Ask Wockhardt Chairman Habil Khorakiwala and he'll tell you that organizations can achieve fast growth by using IT to strike a balance between volumes and price and by ministering to their customers. In doing so Wockhardt's grown from a Rs 3 lakh (US$6703) company to a pharmaceutical house with a global presence.
CIO: How does IT fit into a research-based pharmaceutical and healthcare company?
Habil Khorakiwala: IT helps improves the quality of our decisions and end-products and takes us closer to our customers. With the amount of information we deal with and the complexity of business we're in, IT gives us our competitive advantage.
In creating and sustaining a global business model, the whole ballgame is about being two steps ahead of the others, with a higher degree of thoroughness and speed when it comes to implementation.
I personally encourage the use of IT in the organization -- it is fundamental to all that we do. Let's take an example of one of the most complicated activities we tackle -- the process of launching a generic product. We have about 100 projects that we need to market. Normally, going from concept to getting final approval for a product takes about three years in a regulated market like the US. This involves around eight to nine functions, with 20-odd people dedicated to each function; the level of complexity involved is pretty high.
IT's ability to put in place processes and systems is enormous. IT is used right from the concept level through research to manufacture of Active Pharmaceutical Ingredients (API) and formulations and in meeting regulatory guidelines and patenting requirements for manufacture. Then, we also need to structure documentation to respond to FDA queries adequately and with speed. While dealing with a regulatory market, one needs to understand the importance of quality and processes, and reduce failure rates and delays.
Does IT also play a bigger role in R&D?
As with biopharmaceuticals, new drug discovery involves numerous complexities. The entire lifecycle takes close to a decade. Enormous information is generated as multiple disciplines become involved. It is essential to capture data and analyze it at every stage.
Additionally, if you're in drug research, you cannot be successful unless you are globally competitive. A drug isn't worthwhile unless it's superior to what's available. We have eight to nine drugs in various stages of discovery and development and our team uses IT extensively here.
Patent research is another area. All the disciplines of Wockhardt (pharmaceuticals, drug discovery and biotechnology) require searching for patents. It is far more important not to infringe existing patents than filing our own. We generally file between 30 and 40 patents every year. It is impossible to access and search hundreds of thousands of patents without IT.
What about non-R&D operations?
Wockhardt has integrated functions such as planning, procurement, resource management, interfacing the manufacturers and the supply chain, and distribution. As a result, today we have zero working capital. We tightly balance processes and inventories. This gives us enormous strength because we don't require a lot of cash to grow.
We have an online system of product-costing based on actuals. The system computes the actual cost of manufacturing and distribution, and adds a planned marketing cost for each product. Sales and marketing staff can see the profitability of different products. With SAP, it also becomes easier to integrate with the other entities we acquire.
In addition, with the Infinity Prescription Information System, we can compute the value of business a doctor gives us. Our field force of 1,200 sends us their daily reports electronically. We have found that globally we receive 85 to 110 percent validation for our products by getting regularly prescribed. This helps us to monitor the performance of both doctors and our people.
Have initiatives such as Infinity contributed to increased market share?
Absolutely. For instance, when we entered the Insulin domain, there were already a couple of transnational pharmaceutical giants that made sure new entrants failed. The process I established in Wockhardt of micromanaging customers using IT initiatives like Infinity, meant that in the first year we were able to garner a 22 percent market share for new prescriptions. In less than two years we enjoyed a 31 percent market share.
Similarly, we introduced Wepox, a recombinant erythropoietin used to treat anaemia caused by cancer and chronic renal failure, about four years ago. When we entered the market, our competitor almost held the entire market share. Today, we are market leaders. We achieved this using a moderate-pricing approach and by aggressively micromanaging customers using IT. Though the price of Wepox has come down by 60 per cent, we've increased volumes 10 times. The challenge, however, is to develop skill among our people to interpret and analyze information.
While developing an IT solution is challenging and getting it implemented even more so, using the data effectively is the most difficult task. We already have competency at the senior level and I'm sure we will develop into an organization that interprets and analyzes data and takes better decisions faster.
Has technology helped leverage global business and acquisition -- key growth drivers at Wockhardt?
The factors that drive our international business are the quality of management, advanced research, and manufacturing. We replicate similar IT implementations across geographies. In an acquisition, useful aspects should be retained and the rest should be migrated to one's own levels. Technology helps us to raise the standard both ways.
With acquisitions, SAP takes care of the supply chain. However, we do not replicate marketing-related IT deployments. We only acquire to have market access, so we generally rely on existing systems.
Nevertheless, as we approach newer areas in major markets, we are looking at ways of employing IT to better understand customers and respond to the markets more effectively. We are in the process of integrating businesses in these markets with the Indian supply chain.
On a different tack, how do you ensure an alignment of business goals and IT?
IT is core to Wockhardt. Advanced R&D and compliance to regulations and standards are crucial for any leading pharmaceutical enterprise. IT gives us a competitive edge, whether in the pharmaceutical market or the healthcare business. Even our hospitals are equipped with the latest IT infrastructure that enables telemedicine and an anywhere, anytime availability of clinical and patient data.
At Wockhardt, business goal are supported by IT initiatives. For instance, with the Infinity Prescription Information System we are in a place where we understand a customer's experience and views, and know exactly what to communicate. I wouldn't say that we've reached the kind of pervasive levels I envisioned, but we're on a fairly advanced course to make it happen.