Knowledge management a core competency for e-business survival
Spiguel began by describing what he termed a visionary selection by Time magazine of the computer as its man (or machine) of the year in 1981. He noted that although the computer was being featured, the cover of the magazine actually depicted a digitized human image in the foreground with a picture of a computer in the background.
This, Spiguel contends, was a telling foreshadowing of the future of the relationship between man and his invention. We'sre going into the digital age, but people are still having to manage the change, he said. The technology has advanced, the price has gone down, but it still requires humans to make things happen.
Spiguel told delegates that a study by Booz-Allen and Hamilton of 600 executives from a variety of industries, including pharma, found that participants believed the emerging digital environment spelled a transformation of global markets, as well as the need for new business models and a re-thinking of corporate strategies.
Try to step back a little and see what is happening in this transformation, Spiguel said. In terms of background, if you compare what happened with the change in the industrial age and the change in the information age, there's a clear distinction.
With the industrial age, there was an inward look, he continued. We became more efficient. We did everything internally - companies had to be good at everything. In the information age, it's the opposite. You'sre looking outside. You'sre trying to partner to choose what you'sre core competencies are.
Spiguel believes what the pharma industry has accomplished so far is first generation. In first generation, the important thing is content, he said. Detail to physicians it's the same information that they'sve been getting from the sales people. We need to move to second generation, where the patient becomes the center. But we don'st know how to interact with patients. Our only connection has been recruiting for clinical trials and adverse events related information, and those are connections that you don'st necessarily want. It hasn'st been a core competency for pharma.
But according to Spiguel, the market has been transformed. The Internet has revolutionized sales and brand management. The notion of a many-to-many's connection is possible with the Internet, he said. The concept is old but the reality is new. Something on the order of 70% of the traffic on the Internet is health-related. The balance of power is shifting to the customer the patient.
Spiguel points out that competition is intensifying and the pace of business is accelerating, and it's all happening because of newly established networks. Companies are transforming into extended enterprises, he said. This isn'st how pharmas work. We might look like we'sre collaborating on the surface, but it's very superficial. Down deep we don'st.
He believes that mindset and model needs to change. Although Spiguel admits that pharmas will never cease competing with one another, he believes competitive collaboration can help them to capitalize on the digital environment now available to them.
Companies are re-evaluating their role in the value chain, he said. They can'st do everything, so they have to choose the core competencies that add the most value, allowing others to pick up the rest. Knowledge is becoming a key strategic asset.
Spiguel told delegates that the executives in the Booz-Allen and Hamilton survey identified some valuable imperatives for change. These included: designing a new business model, developing capabilities to do business over the Internet, building new brands for the new media, accelerating global initiatives, creating a 24 X 7 business, institutionalizing knowledge and acting immediately.
When it comes to re-thinking old business models, Spiguel believes that most executives aren'st being creative enough. The participants in the study suggested improving customer satisfaction, reducing costs, exploiting global markets and resources, stimulating product and process innovation and accelerating time-to-market.
That sounds like old hat, Spiguel said. That could all apply ten years ago. This exemplifies the kind of thinking you'sre facing Yes, let's embrace it, but with the old model.'s That's what has to change we need a new e-business model to be able to function.
Spiguel believes the key focus, especially for pharmaceutical companies, must be to treat information management as a core competency. Imagine using a global document management system that allows you to put physicians in Europe in touch with chemists in the Far East and experts in South America to answer a question from a regulatory agency in Switzerland. That's not far-fetched it's reality.
To consider management of this information as anything other than a core competency is very dangerous, he warned. When I joined Zeneca as worldwide CIO for R&D, we invested 4 may 4.5% of turnover into IT technologies. By the time I left, we were at about 7.5% and the leaders in the industry are investing somewhere between 9 and 11%. Information management needs to be a core competency and managed that way.
Spiguel cautions, however, against confusing knowledge management with computers themselves. Knowledge is a tool that helps you change the threshold of competition of how you flow information, he said. But don'st confuse the two what's a core competency is the management of information not the management of computers.
He contends that you can source knowledge management from many places, even outside your organization, but it must be managed as a fundamental business process. Look at it as an investment, not as a cost an investment you'sll reap return from, Spiguel said. Costs you minimize; investments you optimize.
When it comes to building brands for the Internet, Spiguel stresses that pharma needs to begin offering all of the services the customer needs. Think about the patient in the center of the picture. Create a 24 X 7 business, not a help desk, but a complete experience for somebody who's going to use your product. Pharma hasn'st done this in the past but our clients haven'st been the customers. Up until now, our clients have been physicians and the regulatory agencies, not the end users of the products.
Spiguel said he believes it's important to go beyond just providing information. He told delegates there are great opportunities when it comes to providing a neutral middle ground between patients and their doctors to facilitate communication for example, for terminally ill patients.
Pharma does a good job better than most when it comes to managing global initiatives Spiguel said. But when it comes to capitalizing on global opportunities, the industry is missing out on important collaborative relationships from which it could benefit. Spiguel encouraged participants to view the customer, suppliers, and even competitors as partners.
The industry doesn'st partner well, Spiguel said. If you'sre going to face the rising costs of R&D, you'sre going to have to co-develop, co-market, co-many things and we don'st do very well at that.
He also stressed the importance of effective partnering with the FDA. We have a choice, Spiguel said. We can diverge between the agency direction and the pharma one and have a widening gap in the processes and standards, or we can converge and healthcare gains through reduced costs and improved time to getting medicines out to the public.
And on all of these issues, Spiguel stressed the importance of acting sooner rather than later. It's a time issue, he said. If you wait it will be too late. If you haven'st acted yet, it's probably too late already you might see yourself out of business.