Changing Change Management – How to Ace Change Initiatives in Pharma
How to optimize project success
Technology waits for no one and she’s an expensive date. As companies continue to compete for the most advanced tech and latest innovations IT spending is dramatically increasing. This isn’t surprising seeing as more than 90% of the world’s data was created after 2015. But at the same time, we’re growing and innovating we can see the percentage of project failures increasing. Companies want to explore this unstructured data and leverage it into actionable insights and valuable information, but find themselves unprepared to enter the world of Artificial Intelligence, Machine Learning, and Natural Language Generation.
While these techs are advanced, the pharmaceutical industry is ready, and our patients need us to be.
But fret not, we did some research to find out why IT projects are failing at the rate they are…and we found a major way to optimize project success with the same tools already in your toolbox.
What are IT change initiatives?
In this digital era with transformations occurring around every corner, it seems like IT is creeping and seeping into every business unit. HR, accounting, sales, scientists, and everyone else in the organization has a plethora of necessary IT building blocks that need repairs, need updating, and need scaling. These efforts to keep up with the daily run-of-the-business can be categorized as IT operations and infrastructure activities, and they eat up a lot of your executive’s and leadership’s time, focus, and, most unfortunately, two-thirds of their IT budget.
You’re probably thinking, OKAY but what about the investments in innovation and revolutionary technology that give you your competitive edge and catapult you into the next era of digital evolution?…the exciting stuff.
Well, those cutting-edge tech projects that keep this industry constantly setting the bar higher, are our change initiatives.
Gartner’s research shows that if 30% of an IT budget is allocated to IT change initiatives, of that budget, more than 20% is lost due to initiative failure. Industry analysts haven’t come up with an average project failure rate, but research is showing numbers are reaching as high as 50%. This data tells us that companies want to invest in exciting and transformation change initiatives, but they are diving into the deep end with their eyes closed, and hitting head first. You need a clear direction and focus for these initiatives to see the success and ROI they deserve.
Many companies focus almost all their efforts towards IT operations, (about two-thirds of their IT budget) because it is easy to have a clear goal and coherent strategy when it comes to necessary infrastructure. You can quickly calculate how many new computers you need, what kind of processing power is required, and the space you need to manage the updates.
But change initiatives, on the other hand, can be very unclear and confusing if the enterprise lacks a change agenda. The goals and strategy need to be specifically defined and documented in a change agenda to drastically improve the chances of the project’s success.
When there is no agenda or the strategy is obscure, you will find substantial levels of waste in your change portfolio. This waste is made up of failed projects, delayed projects, and projects lacking strategic coherence. But there are ways to reduce this waste before and during these change initiatives.
- Start by asking questions. “Am I spending too much, not enough, or the right amount on IT?” and most importantly, “Am I spending on the right IT?”
Quantitatively assess initiatives as much as possible to determine their value proposition and decide whether funding should be adjusted up or down. Calculating the ROI can be a great way to quickly prove the value is worth the investment. It’s great to say “investing in X technology will give us Y capabilities and improve our revenue”. Flip that to, “we can expect a $22 – $34 million ROI over just a 5 year period”, and your CFO will be itching to know more. Certain objectives can be more difficult or nearly impossible to calculate, like most of the necessary infrastructure spending. That’s okay because those projects already have priority, to get the change initiatives prioritized, you want to prove how valuable their investment will be. No CFO can resist a good ROI.
- Organize portfolios of projects that align to the same strategic enterprise goal.
Pharma companies can be huge, so depending on the size of your enterprise you may have hundreds of initiatives you’re trying to pin against each other. This can be overwhelming and extremely difficult because you’re comparing apples and oranges. Instead, try organizing projects into portfolios that align with the same strategic goal. Now you can prioritize those initiatives pertaining to that specific objective based on their value assessments. This will make it much easier for everyone involved and for business units with common overarching goals to realize those objectives together.
- Rebalance portfolios to spend on the “right IT”.
Once you have portfolios broken down into strategically aligned objectives, you can start to get a better view of where exactly you are spending and what overarching business goals are taking priority. If you find you bit off too much to chew in change initiatives, you may want to refocus the infrastructure and operations activities to ensure over-ambition doesn’t lead to project delay and failure. But in most cases, business units are realizing their change initiatives are highly under-prioritized. In this case, we will want to scale down other portfolios and scale up the business change activities. Shifting investments to a more balanced portfolio to prioritize change initiative projects will overall prove a successful ROI. This will help you stay afloat with the technology curve while increasing revenues with your investments.
- Sunset projects that are sure to fail.
Now that you have your portfolios prioritized and therefore, your strategic goals prioritized, you’re set to get started on phase 0 of your projects. It’s okay for these priorities to shift, the more flexible your organization can be to adhere to these shifts, the more success the portfolios will see. While some flexibility is necessary, it’s important to keep leveraging that change agenda to ensure the project never gets misaligned….
As we know, that’s where waste is produced. It’s imperative to take inventory early in the project and continue throughout with questions like:
- Do you have an organizational chart, with defined roles and responsibilities?
- Is there executive alignment and confirmation of project scope?
- Does a project schedule exist with team members’ hours time assigned?
- Is the solution end-to-end or will this require multiple products to complete this solution, now or down the road?
- How will the solution be maintained going forward?
If these questions are tricky to answer or the answers are falling further and further from the change agenda, it may be time to quit the project before the investment is unsalvageable. End-to-end solutions can be hard to come by, especially if what you’re looking for is a customizable solution, but that sole factor can drastically decrease the project’s likelihood of going over schedule and over budget.
Asking these questions and setting the stage with focused portfolios will make it 100 x easier for executives and/or partners to understand the big-picture and motivate them to initiate change. Executives don’t really care about IT operations and infrastructure, they want the big-picture as quick and coherent as you can get it to them. This approach will get the answer to, “Am I spending on the right IT?” before they even have to ask.
If scaled innovation is your goal…you’ll need your CFO and CEO on your side.
The Impact of Change
Change can be intimidating and it can feel like it’s never the right time to break into the latest technology. To many, change can be risky but, “the biggest risk is taking no risk, in a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks” – Mark Zuckerberg. In this industry, we are constantly challenging the status quo. Strides in oncology and cures for what we thought were terminating illnesses, wouldn’t be possible if we didn’t. But as we keep up on the clinical side, we need to keep up the IT that supports us to get these medical products to our patients quickly and safely.
How Glemser can help
Glemser’s team of trusted advisors has been guiding pharmaceutical companies through end-to-end transformations for over 30 years. We wanted to prove how successful our technology is so we mastered our ROI calculator to effectively communicate the value of your return from ComplianceAuthor™. Most pharma companies can expect $22 – $34 million dollars of savings over just a 5 year period. Even better, the implementation will pay for itself after just 12-18 months. Want to see how much money we could save you? Schedule a 1:1 ROI review with one of our consultants here.
*Some information sourced from Gartner.