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Business and Technology Insights

Pharma Mergers: The CIO's Perspective

 
June 28, 2016

Merger and acquisition (M&A) deals have resulted in the formation of large, blockbuster pharma companies, and as a result the pharma industry is in a state of metamorphosis. In this two-part blog series, I share insights on how IT harmonization takes precedence in a post M&A scenario, and present a case on why Quality Assurance (QA) plays a pivotal role in IT harmonization.

M&A in the pharma industry is not a new phenomenon. A series of M&A deals have systematically helped pharma organizations – from entering new markets, and gaining footprint in a business segment, to increasing specialization, strengthening the drug pipeline, broadening therapeutic expertise, and gaining scale and size. While the business finds M&A necessary for growth, lets explore what such M&A requires of IT and QA functions.

When two pharma companies merge, besides accumulating tangible and intangible assets such as sites, research facilities and drug pipelines, they must also strive to eliminate redundancies through operational integration (OI). When this is done as an afterthought, OI can turn into an Achilles heel over time. Thanks to the FDAs increased compliance monitoring rigor, pharma companies can no longer overlook the OI aspect.

At a minimum, OI requires over an elaborate period of time pursuing standardization and harmonization, implementing structured governance and oversight, and securing organizational commitment. Since implementing such a change calls for fiscal discipline, often, the post M&A OI starts and stops with just adding or updating legal entities, achieving brand uniformity, and ensuring consistency in corporate and regulatory reporting. The need to pursue integration is not fully realized until there is an organization-wide, cost optimization thrust. And the IT function is not oblivious to this.

As an after-effect of a merger, the fragmented IT organizations of the concerned pharma companies are in a state of flux forced into continuous restructuring and realignment, their efforts are locked into supporting multiple applications and performing many avoidable tasks. Without a clear global standard operating procedure, IT continues to be faced with an array of quality management procedures and working methods inherited (or rather even force-fitted) from their parent organizations. Some IT organizations may choose to continue with status quo, waiting for greater organizational commitment, before they change. But there are a few who recognize early, how disorientation is harming the overall IT productivity, and choose to welcome harmonization, supported by Organizational Change Management (OCM).

From a CIOs perspective, fulfilling the promise of IT harmonization translates into multiple initiatives and large programs involving standardization of IT platforms, deployment of package solutions, cloud adoption, and gradual decommissioning of old legacy systems. The transition from legacy systems to new IT platforms becomes the CIOs motto. Consequently, IT teams are mandated to deliver agility and flexibility to business. From the IT teams perspective, where is the supporting eco-system for them to meet this mandate from the CIO? And this supporting eco-system is not just about staffing, competency, technology-awareness or tooling; it is also about the guiding force that ensures audit-ready and compliance systems are delivered first-time-right, even while the transformation happens.

This guiding force, in my view, is the Quality Assurance (QA) function acting not only as a guardian of risk management and compliance, but also as custodian and implementer of quality procedures, methodologies, guidelines, testing and validation standards. What really are these procedures? What should QA do, to drive IT harmonization? I will explore these in my next post.

Satya is a Quality Assurance Consultant at TCS' Assurance Services Unit. He has handled various roles including IT Program Management, IT Delivery Management, Consulting and Business Development. Over the years he has helped customers, across the major markets, to set up Test Models and develop an Assurance Strategy for Large Programs. He is passionate about the world of Quality, Design, Art and Pharma. He holds a Post Graduate Program in Management from Great Lakes Institute of Management, Chennai.