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INSIGHTS / Articles

Pharmaceuticals Focused on Cost Savings

 16 Jul 2018 
INSIGHTS / Articles

Pharmaceuticals Focused on Cost Savings

 16 Jul 2018 

The Harvey Nash/KPMG CIO Survey has found that pharmaceuticals companies have lower expectations for their IT budgets than other industries. Less than a third (32 per cent) of the 34 organisations surveyed expect an increase in their IT budget, compared to 44 per cent for all industries.

Pharmaceuticals Focused on Cost Savings

IT projects at pharmaceutical companies also tend to be more focused on cost savings than other industries. 47 per cent of respondents said projects that save money are most appealing to CIOs, compared to 37 per cent for all industries.

For those reasons, it’s no surprise that pharmaceuticals companies outsource more than other industries. Software application maintenance (77 per cent) is the top function that is outsourced, followed by software application development (69 per cent), service desk/help desk (65 per cent), and datacentres (62 per cent).

The board priorities for IT at pharmaceuticals companies, such as increasing operational efficiencies (62 per cent), saving costs (47 per cent), enabling business change (47 per cent), closely mirror those of other sectors. However, the survey found that they place a somewhat lesser importance on improving business processes (47 per cent) compared to other industries (56 per cent)

To become more agile and responsive, pharmaceuticals companies are more likely to buy rather than build (59 per cent) than other industries (37 per cent). Utilising DevOps is also low on their list of priorities (10 per cent), even though other sectors are more interested in it (28 per cent).

Cloud and digital disruption

Pharmaceuticals companies are showing interest in the Cloud, with plans to invest more heavily in SaaS (79 vs. 49 per cent for all industries) and IaaS (46 vs. 39 per cent). As for why they are investing in Cloud services, respondents said it is the best solution available (48 vs. 27 per cent) and comes with simplified management (38 vs 21 per cent).

The top inhibitor for cloud adoption are legal and regulatory compliance issues (57 per cent), which is higher than for other industries (35 per cent). At 52 per cent, integration with existing architecture, and data loss and privacy risks were the other top concerns.

Many pharmaceuticals companies say they are thinking about their IT strategically. Whether it is enterprise-wide or within business units, 67 per cent respondents said their company has a clear digital business vision.

Pharmaceuticals encountering digital disruption said the primary source of disruption is innovative products and services (40 per cent). New forms of customer engagement (20 per cent) was the other top response, followed by new business models and new operating models (12 per cent).

Like many other industries, pharmaceuticals companies cope with digital disruption by hiring and developing people (28 per cent) and partnering (16 per cent). Likely due to pressures to cut costs, acquiring was the lowest scoring method (4 per cent).

A new approach

As their margins get squeezed, pharmaceutical companies feel growing pressure to decrease costs. Faced with situation, pharmaceutical companies are looking at disruptive technologies, such as Cloud and Internet of Things (IoT), to do more with less and create new revenue generating models.

We’ve already assisted several pharmaceutical companies with their digital transformations and improving their consumer experience. If you are looking for guidance with Cloud-based solutions and data security, contact us today to learn how we can ensure the best quality experience for you and your audience.

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