Catalyzing the growth strategy of a Pharmaceutical giant
Catalyzing the growth strategy of a Pharmaceutical giant
The client is one of the largest customers of HCL from Americas, and a top US-based global research-driven pharmaceutical company engaged in discovery, development, manufacturing and marketing of vaccines and medicines. With over 60,000 employees, the client conducts research at 10 major research centers in the United States, Europe and Japan, manufactures products in 30 facilities, and sells products in approximately 150 countries. The client’s product line includes a broad portfolio of highly innovative prescription products in various important therapeutic areas.
Need of the Hour
As a result of pressures on drug pipeline, this pharmaceutical company has been facing challenges in controlling drug development and R&D costs, and at the same time driving top-line growth while maintaining intense bottom-line focus. With the entry time of a drug in the market ranging from less than five years to more than fifteen years and regulatory challenges driving up operational costs, the client was facing tremendous pressure to cut down costs and increase revenues through a quick throughput in R&D investments. The client had another big problem of applying the IT sourcing strategy across its diverse organization. This was the strategy of leveraging services of a global technology partner and hence the partnership with HCL began to meet the dual objectives of growth and cost efficiencies simultaneously. One of the key pillars of this strategy was to have an integrated enterprise-wide application and a common platform which could run across over 3000 applications and could also support a range of technologies from Mainframes, Oracle and SAP to Java and .Net architecture. The number of applications was also growing along with business functions, new insights and know-how of the industry. The inherent need to optimize business processes, enhance workflows and system integration followed by an unsuccessful drug launch enhanced the need for cost savings along with driving business growth.
The client had been heavily engaged in out-tasking through hundreds of local suppliers but not in offshoring. The client appointed a core team to decide on the way forward and this team gave a clear roadmap on the outsourcing strategy on the three-pronged approach:
- Move disparate IT systems to a common IT platform
- Outsource all non-core IT support and development services
- Consolidate IT operations into a preferred partner landscape
HCL recommended a strategy which was based on three propositions:
- Provide end-to-end IT managed services in an SLA-driven fashion
- Pharmaceutical domain expertise along with its technology strength; ensure scalability and flexibility as quickly as possible
- Share risk in the client’s growth
The engagement had two main challenges at an operational level and technology level. The client had never worked before with an outsourcing partner outside their local geographies. Many of the managers along with the people who interacted with them did not know culturally how to deal with such kind of an engagement. This required a lot of change management through learning, coaching, interaction and hand holding from both the ends. The second challenge was to transition the engagement which required diversified skill sets as quickly and in a risk mitigated fashion as possible while ensuring that the solution was scalable in nature.
The relationship becomes stronger
The scope of the engagement expanded to include multi-service/ multi-location global delivery, operating structure aligned to client’s enterprise, value creation in alignment to client’s strategic goals and risk- sharing model to partnership approach. It was a noteworthy milestone when HCL was awarded the ‘Best Global Supplier’ – later it was also recognized as the most trusted global partner.
The engagement which started as a small project in 2005 has gone through various stages of evolution. The relationship has grown stronger from one that was entirely focused on cost efficiency to more of providing value addition to overall business objectives of the client. The relationship which initiated with application maintenance engagements has grown to more complex domain specific engagements running into strategic programs. Today, the relationship span the entire business cycle from drug discovery to drug sales and marketing. Presently, there are around 500 HCL people working on the various projects for the client. HCL has also started providing consulting services in terms of defining process framework, standard operating procedures and e-mail marketing of new drug releases and conducting analysis of field information of new drug release. As part of the value addition, several areas of bringing in business efficiencies and other areas of improvement to attain more cost savings have been suggested – some of which have not been identified in the initial project scope.
The Way Ahead
The two most important value additions have been risk management and quality delivery. The current focus is on the client’s revised growth strategy to gain the leadership position in the pharmaceutical industry. The present engagement model and services have been aligned to that of the client’s, by providing a single point of contact for each engagement in order to bring in flexibility. A plan has also been worked upon to set up a shared services model along with the client that would help bring in further operating efficiencies in the business.
The engagement started as a simple outsourcing partnership, soon became a trusted and strategic partnership, and is on its way to reach a trusted advisory relationship. Both the companies have created many industry benchmarks and present a compelling case study for the industry.