At first glance, Boehringer Ingelheim’s IT was well positioned in 2018. It was considered a central part of the value chain, with issues such as operational excellence, project efficiency and security in the foreground. But the prerequisites for developing digital products were anything but ideal. After a thorough self assessment, the management initiated a comprehensive transformation program. The manufacturer from Rhineland-Palatinate thus applied to the Digital Leader Award 2020 competition.
Several problem areas emerged in the analysis. For example, there was no HR strategy to improve the technical skills of the employees. Because too many resources were tied up in core processes, the company did not invest enough in innovations. There was also no defined target image for IT. The auditors complained that overall IT was not changing fast enough.
In this form, according to a central result of the analysis, the operating model was not suitable for the digital future. Management called for a paradigm shift for IT: away from the role of a provider of IT tools and systems and towards a “dual mode IT” that can also develop, commercialize and operate digital services. Against this background, a new target image was created for the IT organization. It should become a leading partner for digital transformation in the company.
The necessary change process was driven by three high-ranking managers: CIO Markus Schümmelfeder, Clemens Utschig, Head of IT Technology Strategy and CTO, and Paul Bhawna, Head of IT Strategy. The protagonists defined six areas in which they saw an urgent need for action:
The Group launched a strategic initiative for each field of action, which is continuously improved and controlled using KPIs. Together with the digital laboratory “BI X”, employees have already developed eleven digital products as part of the “Product Teams” initiative. According to the information, these are either already commercially established in the market or make a significant contribution to the core processes. The cross-functional teams worked with agile methods.
The transformation program is also changing classic IT operations. With the “Enterprise Operations Center” initiative, Boehringer Ingelheim centralized and standardized 80 percent of all “run activities” and operated them cost-effectively in offshore mode. In doing so, the company wants to relieve employees of classic administrative tasks and create scope for process innovations and new technologies.
Other strategic initiatives focus on reducing the number of applications used, building technical knowledge of employees and measuring the value that IT brings to business units. The newly formed change team “Transform IT” helps to implement these projects. According to those responsible, this team is anchored in every single IT function.
The technical basis is formed by enterprise platforms, for which the pharmaceutical company increasingly uses AWS and Microsoft (Azure) cloud resources. Open source systems such as Red Hat’s OpenShift container platform are also used. The company now operates more than ten productive Kubernetes clusters worldwide. A new “Data Science” stack works with three Hadoop clusters and uses a data volume of 280 terabytes.
With the help of such technologies, the Rhineland-Palatinate developed a number of new digital solutions, including the smart assistant ADAM (Advanced Design Assistant for Molecules). He supports researchers in developing active ingredients for drugs. The tool suggests suitable molecular compounds and tests them for stability. Corresponding connections could be found in seven instead of the previous 13 weeks, the company said. Among other things, this makes it possible to develop medication faster and in a more targeted manner.
Those responsible sum up the effects of the strategic initiatives across the company. Digital solutions and technologies would be used along the value chain. The strategy of relying on the transformation ability of the existing organization instead of setting up a new model had paid off. The bottom line is that today you are significantly faster and more agile.