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HPE life sciences point of view on how to deliver value “beyond the pill”

Table of contents

1 Preface and recommendations2 Current reality2 The life sciences market forces3 Change is accelerating in all areas of the life sciences industry framework4 A random use case to illustrate IT organizations’ current reality5 Vision5 Strategic themes6 Key IT value chain capabilities7 Essential traits of future-proof IT value chain capabilities8 Measure8 Risk9 Strategic outcome9 About the author

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Preface and recommendations

We are pleased to present this discussion paper outlining a point view by Hewlett Packard Enterprise (HPE) on how to disrupt the life sciences industry with digital products and services that deliver value to the patient beyond the pill.

In this paper, we offer a high-level vision, related strategic themes, and IT value chain capabilities that are critical for the success of IT organizations of life sciences companies.

In preparing this paper, we have taken into consideration life sciences industry-specific intelligence, the knowledge gained during current HPE customer engagements within the life sciences industry, as well as insights and trends that we see in industries related to the life sciences.

“The future of medicine is no longer blood and guts, but bits and bytes.” – Richard M. Satava, Professor—University of Washington

We aim to help develop, transform, and manage a best practice for IT operations that deliver on tomorrow’s patient expectations. In this context, we begin with three key recommendations and calls-to-action targeted at IT organizations of life sciences companies:

• Recommendation #1: Drive digital business model innovation through rapid innovation projects that promote digital assets to create new business value and revenue.

• Call-to-action #1: Cater to the notion of two-speed organizations by establishing a Fluid IT capability that concentrates on agility and speed. Use R&D IT to become the digital leadership team using Fluid IT means for the organization, the processes, and tools.

• Recommendation #2: Enable demand-driven provisioning of subscription- and consumption-based digitized services.

• Call-to-action #2: Establish a Hybrid IT capability and abstract sourcing and management across systems of engagement and systems of records, using a mixture of “run” delivery models from various service providers including legacy and in-house services.

• Recommendation #3: Provide access to hyper-personalized apps and an ever-growing portfolio of digital assets for more meaningful patient relationships.

• Call-to-action #3: Transform the existing IT value chain to a contiguous, fully digitized services management circuit. Focus on existing, burning IT capabilities that are not fit for purpose anymore for the promotion of digital assets.

To support life sciences companies’ increased focus on the patient, what strategic themes and value chain capabilities will drive their IT organizations toward overcoming the common thread—the convergence of the life sciences industry and technology—and enable them to deliver value “beyond the pill” in the era of “digital everything?”

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The remainder of this paper is structured around answering the preliminary question of what strategic themes and IT value chain capabilities will drive IT organizations forward toward life sciences companies’ goal of delivering value beyond the pill. Moreover, it provides the rationale for our conclusions and the basis of our recommendations.

Current reality

”Have a disease, get a pill, kill something.” The current medical treatment model can be summarized with these eight words by Siddhartha Mukherjee, an Indian-born American physician and scientist who won the 2011 Pulitzer Prize for his book The Emperor of All Maladies: A Biography of Cancer. The expectation for the future medical treatment is, however, that cells may soon replace pills, at least to some extent.

“Have a disease, get a pill, and kill something.”

–Siddhartha Mukherjee, Assistant Professor—Columbia University

Similarly, on the topic of the future of medical treatments, Professor Richard M. Satava, M.D. holds the opinion that tomorrow’s medicine is all about “bits and bytes.” For example, utilizing advanced robotics for surgical procedures or making use of virtual reality for tissue engineering.

Both men are forward-thinking authorities in their respective fields, and while the examples above look at life sciences from different vantage points, one thing is clear: The art of life sciences is changing rapidly.

The life sciences market forces

The triggers for change in life sciences are manifold. For example, consider ourselves as health consumers. When we see a doctor, how many of us are looking for confirmation of what we think we already know, based upon our own research? And don’t we expect instantaneous, personalized healthcare services tailored to our specific needs, only being willing to pay if the outcome is positive?

In contrast, and as outlined in Figure 1, healthcare budgets are becoming tighter year over year. Regulatory agencies are pushing for harmonized and global standards, while the industry is undergoing an intense technification, putting pressure on well-established life sciences players.

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One thing is clear: The art of life sciences is changing rapidly.

Figure 1: The life sciences market forces

Globalizedregulatory

environmentRegulatory agencies harmonizingprocedures, standards, and decisions.

Industryconvergence &new entrants

Innovative new technologies andnew entrants will gradually reshapethe industry.

Limitedhealthcare

budgets

Tighter HC budgets will enforceoutcomes-driven payments.New technologies will have to provebetter outcomes.

Longer lifeexpectancy

Global population is becoming older.Chronic diseases incidence levelsgrow 17% YTY.

Empowerhealth

consumers

Consumers demanding moreinformation and transparency.Consumers as director of their own healthcare.

Decentralizedpersonalized

healthcare

New technology and governancemodels will allow for a morepersonalized and decentralizeddelivery.

Pervasivehealth data

Abundance of health-related data ashospitals, insurers, government, and consumers (patients) provide accessto data sources.

Digitalmedicine

Internet (of Things), mobiletechnology, and digital medicine arereshaping consumers’ expectations.

Change is accelerating in all areas of the life sciences industry framework

Undoubtedly, the convergence of life sciences with technology, coupled with big trends like consumerization or “digital everything,” accelerates the rate of change across the core of the life sciences value chain, as well as in adjacent areas. Figure 2 lists four technification examples of where change is happening outside and inside of the life sciences core value chain.

1. Consumer-oriented technologies: Engaging with patients (consumers) anytime and anywhere through various types of IT, or employing wearables to enhance clinical trials, are just two examples of rapid change in areas related to life sciences.

2. Harnessing and exploiting clinical data: Hospitals around the world are starting to harness and exploit clinical data for various use cases, be it for medical coding, a real-time patient dashboard, or making the data available to third parties for monetizing purposes.

3. Real-world evidence for personalized treatments: Life sciences companies are keen to understand whether their drugs perform as well in the real world as they do in clinical trial environments. Those real-world evidence (RWE) initiatives rely heavily on, among other things, real-world clinical data that originates with third parties.

4. Profiling and monitoring consumer behavior: Insurance companies are eager to collect and analyze data from devices worn by individuals for the purpose of monitoring their wellness, chronic conditions, or daily habits and exercise routines.

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Figure 2: Examples of change across the life science industry framework

1 2 43

Patient/consumer Payer

Government &professionalbodies

ServiceSales &marketingSupply chain

1Consumer-

orientedtechnologies

2Harnessing and

exploitingclinical data

3Real-world

evidence forpersonalizedtreatments

4Profiling andmonitoringconsumerbehavior

Procurement &manufacturing

Research &developmentProvider

Digital everything

Fluid IT

Adjacent areas Core value chain Adjacent areas

Core IT Fluid IT

A random use case to illustrate IT organizations’ current reality

All of the above technification examples exploit pervasive digital connections among systems, people, places, and things. It’s little wonder that IT organizations are in the spotlight. They need to turn ideas into real digital products and services. The use case of edible electronic pills is a very relevant example that illustrates the level of expectation toward IT organizations of life sciences companies.

This use case1 involves enforcing the “power of a pill” by monitoring and reporting whether the patient has taken the pill, at what time of day, and whether the dosage complies with the suggested protocol.

In this use case and as shown in Figure 3, the pill is also a sensor, transmitting data as soon as it comes into contact with stomach fluid to an arm patch worn by the patient. The sensor is essentially made out of minerals, such as silicon, magnesium, and copper, and thus is fully edible. The arm patch sends data to a nearby device, such as the patient’s smartphone. The related app on the smartphone transmits the data to the patient’s doctor, or to a caretaking relative who wants to confirm that the patient is on track with taking the medication as prescribed by the doctor.

To bring such a use case to market, IT organizations must be ready to quickly develop a proof of concept for a mobile health application. They must run a pilot phase to test scalability, continuously promote code into production, offer a hyper-personalized mobile health application in a self-service marketplace, monitor mobile health consumption for billing and reporting, predict and resolve incidents and threats, capture user acceptance and experience from social media and the help desk, report on internal KPIs, and more.

1 Source: FDA clearance of ingestible sensor

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IT organizations are in the spotlight. They need to turn ideas into real digital products and services.

Photo: Proteus Digital Health

Figure 3: FDA approved edible electronic pills

Vision

Considering current reality, as life sciences companies strive toward their goal of creating value beyond the pill, the effort will not occur in a vacuum.

In the era of digital everything, every company across the life sciences value chain and ecosystem morphs into a digital business. In what we call the “idea economy,”2 every digital business can disrupt existing players in every direction, in every corner of the core value chain and the adjacent areas. And the rate at which new digital products and services come to market is accelerating.

Life sciences players must find ways to accelerate the speed of both innovation and transformation to deliver new outcomes to their customers and patients. And in this context, success is defined by how quickly life sciences companies and their IT organizations can turn ideas into value.

In other words, we envision for IT organizations of life sciences companies nothing less than an aptitude for promoting digital assets at business speed, and a shift to serving as a value creator.

Strategic themes

At HPE, we believe that the advent of digital everything is the opportunity for IT organizations across the life sciences industry to transform from a typical IT cost-efficiency play to an IT investment play.

Reflecting on the current situation and in support of the defined vision, a number of strategic themes arise that help crystallize the types of heavy lifting that IT organizations will need to do.

Strategic theme #1: Drive digital business innovation• Point of departure: IT organizations make significant investments into industrializing the

companies’ business processes and products, but don’t change the way companies do business.

• Point of aspiration: With the technification of the life sciences industry, IT organizations can drive the exploitation of pervasive digital connections among systems, people, places and things, enabling transformative growth.

Strategic theme #2: Enable the agile life science enterprise• Point of departure: Sourcing and technology decisions are made within the companies’

business units as IT organizations fail to respond to the speed-of-business demands.

• Point of aspiration: IT organizations are relevant to the business and deliver services instantly by preintegrating and consuming digitized assets as-a-Service offerings.

Strategic theme #3: Show business value of the investment in IT• Point of departure: The common IT investment denominator and business case is cost

savings, despite the fact that conventional IT capabilities are already industrialized with little cost-saving rewards.

• Point of aspiration: Accelerating velocity is the key to fast ROI. IT organizations can drive rapid digital innovation projects that promote digital assets to create new business value and revenue.

2 HPE, “HPE Matter; The Next Enterprise”, 2015

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In the era of “digital everything,” every company across the life sciences value chain and ecosystems morphs into a digital business.

We at HPE envision for IT organizations of life sciences companies nothing less than an aptitude for promoting digital assets at business speed, and a shift to serving as a value creator.

Strategic theme #4: Unlock cost savings• Point of departure: Front-end heavy “plan” and “build” IT solution lifecycles and committed

OPEX “run” cost leave IT organizations with limited headroom for innovation and change.

• Point of aspiration: Leaner IT solutions lifecycle with increased productivity and operational efficiency by industrializing code promotion into production, and using a mixture of “run” delivery models (Hybrid IT).

Strategic theme #5: Secure the digital enterprise• Point of departure: Increased security exposure as companies have outgrown their protection

capabilities, especially for digital assets that are offered beyond the companies’ borders.

• Point of aspiration: IT organizations take pro-active measures and dynamically provision security controls, based on security exposure that is measured continuously and in real time across the entire ecosystem.

Key IT value chain capabilities

Moving toward the vision where IT organizations of life sciences companies create strategic agility and value, and where IT organizations deliver against the five strategic themes, requires attention to a number of key IT capabilities.

These key IT capabilities are ultimately targeted at promoting digital assets (see recommendation #1), and providing access to hyper-personalized apps (see recommendation #2) for deeper and more meaningful relationships with patients.

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Figure 4: Key IT capabilities along the IT4IT value chain

Plan Life sciences companies

ecosystem

Marketplace to hyper personalize apps

Rapidvulnerabilityidentification

and resolution

Applicationlifecycle

managementrepository

Continuouscode

testing

Rapidsoftwaredelivery

ProgrammableIT/bimodal IT

Smartmachine-enabledservices

Continuousbusiness

and ITalignment

Service andapplication

portfoliomanagement

Project andportfolio

arrangement

Executiveflight

control

Singlesystem

of record

SocialITSM

Predictiveincident

identificationand

elimination Real-timethread

detection

Assetlifecycle

management

Infrastructure

Automationengines

HybridIT

Intelligentorchestration

engines

Consume/buildSource/deploy/o�erRun

We like to organize these IT capabilities along the IT4IT3 value chain, which is a blueprint for a contiguous, fully digitized service lifecycle management circuit that we developed together with companies, such as Shell, AT&T, and Munich Re. The blueprint ensures continuous alignment between the business and IT, as shown in Figure 4, from planning to consumption and from deployment to run.

The IT capabilities shown in Figure 4 summarize people, process, and technology and related governance. Some of these capabilities are conventional IT value chain capabilities, but are no longer fit for purpose for the new style of business. Therefore, they need to be transformed into something new.

Besides conventional capabilities, a number of new IT value capabilities need to be introduced and established, such as “rapid software delivery.”

Rather than a revolutionary approach in which IT organizations attempt to tackle all of the IT capabilities at once, this transformation is intended as a journey. IT organizations can start their transformation at any point on the diagram.

Essential traits of future-proof IT value chain capabilities

Below are some examples of how conventional and new IT capabilities need to be transformed, and/or established to create a successful model for tomorrow’s IT organizations.

• Digital marketplace: One-stop-shop for the entire ecosystem, providing access to hyper-personalized apps and all manner of digital assets (systems of engagement) for deeper and more meaningful relationships with customers, partners, and increased employee engagement and productivity.

• Smart-machine-enabled services:4 These are a new kind of industrialized and commercially available service that will shift from labor-intensive to digitized operations, resulting in significant cost savings and increased quality and speed.

• DevOps capability: Paradigm shift from “design-to-last” to “design-for-change,” and the ability to accelerate business innovation across systems of engagement and systems of records by managing the entire IT stack as code.

• Rapid software delivery capability: Ensures fast-paced incremental releases of software to manage large-scale digital business projects.

• Continuous code testing capability: In support of a continuous delivery value chain, continuous code testing is targeted at the automated execution of predefined suites of test cases, providing rapid feedback of test results to developers and other stakeholders.

• Rapid vulnerability identification and resolution capability: As applications are a prime target for cyber-attacks, this capability is in support of building security from the inside out, scanning and containing threats before they become a problem, prioritizing issues based on the companies’ preferences and policies.

• Hybrid IT capability: Ability to abstract sourcing and management across systems of engagement and systems of records, using a mixture of “run” delivery models from various service providers, including legacy and in-house services.

3 Source: IT4IT overview

4 Gartner term that includes technologies such as process automation, virtual agents, autonomics, cognitive computing, artificial intelligence and machine learning

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• Intelligent orchestration engines: Ability to orchestrate process automation across multiple functional requirements, using built-in intelligence to change workflows dependent on policies and business outcomes.

• Automation engines: Ability to automate tasks throughout the entire IT stack and across smart-machines and IoT.

• Asset lifecycle management capability: Ability to control and manage IT assets in a user-centric subscription model where cost is directly linked to content consumption and application utilization, facilitating asset transparency across the entire IT environment, and providing a data stream for smart-machines.

Measure

Considering the vision, the strategic themes, and the suggested underpinning IT value chain capabilities, we foresee a multidimensional business impact in the core life sciences value chain and adjacent areas.

We have seen business model innovation across all areas of the life sciences industry framework. For example, we successfully implemented a real-time patient dashboard at the Lucile Packard Children’s Hospital Stanford,5 targeting the prevention of human medical errors, improving compliance, and predicting what patients will need intensive care.

Similarly, we partnered with a research institution to drive an initiative targeted at harnessing and exploiting clinical data to third parties, benefitting initiatives like real-world evidence (RWE). This initiative represented a potential new revenue stream for the research institution.

We also pushed the practice of medical coding to the next level by assisting a health care and cutting-edge medical institution in improving the accuracy of its billing and invoicing.

In addition, we are helping more than 100 hospitals across Spain deliver an improved patient experience by implementing an HPE industry solution using, among other elements, electronic medical records.

Risk

From our perspective, transforming IT organizations of life sciences companies into value creators that can promote digital assets at business speed carries the following risks:

• IT organizations are unable to take control of technology and sourcing decisions within their ecosystem, leading to increased risk exposure, integration challenges, and increased cost.

• Companies resist putting IT organizations in the driver’s seat for the development and promotion of digital assets, keeping their main focus on cost reduction and increased operational efficiency.

• IT organizations lose credibility with business stakeholders because of lack of speed and the traditional IT approach to developing IT products and services.

• Companies have inadequate means for securing the digital enterprise and an insufficient understanding of how to avoid or mitigate risk, leading to an increased overall risk exposure.

5 Reference: HPE & Lucile Packard Children’s Hospital Stanford

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Strategic outcome

Building a foundation for successful execution of strategic priorities is never uncomplicated. However, we at HPE view the vision, strategic themes, and the underpinning IT value chain capabilities as essential for helping life sciences companies move beyond the pill. Furthermore, we believe the three recommendations offered in this paper can help IT organizations kick-start their transformation journey.

In summary, we foresee the following strategic outcomes for IT organizations of life sciences companies:

• The ability to drive digital business model innovation by developing and promoting digital assets as a strategic imperative and a radical departure from today’s status quo

• The ability to increase time to value, and therefore create a competitive edge within the marketplace

• The ability to improve the patient’s experience and engage patients within context

Learn more at hpe.com/us/en/services/consulting/industry-specific.html

About the author

Andreas Jenzer is a distinguished technologist for HPE and an 18-year IT veteran with experience in life sciences and other verticals. In his role, he looks after a number of outsourcing clients where he offers thought leadership and strategic direction around next-generation IT capabilities and architectures. An open group master certified architect, Andreas is the author and co-author of articles such as “Maximizing the Value of Cloud for Small-Medium-Enterprises” and books dealing with topics such as implementing SAP.

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© Copyright 2016 Hewlett Packard Enterprise Development LP. The information contained herein is subject to change without notice. The only warranties for Hewlett Packard Enterprise products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. Hewlett Packard Enterprise shall not be liable for technical or editorial errors or omissions contained herein.

4AA6-4346ENW, February 2016

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