AstraZeneca CIO David Smoley interview – From transformation to innovation agenda

AstraZeneca CIO David Smoley has guided the global pharmaceutical company through a three-year transformation process and is turning his attention to enabling business innovation for competitive advantage, he told CIO UK.

Smoley, a member of recent editions of the CIO 100 who joined AstraZeneca in April 2013, said that the transformation’s tagline was “twice as good for half the cost” and was underpinned by two major pillars – insourcing and technology transformation based on cloud and mobile technology.

“We started in 2013 doing this mass of transformation,” Smoley said. “In the end it was achieved within the three-year timeframe so we were quite proud of that.”

For the CIO it was crucial to move from an outsourced IT function to bringing crucial skills back into the Cambridge-headquartered pharmaceutical and biopharmaceutical company.

Insourcing

“That insourcing represented a fairly meaningful skill-shift and culture-shift,” he said. “From one of overseeing service providers to one of actually owning and therefore having to have the technology, leadership, operational excellence skills and customer-focused mentality.”

There was also a push from AstraZeneca to refresh its technology stack with more innovative technology, with an emphasis on cloud-enabled, mobile-first tools.

“We were continuously looking at how we could refresh, and as part of the refreshing then streamline, simplify and consolidate to make the footprint smaller,” the CIO explained.

Smoley described this as good “meat and potatoes” business in the classic MBA mould; weighing the investment against the payback and the risks to make the organisation more efficient and effective.

Vendor consolidation

A consolidation of AstraZeneca’s key technology and IT partners was necessary as part of the CIO’s strategy, which Smoley said had a kick-on effect of creating the more innovative team the company required.

“We went through all of our procurement contracts, all the agreements we had with software and hardware vendors and service providers,” Smoley said. “It wasn’t about cost-cutting, it was about prioritising relationships which were strategic, dynamic and helpful as opposed to others that were pure buy-and-sell, or kind of walk-away relationships.

“I think there are a number of companies that we work well with and I think at this point most of the successful companies are coming around and getting on board.

“Then emphasising those partnerships, which led to more creative thinking, to more creative and innovative solutions.”

Smoley said this this had manifested itself in the team solving business problems and understanding customer needs rather than “just jamming technology in”.

“It could be a technology solution, or a process solution, or it could be purely pushing back and helping the business understand how they can maybe improve things on their own without necessarily needing IT,” Smoley said.

Part of the new way AstraZeneca works with its suppliers has been engaging with startups, which Smoley described as being an important part of the company’s innovation agenda.

“We are really trying to tap into the startup community,” he said. “We are working with many companies that didn’t exist five years ago, who typically have developed their products with only cloud, mobile and usability in mind.”

Transformation to innovation

The CIO over-simplified the three-year transformation as being “not easy but fairly formulaic in a way”, although some of the figures related to the programme highlight what simple ‘meat and potatoes’ business can achieve.

More than $700 million in savings since 2013, which is the equivalent of more than 80% of Smoley’s yearly global IT spend. The 2016 senior leaders meeting, held virtually for the first time, saw 1,700 AstraZeneca employees connect from over 60 global sites, which the company estimated to have saved more than 2,700 tonnes in carbon emissions. Smoley is also sponsor of a productivity initiative based around simplification projects which AstraZeneca believes unlocked more than 750,000 hours in 12 months alone, which the company is keen to dedicate to developing its science.

“The last three years have seen a huge transformation across AstraZeneca, with the move away from a risk averse, siloed and slow-moving company to one that is now proud to embrace fast-paced innovative and entrepreneurial values,” Smoley said. “IT has played a key role in driving and enabling this change.”

Entrepreneurial mindset

The culture-shift and different mentality at AstraZeneca is the platform for the company to be more entrepreneurial and embracing of a startup mentality, according to Smoley.

“Being much more open to taking smart risks and being a bit like a small biotech as opposed to a large, multinational pharma company,” he said.

Smoley said that backing from AstraZeneca CEO Pascal Soriot was important to the success of the project, with the Chief Executive driving the idea of a culture shift in the science, manufacturing, commercial and IT functions at AstraZeneca.

“Pascal Soriot, our CEO, is committed to technology innovation,” Smoley said. “He truly believes information technology is a key enabler and is important for our success, and he’s supported that very visibly and vocally over the past four years.

“That definitely sets a bit of a tone from the top.”

The CIO has been running sessions on emerging tech and the opportunities provided by digital, proposing to the senior executive team a “list of hot technology areas”. Each month the group convenes on an area like artificial intelligence or machine learning and discusses what it might mean for the industry, Smoley explained.

“In these tech engagement sessions part of what we do is not only titillate and inspire, but also inform a bit what these people might not know about,” he said.

Executive engagement

It’s because of initiatives like executive engagement and the transformation plan that the IT function is held in good regard at AstraZeneca, which spurs the CIO on and perhaps pushes IT beyond its comfort zone.

“The senior executive team has a very healthy relationship with IT and the view of IT is as a real partner in delivering business goals and objectives,” Smoley said.

“I’m not sure the senior leadership is particularly leading edge from a technology standpoint, but I think in terms of attitude, and interest and willingness to engage and discuss, the senior executive is very much there and that’s good because it pushes us and creates a challenge for us.”

This is one of the key modern capabilities of the CIO, which Smoley said was to be a transformation driver and value-add to the organisation.

“If you can connect people and be a catalyst; bring people together and share best practices, share lessons learned and accelerate – then that provides value to the company,” Smoley said.

Competitive advantage

Despite pressing on with innovative technology initiatives following the organisation’s technology transformation, Smoley said that “running brilliant IT” was still an important part of the CIO role.

“The twice as good for half the cost tagline never really goes away because you can always look at how you can improve and apply it to almost anything,” Smoley said.

“Going forward what we’ve said is we’re going to push the boundaries of technology.”

The three focus areas were “running IT brilliantly, digitising everything, and innovating for competitive advantage”.

“We have to do all three. You could envision it as a pyramid because running IT brilliantly is where most of the money goes, and it’s where most of the people are, and it’s what you have to do if you ever want to get to the discussion around the other two areas,” Smoley said.

“If your email’s not working, or your network’s slow, or SAP is falling over, nobody’s going to want to talk about the next cool technology or innovation. Making IT run brilliantly is so very important and we talk about it every day and you can’t take your eye off that ball.”

Emerging technologies

The CIO acknowledges that finding metrics to measure the success of a new mentality and innovation agenda is not as straightforward as it was for ‘traditional IT’, but that AstraZeneca was tracking experiments rather than success and failure.

“On the innovation side, what we do is measure ourselves in terms of the number of pilots that we’re running and the number of pilots that actually transform or convert, if you will, into advanced instruments and scale-up,” he said.

Smoley said that augmented reality, virtual reality, artificial intelligence and robotics were some of the emerging technologies which would have the biggest impact on the pharma sector. These also tied into the biotech startup mentality of large corporates looking more like software engineering companies.

“Virtual reality is something that is helping us in a number of areas,” Smoley said. “We’re excited about that. I think the whole machine learning robots, and to some extent chatbots, and artificial intelligence is an area that I would more broadly – maybe as a computer scientist – lump into software engineering.

“As part of insourcing work and shifting to more contemporary IT, the emphasis on software engineering is becoming increasingly important for companies like ours – I think we’re going to be doing more and more ourselves.”