“An Organisational study of ICT Innovation as a Strategy in Five Pharmaceutical and Technology Cases” MBS - Information Systems for Business Performance Stephen McCarthy Dorota Gedrowicz Kieran Mulcahy Kristina Gyurova Robert O’Leary Course Coordinator - Dr Karen Neville, UCC Project Mentor – Mr Gerard O’Riordan, HSE Date: 30 th August 2012
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“An Organisational study of ICT Innovation as a Strategy in Five
Pharmaceutical and Technology Cases”
MBS - Information Systems for Business Performance
As many authors pointed out knowledge based assets, especially those that were unique and
inimitable, offered real strategic potential; yet, as with innovation value, the amount of value derived
from intra/inter firm knowledge was based on how existing and new knowledge could be
transformed into wisdom and then commercially exploited (Miller & Shamsie, 1996; Osterloh &
Frey, 2000). In other words ICT must become a “specific instrument of entrepreneurship”, in order to
fulfil Peter Drucker’s (1985) definition of innovation where it becomes a process that utilises
resources to create profit and added value.
In the next subsection, the white paper looked at how exactly ICT innovation can create new wealth
and foster innovative success through ICT.
2.4.2 How ICT Fosters Organisational Innovation
As storage memory and CPU have become increasingly inexpensive in recent years, the business
world has seen an explosion in the amount of data captured (Chaudhuri & Dayal, 1998). Based on
their latest predictions regarding the area of “Big Data”4, EMC (2011)
5 believed the amount of data
stored worldwide would soon reach 32.5 zeta bytes. This has consequences for the management of
data, information and innovation pipelines in organisations.
4 “Big Data” is term coined to refer to large, complex, and dynamic data sets which are stored in organisations. By
analysing this body of data (i.e. through data mining) decision making can be aided. 5 EMC Corporation is a multinational organisation involved in the procurement of information systems and data storage.
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Alavi & Leidner (1999) stated that knowledge must be effectively organised and not simply hoarded
otherwise the process of assimilating information into knowledge will be inhibited. A firm’s ability
to learn from both successful and unsuccessful innovative efforts and make decisions depends on
how effectively they capture and share knowledge through ICT (Leonard & Sensiper, 1998; Osterloh
& Frey, 2000).
The case of technology company Intel provided an excellent example of the benefits that can be
realised from directing more attention to ICT innovation efforts and management of organisational
data. Following a change in their strategy, IT became “the fastest-growing contributor to Intel’s
intellectual capital” for reacting to market requirements, with “more than 700 IT-related invention
disclosures were submitted in 2006, with 85 approved for patent filing or trade secret” (Westerman
& Curley, 2008, pg. 33 - 45).
Even more encouraging was that the benefits of increased ICT innovation were visible on the
company’s financial accounts also, as evident in figure 7 below.
Figure 7: Westerman & Curley (2008, pg. 46) -
“Business Value Delivered Through 2006 by Intel’s IT Innovation Initiatives”
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PPD offered example where ICT had fostered innovation in the pharmaceutical industry. PPD, a
research service agency for many large clients in the biopharmaceutical industry, adopted a
customised version of Microsoft’s ProtoSphere Lync Edition 2010 (www8). This Ubiquitous
Communication Technology helped increase collaboration across the firm system boundaries, and
reduced R&D costs overall. By also utilising ProtoSphere Lync’s “text chat, voice over IP,
application sharing, blogs, wikis, and user profiles”, the firm was able to earn a six month return on
investment and build stronger collaborative innovation networks (www8).
However, a way of accurately measuring ICT’s business value was still needed, in order to convince
decision makers how ICT innovation can benefit their organisation. This point was dealt with in the
following subsection.
2.4.3 Measuring ICT’s Value Contribution to Innovation
There has been much debate in the past regarding the inherent strategic value of ICT for innovation
processes. Despite the high levels of capital spending in ICT by businesses over the last 20 years,
there have been difficulties in accurately measuring the value derived from ICT investments, which
made many organisations believe that ICT didn’t add value or contribute to their bottom line
(Bryjolfsson, 1993; Carr, 2003).
However, authors such as Tiernan & Peppard (2004) instead suggested that while technology was by
its very nature “purposeless”, strategic advantage can be derived through the unique application of an
ICT platform through business changes. In other words, ICT contribution to innovation comes from
working smarter with the technology, and not by simply by investing in the platform itself (Barney,
1995; Porter, 1996).
Understanding the properties of ICT’s benefits for innovation was essential. According to
Bryjolfsson (1993), ICT value was often of an intangible non-financial nature and may not have a
noticeable effect on the bottom line for many years due to the time lag affect. Failure to recognise
this can cause inaccurate measurement of ICT’s output and poor management of benefits delivery
(Tiernan & Peppard, 2004).
For instance, traditional financial measures such as Return on Investment (ROI), Net Present Value
(NPV) and Payback Method, fail to account for the properties of ICT investments, as therefore
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should not be relied on as primary decision making tools (Bryjolfsson, 1993). Instead, McShea
(2006) offered a number of alternative composite measures.
Firstly, “Applied Information Economics” weighed long term business and technology factors by
measuring hard financials, intangible benefits and probability distribution or risk (also known as
scoring methodologies). Another composite measure involved “Portfolio Management” whereby ICT
investment classes are aligned to support business objectives and strategy. This structured approach
helped balance risk and return to help match the firm’s future profile, which helped distinguish
between strategic and operational investments.
In the following subsection the issue of change management was discussed and its importance in
building strong innovation ICT innovation environments.
2.4.4 The Role of Change Management in ICT Innovation Success
In this white paper, change management was found to be a pivotal business area and key determinant
to the success of ICT innovative environments. Change Management can be defined as a process
whereby attention is directed towards converting a company from “its current state to some future
This section looked at the critical success factors of ICT innovation employed by the white paper’s
three case studies from the pharmaceutical industry.
4.3.1.1 Pharma Process
Although Pharma Process admitted they don’t approach ICT innovation with the same intensity that
technology companies do, process and business model innovation were still very important in the
company. ICT was seen as an enabler and facilitator to all business units. It contributed to the whole
structure and systems (hard elements) of this white paper’s critical success factors of innovation. As
stated by Pharma Process’s IT Leader to Engineering Services:
“Innovation is one of our mantras, we’re confident in our own pipeline and we would see IT as an
enabler of innovation… however, we prefer to invest in innovation for new medicines as opposed to
IT systems, but we will invest in ICT innovation where necessary”.
Figure 13: Pharma Process’s System Dependency Model
Source – Created by Research Team
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Figure 13 shows the systems dependency network within Pharma Process, starting from core, lowest
level manufacturing processes through management layer up to the highest processes of e.g.
authentication and “ideas nest” - R&D labs and overall IT surrounding all the processes.
Strategy and systems are also prioritised as critical success factors to innovation. As discussed in
section 4.2.3, in the pharmaceutical industry standardised ICT solutions tended to be adopted at
higher levels in the S95 architecture model, with more customised solutions build for lower levels.
According to the IT Leader to Engineering Services, this objective was outlined in Pharma Process’s
strategy and systems documentation plans:
"Strategy: to replicate where innovation occurs get better use of the existing systems and assets;
outsource the ICT hierarchy to make it quicker and faster i.e. systems optimisation. Systems:
optimise at operational level, standardise at global level”.
Meanwhile, structure was a critical success factor and involved outsourcing the ICT capability and
employing business analysts. Utilising these services allowed the firm to avail of vendor expertise at
a competitively priced model of ICT supply. These outsourced ICT innovation solutions, which were
illustrated in table 4, are then used by internal employees to share ideas and aid decision making. As
discussed by Pharma Process’s Team Leader for Manufacturing Controls and Information Systems:
"For IT system support we are operating more on help-desk type support system, depending on issue,
and can be local type supporting system. Some of IT system functions are partially centralised,
partially outsourced".
Therefore, outsourcing was seen as a key activity in achieving cost minimisation.
4.3.1.2 Drug Development
Drug Development’s formulated strategy was found to be a driver of ICT innovation. Similar to EKI,
the company’s strategy has begun to focus more on the consumer care market, and utilising patient
data in order to ensure the delivery of high quality healthcare. This example of business model
innovation was addressed by the Plant Engineering & Operations Leader:
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“Pharma has always been the main revenue earner for the company but the consumer care market is
probably growing faster than pharma at the moment. They’re all growing in double digits which are
brilliant but from an innovation point of view the innovation is much stronger from a consumer point
of view than pharmaceuticals”.
Radical innovation was therefore being undertaken within the consumer care portfolio. However,
there was more of a strategic emphasis on incremental innovation within the existing pharmaceutical
product portfolio. This involved looking at how greater value can be derived from product patents
though process innovation, as discussed by the Lead Automation Engineer:
“We have developed a lot of smart dispensing technologies, say for example when you get a bottle
and you open it there’s is a sensor which a will remind the person to take the right medicine and
when you open the bottle there is an assumption that you will take something out and that will
potentially notify the pharmacist”.
Systems and structure were key enablers of collaborative innovation networks in Drug Development.
The company adopted Informatica’s Enterprise Data Integration Platform, which integrated their
ERP7 infrastructure and data warehouse
8 to help build stronger collaborative networks that could
exploit innovation. As a result both internal staff and external collaboration innovative network
partners were able to access collective business intelligence. This lead to a high return on investment
and reduced R&D costs overall. As stated by the Lead Automation Engineer:
“Our collaboration ICT networks (Enterprise Data Integration Platform) are mainly concentrated
on R&D, engineering and chemistry. We work closely with solid state scientific cluster on some
projects that include process development. We have a number of partners who we throw problems
out to. These collaborations create an external consultancy business around innovation”.
Without collaborative innovation networks, Drug Development would have more limited innovative
capabilities. Therefore, the company saw collaborative innovation networks were seen as an essential
enabler of innovation processes.
7 Enterprise Resource Planning systems help manage data and information across organisation through integrated
software applications and centralised data storage i.e. SAP ERP solution. 8 Data warehouses are a collection of Decision Support technologies that store data, which is subject oriented, non-
volatile, time varying and can originate from a number of data sources.
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4.3.1.3 EKI
Firstly, EKI’s strategy was found to be a key driver to ICT Innovation. The innovation team
primarily focuses on idea generation, in particular how to undertake business model innovation. The
company’s strategy has experienced a significant change in the last 3-4 years and now the
opportunity for growth is expected to come from the emerging markets such as China, Russia, and
Brazil. As stated by a member of their Global Innovation & Sustainability CoE:
“In emerging markets a lot of products are predicted to stay in maturity stage of the product
lifecycle for indefinite period of time. This will bring enormous prosperity, especially for
pharmaceutical companies that will be able to get their marketing and pricing right. ICT is needed
here as there will inevitably be many culture clashes with the Western world, Pharma companies
will need to adapt their operational models in the future through tighter communication”.
Capabilities were another key critical success factor for innovation. EKI’s innovative team was built
around getting a diversity of skills. This means the group was not formed with people of the same
mind set and the same background, networks. Currently, the team consists of staff from very diverse
background such as physics, engineering, chemistry, biology.
“You want people brilliant at ideation, technically savvy people who are really good at taking an
idea and making a project out of it. And then you want deliverers because if we were all deliverers
we’d be really weak at the front end. We have people who know facets of products and business, but
you must have an interest in taking an idea and turning it into a business opportunity”.
Similarly, systems and structure were key for EKI’s open innovation policy which was based around
external collaboration innovation networks. The interviewee described how the team undertook a
project of designing an ICT platform for process innovation, and worked closely with academics and
other collaborators who had particular skill sets i.e. in automation and analytical technologies.
“We work with strategic partners such as CIT and McLaren who are known for their excellence at
microelectronics, and in this case API innovation. This open innovation approach resulted in our
project becoming a success”.
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Finally, leadership was found to be essential critical success factor for EKI. Through strategy
directed leadership the company has created a focused vision of the future through business model
and process innovation (see figure 13). This was mentioned by a member of their Innovation &
Sustainability CoE:
“The most important (critical success factor) is leadership. You need the strategy and you need the
central managerial group that would do things a little bit differently, and come up with the concepts
and ideas. These are the people who are going take the business forward, differentiate the product”.
Figure 14: Innovation Strategy for EKI
Source – Created by Research Team
Figure 14 shows the innovation strategy for EKI which revolves around 4 key areas: business model
innovation, product enhancement, process innovation and sustainability. Each area was seen as a key
to EKI’s future strategic direction and targeted objectives.
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4.3.2 Technology Sector
In this section the white paper turned its attention to the technology industry and the critical success
factors needed to build strong innovation pipelines by utilising ICT support.
4.3.2.1 Health Tech
Firstly, strategy and culture were identified as a critical success factors. According to one member of
Health Tech Service IT compliance team, change management is a key factor in the deployment of
ICT and building a culture of innovation. Therefore, encouraging idea sharing and ICT usage were
primary variables in determining ICT innovation success:
“The thing about innovation is just for the sake of itself it has to work it’s no good, it has to work
and has to deliver benefits. So the big thing about innovation is not the newness but the acceptance
of the new technologies and new ideas which is crucial”.
In particular, fostering a culture of ICT innovation was also essential here for Health Tech. For
instance, should divergent collective perceptions, or poor interpersonal and organisational
coordination exist, it can negatively impact on an organisation’s approach to innovation in general.
ICT can aid awareness propagation across an organisation. This point was reiterated by another
member of Health Tech’s IT compliance team:
“The success of a project is the quality of the acceptance to change. We believe this is key to
innovation, if you have a great quality solution but no acceptance, it is bound to fail… Unless you
engage people to come along with you and get things done, the project will be unsuccessful”.
Leadership was also needed to ensure that the success of process and business model innovation
could be measured. Measuring innovation was essential for innovation projects to be given the go
ahead and a key determinant to driving continued innovation efforts i.e. added value and ROI. This
point was first dealt with in detail by Health Tech’s ERP Deployment Leader, Global Supply Chain,
IT and Process Excellence:
“Every leader is part of promoting innovation. You have to demonstrate innovation in your day to
day work especially in IT… But before we digitise any process or supply chain systems we must go
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through a lean board to show what the post lean process will deliver in terms of productivity and
efficiency”.
Finally, capabilities were prioritised as a critical success factor of innovation. ICT platforms enabled
the strengthening of Health Tech’s internal capabilities while also facilitating collaboration
innovation networks. Through these ICT systems communication channels, training and knowledge
sharing was improved, as discussed by Health Tech’s quality manager:
“We work with Oracle as well from a HR perspective. For example, a lot of our training now is web
based learning… there certainly are collaborative networks in place within the industry in Ireland
also. Examples of these would be IBEC and Pharma Chemical Ireland in which if anybody has a
question they can always ask for help through e-mail on their website”.
These digital channels helped provide expertise quickly and easily through ICT. Therefore, problems
can be tackled and decisions make through obtaining actionable information.
4.3.2.2 Web Tech
Web Tech has committed to a strategy for ICT innovation. Their business mode and value
proposition to the customer directly relates to the use of ICT to support innovation both internally in
the Web Tech and externally in their clients’ firms. This point was discussed by their CEO:
“(Web Tech strategy would be based) on both adoption and allocation of technology. Using
technology to add value to our business and to improve/leverage our customer business processes…
So ICT functions as a service provider for innovation… we innovate to protect companies. That’s
from a security type perspective”.
Leadership was still needed to control the innovation pipeline and implement the ICT innovation
strategy. There were also financial rewards for staff involved in innovation. As described by Web
Tech’s CEO:
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“Leadership is needed to implement change, using innovative technologies to change the way
business processes are executed… and there are financial rewards for innovation. We measure
innovation based on business process improvement metrics and a QA process”.
Capabilities were said to be the primary critical success factor of process innovation in Web Tech,
with special emphasis on building the skill sets of staff. Also special effort was made to capture the
collective knowledge within the organisation and record lessons learned in Web Tech’s proprietary
SAP enabled Knowledge Management System. As stated by their CEO:
“The main critical success factor for Web Tech is people. For instance, you have to input knowledge
into the knowledge management systems… We undertake regular individualise training plans for
hard skills like programming. This is considered an important element to our innovation strategy”.
Collaborative innovation networks were also utilised to help develop innovative ideas. As an SME,
Web Tech relies on collaboration with companies external to the organisational boundary and they
are a member of the technology sector networking group IT @ Cork. This was very important in
order to expand internal capabilities. As stated by Web Tech’s CEO:
“We worked with ITE-Corp for various projects: cloud-based, and web-development-based… We
also worked and developed new ICT solutions with a company in New Zealand, which loads our
software on the client site, on their servers and PCs. So when the client’s server is overloaded,
running low in RAM, or heated, the software sends the message to our Zoho virtual help desk”.
Finally, a culture of ICT innovation is fostered in Web Tech. The interviewee also suggested that this
culture of ICT innovation in the technology sector can be disseminated to pharmaceutical firms
through collaboration.
“Innovative companies are these who adopt or develop new technologies e.g. Apple, to improve their
ability to deliver their business goals. Our culture involves building dedicated teams for
innovation… I also believe that technology and pharmaceutical companies can work in
collaboration to build a shared culture of ICT innovation”.
Without a culture of innovation, the company felt their strategy and capabilities wouldn’t be as
strong as they are. Therefore. culture was seen as an essential critical success factor.
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4.3.3 Contrast between Critical Success Factors in Pharmaceutical and Technology
Sector
In this section an overview of the concepts and insights gained through primary research was shown
regarding the differences between the primary critical success factors employed in the
pharmaceutical and technology sectors. While all critical success factors were present to some
degree in all subject organisations, the white paper only focused on those that were seen to be
prevalent and prioritised.
Table 5: Summary of Critical Success Factors employed by Subject Organisations
Source – Created by Research Team
The highlighted cells in table 5 indicated which set of elements were most prevalent in each
organisation. The table shows that hard critical success factors were promoted in the pharmaceutical
industry, while soft critical success factors were prioritised in the technology sector.
As discussed in section 4.2.3, there was not a high degree of contrast between the types of solutions
employed in the Pharma and technology sector. Therefore, white paper argued that the main point of
contrast revolved around how these ICT solutions were deployed i.e. the critical success factors
prioritised for ICT innovation.
Firstly, in the case of technology companies, soft critical success factors (culture, leadership and
capabilities) were consistently found to be the main drivers of innovation. This means that while
tangible hard elements were undoubtedly important to innovation success in the technology sector, it
was the intangible soft elements which made the greatest contribution to innovative environments.
Company Sector Critical Success Factors
Strategy Structure Systems Leadership Culture Capabilities
Pharma Process Pharma x x x
Drug Development Pharma x x x
x
EKI Pharma x x x x
x
Health Tech Tech x
x x x x
Web Tech Tech x
x x x
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ICT played a very important role in enabling these soft critical success factors of innovation in the
technology sector. For instance, ICT provided communication channel for leaders, employees and
collaborative innovation networks to work together. Furthermore, a culture of ICT innovation was
fostered through incentivised ICT usage and financial rewards for internal innovation competitions.
However, without a solid innovation strategy, ICT innovation could not thrive. Therefore strategy
was consistently found to be a critical success factor in all subject firms.
In contrast, soft critical success factors were not as highly prioritised in the pharmaceutical
industry. While leadership and capabilities were found in Drug Development and EKI, there was
not enough evidence to suggest that soft critical success factors were key enablers of innovation. In
particular, there did not seem to be a thriving culture of innovation compared to firms in the
technology.
In the technology sector, all employees were engaged in the process of idea sharing and project
implementation which contrasted to the Pharma sector where specific groups were tasked with ICT
innovation. Innovation seemed to be a guarded responsibility of a centralised team or expertise group
such as in EKI, rather that disseminating the responsibility to all members of the organisation, such
as in Health Tech and Web Tech. Idea selection then was used as a mean to choose the best ideas to
implement, based on strategy and leadership.
In conclusion, the collective presence of the three soft critical success factors of innovation in
technology companies seemed to lead to the greatest contribution to ICT innovation success, rather
than singular adoption of one or more of the elements. In the following section, the insights gained
from research findings were discussed further and the implications of these findings was looked at.
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5. Conclusion
In this section conclusions were drawn based on the research objective previously outlined in section
3.1 and the research questions proposed in section 3.2 were answered. The research objective, to
investigate ICT innovation as a strategy in five organisations in the pharmaceutical and technology
sectors, was reached through implementing the research methods outlined in section 3. In the
following subsections, recommendations were made and a proposed future research direction was
offered.
To begin, the white paper introduced the main business problems and ICT solutions identified during
in literature and how this compared to qualitative research findings. This was offered as a way to
refresh the issues discussed in section 2.4.
5.1 Business Problems Identified from Literature
Based on the literature review in section 2 and the studies outlined in table 2, the following common
constraints to innovation were identified where ICT was not employed:
1. Organisational communication silos can exist between departments, which in turn curtails
idea generation and idea sharing.
2. Without the help of ICT solutions, manual data aggregation for the purpose of analysis can be
difficult to manage and unreliable for decision making and innovation.
3. A platform would not exist to store knowledge and lessons learned that is readily accessible
to privy parties both internal and external to the organisational boundaries.
5.2 ICT Solutions Identified from Case Studies
In turn, subject organisations tackled the issues in 5.1 by employing the following ICT solutions:
1. Utilise business social media platforms, collaborative editing systems, and videoconferencing
to enable communication across organisational boundaries and time zones.
2. Use data analytical and control systems to monitor trends and provide actionable information
which can in turn be used to make better decisions relevant to scenarios.
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3. Employ solutions such as blogging services to develop KMS which can be continuously
updated and shared.
5.3 Implications of Findings
In this section, attention was directed towards both of the white paper’s research objective and
questions, and then conclusions were drawn. Firstly, innovation was looked at from the perspective
of the 7S’s model detailed in section 2.3.1 and how ICT supports each concept (see figure 1).
1. Strategy Corporate Business Intelligence allows data aggregation and visualisation of large
data sets. This helps uncover hidden trends and provide actionable information to support
decision making and the formulation of strategy. Data analytics and control systems such as
Crystal and PI were employed to capture, aggregate and retrieve data for the purpose of
building and/or reengineering pharmaceutical and technology processes. BI was found to
increase managerial insight beyond what would otherwise be possible without ICT –
involving unstructured and manual data collection. BI allowed self-service data analysis to
help leaders make informed decisions related to process and business model innovation.
2. Systems However, data collection alone isn’t innovative, and its importance is based on the
systemic utilisation of actionable information. For instance, Pharma Process stated that
systems employed to meet industry compliance standards and monitor batch
quality/temperature monitoring has been around for years in the pharmaceutical industry.
Therefore, the true innovation lies within integrated systems architecture and state of the art
data aggregation and modelling applications which can analyse large quality data sets.
3. Structure Modern Ubiquitous Communication Technology such as business social media
platforms was found to be a key enabler for innovation and breaking down structural barriers.
One of the primary benefits of using social media platforms for internal communications was
that it can overcome ICT adoption fears as staff will already be familiar with the application
from their personal life; therefore, the technology is already psychological and socially
trusted. This was an excellent example innovation as it involved commercialising an existing
idea in a novel way that creates value.
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4. Culture It was also found that business social media platforms, blogging and collaborative
editing systems can help build a culture of collaboration and knowledge sharing. This was
because employees were already familiar with as social media sites such as Facebook which
rely on and encourage sharing. Therefore, this can have positive connotations for business
social media platforms as staff will approach the platform in a similar way.
5. Leadership In turn, replication of the communication platform can remove both
internal/external communication barriers and can improve leadership through improved
coordination and monitoring of teamwork. This can lead to staff from all departments and
skill sets working together to avail of collective expertise and ideas.
6. Capabilities Many subject organisations also had ICT platforms to develop internal
capabilities and collaboration innovation networks. For instance blog posting allows
employees to share updates, new ideas, lessons learned from recent projects, which in turn
contributes to the knowledge capabilities of the organisation. Subject organisations in the
technology sector also hold internal competitions to encourage innovative ideas, and
incentivise contributions through financial rewards. A peer and managerial review system is
then provided for rating ideas, leading to the selection of viable innovation ideas for further
investment while discarding those that are not yet tenable.
The white paper then offered an abridged account of the principal insights gained through primary
research. Each insight listed below and applied to both the pharmaceutical and technology sectors
unless stated otherwise. Based on the white paper’s research, six research findings were discovered
within the subject organisations:
1. Intangible critical success factors such as culture, leadership and capabilities were
consistently identified as the primary enablers of ICT innovation in the technology sector.
Meanwhile, tangible elements were primary in the Pharma sector.
2. In the Pharma sector, at higher levels in the S95 architecture model standardised off-the-shelf
ICT solutions were employed. Conversely, customised systems were utilised for lower levels
such as R&D.
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3. Pharmaceutical firms remained more risk averse to ICT adoption for the purpose of
supporting innovation compared to companies in the technology sector. This is due to tighter
regulation, data security and data integration standards.
4. Change management played an essential role in fostering a strong culture of ICT innovation,
for instance by helping to alleviate fears regarding idea sharing.
5. While added value was a promoted measure of ICT innovation success, cost minimisation,
risk management and ROI were equally important in ICT purchase decisions.
6. Collaborative innovation networks were pervasive in both industries as a means to expand
innovative capabilities. ICT solutions facilitated this process.
Subject organisations in both the pharmaceutical and technology industry have employed very
similar ICT solutions, as illustrated in table 4. However, the primary difference was that technology
firms were more open challenging ICT paradigms. More importantly, technology firms focused more
on intangible “soft” critical success factors such as culture, leadership, and capabilities.
In contrast, the pharmaceutical sector’s risk adverse perspective of ICT innovation means that they
favour standardised solutions overall and tend to focus on more tangible “hard” critical success
factors such as systems and structure. These points may help explain the higher ICT innovation
success rates in the technology sector and were elaborated on below.
In the following section, the white paper concluded with a set of recommendations based on
qualitative research.
5.4 Recommendations
The white paper reiterated its modified McKinsey’s 7S’s model as a potential framework for
fostering ICT Innovation. The main insight gained from this white paper was that ICT innovation
success was not determined by the ICT solutions adopted by an organisation, but the way in which
these ICT solutions were used. This entails working smarter with ICT, a topic that has been
addressed by numerous academics in the past (Brynjolfsson, 1993; Carr, 2003; Porter, 1996).
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The white paper readdressed the two research questions, offering recommendations for the
pharmaceutical industry on each subject area to tackle the “innovation deficit” outlined in section 2.2
(PWC, 2008):
5.4.1 Research Question 1
Q1. How can ICT be used to facilitate innovation?
Deployment of ICT platforms is not sufficient as true value lies in how organisations utilise
ICT platforms, and their application of ICT within innovation processes. The primary issue
concerning ICT innovation was how ICT deployment can help a firm in working smarter and
build inimitable innovation processes. ICT platforms are by their very nature purposeless and
therefore an organisation must utilise technology in new ways to facilitate innovation within
their unique context and innovation process.
5.4.2 Research Question 2
Q2. What critical success factors can be adopted?
Soft critical success factors were found to be essential enablers of ICT innovation. Intangible
soft elements (culture, leadership and capabilities) lead to long term competitive advantage as
collectively they are harder to imitate, compared to the tangible hard elements (Barney,
1995). Eventually they become fused into the hard elements (strategy, systems and structure),
strengthening these also (www3). In particular, building a culture of ICT innovation is very
important i.e. where employees are encouraged to participate in the innovation process.
Based on our literature review in section 2 and case study analysis in section 4, the white paper has
found that ICT innovation was a key enabler to adding value to the customer and contributes to the
knowledge store of the organisation. The white paper’s subject organisations were focused on
process and business model innovation, where commercialising new ideas through primary
manufacturing was the goal (figure 10). However, technology firms were more committed to
fostering a holistic environment of ICT innovation compared to the pharma sector.
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Figure 15: Modified Strategic Problem-Solving Model
Source – Adapted by Research Team
Figure 15 was a proposed model for this white paper, originally created by McKinsey & Company to
depict the 7S’s approach (www4). This white paper has adopted part of the model and made some
structural adjustments to reflect the key ideas that were presented in the white paper. Firstly, the
three forms of ICT identified were added as a support factor to the innovation process. Secondly, the
composite critical success factors were inserted as enablers to innovation. Finally, added value was
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presented as a result of the innovation process, as based on the white paper’s literature and case
study research.
Therefore, this model depicted how innovation processes are formed, developed, and supported
through ICT. It summarised the information presented in the literature review in section 2, and
amalgamated all areas into a holistic model of common issues. The strategic problem solving model
can be used to organise challenges and develop action plans as regards an organisation’s innovation
process. The “Business Need” element in figure 15 was a key driver for the innovation pipeline and
aims to tackle one of four business problems: competitive (rival companies), organisational (systems
and structuring), financial (business model or profit and loss), and operational (organisational
processes) (www4).
The white paper realises that it may not be feasible to implement these recommendations in the short
term, due to the limited finances and challenging environments faced by pharmaceutical firms at
present (PWC, 2009). However, in the long term it is recommended that these issues be looked at to
ensure sustainability and build competitive advantage.
5.5 Future Direction
There is still further research needed in the area of ICT innovation, which was beyond the scope of
this white paper. Issues such as industry regulation, data management and integration within the
innovation pipeline is a challenging area that is fast becoming one of the most pressing concerns for
businesses in the digital age. Finally, human behaviour and ICT adoption are key determinants as
regards ICT innovation success. Therefore, further empirical studies should be undertaken to
understand the interactions between ICT and people to understand this multidimensional subject.
Page 70
6. References
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