Pharma Bio World: Cognizant’s Global Delivery Head of Life Sciences Discusses the Role of the CIO in Making Mergers and Acquisitions Successful
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Ram Meenakshisundaram, Senior Vice President and Global Delivery Head, Life Sciences, Cognizant, and Rajesh Kuppuswamy, Senior Director, Life Sciences Consulting, Cognizant |
“Mergers and acquisitions in the life sciences industry, like in other industry sectors, provide opportunities to redefine business models,” writes Ram Meenakshisundaram, Senior Vice President and Global Delivery Head, Life Sciences, Cognizant, in an article coauthored with Rajesh Kuppuswamy, Senior Director, Life Sciences Consulting, Cognizant. “Understanding opportunities for transformation, and architecting the change through informed decision-making and enhanced standardization and automation make the role of CIOs more significant than ever before.” Excerpts:
“Multiple industry studies have shown that more than 50% of targeted synergies are tied either directly to technology or technology-led/technology-enabled processes. Let us therefore take a moment to focus on the CIO. The CIO’s role can be viewed through the prism of the dual mandate: To “run better” via efficient and seamless integration and operations of the joint entity from day one of the merger, and to “run different” by unlocking opportunities to innovate and create value through new technology-led business models.
The “run different” responsibilities are critical to uncovering the true value of the merger. Attaining synergies, after paying for restructuring and acquisition premium, requires discipline and changing status quo. Typical targeted synergies, besides cost takeout or those related to efficiency, include strengthening of pipeline and enhancing reach into complementary markets or existing markets with complementary product portfolio.
In the life sciences industry, typically about 50% of synergies targeted are related to IT, that is, rationalizing the application portfolio and optimizing the realization of application value to provide enhanced benefits. Based on the synergy avenues discussed here, this finding is not surprising. Therefore, the role of the CIO and the CIO’s team is critical from the outset in shaping the success of any M&A.
The onus of attaining synergies will continue to increase and the need to optimize application value realization will be more relevant. New processes may need to be defined, which are likely to be technology-led, rather than being just technology-enabled.
The CIO needs to be empowered and also held accountable. Only then the true value of M&As can be realized. This also means that some of the current core “run better” responsibilities of the CIO must be managed by a separate team from the one that is responsible for innovation and value realization. This requires a rethink of the organization and the operating model.”
Click below to read the article, originally published in the July 2016 issue of Pharma Bio World.
