By David Rosner, principal, Deloitte Consulting LLP
Biopharmaceutical companies are science-based research firms that develop life-saving, cutting-edge therapies and innovations. But when it comes to digital innovation, biopharma is typically a few steps behind banking and other consumer-focused industries. As the sector works to catch up to other industries and meet the digital expectations of the patients and clinicians they support, many companies are trying to determine who should lead the charge.
Some biopharmaceutical companies are pushing digital responsibilities onto their chief information officers (CIOs) and IT departments. Other companies have hired chief digital officers (CDOs) from outside of the industry often after determining that their IT workforce either lacks the competency or isn’t chartered to make the transition to digital. In life sciences, the CDO and CIO are often separate positions. Some of their duties might overlap, which can create a certain level of tension, and in some cases, a proliferation of chiefs.
In addition to a CDO and a CIO, a company might also have a commercial digital officer, a head of digital meds, and a head of digital research and development. Sometimes the effort is led by the commercial function, or by another part of the enterprise such as the head of strategy.
So who should lead the digital strategy?
Deloitte recently assessed the digital maturity of biopharma companies based on a survey conducted with the MIT Sloan Management Review. We found that about 25 percent of biopharma executives are in the early stages of their digital journey and 55 percent are developing their digital capabilities. Only 20 percent of respondents say their companies are digitally mature.
There is no question that biopharma companies are trying to become more digital. But their strategies to get there have been varied, and sometimes not entirely effective. We think it is important that biopharma companies have leaders who can build internal digital product teams that can drive digital change throughout the organization. But companies also should consider internal cultural issues. Sometimes the IT department doesn’t have the competency to stand up the digital product teams needed to drive a company-wide digital strategy. But bringing expertise in from the outside can create tension within the company’s IT department. There can also be challenges if the CDO’s mandate overlaps with the CIO’s duties.
Three models for digital leaders
Over the past two or three years, many large biopharma companies have developed some sort of digital strategy. The nature and magnitude of digital change can vary by company, as can the organizational structure and type of leadership needed to guide the transition. Here’s a look a three potential digital leadership models:
- The CIO: As digital has become a vital business component across many industries, 44 percent of CIOs across all industries say they are now involved in their company’s digital strategy, according to the results of Deloitte’s global survey of CIOs. The report is based on a survey of 1,437 CIOs in 71 countries conducted between January and March of 2018. Nearly half of life science company CIOs said they (or an equivalent) are leading their company’s digital strategy. Some biopharma companies, are expanding the role of the CIO to take on a larger digital presence. In some cases, the CIO has the competencies needed to wear both hats. But a digital solution is not the same as an IT solution. Moreover, CIOs who sit in the siloed world of IT might not be prepared to push for company-wide digital disruption
- The CDO: A role that has emerged in recent years is the CDO. The true CDO is in charge of driving digital transformation within an organization. More than 25 percent of FORTUNE 500 companies now have a CDO, and a growing number of biopharma companies are adding CDOs.1 In Deloitte’s global survey of CIOs, 14 percent indicated that their company’s digital strategy was now being headed by a CDO. Case in point: GlaxoSmithKline created its chief digital and technology officer position about a year ago and tapped the CIO to fill that new role.1 Novartis’ first CDO is overseeing the biopharma manufacturer’s company-wide digital strategy. He was previously the CDO at one of the United Kingdom’s largest online retailers, and also held senior positions at Amazon.com.2 To be effective, the CDO will likely need support from the CIO.
- The Chief Digital Information Officer or the CDIO: A role that brings together the experience and skills-set of the CIO and the CDO is the CDIO. While the CDIO model may be novel for pharma, it is not new in retail. For example, Target created a SVP of Digital and Chief Information Officer role to help the company compete in the digital world with online retailers.3 There is no reason biopharma companies can’t blaze a similar trail. Case in point: Nike Inc.’s former CIO recently joined global pharmaceutical manufacturer Merck as its first CDIO. He is responsible for leading all aspects of IT and digital strategy and is a member of Merck’s executive committee.4
CDOs have traditionally focused on the customer experience and on building products from a customer perspective to fulfill unmet needs. CIOs, by contrast, have tended to focus on the platforms, infrastructure, and technology backbone needed to run a company. The blending of these two roles (and the teams that support them) can create a unique opportunity for the business to bring customer-minded and technology-focused resources together as one team.
The path forward
Companies that figure out how to create internal digital product teams comprised of business and IT resources that can execute with agility will likely become more differentiated.
A few years from now, I suspect that few people will be talking about digital transformation—in biopharma or any other industry. Digital won’t appear in anyone’s titles because digital will have been completely integrated throughout all organizations.
Access the report: Survey finds biopharma companies lag in digital transformation It is time for a sea change in strategy