Michael Schmelmer, CIO at pharmaceutical giant Boehringer Ingelheim, recognizes technology is key to helping his organization steal a march on its rivals and that developing digital products is key to achieving this. He believe that this will also help to guard against the risk of disruption in an ever-competitive marketplace.
“Our priority is to serve mankind and to improve the health of human beings and animals,” he says, referring to his priority for helping the business transform with advanced technology. “To meet this aim, we are developing digital products – we want to interact digitally.”
Schmelmer, who has led IT at Boehringer Ingelheim for almost six years, has an extensive background in digital communications, having previously spent twelve years at Infineon Technologies. He is using his experience to deliver new value through the implementation of digital products and innovative technology for the firm’s clients.
The desire to create lasting change is significant. Schmelmer looks at the impact of nascent firms like Airbnb and Uber and expects his firm to be similarly disruptive in the pharmaceutical sector. “We want to bring more value to our customers, whether that’s the healthcare providers, the physicians or the patients,” he says.
Schmelmer says Boehringer Ingelheim has already taken a crucial first step in its aim of disrupting rather than being disrupted. In June this year, the firm announced the creation of a digital lab, known as BIX, which focuses on the development of innovative digital products and solutions in healthcare.
The lab is run as an independent start-up and its employees work closely together with the three business units of the company: human pharma, animal health, and biopharmaceuticals. Schmelmer says BIX provides a platform for joined-up creativity.
“It’s so important that the new team in BIX is working and collaborating from day one with existing functions around the rest of the business,” he says. “After the pilot phase, which is developed by the BIX team, we use these experiences to help us roll the initiative out across the whole organization.”
BIX develops prototypes for new products which the business units then bring to market. The approach ensures smart ideas from the lab are quickly integrated back into the parent business. Boehringer Ingelheim is set to invest 10 million euros in BIX through 2017 and is recruiting a multidisciplinary team of 50 specialists from around the globe.
Schmelmer says the business has implemented agile methodologies to help run the lab. As part of this process, the firm draws on back-end and front-end designers, who create solutions for the business and its customers.
“The lab is one of the tools that we want to use to disrupt the market,” he says. “We have a lot of other initiatives that we want to use as well. The most important thing for being a disruptive factor in an organization is your people. That’s why we are hiring new talent and we’re bringing in a new culture that will help us to disrupt the market.”
Receiving boardroom backing
CIOs looking to push a transformation agenda need strong executive support. Schmelmer says he is lucky to have a C-suite team that pushes disruption. “The board was involved in the development or our whole digital strategy from day one,” he says.
“We have a clearly defined process about how we want to develop the products and that is driven by the requirements of the business. The board is product master in our projects. We interact with all their demands and they own all our digital initiatives.”
Schmelmer says the executive team forms part of the organization’s digital prioritization steering committee and is even involved operationally on a day-by-day basis. With boardroom buy-in confirmed, he says the biggest challenge is ensuring the rest of the organizations recognizes the value of transformation.
“It is not standard practice to use digital media and channels in the pharmaceutical sector, but it is the future. To convince your people about the power of change, the leadership team must take responsibility and bring transformation into the organizational culture,” says Schmelmer, whose firm employs 50,000 people around the world.
“Taking digitization to a global scale is not about technology – it’s about the culture, the people, and the transformational approach. The difference comes from the skilled people your business holds, and the methodologies they apply to their initiatives and ideas. Convince your people that what you change now provides a new way of looking at the organization.”
Identifying new opportunities
Transformation remains a work in process. To ensure success, Schmelmer says he and his colleagues place customer experience at the heart of the design process, especially when it comes to the creation of new digital products and services.
“If you’re working on non-pill related products, you need to interact with your customers from day one,” he says. “They are part of our initiatives. We involve them in the app design process, for example, and they are part of our workflow. In our pilot projects, real customers are part of the test process and they give us feedback.”
Schmelmer recognizes that his firm must prioritize data security as it develops new digital products. The good news is executives in pharmaceutical companies are used to working with information at the highest possible security level. “It’s in our DNA as a business; we know how to handle the risks,” says Schmelmer.
“That’s a big advantage for us because we know exactly how to deal with threats. We are aware of the risks but we see more of an opportunity around how we can create value out of our data. We are always looking for new ways to use our information.”
And when it comes to those prospects, Schmelmer says he and his team have two key aims. “In the short-term, we want to deliver the first, successful initiatives this year and next. In the long-term, I would consider that our transformation has been successful if the patient is getting value from our digital products,” he says.