Doubling IT Innovation Spending: Laying the Foundation for IT-Enabled Business Process, Supply Chain, and Service Innovation in the Pharmaceutical Industry

This IT leaders within the pharmaceutical Industry are struggling to meet two critical challenges: dramatically improve the efficiency of IT and use that efficiency to drive business innovation. Over the last few years, Pfizer has been putting in place a rationalization methodology to dramatically reduce IT "life cycle" costs. This methodology, when coupled with effective governance and portfolio management, facilitates the rationalization of IT resources, infrastructure, applications, databases, and IT-enabled business processes. The methodology has been successfully applied on a global basis to increase IT efficiency and effectiveness, as well as significantly reduces IT costs. This paper discusses the development and application of the methodology, which was part of a multi-year effort that I led on the part of Pfizer's Global Business Technology organization. The effort resulted in a 30% reduction in IT support and maintenance expenses, a 75% reduction in service providers, a 50% reduction in the cost of global operations support, and a 50% reduction in the worldwide portfolio of applications and databases. The associated savings allowed Pfizer to double its level of investment in IT-enabled business innovation throughout its Worldwide Drug Development organization. For Pfizer, the methodology served as a catalyst for IT organizations to increase their efficiency and become more effective at leveraging information, improving business processes, and seeding IT-enabled business innovation. For the Industry, this work can serve as a roadmap for improving the efficiency of IT organizations and using that efficiency to drive IT-enabled business innovation across the enterprise.