By: Geoff Schmidt Managing Director – Cloud First, Life Sciences Lead – Accenture
Most life sciences executives recognize the cloud is one of the most value-creating technologies of our time. They understand it is the foundation for the digital transformation that is driving profound changes in how businesses operate, compete and create value for all their stakeholders. After all, the pandemic has underscored the need to be nimble in how we interact with one another and access data.
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Nonetheless, our research during the pandemic has shown that two-thirds of life sciences companies say they haven’t achieved the results they expected from cloud. For our latest “Cloud Outcomes” research, Accenture surveyed senior business and IT executives from 70 life sciences companies around the world to understand their cloud strategies, progress to date and plans. Compared to the eleven industries surveyed, life sciences companies ranked the lowest in achieving their innovation, data access and analytics goals from cloud.
We’ve highlighted three key reasons as to why this could be happening.
- Life sciences is taking a tech-first approach
- When asked, life sciences executives cited “cost” and “speed” as their top cloud priorities.
- The two lowest priorities for life sciences companies were “business enablement” and “resilience/business continuity.
- Progress to date trails most other industries
- Two-thirds of life sciences companies are not realizing the full benefits of their cloud migration journeys.
- Life sciences landed as the second-lowest industry when asked about their company's percent of workloads "in the cloud". (10th place out of 11 industries)
- There is low confidence in their approach
- Only 23% of life sciences companies were confident that their organization’s cloud migration initiatives will deliver the expected value at the expected time.
- 40% of life sciences companies said they always or usually run into unexpected complications during cloud migration initiatives – the highest of all industries surveyed.
- Less than half of life sciences companies (43%) said they are very satisfied with the cloud outcomes achieved to date.
Let’s dive deeper into these three challenges before considering a new perspective.
Life Sciences Companies are Approaching Cloud as a Technology Play Instead of a Business Opportunity
For life sciences companies, the cloud’s virtue is not just about running a more streamlined infrastructure, lowering costs and accessing computing on demand. It is about the ability to unlock data, collaborate better across the ecosystem, create more meaningful patient and healthcare provider engagement, and transform their culture to embrace these new ways of working.
All of this helps life sciences companies deliver more effective treatments to patients across the world in a more economically viable way. These are the imperatives that the ongoing health, economic and societal crisis demands. It is through this lens that executives should consider their migration to a cloud plan.
Progress to Date Trails Most Other Industries
There is, superficially, little incentive to transform a business model when it seems to work. Despite forecasts of compressed future value and margin declines, life sciences companies have not been as motivated as other industries to prioritize moving to the cloud.
Indeed, there are five main obstacles to cloud adoption in life sciences:
- Competition for talent with other industries, particularly tech giants and startups, leaves the industry at a disadvantage to access the best human capital.
- Margin decline is so slow that it can be hard to see or be considered alarming, especially when profitability is still high compared to other industries.
- Individual data silos, different systems and security concerns across the value chain add complexity and risk to the move to cloud.
- Disparate groups have the responsibility and funding for digital and cloud as well as ecosystem collaboration, resulting in multiple stakeholders with different incentives, allotment of funding and ways of measuring success. For example, CIOs are pressed to find efficiencies and cost reductions in their budgets while other parts of the organization are increasing their IT investments in digital - this results in misalignment on how to allocate funds to capitalize on new digital investments.
- Regulatory policies are slow and complex whereas new IT methods that cloud enables are agile and faster. They require a different approach to regulatory approval, much of which is still in development. This disconnect can delay a company’s investment and adoption of cloud and other modern technologies.
The next major business disruption will see those companies who overcame these obstacles with a holistic cloud strategy able to respond in an agile, cost-effective fashion.
They are Not Confident In Their Approach
Many life sciences companies took an ad hoc approach to leveraging the cloud as various departments and teams took it upon themselves to take advantage of low cost, on demand storage, and computer services. This has led to a general lack of enterprise cloud strategies and a mix of private and public clouds being the predominant situation for most life sciences companies. Only a few life sciences companies are taking a “cloud first” approach where the cloud is primary (80% in the cloud) and prioritized, extended beyond the IT organization and embraced by the whole organization. This could explain in part why two-thirds of life sciences companies said they haven’t achieved the results expected of their cloud initiatives to date. Just adopting cloud technology or moving parts of the business to the cloud does not ensure business value. It must be part of an overall digital strategy that values data and its essential role in discovering, developing and delivering New Science and enables new ways of collaborating and working.
A New Perspective
Viewing cloud as a technology “cost of doing business” puts the focus on legacy barriers instead of the art of the possible when the business is aligned on goals and outcomes. Leading companies understand the need for business and IT to work together and that true transformation requires a commitment to experiment, fail, and improve next time.
When part of an overall digital strategy, cloud can become a true business enabler allowing life sciences companies an opportunity to unlock data, collaborate across the ecosystem, improve engagement and more. In fact, the rapid response for COVID-19 vaccines, delivery of digital therapeutics and cell and gene therapies are a few examples of how companies are setting the pace for transformation with innovation taking the lead. Consider Takeda’s Plasma-Derived Therapies Business Unit, which develops critical, lifesaving and life- sustaining therapies for patients with rare and complex diseases. It has begun leveraging cloud with plans to increase its plasma collection and manufacturing capacity by at least 65% by 2024 to expand access to essential medicines and accelerating new treatments for patients.
We also worked with a large life sciences company to create a COVID-19 home-care app that helps patients manage the illness from home, in partnership with their healthcare providers. Patients capture their own symptoms daily, and the data is stored in the cloud. With hospital systems overwhelmed by COVID-19 patients, the ability to monitor patients at home, and admit them to hospital only when necessary, is critical to managing scarce resources. Post-pandemic, patients and providers may find the convenience worth keeping.
The How-To Part: An Intelligent Cloud Journey
An intelligent cloud journey needs to balance speed and value. A rushed migration without clear strategy can end up costing the business more, leaving legacy applications racking up consumption - and costs - at an alarming rate. To achieve value, life sciences companies must incorporate new ways of working and develop new roles and skills. While there is no one-size-fits-all approach, each company should start with defining the value, mapping out the journey and determining how cloud will enable the overall business strategy and ambition. For life sciences companies, that means adopting and adhering to the following key strategies:
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Embrace cloud as a CEO priority: The whole enterprise will need to be aligned, with detailed scenario planning to ensure the cloud delivers its intended ROI and a more resilient enterprise and culture. Migration to the cloud cannot be a purely IT-driven exercise. All aspects of the business need to be part of the solution and agree that cloud is a critical enabler to business initiatives that drive efficiency, innovation and growth.
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Business value focus: Develop a cloud strategy anchored to economic business cases to identify revenue upside and cost efficiency opportunities while aligning goals.
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Workforce and culture change management: Implement talent readiness programs and new operating models to evolve culture, transforming how people work and how they meet rapidly changing needs.
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Partnering for success: Leverage the skills, experience, and innovation of appropriate partners. Cloud-managed services can help companies access key capabilities while keeping costs down.
Life Sciences companies should invest in developing talent with digital skills such as improving organizations’ technology quotient (TQ), going beyond building pockets of excellence, to implementing a strategy for achieving enterprise-wide transformation. Find ways to reshape the regulatory environment, including faster approval processes and policies around risk, security and data, for new IT methods that will enable the industry to speed tech-enabled treatments to market.
Successful strategies for implementing a cloud-first mentality within a life sciences organization could include building cross-functional digital teams to allow the cloud to serve as a catalyst for business reinvention using advanced digital technologies across the organization. This could include integrating data to draw fresh insights on everything from discovering new treatments to providing the right support for the patients taking them.
Executives could also try to fire up their company’s innovative spirit to embrace digital and analytics as the core to developing and delivering new treatments and supporting services. Cloud enables experimentation at speed, including testing new ways of working. It enables companies to spin up new environments instantly, try out several ideas at once and see what’s working quickly and securely. It can also provide a way to open ways of working to greater diversity in thinking and culture.
We have also found that companies that unify responsibility and success metrics so that all parties have a vested interest in moving to the cloud and are doing so in tandem. This requires agreeing to what they want to achieve, how they will achieve it and how to measure success. One way of doing this is by creating a Cloud Center of Excellence– a small team of cross-functional experts to accelerate cloud adoption and the value realized from it. This brings central governance and direction to cloud architecture and design choices, helping manage the complexities of distributed and multi-cloud solutions and prevents the confusion that can ensue if each part of the business goes its own way.
Conclusion
Cloud isn’t some future aspiration - it’s an urgent mandate at the heart of the business. COVID-19 has created an unprecedented wake-up call and an opportunity to embrace the promise of cloud in life sciences. Furthermore, the cloud’s ability to facilitate the analysis of vast data sets, quicker decisions and scenario planning goes beyond discovery and development of science and into a need to respond to external threats. Securely partnering and taking on new opportunities in converging sectors will be critical as the industry grapples with cross-sector disruption and new entrants.
It takes courage and investment to shape the near-term progress of cloud technology in life sciences. It’s a big lift, but those companies that do will lead the New Science revolution with unparalleled resilience, agility, adaptability and scalability. They will empower their workforce, digitally transform their company and improve their ability to deliver better patient outcomes.
About the author
A 25-year veteran of the life sciences tech industry, Geoff Schmidt has held roles of increasing responsibility at Accenture including leading Accenture's Life Sciences R&D Technology business where, among other responsibilities, he designed, launched and led Accenture's industry leading INTIENT platform. Building on that success he became Accenture's Global Life Sciences CTO. In his Cloud leadership role Geoff focuses on developing Accenture's point of view on the value of cloud transformation, developing unique assets, building the world's best talent and working with Fortune 500 Life Sciences companies to transform their business through the use of innovative capabilities available through the cloud.
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