On October 1st, I wrote a piece about the19th Annual Information Week 500 list. At that time, I told you that I would try to get more information about the pharma/biotech companies that made the list.
Lisa Smith, an editor at Information Week, sent me the copy of the entire report and a brief explanatory note with it.
The gist of her note was that they do not release the ranking of the companies above 250. I'm guessing that when you get past the first 100 to 200 the ranking algorithm can't hold up too well. In other words, there are too many variables to deal with when deciding whether a company should be ranked 300 or 400. It's called splitting hairs.
Next, Lisa noted that she also could not release any company-specific data related to new or ongoing initiatives. I guess this makes sense since companies would be less likely to participate in the rankings race if their intellectual property was not protected.
So, I am unable to give you any more information for the reasons why the following companies made the list.
But, there are a few additional insights that I'd like to share with you from the report.
First, the report makes it quite clear that they consider the companies in the Top 100 to be more innovative than the remaining 400.
Some of the reasons given are:
more focused on customer issues, such as getting new products out faster and engaging customers in creative, new ways;
tend to be early adopters of emerging technologies, including SOA/Web services, business intelligence tools, wireless e-mail, encryption, server virtualization, and Ajax;
embracing Web technologies such as wikis, blogs, social networks, and mashups. Three quarters of them are integrating search tools like Google with their Web site or business applications;
they're far more likely than the others to use Web-only applications. Sixty-three percent of the top 100 are trying Web-only delivery and 81% are using the software-as-a-service delivery mode;
more likely to have global strategies, including contracting with offshore outsourcers, augmenting their IT staff with H-1B and L1 workers, and exchanging real-time information with foreign partners and suppliers;
more likely to be deploying business intelligence tools and software such as Microsoft's SharePoint or videoconferencing software;
twice as likely to be developing new products, processes, or services that are patented or trademarked;
spend slightly more on IT as a percentage of annual revenue (3.0%) and are devoting a larger portion of their IT budgets to new projects;
From the above, we can infer that Lilly and Wyeth are the only two companies in the top 100 that exhibit these behaviors. However, the reader should not assume that they are embracing all of these approaches to the same extent. For example, it would be safe to bet that Wyeth and Lilly are just as scared/concerned about embracing blogs and wickis as any other large pharma company. On this measure, Astra-Zeneca is actually ahead of the game but does not show up in the rankings at all.
The report does allow some comparisons to be made between the biopharma industry and other market segments. Here are some examples:
- Biopharma comes out at the top of the list (73%) for wanting to improve business processes. General Merchandising comes in second at 71%, Metals at 67%, and Energy/Utilities at 65%;
- The industry is nearly at the bottom (27%) when it comes to implementing collaboration tools. Metals and Natural Resources is at the top of the list at 67%;
- Biopharma comes out in the middle of the pack for using mashups to deliver web content (29%). As you would expect, consumer-facing industries come out much higher on this measure: General Merchandising and Telecommunications come out on the top at 50% each;
- There is 0% adoption of wikis, blogs and other social media by Biopharma (so far). Information Technology, Telecommunications, Consumer Goods, Electronics and Hospitality all come out at 40% or higher;
- The industry scores high (67%) on the use of Web-only (read: SaaS) based applications. This, however, is also prevalent in most other industries;
On the IT spend front, Biopharma comes out on the high end when compared to other industries. In 2007, for example, 4.3% of worldwide sales revenue is being devoted to IT. Contrast this to some of the other industries:
- Banking & Financial Services - 6.3%
- Telecommunications - 5.2%
- Media & Entertainment - 5%
- Biopharma - 4.3%
- Consulting & Business Services - 4%
- Information Technology - 4%
- Electronics - 3%
- Insurance - 3%
- Hospitality - 2.9%
If you think about it, this 4.3% figure is probably an underestimate. Why? Because Biopharma companies spend a lot of money on CROs who widely use information technology to process all types of data and content. None of this spend would show up in this type of ranking. It would be interesting to study how the CRO spend breaks out, including the portion devoted to information management.
On average, the amount of the IT budget spent on new projects is 39%. For Biopharma specifically, this figure in 2007 is 34%. From my perspective this does not significantly diverge from the average especially when considering that the 2006 figure was 43%.
One quite interesting finding is that while Biopharma is putting lots of emphasis on improving business processes (73%), it is not supporting that through the use of business process software (33%). This shows that there is a clear disconnect between business goals and technology adoption. Contrast the 33% figure, for example, with a 62% figure in the Chemical industry. This comparison is appropriate since these industries are both process oriented (rather than discrete.)
Note to BPM software vendors: You have a lot of work and opportunity ahead of you!
So, make what you will of the above. From my perspective, I'd like to see more Biopharma companies graduate to the Top 100 list.