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Small-scale innovations – some of them seemingly trivial – can have a significant positive impact in terms of cost-savings and improved efficiency.
By Paul Cassidy, Head of IT Strategy and PMO, Shire Pharmaceuticals
Two years ago, under a new CEO, Shire underwent a significant reorganization designed to better serve patients and grow our business by collapsing multiple businesses and establishing a simple “One Shire” organizational model. We also had a new CIO, who viewed that larger transformation as an opportunity to streamline how we had been delivering IT products and services.
Prior to that, IT was organized around our therapeutic business lines. We had a number of IT functions that reported into local business lines rather than the corporate headquarters. When our CIO joined, it was readily apparent that the way we delivered IT services and capacity created numerous redundancies and prevented IT from responding effectively to overarching business demands. So as the company reorganized and embraced a global supply chain and quality model, IT also came together as one global corporate IT function.
We took several months to review how IT operated in the past and rethink how it might function in the future to better support the business. One of the biggest outcomes of that effort was our Effectiveness and Efficiency initiative, which fell under my team’s responsibility. We wanted to identify the most obvious areas where we could expend a little bit of effort to greatly streamline certain IT capabilities and deliver more value to the business. Those could be simple things, like eliminating the cost of redundant systems and the related infrastructure needed to support them, or more complicated initiatives, such as building consensus around the varied processes done different ways in different business units.
An IT Efficiency Reboot
We started from a clean sheet of paper. Our charter was to come up with innovations, often small in scale, which could have a big impact in terms of cost savings and improved efficiency.
We began implementing the concept two years ago, talking among the IT leadership and some consultants we were working with. We knew there were some glaringly obvious opportunities for us. We had nine different learning management systems. There was no question that going from nine to something less than nine would have a positive impact. We had 13 different analytics platforms, some of which should have been retired years ago or were only used for a very small function within the business. We had five different change management systems. It was clear we needed to settle on one.
Crowdsourcing IT Transformation
As a first step, the leadership team looked at the whole of the IT function—essentially broken down into plan, build, and run—to figure out what systems and processes we needed to harmonize. We planned to tackle the low-hanging fruit first.
Then we continued meeting to ask, “What else would make a difference? What else could we do differently to drive more value from IT and deliver more value for the business?” We’d gotten as far as we could get on our own, but we knew we had an IT organization eager to share their ideas.
First, I identified a leader for the IT Effectiveness and Efficiency “Office.” Our appointed leader had come to us through the acquisition of a biotech company. He was a great technical leader who worked well with both vendors and the broader IT organization. It was a challenging position that often placed the Effectiveness and Efficiency lead in the middle of the long-standing “business-as-usual-why-would-we-change?” crowd and the emerging “we-have-to-get-better-or-else” pack.
While we socialized our desire to gather ideas for improvement from everyone in the IT team, we accumulated a large list of suggestions. Our leadership team grouped them into three categories: those with a high likelihood of success, those that needed more research – and those that weren’t worth pursuing.
We then began prioritizing those proposals based on their probable value. One idea that we immediately tested was a tool that was able to take a production snapshot of an environment so that an exact copy could be spun-up in a new virtual environment within a couple of hours, thus eliminating the need to maintain a development environment for that system. Ideas like this promised significant savings and the elimination of the complexity of managing servers only used when there were new projects.
A Culture of Improvement, One Stakeholder at a Time
Another quick pay-off involved rethinking the capabilities of the iPads we were purchasing. Standard-issue iPads automatically have 3G or 4G connectivity. But the person who runs our mobility platform pointed out that the vast majority of users never use the 3G or 4G. With the exception of our sales force, most of our tablet users employing the iPad to monitor a plant or do analytics in a meeting don’t need that capability. That idea saved us a half a million dollars a year.
Simple as it sounds, the idea wasn’t the most straightforward one to implement. Our carrier didn’t want to sell us non-3G or -4G iPads. So we had to renegotiate our contract with them, stipulating that we would purchase iPads for our sales force from them but could buy iPads for any other purpose from any retailer we wanted, including Apple.
Some of the ideas have come from the business, like the decision to standardize on an enterprise platform for business analytics. But the vast majority of ideas have come from IT.
The biggest challenges remain making this initiative a priority amid the increasing IT demands of the business and getting the people who generate the ideas to make enough time to see their innovations through. There’s no question everyone already has a lot on their plate. But if you put your idea out there and it has legs, you have to be willing to own it. I want our employees to have the experience of not only coming up with a great idea, but getting it done. If the person honestly doesn’t have the expertise to take over, we’ll work with them to find someone who does. But the best ideas come from those who know their areas inside and out.
It’s always easier to get some attention around these initiatives when we’re coming up on our year-end budgeting cycles. I can turn to my colleagues and show them how we’ve identified $5 million worth of savings that’s deliverable using just $500,000 worth of investment in full-time employee time. That’s $4.5 million worth of savings we can take to the bottom line immediately. We try to make the benefit as concrete as we can.
And we explain not only the cost savings we’ll be able to achieve but also the improvements in efficiency and effectiveness. By consolidating our change management platform, we were able to reduce the amount of time it takes for a change to move through the system by 30 percent and to reduce errors associated with management of that change.
We have not offered any financial incentives for employees to participate in the program. Instead, we have marketed our IT transformation crowdsourcing program by highlighting the satisfaction our people get from suggesting – and being recognized for – an improvement that positively impacts Shire’s ability to serve our patients around the world. We’ve found that, generally speaking, IT people are excited about being able to change something for the better.
From Small Improvements to Major Changes
Last fall, a larger company made an acquisition bid for Shire. After months of uncertainty, Shire emerged from the failed acquisition as a separate entity. But the innovation mindset we had worked so hard to foster had stalled. Team members had changed, and with our new-found freedom in the marketplace, Shire immediately made an acquisition of our own.
As we gained our identity back, we continued to make progress on a number of our initial recommendations and decided to implement the biggest idea we had: a comprehensive supplier strategy, which we called Partner Full Potential. The hallmark of this program was to streamline our supplier landscape from 55-plus vendors to a handful that would enter into multi-year “exclusive” contracts with Shire to deliver IT services. As with our previous innovation initiatives, our focus would continue to be on value, efficiency, and cost.
That program is currently in the implementation phase. And while it has brought significant cost savings, we continue to look for those smaller opportunities that will help us deliver the IT services that will support Shire’s aspiration of becoming a leading biotech focused on rare diseases and specialty conditions and that make IT a better place.
As we continue to negotiate new contracts with our suppliers, one thing we are very keen on is innovation. Each supplier now includes an “innovation fund” in the contract, which is money that comes back to Shire for our investment in something new. While the original innovation initiative gained traction within IT, we are finding that suppliers are eager to participate in the process, representing a win for both parties. An investment that improves a process, for example, makes it easier for the supplier to manage that process and also delivers better results for us.
Our original incremental innovation process has gone through an incremental change. While there is always a need for innovation on even the smallest of things, we have broadened our focus to include larger programs that will make a more significant impact on Shire’s ability to enable people with life-altering conditions to lead better lives. In the end, all of our innovations, whether small or large, impact our patients. That’s the reason why we are all here and what keeps driving us to do better every day.
Small-scale innovation can have a surprisingly big impact in terms of cost savings and improved efficiency.
When you have run out of ideas for innovation, tap the creativity of the entire IT team, effectively crowdsourcing your innovation initiative.
Despite the regular demands that people have on their time, encourage the people who generate the ideas to see their innovations through. The most effective execution of a good idea will come from someone who knows his or her area inside and out.