The pharmaceutical industry is at a crossroads. Changing goals in the healthcare sector particularly the move to value-based care are putting a pinch on downstream organizations to reduce expenses while improving results. Longstanding inefficiencies in supply chain and research and development processes have prevented pharmaceutical companies from keeping pace with the new demands for lowering costs and ramping up quality in the sector. In response, many organizations are moving to transform their operations around digital technologies to foster greater collaboration, process coordination and technology use.
According to research from McKinsey, the healthcare industry is beginning to move quickly to adopt digital technologies, and the pharma sector is facing uncertainty as a result. In many cases, major pharmaceutical brands have begun to implement digital technologies, but are struggling to properly adapt to the changing demands of the healthcare sector at large. As such, the organizations that are effectively streamlining decision-making processes for patients and physicians are gaining an edge.
"Organizations that are effectively streamlining decision-making processes for patients and physicians are gaining an edge."
The core problem facing pharma companies is not a lack of awareness that they need to adopt digital technologies, it is instead in how much companies are willing to prioritize the process.
McKinsey created a scale to score how companies in various sectors perform in terms of digital maturity. The digital leaders tend to score somewhere in the 70 to 80 range, with top-performing industries, such as retail, travel and hospitality, boasting average net scores between 40 and 50. The global average digital maturity score for all businesses studied by McKinsey was 33. The average for the pharma sector was 27. The problem is simple: Just 10 percent of companies polled as part of the study said they are basing their strategic decisions on a clear understanding of how digital impacts their business.
Among pharmaceutical industries, many problems associated with digital transformation stem from limitations in building out modern technology functionality across the business as a whole. Sixty percent of pharma respondents told McKinsey that they have only partially linked digital initiatives to their overarching enterprise tactics.
This describes the situation Merck found itself in before it came to work with Appian. By partnering with us, the leading pharma brand has gained greater operational visibility and coordination, setting a foundation for true digital transformation.
Merck stands clearly among the leaders in the pharma sector. The brand coordinates operations across approximately 69,000 employees spread over more than 140 countries. It spent $6.8 billion on research and development in 2016 and created revenues of $39.8 billion in that same year. These figures stem from a brand identity focused on a vision for making a positive difference in people's lives. Merck works to develop medicines, vaccines and animal health products that are backed by research-intensive processes and drive health care innovation.
Before coming to Appian, Merck faced a problem that is common in the pharmaceutical sector. The industry is filled with specialized technology solutions, particularly database systems, that support various types of research, supply chain operations and other lines of the business. Over time, these technologies have evolved and grown alongside the industry, turning them into powerful tools for the various users they serve. However, these systems are typically siloed in the lines of business they support, limiting how pharma companies can use the technologies to support overarching business goals.
With the current demands surrounding digital transformation in place, companies can't afford to leave data segregated within the business. Too many teams depend on one another to get the job done to make users jump through hoops to get basic information. A snag in the supply chain can impact research teams, production lines and even physician stakeholders down the line. Merck wasn't willing to tolerate this inefficiency, and they ran into Appian while establishing a regulatory information management plan and realized other options were available.
Merck wanted to eliminate silos and gain a broad, end-to-end vision into how the company operates at any given time. Appian proved to be a key strategic enabler in making this possible, giving users the tools they needed to gain greater transparency into the entire business. Because of this, users were empowered to truly envision the full possibilities of any drug and create more value. In essence, Appian brought together structured and unstructured data sets, allowing Merck's employees to achieve their core mission with greater efficiency.
Merck chose Appian because we offered the most complete end-to-end solution for connecting data and unstructured information in a cohesive way. One factor that really stood out for Merck was our core platform interface. The simplicity of the platform configuration allows colleagues to collaborate and problem solve with ease, eliminating the learning curve that comes with new technology. Furthermore, without any extra effort, users can access the Appian platform with a phone, a tablet or a traditional computer system. The platform gives the brand flexible access into its systems.
In many pharma companies, employees are forced to waste a great deal of time looking for information and converting raw data into knowledge. Appian is making that cycle shorter, simplifying how people get to information while giving them the power they need to move forward.
With Appian, Merck has been freed to bring important medicine to patients instead of having to spend huge amounts of time learning IT systems. This is the essence of digital transformation in pharma - breaking down the underlying IT barriers that have historically held back innovation.
With value-based care pushing the pharma sector to perform research and development with greater speed and efficiency, organizations need solutions that help them take full advantage of the data at their fingertips. Merck was able to work with Appian to rebuild its business capabilities around digital technologies, and we can do the same for you. Our application development platform offers low-code technologies that empower companies to create new apps with ease and create data workflows based on parameters already built into the platform. As such, users can focus on their business needs and let the technology slip into the background.
Want to learn more about our work with Merck? Check out our customer video here.
Appian is a software company that automates business processes. The Appian AI Process Platform includes everything you need to design, automate, and optimize even the most complex processes, from start to finish. The world's most innovative organizations trust Appian to improve their workflows, unify data, and optimize operations—resulting in better growth and superior customer experiences.