Discusses the affects of QA/IT-department disconnects especially in regards to pharmaceutical companies.
For significant ROI results, the article provides suggestions for the improvement of communication and comprehension among QA/IT staff.
During the 1990s, a handful of Fortune 500 companies lost hundreds of millions trying to implement complex enterprise software systems. In some cases, projects dragged on for years before the companies killed them. Business executives were tearing their hair out trying to get a handle on the cost explosion and failed projects. How do you explain to shareholders and the board of directors that you spent two years and $500 million on world-changing information technology (IT) and yet have absolutely nothing to show for it? The business press rightfully called these disasters “corporate train wrecks.” CEOs lost their jobs. As did scores of Chief Information Officers (CIOs) who convinced the business execs to make these leaps of faith. CIOs sold these projects as “slam dunks.” They were anything but. Little wonder that the half-life of a CIO fell to 18 months or that his/her respective title became known as Career is Over.
Gradually, management learned its lesson. Business executives took more control over IT, often insisting that the CIO report to the Chief Financial Officer. The idea was to bring business discipline to IT, which for too long had been practiced as a black art, something only computer geeks could understand and business people shouldn’t even ask about. Other companies broke their IT departments into manageable chunks and distributed them throughout various lines of business, each one ultimately reporting to a business executive. And, for the most part, it worked. Project failure rates declined, as did wasteful spending.
Unfortunately, the pharmaceutical industry did not participate in the same rosy improvements. Why? There are two reasons. The industry was so profitable that as long as IT projects were never terminated and declared a failure, they always had a chance to succeed. After all, pharma was wildly profitable and could afford it. And management was used to funding multi-year drug projects. Why should IT be any different? In some large pharma firms, IT departments became famous for dragging failing projects on for years. The other reason, of course, was that FDA regulations raised the cost of compliance to a level not experienced in other industries. IT plays a bigger and bigger role in the pharmaceutical industry, from drug development to manufacturing. Vast data centers are subject to unannounced visits by FDA inspectors. Failed audits cost a lot of remediation money, not to mention the potential for drug recalls and bad publicity. Even if you never fail an audit but manage to pass by Herculean efforts, IT spend is commonly projected in the millions. Add to that the cost of sloppy IT service practices devoid of standard operating procedures and you’ve got a never-ending disaster on your hands. No wonder pharma spends four to five percent of revenue on IT. By some estimates, that’s nearly twice the rate of other industries. Can pharma still afford this luxury with so many blockbuster drugs coming off patent? Probably not.
Why can’t pharma learn to run IT like a business? Perhaps the biggest reason – and it’s one that few executives are aware of – is that most of the companies in this industry suffer from an organizational disconnect, a culture war, if you will – in which the quality assurance (QA) organization and the IT department simply don’t communicate. Call it the QA/IT disconnect, and be assured that if your firm has more than $500 million in revenues, it may be costing you millions.
QA must ensure every department complies with myriad regulations, and often writes onerous and unnecessary rules for IT to follow. IT thinks many of the rules are overblown, and sometimes they’re right. Moreover, they feel embattled by the need to make sure that systems are up and running and that projects are delivered in time and on budget. Regulatory compliance was never high on IT’s list of priorities to begin with. Who has time for documentation when the servers are crashing?
IT professionals love technology and hate process. That’s their personality. QA folks are the other way around. Most haven’t a clue when it comes to information technology, but they do understand the need for processes that ensure compliance. If you’re a senior business executive and you’ve got a war raging several floors down, wouldn’t you like to stop it? Hopefully you will hear the canons firing before it’s too late.
There are many techniques for resolving the QA/IT disconnect. The most important step is to find out if you have one…and you probably do. Second, you need to get the two groups into a room and make them work together to develop standard operating procedures that will make compliance a natural outcome of doing business – not a fire drill. To do that, each side needs to understand the other’s goals and responsibilities. Then make the senior hands-on leaders of these two groups report their progress to you or a senior business executive once a quarter. Has IT’s process and documentation improved? Does QA still require ridiculous and unnecessary compliance practices that are not required by the FDA? Have operations in each group been streamlined? Are failing projects being escalated to management’s attention? Can they point to any specific successes? And finally, consider the power of the almighty dollar in resolving organizational disconnects. Tie in compensation incentives for both groups when compliance, operations and spending benchmark goals are met—jointly. That’s probably the most powerful tool of all.
Keith Parent is the CEO of Court Square Data Group, a managed services consulting firm providing IT solutions for companies in transition. The company’s Good Systems Practice delivers IT solutions that are optimized for FDA-regulated environments. You can write to Keith at firstname.lastname@example.org.
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