The Nature of IT

IS6800 Professional MBA Course

Rick Morgan

David Ouellette

Paul Hippenmeyer 8 October 2004

Key Products

Pfizer Company Background

• World’s largest pharmaceutical

company

– $45.2 Billion in Revenue (2003)

– Headquarters New York, NY

• 122,000 employees

• $236 Billion market cap

Selected Financials: 2003

Source: 2003 Financial Report

REVENUES: $45.2 Billion

R&D Budget: $7.1 Billion

Net Income: $3.9 Billion

% of revenues 8.7%

Revenue by Business Segment

2003 Revenues by Division

Pharmaceuticals

Consumer Health

Animal Health

87.7%

3.5%6.7%

David Ouellette

Pharmaceutical Division• Pfizer Global Research and

Development (PGRD)– Drug Discovery thru Clinical Trials

• Pfizer Global Manufacturing

• Pfizer Global Pharmaceuticals– Marketing, Strategic Planning,

Sales

Pfizer Global Research & Development (PGRD)

• 10 Research sites– Amboise, France– Sandwich, UK– Nagoya and Tokyo, Japan– USA … Cambridge, Groton/New London, La

Jolla, Ann Arbor, Kalamazoo, and St. Louis

Discovery Research Informatics (DRI)

PGRD IT Organization

Informatics (PGRDi)Corporate

Information Technology (CIT)

Clinical Regulatory Informatics (CRI)

Development Sciences

Informatics (DSI)

Enterprise Informatics (EI)

Applications Network and Infrastructure

Informatics (PGRDi)Corporate

Information Technology (CIT)

PGRD IT Organization

PGRD Leadership

Team

Corporate Leadership

TeamHead of Finance CFO

IT Budget Estimates

$45.2B

$40.0B

$7.1B

5%

$2.3B

>>$1B

88%

PGRD IT Budget Issues

• Software licenses are huge drain on budget

• Too many applications to support.

• All capital request are funneled to Groton (PGRD headquarters)– No local control

Paul Hippenmeyer

PGRD Governance Model

Discovery Leads

Safety Science Leads

Pharm. Sci. Leads

PDM Leads

PGRDi Board of Directors

(oversight)

Discovery Unit IT Governance Board

Safety Sciences Unit IT Governance Board

Pharmaceutical Sciences Unit IT Governance Board

PDM Unit IT Governance Board

Business Unit GovernanceDecision-making authority within

business unit

Vendor Sourcing

• Most PGRD application development in-house– Occasionally one vendor chosen

• Temporary staff hired on an “as needed” basis

Evaluating Cyclone Commerce E2BM

(Enterprise eBusiness Management)

• Safety reporting of Severe Adverse Events (SAEs)– Speed

• Clinical Trial and Regulatory submissions– Compliance with various regulatory agencies and

ICH guideline

Pharmaceutical Business

Multinational Safety Organization

Collecting Data from 50+ countries150,000 reports per year

SAE Reporting

Clinical Trial Management and Submission

Summary PGRD IT

• Separate reporting lines for applications vs. network and architecture

• Little out-sourcing of PGRD application development

• Software licensing huge drain on budget• Shear number of applications limits

resources• Moving toward centralized type

governance

IT Organizational Mapping

Pfizer IT organization resembles a “Platform Model”

• “Primarily aims to insure that IT function provides assets, services and resources for business innovation across the enterprise” (Agarwal and Sambamurthy, MIS Quarterly Executive 1 (1), p. 9, (2002)

• Corporate IT seen as enterprise-wide resource for architecture and networks

• Business units own IT innovation with unique application needs.

Pfizer IT Governance Mapping

• Within PRGDi the governance appears to be transitioning from a “Duopoly Model” to a “Federal Model” of governance (Weill, MIS Quarterly Executive, 3(1), (2004).

• Currently independent Business Units

• All business units represented

• Enterprise-wide network and architecture input

• Ultimately C-level executive committee involvement

Sources

• Email Correspondence and phone interview (10/4/2004) with Jeffrey Gaw, Director, Scientific Informatics, Pfizer Global Research and Development

• Pfizer 2003 Financial Report• Presentation by Pfizer and Cyclone Commerce on

Electronic Submissions and Safety Tracking (11/2003)• James Champy, “Re-Examining the Infrastructure”,

Optimize Magazine, September, 2003.

“The ultimate discussion is about value to the business. If we understand true life-cycle costs and benefits, we can evaluate any decision on its economic value to the business. That being said, not all potential investments can be made on an ROI basis. Some have to be made for risk-mitigation or regulatory reasons. Others are option-creating investments that are experimental in nature. By far, however, the vast majority of decisions by an infrastructure manager or CIO will be made on the basis of return. Understanding costs and benefits makes that possible.”

-Chuck Williams. CTO, Pfizer

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