that of the vendor to avoid culture clashes. Be wary of service providers who suggest they are a “one-stop shop”. There is no such thing as holistic outsourcing; no one provider does everything well. However, vendors are investing in Business Process Optimization, and synergies between Infrastructure and Application and have a vast and capable array of services to offer. Consider all the options with an open mind, and work through cycles to see what makes sense for your company. It takes time, but many companies develop a blend of out-tasking, outsourcing, and off-shoring.
Outsourcing forces process harmonization and process harmonization drives costs down. Unique solutions to fit the specific needs of the home office that differ slightly from the R&D group will likely increase costs. It will always be a balancing act between cost and responsiveness. Prepare your IT organization by becoming more process and service delivery-driven. The company culture must stress the value of creating standard and repeatable processes.
Leadership should own the processes. Internal management should determine what those key processes are, ensuring that FDA regulatory and Sarbanes-Oxley controls are imbedded into them. These processes, referred to as an internal playbook, should be owned by internal employees. You would never ask a builder to build the house he or she thinks you should live in. You are the one who will have to live in that house; you are the one who must make your needs and preferences clear.
Management is expecting more than cost reductions through the outsourcing strategy. Financial metrics alone do not demonstrate a transformation and do not necessarily add value. The IT strategy should hold management accountable for productivity and performance. The vendors who have gone above and beyond the performance expected of them should be rewarded with more business. When vendors demonstrate consistently that they want your business and want to integrate into your organization seamlessly, they ought to be recognized.
Building captive offshore capabilities. “Captive” off-shoring refers to companies that set up their own wholly-owned facilities for software development, IT support, back-office data processing, call center operations, or business process outsourcing. One benefit is that the employees of the affiliate learn the company’s culture and values and become committed to the company. If the company is also selling products in the region it is investing in, these employees can be key to increasing sales.
Management is constantly on the lookout to identify and retain qualified people in every country where they operate, and to invest in them. Look for and be one of the core people who show that they can make a difference in helping your company address the peaks and valleys of the economy.
Some other ways to enhance your career brought up by the panelists:
- Learn how to be a real business partner, not the lowest common denominator. The key components are business acumen, technical expertise, and an unwavering desire to do more.
- Learning how to outsource or working on an outsourced project is a skill which you can learn, practice and in which you can excel. This experience builds professional credibility by demonstrating you have learned how to do it and how to make it work for your organization.
- Fundamentally, the world is smaller because of IT. Take advantage of opportunities, invest in yourself, and hold your head up high in every role you undertake.
Committee members for the HBA WHIT committee consist of Co-Chairs De Scachetti and Arnell Davis, as well as Michelene Assad, Leslie Cirillo Plante, and Tammy Warner, with Board Director Charelle Cusberth.
To learn more about the panelists, click on the below links:
LaVerne Council
Mary LeBlanc
Vicki Phelan’s company is www.equaterra.com