Teva Pharmaceuticals’ Americas Chief Information Officer Nolan Bennett speaks candidly about Teva’s impressive transformation from a technology-focused organization to a more business-aligned, global organization.
Nolan Bennett, vice president and CIO of Teva Pharmaceuticals, Americas, has more than 20 years of experience in the life sciences industry. He joined Teva a year ago, drawn to its top placement in the market and its rapid growth and transformation. Lisa Walkush, Grant Thornton's national Life Sciences Advisory practice leader, sat down with Bennett to learn more about his experiences as a CIO for one of the top 10 pharmaceutical companies in the world.
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Lisa Walkush: Over the past 10 years, Teva has grown from a $3 billion to a $20 billion company. How has this rapid growth impacted its IT organization? How are you managing the changes from both the organizational and technological perspectives?
Nolan Bennett: Teva has been growing at a pretty spectacular speed over the past few years, and one outcome is that it has become quite fragmented on many levels, particularly inside IT. Over the last year we really started to globalize across the company, and IT was one of the first functions to become a cohesive global function. In the Americas, we’re transforming from a very technology-focused IT organization, which is what we had traditionally been, to a much more business-aligned IT function. From a technology perspective, what we are doing is harmonizing global systems to support the global functions and global processes that are being established. For example, we just started a global ERP implementation, and that’s just one of many new developments that the company has started in the past year or so. It’s a huge and very complex change for the organization.
LW: By all accounts, the culture at Teva is dynamic and adaptive. How has this impacted the IT function?
NB: That is an accurate description of the culture here. As you know, generics is a fast-moving business to begin with. The market dynamics are constant in terms of the change, and I think from an IT perspective we also need to be ready to change and react on a constant basis. It’s been very exciting to realign the organization from a technology focus to a much more business-aligned focus. This has really allowed us to react in a much better and faster way. But change is hard and takes a long time, especially in an organization of hundreds and hundreds of people who have traditionally been technology-focused. What is really heartening is that we have made great changes over the last year, and we actually have the proof now in terms of the customer survey that we did at the end of last year, which showed that we’re really moving the needle in a very significant way — not just 1 or 2 or 3%, but 10 or 15 or 20% in areas like responding to customer needs and gaining the respect of the business, etc. It’s actually happening, which is fantastic.
LW: Today’s life sciences companies are under a lot of pressure between growing regulations and the need to cut costs while still competing globally. What do you see as the top priorities for a life sciences CIO in today’s environment?
NB: At Teva, our cost pressures are relentless. The company has publicly said that we want to shave $2 billion from our costs, so for us in IT the cost pressures are intense this year. Regulatory bodies are also tougher to deal with year after year. And the demands of our customers never go down, so we never have a year where they want less than the year before. But none of that is particularly new for anyone in the industry, and none of that is going to change.
For Teva IT, the globalization of our functions and processes and supporting that transformation is really a top priority. And IT and technology really underpins it all, whether it’s a global ERP tool or a global HR tool or a global procurement tool.
LW: Let’s talk more about some of the new technologies out there today. Do you see technology innovations playing a key role in life sciences companies and the industry as a whole?
NB: Definitely. Innovation is one of the most important things that my team has to contribute to the company, and it really is critically important. But it’s also difficult to put your finger on exactly what innovation is and how to use it. From Teva’s perspective, we operate in a very crowded, very competitive marketplace. And since we want to stand out with our customers, one of our biggest challenges — and at the same time, one of our biggest opportunities — is to use technology to innovate and to bring that advantage to the company. So it’s absolutely critical, and absolutely one of the hardest things to do.
LW: In talking about technology and innovation, there’s a lot of discussion around using advanced analytics in life sciences, and combining internal data with external data to help drive value in the business around patient outcomes and evidence. How do you see Teva using advanced analytics?
NB: This has been a hot topic for years and has always fallen short on delivery, but I think we’re there now. I think with some of the technologies that are now available we can actually do real things, especially with our size and our position in the market — we have huge volumes of data that we are processing every single day. But I think the difficult thing is to really find where the value is. What is that thing that you’re trying to lasso and where is its true value? Beyond this, it’s not just an IT issue — this is a business issue. From an IT perspective, we can certainly enable the analytics, but you need very willing partners on the business side who really see the potential and the power of the analytics, and that’s often quite difficult. It’ll be very interesting to see how this unfolds.
LW: What are some of the biggest IT challenges impacting the operations of a life sciences company today, especially looking at it through the lens of an organization that has really grown through acquisition and is transforming into a truly global function?
NB: For us, just creating that single organizational structure — with global IT aligned through the regions and through the global functions — really making sure that we’re absolutely aligned with the business is key. We’re an organization that has traditionally operated in a very fragmented fashion, and past acquisitions have just contributed to the fragmentation across the regions and functions. Teva has been very successful in that mode for many years, so now we’re kind of creating havoc in some respects by saying, “We’re not going to work like that anymore; we’re going to work in this global way now.” This is not just something you instinctively know how to do. It takes time and it takes practice. But it’s also something that we have to do.
The other piece here is the cost structure. We have to create a cost structure that makes sense in a global IT organization. Because of the acquisition history, because of the fragmentation, because of the duplication in the systems, our cost structure is not where it needs to be. We have made very significant strides in putting that right, but we still have some way to go.
LW: What are the criteria that you use to prioritize those investments? And how do you determine what the ROI will be for the projects and processes these entail?
NB: Last year we put in place a formal process of collecting and evaluating investment requests. This was something that was not there in a very structured way in the past. It was clear to me last year coming in that we had way more demand than we could possibly satisfy, and that was going to be the case for this year as well. So how do we make those trade-offs and those conflict decisions? First, we had to put a framework in place to make sure that we had a very robust process that we could defend in front of customers. While IT was not making the decisions, we put the tools there to enable the process. The other thing that we put in place last year was what we called the PAB, the Portfolio Advisory Board, which was made up of executives of the different functions in the region who could help us find the answers to the difficult questions. This was a big organizational change and a big mind-shift change for people to take onboard, but it went very well.
LW: Teva is now one of the top 10 pharmaceutical companies in the world. What lessons have you learned as CIO for the Americas?
NB: You know, I truly believe that the role of the CIO is the toughest job in the company. I really do. Everybody wants a piece of you. Everybody expects you to be an expert in that particular area. There are always more demands than you can possibly satisfy in any given year. But I think what was really successful for us last year is that we took the time at the beginning of the year to really decide: What are the things that we’re going to commit to doing this year? We had a huge portfolio before I walked in the door, but we really slimmed that down to the core things that we were going to deliver back to the business and commit to doing them well. We stayed really focused on doing that through the year, and we were successful at the end of the year in really doing what we said we were going to do. That helped build a lot of trust and credibility inside the organization. And I think that’s stood us in good stead for this year in moving forward.
LW: Nolan, you’ve had a very successful career. If you were advising an up-and-coming CIO of a rapidly growing life sciences company, what would you tell him or her?
NB: Probably three things: Number one is to hire the best possible people you can — over hire as much as you possibly can. The second thing is to ensure that you’re running your day-to-day operations absolutely flawlessly. That’s really how you build your credibility. It’s also the way to destroy your credibility quickly if you don’t do it. And I think the third thing is to focus as much energy as you can on building relationships and finding ways to really leverage technology and innovate. That’s where IT can really make a difference.