Published: 08 April 2020
Analyst(s): Michael Shanler, Stephen Meyer, Andrew Stevens, Animesh Gandhi, Jeff Smith
The COVID-19 pandemic continues to cause global industry disruption. Life science companies will see specific disruptions, requiring CIOs to take focused action. Use this research to identify business function questions that planners in the CIO’s office must answer to aid the organization.
The level of pandemic-related disaster preparedness is widely variable, and for many organizations the playbook for surviving severe pandemics like COVID-19 is still being written.
Most life science organizations rapidly issued travel and health policy announcements to protect their staff. However, the new HR guidelines do not address the specific risks to critical business processes or provide guidance on how to navigate through the disruption.
News is spreading fast, with a jumble of staggered events across the globe. This creates opportunities for organizations to detect predictive indicators on life-science-specific business disruptions, but clients are dealing with a multitude of information channels with variable implications for varied regional operations.
Life science CIOs’ IT plans have already been disrupted by the COVID-19 pandemic and yet IT employees are just beginning to understand its effects on business functions.
Life science CIOs advancing healthcare and life science digital optimization and modernization:
Rapidly deploy key corporate IT-related messages by adapting existing content from the Gartner Coronavirus (COVID-19) Resource Center
Respond to COVID-19 “early warning signals” quickly by implementing radar-like capabilities so you can have informed discussion with stakeholders and formulate predictions.
Link “early warning signals” to predictable business impacts by building in context with peers.
Create a more complete radar picture of COVID-19 disruption by collecting both the “outside-in” and “inside-out” views.
Assess and prioritize the degree and immediacy of the disruptions by developing short-, mid- and long- term plans.
In a few short months, the COVID-19 outbreak has already affected global economies, policies and daily life. Since the outbreak occurred so quickly, the window of opportunity for preventing significant pandemic-related business risks is now closed. Gartner clients widely report they are operating in “emergency” mode. Most organizations had not really focused on pandemic response planning at scale in advance of the current crisis. Meanwhile, governments are issuing emergency actions to communities around the world. CEOs, HR and risk managers are issuing policies and messages in real-time.
For the moment, many life science organizations have placed long-term IT plans on the back burner. CIOs must address the emergency directly in front of them. While they cannot lose sight of business objectives that are on the horizon, they must also focus on the critical issues in front of them today. To support CIOs during this time of crisis, key COVID-19-related research is regularly being aggregated to the Gartner Coronavirus (COVID-19) Resource Center. While the majority of the existing content is not specific to life sciences, the information is extremely valuable to industry teams. You and your IT leaders should use these tools and adapt your approaches to protect the health and well-being of your employees, business and customers. Immediately assess this information and perform quick scans as new crisis-related material is added. This advice is relevant while in the middle of the pandemic as well as when the crisis begins to ease.
CIOs should keep a running tab on COVID-19-related issues that will impact their businesses. Below are examples of headlines and the corresponding “early warning signals” for your organization. Use these examples as starters and add new events to your share sites as they surface (see Figure 1):
“Novartis Sidesteps Europe Travel Ban to Provide CAR-T Drug Kymriah to Patients”
Early warning signal:Disruption to your supply chain logistics and elevated risks to patient health outcomes due to the reduction in commercial airline travel couriers.
“Pfizer Tells All US Salespeople They Must Work Remotely”
Early warning signal: Expect a massive and prolonged reduction in face-to-face physician engagement opportunities and more reliance upon digital engagement approaches.
“AbbVie, GSK, Sanofi and More Limit Employee Travel as Coronavirus Threatens Business”
Early warning signal:Your organization will have fewer in-person meetings and opportunities for face-to-face collaboration.
“Swiss Bio Addex Halts Parkinson’s Test as Trial Delays Tick Up on COVID-19 Disruption”
Early warning signal:Your organization will see delays in your clinical trials, especially in design, recruitment and enrollment. This will impact and delay the value of your R&D portfolio internal rate of return.
“EMA Announces Measures to Manage Drug Shortages as Result of COVID-19”
Early warning signal:Your organization will see disruptions to your drug product stockpiles and supply chains due to stockpiling and panic buying.
“Coronavirus Strains Fragile Pharmaceutical Supply Chain”
Early warning signal:Your organization will need to rapidly move drug manufacturing and methods to new locations.
“Covid-19 Impact: Government Panel Lists Essential Drugs That Can Run Out” and “Covid-19 Impact: Fears of Chinese API Shortage Hurt Pharma Players”
Early warning signal:Countries may implement new rules or even drive legislation that will impact both your raw materials, and effect your own level of sellable product.
“Regeneron a ‘National Strategic Asset’ for Quick Response to COVID-19 Outbreak: Analyst”
Early warning signal: Expectations and public sentiment, and hence your brands, may be affected — either positively or negatively, depending on performance or news.
Tracking external news events will only drive value for your organization if you contextualize them into insights for your organization and act upon them as an enterprise with a sense of urgency. You need to immediately work with executives to create a plan for a command center that leverages external news feeds, social information and internal links to detect trends on the most up-to-date information. Existing solutions such as Brandwatch, Crossix, Elementum and Sprinklr can be adapted to provide the platform. You can also tailor existing content aggregation, business intelligence/visualization dashboards, and share sites. Use the early warning signals to build in alert capabilities for what you predict may impact your business at a functional level. This will have downstream impacts on command center, crisis management and enterprise level decision making (see Figure 2).
The following is a high-level summary on COVID-19 disruptions on life science business functions and what we are anticipating to trend further. Be on the lookout for these issues as you continue scanning and filtering for both these signals and the next wave of new developments:
R&D: Scientific collaboration will decelerate as more employees adjust to working at home. Wet lab testing will not be available to support scientific assumptions and existing in silico models. Animal studies, with time-sensitive processes will be delayed. External scientific meetings have mostly been canceled. They will begin to be virtualized as conference companies adapt, but the content quality and volume will drastically decrease.
Clinical: Studies will slow down and trials will see increases in drop outs and missed subject visits. Recruitment and enrollment will become particularly challenging. Hospitals and clinics will reprioritize as COVID-19 care takes precedence over other activities, including ongoing trials. Clinical supply and logistics will be challenged. Milestones will be missed and trial endpoints may be put in jeopardy.
Manufacturing: Teams may need to operate with skeleton crews. Some lines will need to be shut down for safety or capacity reasons. This may result in postponement strategies, extended storage based on certificate of analysis shelf life and greater reliance on automated systems to retain product security and integrity.
Laboratories: Automation, instrumentation and informatics systems, often requiring manual interventions, will become much less productive. Chemicals, reagents and biologics with limited shelf lives will degrade due to storage and logistics issues.
Supply Chain: Logistics are becoming a major challenge, with reduced shipping, freight and transit capacity. Raw ingredients sourced from around the world (that is, not just those from China and India) will be subject to restrictions and delays. Time sensitive logistics are especially vulnerable. Clients will need to prioritize “last-mile” fulfillment in countries by prioritizing critical care products and services. Segmentation will be key in the process. Clients will need to collaborate with national regulators to fast-track global trade and customs barriers. Availability of staff due to social distancing and quarantining will disrupt operations. Demand spikes will create shortfalls and logjams.
Sales and Marketing: In-person prescriber engagements, such as sales representatives who already had faced challenges getting in front of prescribers, will not even be allowed into facilities as they are nonessential vendors/personnel. This will negatively impact engagement with prescribers and sales cycles.
Patients:Individuals will become more reluctant to see physicians for what may mistakenly seem like a minor adverse event. Surveillance capabilities will be reduced.
Communications: Front-office messaging will be less unified for most organizations, as they lack the internal collaborative capabilities to align in real time. This will create confusion for customers, suppliers and employees.
Use the combined information your organization gathers across the external world to improve the early warning signals you detect by fully activating the radar for your command center. You will want to use this capability to augment decision making across the business. There are a myriad of specific items to track that can be contextualized for your business, including the following key signals:
Which countries are closing or opening which adjacent borders and for how long?
What are the patient or consumer sentiments associated with your brand (like products, services, channels and care) during this time and when the pandemic eases? What about competitor brands?
How do the specific news announcements related to payer, provider, pharmacy and other organizations change the overall health value delivery system where you operate?
Where are key raw material or drug supply chain shortages and opportunities occurring? Where can they be predicted to occur next?
Are regulators relaxing or tightening rules in certain cases?
CIOs need to work with stakeholders to determine which warning signals will help ward off business disruptions, prioritize those alerts and build them into your enterprise communication channels.
While most organizations have initially focused on mediating risks that directly impact employees and customers (such as travel restrictions, “social distancing,” meeting size limits, remote work policies and quarantine measures), the implications for key business functions and workflows remain largely unanswered. COVID-19 will undoubtedly have specific impacts on functional areas, many of which are unique to the life science industry. A handful of Gartner clients have already initiated these discussions, but the majority are still in the dark.
Gartner anticipates that after the initial shock wears off from adapting to the new COVID-19 realities, business function leaders will amplify any festering challenges. They will focus on challenges that slowed down the organization’s ability to adapt and respond more systematically — especially the challenges that involve or appear hampered by IT. For example, without an approved vaccine on the market, containment may happen in waves. This containment action plan may impact your business. If a clear direction and operating principles are not agreed upon, lingering issues will fester and will add extra challenges to business performance during an existing high-pressure time of crisis. It is important to get these data points onto your radar.
CIOs will have different levels of visibility, depending on the company environment, structure and culture. Gartner already observes that most CIOs are over-relying on their “inside-out” (that is, internal to the organization and IT-centric point of view) perspective. While this is an important starting point, this view alone tends to create a more system-centric view of the organization. It doesn’t illuminate the business-related issues being affected. These are the workflows that are important to the survival of the business. In short, the “inside-out” view doesn’t create a complete picture.
CIOs must more actively solicit the “outside-in” (that is, business-centric and from the customer’s point of view) perspective. It gives a clearer sight on disrupted (or soon-to-be disrupted) workflows, usability, and customer and partner experiences. This must be performed for all critical business functions. While this view alone is not granular enough to inform IT changes, it does provide strong signals for what IT will need to change to adapt to the new realities.
The combination of both the business’s “outside-in” and IT’s “inside-out” views will create the best possible resolution for the total 360-degree picture. Since this is an extremely dynamic situation, the emergency elements of your organization’s picture will not settle until the COVID-19 pandemic eases. The picture will evolve and become more complete over time.
CIOs must perform a quick radar scan of the business processes affected by COVID-19. It is best to start with the leaders in every functional area (such as R&D, commercial and manufacturing). They must then ask those leaders to outline the most likely business challenges. This process can be expedited by directing IT leaders to engage their peers on the same subject. Provide an opportunity for the business peers to ask questions. Use the questions in Table 1 as a starting point to develop your own questions that are specific to your business. The reconciliation of the two points of view will be useful for better navigating this challenging moment in history.
Time is of the essence. If this process has not already begun, CIOs and IT teams need to build this into the short-term plan and collect the high-level information as quickly as possible. CIOs must direct staff to catalyze and triage the collection process and then initiate the reconciliation task. The business functions need strong IT liaison relationships. Not only will this help IT, but IT will help the business. The business teams need to hear about looming IT issues that are specific to COVID-19-based disruptions.
Once collecting the outside-in and inside-out perspectives, prioritize your response plan for each functional area. And keep your plans dynamic. The information streaming from different channels affecting your businesses is constantly being updated. CIO teams need to break down what is urgent or immediate over time. For instance:
Short term: These are the urgent or immediate IT response for the business. This is while COVID-19 is actively disrupting business processes. Consider these the actions for ongoing “emergency” activities through the end of April or May, depending on your operating geography and the course of the disease.
Midterm: These will need to be ready for when the COVID-19 pandemic begins to ease. Gartner isn’t predicting when COVID-19 will do so, but most clients today expect daily life and challenges to persist through summer of 2020.
Long term: These plans need to be ready to address the post-COVID-19 world. Keep in mind, there could be follow-on effects or another similar pandemic that disrupts your business operations.
The planning process should be collaborative both with internal staff and external partners. This presents some co-development with collaboration opportunities with peers, academia, other biotech, precompetitive consortia, governments and ecosystem partners. As CIO, you must break down the plans for individual functions. Use the starter examples in Table 2 to flesh out your plans.
Revisit these plans as more signals come in through your radar (See Figure 3).
“EMA Announces Measures to Manage Drug Shortages as Result of COVID-19,” European Pharmaceutical Review.
“Coronavirus Strains Fragile Pharmaceutical Supply Chain,” Modern Healthcare.
“Covid-19 Impact: Government Panel Lists Essential Drugs That Can Run Out,” The Economic Times.
“Covid-19 Impact: Fears of Chinese API Shortage Hurt Pharma Players,” The Economic Times.
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