A wind of change is now blowing at an accelerated speed – encompassing virtually anything, across the world, including India, with a varying degree, though. It leaves a profound impact on the day to day lives of many, including almost free access to a plethora of information of any kind available in the cyberspace. The way we express ourselves – connect with others – meet our various needs and requirements – make hassle-free financial transactions – increasing transparency – containing corruption, besides scores of others.
Fast evolving digital technology is predominantly catalyzing this paradigm shift. Its weighty impact can also be felt across the global business world, sparing virtually none. Digitally enabled recent GST implementation process in India is just one such example.
Newer technology driven transformation process of overall business ecosystem is sending a strong signal to all concerned to shape up – coming out of their respective comfort zones of the old paradigm, and embracing the new one. Squarely facing this challenge of change is equally critical even to one of the most conservative, tradition bound, and well-regulated pharma industry. It’s rather an absolute necessity for pharma, as virtually all its stakeholders, including the patients and governments, have already started stepping on to the digitized world. The fundamental choice is, therefore, between shaping-up and shipping-out.
In this article, I shall argue on this critical need, based on several recent, pertinent and contemporary research findings on this fascinating space.
Indian CEOs take:
The 20th CEO Survey of 2017 titled, “Being Fit for Growth”, conducted by PwC
reveals that the term ‘digital’ evokes both excitement and a sense of apprehension among CEOs, both globally and locally. The following are some interesting findings involving the Indian CEOs, as captured in this survey:
- 38 percent observed that over the past 5 years alone, disruptive technological innovations have had a significant impact on competition within their respective industries.
- 47 percent believe that in the next 5 years, disruptive technological innovations will have a significant impact on competition in their industry.
- 77 are concerned about the speed of technological change.
- 76 percent expressed concerns about rapidly changing customer behavior.
- 77 percent mentioned the need to create differentiation in their products and offerings by managing data better.
Its relevance in pharma:
The relevance of taking this wind of change in stride and embracing it fast, is beyond any reasonable doubt today. The 2017 report of EY, titled ‘Reinventing pharma sales and marketing through digital in India,’ also reaffirms: ‘Digital will play an ever-increasing role in this era of profound transformations, characterized by increasingly informed patients/physicians, new range of customers and new disruptive entrants. To stay relevant, pharma companies need to adopt a nimbler approach and make data the currency of marketing.’.”.
The urgency:
A sense of urgency for this change has also been epitomized in the same report, as it underscores that digital disruption has demolished 52 percent of Fortune 500 companies, since 2000. The study further reiterates: “The pace of transformation has increased, competition has intensified and business models have been profoundly disrupted. This shift is happening at breakneck speed across industries, and pharma can no longer be an exception. Customers have already embraced technological changes, through their many digital touch points, and pharma must look toward digital to re-imagine the customer experience.”
Just changing manual processes to digital won’t suffice:
This is exactly what is mostly happening today in pharma. Concerned employees, in general, are also receiving training inputs accordingly. Vindicating this point, a recent study reiterates that just changing manual processes to digital won’t suffice, any longer. Delivering greater value to the stakeholders continuously through digitization of business is the name of the game.
The above EY report unambiguously endorses that: “Whatever was being done manually earlier is now being done digitally. But we are not adding additional value.”
While capturing in the report Indian pharma’s journey to the digital world, it articulates, though some digitization initiatives are being taken now, Indian pharma companies are still way behind their global counterparts. The survey found 53 percent of the participating companies still at the ‘beginners’ stage, while 40 percent are at the ‘conservatives’ stage and only 7 percent have moved toward the ‘explorers’ stage.
Three fundamental non-technical barriers, and the way forward:
Two important studies – one by EY, as quoted above, flagged three fundamental non- technical barriers in this area, and the other one by McKinsey & Co that proposed three strategic actions for Indian pharma to start on a digital path by leveraging its intrinsic value, meaningfully.
EY study indicated, 86 percent of the senior pharma leaders exhibited a strong positive inclination toward digital as a ‘strategic’ rather than a tactical approach. It then highlighted the following three key barriers to embracing digital:
- Lack of clear digital strategy for the organization
- Incremental value proposition and effective delivery
- Change management
McKinsey & Co in its August 2015 report, titled ‘The road to digital success in pharma’ also indicated, though differently, lack of a clear strategic direction and focus in this area. The study noted: ‘Most pharma companies have started to build some digital capabilities, but the talent and resources for their efforts can be fragmented, often across hundreds of small initiatives. Without clear strategic direction and strong senior sponsorship, digital initiatives often struggle to secure the funding and human resources required to reach a viable scale, and they cannot overcome barriers related to inflexible legacy IT systems.’
Based on the above finding, the paper proposed three strategic actions for pharma companies to place it on the right trajectory, capturing the differential value of digital, as follows:
- Develop the right organization for new business models with significant value addition from digital. This, I reckon, would involve a cultural shift.
- Focus on two or three flagship initiatives, such as building a digital ecosystem for patient adherence to a blockbuster drug.
- Run collaborative experiments, and then scale what works, such as putting the right people from IT, business compliance, and outside partners in a ‘war room’ to run quick test-and-learn cycles of a well deliberated digital strategic initiative. Where results are positive, scale those up.
Personalization in every facet of the value delivery system:
As we move ahead, personalization in virtually every facet of the value delivery system is unlikely to remain optional for the Indian pharma players. With this wind of change gathering further momentum, many will eventually witness a mind-boggling level of personalization – spanning across from personalized diagnosis of serious ailments based on complex genomics, doctors’ writing personalized medicines to tech savvy pharmacists dispensing 3D printed individualized formulations.
This trend will continue evolving with an ascending trend of outcomes, breaking all conceivable barriers. Accordingly, services to patients and physicians would also demand more personalization, along with the other stakeholder engagement process.
Most of these may appear no more than a figment of imagination today, or probably a science fiction to many – just as what the incredible narrative of unleashing unfathomable potential of the Internet appeared to so many, not so long ago. Indian pharma players may prefer to wish away this emerging scenario, but at their own peril.
Conclusion:
The Indian pharma industry is currently passing through a phase of transition to move into the digitized world. Just doing digitally whatever is being done manually now or earlier, won’t suffice, any longer.
Giving shape to a robust, comprehensive digital strategic game plan for the organization, as a whole, is the need of the hour. Pharma CEOs would require leading their respective core teams to the drawing boards for charting out this digital pathway, without further delay.
This would be a game changer, as constantly delighting the stakeholders with the best possible value addition in business, emerges as the primary means for sustainable organizational excellence. Long term success in this effort, would call for constant upgradation of the state of the art digital platforms and tools.
This is sine qua non to pharma success in the digitized world – offering a strong foothold as the new paradigm ushers in. Envisioning, what all-round excellence in business would entail in a rapidly evolving digitized world, and championing its effective implementation on the ground, sooner, is now a critical accomplishment factor for pharma CEOs in India.
By: Tapan J. Ray
Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.