So you are 'in the cloud;' now what?

March 3, 2014
Pharmaceutical Commerce, Pharmaceutical Commerce - March/April 2014,

Getting to the 'future state' in cloud computing

Fig. 1. Cloud adoption varies by stage (tech, business, future) and by corporate function. Credit: Cegedim

It is difficult to argue against cloud adoption. Gartner predicts the global spend on public cloud services to be $210 billion by 2016, up from an expected $180 billion this year and $77 billion in 2010. This means that while we still know what the “cloud” (noun) is—compute, storage, software, platform or infrastructure—we will be hearing more and more talk about “clouding” (verb)—enabling Everything as a Service. Customers are buying cloud. Louis Columbus, a product marketing manager who writes on Forbes.com, asserts that we are now at the tipping point.

The paragraph above does not reflect precisely the reality of regulated industries such as life sciences who are in the middle of a deep transformation. Life sciences companies are in the cloud, but before we start to wave the “we are at the tipping point flag,” there are some industry-specific considerations we should narrate collectively. Below I have outlined three stages by which one can think about cloud adoption, and the journey to heaven. The three stages (see chart) are: “Tech,” “Business Value” and “Future.” While the broader technology population and writers suggest we are in the Business Value stage—and well onto the Future stage—in life sciences many of us know we are still getting the Tech right.

Stage One (Tech): Getting the technology basics right

For CIOs and CTOs, the Tech stage entails getting security and privacy right. In life sciences we are seeing individual companies move small percentages of their portfolio of compute and storage demand onto clouds; however, security and privacy are paramount. Much like Cegedim, Microsoft and other cloud enablers ensure HIPPA, SAS 70 Type II, ISO 27001 and other types of compliance to bolster confidence in clients.

While these are necessary compliance levels, they pale in comparison to the value of a CIO/CTO designing selection criteria that ensure the right information is in the cloud, and the right information is retained internally. Getting the Tech right for the CIO/CTO in this early stage is about a selection process of what goes on the cloud—when, why and how. We are far from the “throw everything on the cloud” reality. While most vendors have adequate security and privacy standards, life sciences CIO/CTOs are still the decision brokers of what is “cloud ready” and what is not.

CFOs and COOs look at cloud adoption in the getting the Tech right stage as simply a cost and risk play. The proven reality is that cloud capabilities such as Platform as a Service (PaaS), Infrastructure as a Service (IaaS) and Software as a Service (SaaS)—in the early stages of getting the Tech right—are cost and risk propositions. What are the cost reductions and efficiency gains? What risks are incurred, and are the risks substantiated within the framework of cost and efficiency improvements? Many of our clients’ CFOs and COOs are able to see clearly the value of PaaS and IaaS; however, the SaaS jury is still out.

Beyond CRM, only a small number of enterprise software packages are being delivered as SaaS. As the industry moves deeper onto the SaaS bench, it needs to evaluate the costs, efficiencies and risks intensively. This is because while PaaS and IaaS are somewhat one-time evaluations, each large enterprise application is an individual analysis of its own.

Chief marketing officers (CMOs) and CEOs must think about different enterprise capacities while their companies are getting the Tech right. Here the game is “Can we be more connected?” and “Are we now better equipped?” Being in the cloud means (among other things) that you are now connected to a new set of systems and stakeholders to which you were once not connected. Take, for example, the work of the Pistoia Alliance (www.pistoiaalliance.org), which enables simple connections like pharma-to-pharma information sharing. Being equipped is a different animal from being connected. Being equipped answers the following questions for the CMO and CEO: “Is my company now in a position to play with the front runners?” and “Can we reinvest the cost savings in capabilities that enable us to play with the front runners?”

Most companies in life sciences are toward the end of the getting the Tech right stage. While we will cover below the Business Value benefits and Future stage, make no mistake about it: if you don’t get the Tech right, and the various C-levels are not getting their respective values, the wheels will eventually come off your bus. So get the Tech right!

Fig. 2. The Pistoia Alliance is an effort to connect a wide variety of healthcare-data users and sources. Credit: Pistoia Alliance

Stage Two (Business Value): Getting the business benefits

After CIOs and CTOs get the Tech right, the next stage is to really leverage the performance gains and scalability to drive business value. In this stage of cloud adoption, we are still not in the Future delivering on the promises. Getting the Business Value is about unlocking performance to the organization, and using scalability as a value creator.

For example, the performance power of a cloud platform can now crunch much more clinical data for lower cost. License fees for SaaS software enable more users to leverage the software than would be possible with an on-premise model. And last but not least, the ability to be elastic in what data and compute cycles a life sciences company consumes—and the ability to turn up and turn down consumption—is the type of unlimited scale needed for businesses to compete in today’s rapidly changing market.

A CFO or COO in a pharma company that has the Tech right with cloud adoption can now start to think about the flexibility and adaptability of the business. Business Value here can come in organizations being able to pivot by plugging-and-playing entire systems, platforms and infrastructure. For example, take the pharma company that decides to get out of the co-pay card business. Since the company has been using a cloud-based system for its co-pay card initiative, investments in compute, storage, infrastructure and software are not sunk investments, so the pharma company is more flexible to change. In addition, given the rise in M&A activity in the industry, the ability to adapt and merge with other entities is a tremendous Business Value enabler.

Getting the Tech right for pharma companies, and moving onto the Business Value benefits can prepare organizations to execute better on M&A activity, which is squarely in the CFO/COO space.

A CMO or a CEO in a pharma company that has the Tech right for cloud can now start to reap new benefits beyond being connected and equipped. Here, cloud vendors enable an integrated view. The big Aha! is that while you go onto a cloud platform getting the Tech right, with integration into other cloud-available business processes and information assets, you are now able to take advantage of something entirely new. You are now able to take advantage of the ecosystem—or you should be. Marketing-business processes and information assets should now be easily integrated, and pharma companies should see an ecosystem of data sources and applications to pick from, and operate.

Much like Cegedim, IBM has also arrived at the conclusion that exploiting cloud technology is about taking advantage of new business enablers that extend beyond IT and into the boardroom. Do not just get the Tech right for its own sake. Leverage the new business enablers provided by cloud innovation and adoption, and create Business Value.

Stage Three (Future): Taking advantage of the future today

Understanding the cloud journey via this matrix is important because while it tells us how far we are away from the promise, it does draw for us a picture of where we can be.

With cloud Tech done right, and the Business Value benefits leveraged, pharma companies, much like other industries, can start to see the future organizational design become a reality. CIOs and CTOs can purchase from vendors in a contestable manner, swapping vendors as needed innovating at the contractual level of an organization. Think about how exciting (or not!) this may be for your procurement department. In addition, the technology cadre can now really start to innovate. Cloud enables low barriers to entry for technology innovation, and facilitates the fail fast/fail early/fail cheap environment needed for fostering innovation.

In the Future state, with cloud adopted, we can think about co-creation and collaboration between unusual partners. Boundaryless organizational design, and normalized data integrated only once, drive execution on strategies that we once only dreamed of. This is lofty, blue sky and currently outside of arm’s length. However, there are several players working to make this a reality. Vendors like Cegedim are working tirelessly to help customers get the Tech part right with our current products and services; innovating to deliver the business processes and information assets on the cloud to drive Business Value; and at the core of our investment and commitment is the mandate that the industry must transform or risk peril.

At the core of this transformation is that vendors be contestable, capabilities be interoperable, innovation be co-creation, organizations be boundaryless instead of bureaucratic, and information normalized to drive execution.

ABOUT THE AUTHOR

Richie Etwaru is a leader in design thinking, organizational transformation, innovation, and thought leadership. He is a former CIO, CTO, COO, Head of Innovation, holds international patents, and has spoken at events across the world. A champion for global innovation, Richie is responsible for defining and delivering the global next-generation enterprise product suite for health and life sciences at Cegedim Relationship Management. richie.etwaru@cegedim.com; Twitter: @RichieEtwaru