Metrics that Matter: Pfizer case study
About Pragmatic Pathways: New approaches to organizational change
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Many companies will deploy a new tool or practice with a hammer; that is to say, they roll it out and hammer it in with no strategic plan. But when people are told to adopt something and they have no incentive to do so, the outcome is typically a lack of adoption. Imagine if the same company first understood why people needed the tool, and then deployed it systematically to the people who would eagerly adopt it.
When Pfizer was considering increasing the usage of cloud technologies in its organization, the natural place to deploy it was in R&D, the core engine that drives success for pharmaceutical companies. Pfizer R&D needed to quickly analyze, organize, and compute large amounts of very complex data and provide results back to scientists so they could make actionable decisions about a drug. But Pfizer lacked the enormous amount of computing power required to process the information quickly and affordably—two key metrics that determined the company’s profitability and success. To solve this problem, Pfizer partnered with Amazon Web Services (AWS) to design a tailored solution—specifically, a private cloud solution, so that Pfizer could offload mundane tasks and free up its internal high-performance computing (HPC) platform to process critical, yet sporadic projects.
By using thousands of off-site servers rather than relying solely on internal ones, Pfizer compressed compute time from weeks to hours, enabling it to make quicker financial and strategic decisions, and resulting in gains in the millions of dollars2. This tailored solution also freed scientists to focus on problems and solutions without worrying about technology limitations, decreasing Pfizer’s R&D costs by 7 percent, or $600 million, since implementing cloud in 20103. As Michael Miller, senior director of HPC for Pfizer R&D, observes:
Speed can literally change the way you think about a scientific problem4.
Pfizer’s use of AWS is an example of how organizations can effectively launch a new tool or practice by aligning it with business metrics that matter to employees. By focusing on improving operational needs rather than on adoption, Pfizer created incentives for employees, particularly those with the strongest need for it, to adopt the tool. As employees adapted to and created new behaviors, they saw improvements in their own performance, which drove further adoption in vertical and horizontal cascades. This method allowed Pfizer to catalyze new practices and the use of the tool much more successfully than if leaders had pushed for adoption directly5.
This metrics that matter approach is very different from a traditional firm-wide IT implementation; it is a targeted insertion of a new tool or practice to drive business performance. If you look at social software specifically, two-thirds of companies are interested in social platforms and approach them by deploying them agnostically across the enterprise; this, more often than not, fails to drive adoption and usage. As these companies have learned, adoption cannot be the primary aim of deploying a new tool or technology. Instead, adoption should occur naturally as employees willingly use the new tool or practice for their own personal benefit (and the benefit of the company).
There are three types of metrics to consider when launching a tool, each important to a different group within the firm:
- Exception metrics: For line employees, it is critical that they improve productivity and performance, whether through improving collaboration and communication or making exceptions to daily processes easier to handle.
- Operating metrics: Managers aim to drive improvements on operating metrics—near-term indicators of an organization’s performance and success.
- Financial metrics: Finally, executives are focused on improving financial metrics to please shareholders, often in lockstep with quarterly reports.
In an industry characterized by “eureka” moments, Pfizer’s choice to use cloud has afforded the company greater flexibility and capability to scale their operations as needed for critical research. Accessing offsite servers for the necessary computing not only decreases computing time, but also reinforces informal collaboration, accelerates time to decisions, and lowers the costs of new investments. The company benefits handsomely from this, but this benefit is actually driven by individuals finding value in the new tool. For example, the R&D HPC team is now able to expose resource costs very transparently back to the researchers in real time so users can make intelligent decisions on costs versus priorities. Miller claims:
It’s a game-changing approach to making better decisions within Pfizer6.
Not only has the targeted deployment of cloud led to adoption and behavioral changes across the R&D group, but it has also changed Pfizer’s competitive advantage. In 2010, Pfizer spent seven months working with a cloud services provider to design a secure system that fulfilled its compliance and security needs.7 Looking forward, Pfizer could also consider how cloud is deployed across the rest of the organization to enable rapid prototyping, much the same way R&D is able to use cloud now to rapidly undergo new research. A scaling edges strategy could allow Pfizer to adapt to the rapidly shifting health care markets by finding the right “edge” opportunity. Pfizer could even think about how it could shape the way the entire industry pursues R&D and consider how collaboration could potentially occur beyond its own organization and extend to the entire pharmaceutical ecosystem. Cloud could also enable Pfizer to create a flexible platform upon which scientists, quality controllers, customers, regulators, and others in pharma connect and collaborate to quickly design, test, and bring new drugs to market.
This pragmatic approach may start with an executive spotting a strategic challenge that impedes an important financial metric. Or perhaps a business unit manager finds a key exception that needs to be addressed in order to improve operating performance. Skepticism from employees, who are used to and comfortable with the status quo, is understandable, but positioning a new tool or practice as a means to affect key performance metrics can overcome skepticism and align the entire organization to adopt something new to drive change.
2 “Amazon touts Pfizer and other wins in the enterprise,” http://searchcloudcomputing.techtarget.com/news/1515748/Amazon-touts-Pfizer-and-other-wins-in-the-enterprise.
3 YCharts, “R&D Expense Rankings for Drug Manufacturers,” http://ycharts.com/rankings/industries/Drug Manufacturers - Major/r_and_d_expense?s=calc&d=desc.
4 Jeremy Quittner, “A Pharma Giant Goes a Little Bit Virtual,” Crain’s, June 6, 2010, http://www.crainsnewyork.com/article/20100606/SUB/306069989.
5 Megan Miller, Aliza Marks, and Marcelus DeCoulode, “Social Software for Business Performance,” Deloitte Development LLC, 2011.
6 Jeremy Quittner, “A Pharma Giant Goes a Little Bit Virtual,” Crain’s, June 6, 2010, http://www.crainsnewyork.com/article/20100606/SUB/306069989.
7 Derrick Harris, “How the Cloud Could Boost Amazon’s Slow-Moving Margins,” gigaom, April 4, 2012, http://gigaom.com/cloud/how-cloud-computing-could-boost-amazons-margins/.
As used in this document, “Deloitte” means Deloitte LLP [and its subsidiaries]. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.