T H E T R A N S F O R M AT I O N A L C I O

Harvey Nash/KPMG CIO Survey 2018

Pharmaceuticals Industry Findings

The Harvey Nash/KPMG CIO Survey is the largest IT leadership study in the world, with almost 4,000 respondents
across 84 countries, representing over US$300bn of IT budget spend.

This Pharmaceuticals industry snapshot provides survey responses from 59 IT leaders on some of the key
topics, and highlights several areas where this industry’s responses differed significantly from those
across all industries.

Digital Strategy
Does your organization have a clear Does your organization have a Chief How effective is your organization at each of
digital business vision and strategy? Digital Officer or someone serving in the following capabilities? (Very/Extremely
that capacity? Effective)
Yes, Pharmaceuticals
enterprise- No Understanding the impact of 39%
digitization on your industry 48%
wide
23%
Pharmaceuticals 4% 37% Integrating core business
systems with newer digital
30%
solutions 32%
32%
41% Relying upon an overall
All 28%
49% digital vision to guide
Industries decisions 32%
All Industries 11% 39%

27% Hiring and developing 21%

people with digital skills 24%
28%
Redesigning business
Yes, we have a dedicated CDO processes to take 19%
advantage of digital 24%
technologies
Yes, within Yes, CIO or someone else in that role
business units Pharmaceuticals All Industries

Pharmaceutical companies are less likely
to maintain an enterprise-wide digital
business strategy than others (23% vs.
32% for all industries), and are roughly
equally likely to have one within business
units (28% vs. 27%). Overall, 51% have a
clear strategy, less than other industries.
Only 41% of Pharmaceutical companies Pharmaceuticals effectiveness in key digital
have a CDO or equivalent, with 4% capabilities tends to lag peers in other
having a dedicated CDO, and an industries. Pharmaceutical companies are most
additional 37% having the CIO or effective at understanding the impact of
someone else act in that role. Overall, they digitization (39%), but struggle with
are less likely than others to have a single redesigning business processes to take
executive lead their digital strategy. advantage of digital technologies (19%).

Which are the most important goals when How effective has your organization been in Overall, how effective has your organization
prioritizing digital technology initiatives in using digital technologies to advance the been in using digital technologies to advance
your organization? following goals? (Very/Extremely Effective) its business strategy?

Improving business process 70% Improve business process 31% Pharmaceuticals Very/
efficiency 54% efficiency 28% Not/slightly extremely
effective effective
Enhancing the customer 52% Enhance the customer 15% 17%
experience 60% experience 27%

Developing new products 48% Develop new products and 19%

and services 49% services 26% 22%
36%
Developing new Develop new 46% All
delivery/distribution 41% delivery/distribution 15%
27% 19% Industries
methods methods

Growing revenue from 41% Grow revenue from existing 19% 42%
existing customers 52% customers 20%
37%
Attracting new customers 26% Attract new customers 13%
55% 20%
Moderately
Pharmaceuticals All Industries Pharmaceuticals All Industries effective
When prioritizing digital investments, Despite its high importance, just 15% of Like other industries, Pharmaceutical
Pharmaceutical companies most heavily Pharmaceutical companies rate themselves companies report low overall effectiveness
focus on improving business process as very effective or better at using digital to levels in their digital strategies, with just
efficiency (70% vs. 54% for all industries) enhance the customer experience. They are 17% describing their digital strategies as very
and enhancing the customer experience more much effective at using digital to improve effective or better.
(52% vs. 60%). business process efficiency (31%).
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
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 Budget/Priorities Customer Capabilities
Looking forward, over the next 12 months, What are the key business issues that How effective is your organization at each of
what do you expect your IT budget to do? your management Board are looking for the following capabilities? (Very/Extremely
IT to address? (top 5) Effective)
Pharmaceuticals
Stay the Increase Improving business 76% Leveraging customer data
30%
Same processes to deliver personalized
62% 19%
customer experiences

Increasing operational 66% Measuring profitability by 24%

efficiencies 61% customer 27%
42% 38% All 46% Delivering consistent and
63%
Industries 48% stable IT performance to the
62%
Creating engaging customer 22%
business experiences 26%

14% Delivering business 63%

intelligence / analytics Generating actionable 20%
48% insights from customer data 23%

Managing operational risk 56% Having a single view of

12% and compliance 9%
38% customer interactions
Decrease across all service channels 19%

Pharmaceuticals All Industries Pharmaceuticals All Industries

Pharmaceutical companies are slightly Compared to IT priorities in other industries, While Pharmaceuticals exceeds cross-
less optimistic about their IT budgets Pharmaceutical management Boards more industry benchmarks in leveraging customer
for next year than companies in other heavily emphasize improving business data to deliver personalized experiences
industries, with 46% expecting an increase processes (76% vs. 62% for all industries), (30% vs. 19% for all industries), it struggles
in their budgets, compared to an all- and increasing operational efficiencies with its effectiveness in other critical
industries average of 48%. (66% vs. 61%). They also prioritize customer-focused capabilities, with no more
managing risk and compliance more than than 24% rating themselves at least very
others. effective at any, well below cross-industry
standards.
Technology & Innovation

How would you characterize your In which functions have you implemented How important is it to have an innovative,
investment in the following technologies? digital labor / automation? experimental culture in your organization to
(Moderate/Significant Investment) ensure its digital strategy is a success?
Not
Very important
Artificial intelligence / 28% Within IT 26%
machine learning 24% 28% important
Supply Chain 16% 10%
19% 14%
Robotic process automation
18% 14%
Finance
18%
38% 8%
On-demand marketplace 17% 14%
Customer Support
platforms 23% 22%
41% All
HR 14% Industries
Internet of things 14% 16%
21% 51%
Marketing 10%
14%
Augmented/ virtual reality 6% 8%
10% Sales 52%
14%
Blockchain / distributed 6% Legal 2%
ledger 9% 5% Quite
important
Pharmaceuticals All Industries Pharmaceuticals All Industries Pharmaceuticals

Of next-generation technologies, While digital labor remains in its relative As with companies in other industries,
Pharmaceutical companies are most likely infancy both in Pharmaceuticals and Pharmaceutical companies view having an
to have invested in A.I./machine learning elsewhere, Pharmaceuticals has most innovative, experimental culture as a
(28% vs. 24% for all industries) and robotic focused its digital labor/automation efforts critical component of the success of their
process automation (19% vs. 18%). within IT (26% vs. 28% for all industries) and digital strategies, with 90% viewing it as
in Supply Chain (16% vs. 14%). very or quite important.

Conclusion
The digital divide continues to impact in pharmaceuticals. Leveraging the emerging digital ecosystem
Further information
to drive overall enterprise value continues to challenge CIOs in this sector. Pharmaceuticals continue
to have no clear digital vision and strategy, and this is evident by the slow adoption in using
Justin Hoss
intelligent automation within IT versus inside core functions such as supply chain. Furthermore, CIOs National Technology Sector leader – Life Sciences
continue to struggle with leveraging data to drive insights into customer profitability; having a single KPMG in the U.S.
view of customer channels and enhancing the customer experience, showing a lack of integration T: +312 342 1166
between the digital strategy and an executable data architecture roadmap. Because of this, we are E: jhoss@kpmg.com
starting to see a new role emerge in pharmaceuticals, the Chief Digital Officer, who will drive the
innovation required to move the enterprise ‘beyond the pill’, while the CIOs who are slow to disrupt
themselves continue to be pushed to traditional IT operations roles, which are quickly being
automated and moved to the cloud.
www.kpmg.com/ciosurvey

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examination of the particular situation.
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
All rights reserved. Designed by CREATE | CRT099516A. The KPMG name and logo are registered trademarks or trademarks of KPMG International.