IP Prescribed At Ranbaxy : Brian Tempest

Interview Questions

Full Interview with Brian Tempest

Brian Tempest:

IT is one of the most crucial parts of Ranbaxy's growth agenda and it is a true enabler in making the company a connected global giant.

We have set a very ambitious target for ourselves. In 2004, we were worth Rs. 5,106 crore in sales. Our aim is to achieve Rs. 25,000 crore by the year 2012 - that is seven years from now. IT, as we have witnessed in recent years, has empowered Ranbaxy immensely in achieving this target. Technology has always been on the forefront of Ranbaxy's agenda and in the future, when the company reaches out to both the domestic and global markets, three things will help us: strong marketing efforts, better drug and clinical research and products and, Information Technology. IT will enable us to map out our world operations seamlessly. How does IT align with your key business concerns?

Our competitive advantage rests with our innovation in R&D. What we invest in R&D and its productivity is critical to our business.

IT plays a decisive role in sustaining that advantage. A major concern area is the security of our R&D data. We endeavor to work on a real-time yet foolproof IT system, which will guard our intellectual property(IP). Today, it's just IP that differentiates us from other corporations. We have a global IT project to make our systems unbreakable. We have a global steering committee to oversee the progress of such a sensitive project. There is yet another committee which deals with operational details.

 

Ranbaxy has envisioned a war game concept to test its systems. This simulates hacker attacks, it looks for the cracks in our IT systems and tries to breach firewalls and the intrusion detection systems (IDS). We observe the outcome keenly. Based on the results, we take corrective measures. And, this is not a one-time activity. We also engage third parties to challenge our systems, increasing the chances of locating system and network vulnerabilities.

 

Brian Tempest:

No, I think people inside Ranbaxy understand the value and sensitivity of data. Although they know how to take advantage of that data, they don't. Once you've imbibed good corporate governance and a disciplined culture, insider hacking is not expected. Ranbaxy works continually on internal IT and corporate governance programs.

Brian Tempest:

The Ranbaxy board lends a lot of directional guidance to the executive management. It's the board's duty to ensure that everything we do is world-class. IT is no exception. I take personal interest where IT governance is concerned. Systems and data security is a key initiative.

 

As a company, we are constantly pushing IT to achieve two things: efficiency and productivity. We have commercial websites, which generate millions of hits every year. These websites aid the community of doctors to better understand our drugs. We want to ramp up this activity and get closer to the community.

 

We are really looking forward to taking advantage of IT to make Ranbaxy the number one company in the generic pharmaceutical business. That, in some sense, is my vision. And I expect IT to complement it.

 

One of the areas that our IT department is working on is a central server for all historical R&D data, which can be accessed by researchers and scientists. Anyone who is involved in research and needs to draw from the data repository should be able to do so with a click of a button. That's the sort of online, realtime historical data bank we have envisioned. It's a long term project. We started it a year ago but we are working at it strongly.

 

Brian Tempest:

Project Management is a key area in an organization like Ranbaxy. It is critical to create flawless research and drug-testing processes. Ranbaxy has earned the honor of being the world's third-largest company in generic drugs. We need a robust IT infrastructure to manage these gigantic projects. No drug company, with operations spread across the world, can afford to have loose ends where connectivity is concerned. The data generated from these R&D projects  has to be made available on-demand.

Brian Tempest:

We would like to strike the balance between outsourcing and keeping it in-house. Personally, I feel that outsourcing should used for secondary areas where more manpower is required and where there is less risk involved. We see ourselves outsourcing back-office jobs like financial accounting. Ranbaxy's CFO is keen on doing that. However, when it comes to information security, we, as a company, are hyper-sensitive. We would like to keep tight control over our IT security to protect our IP.

Brian Tempest:

Ranbaxy uses IT extensively, in a number of ways and across various departments including manufacturing, marketing and R&D. I have personally witnessed the contribution of IT in drug research and production and its marketing. I strongly believe that our ability to become the world's leading pharmaceutical company depends largely on the supply-chain management structure that we currently employ within and outside the organization.

 

You'd be surprised to know that Ranbaxy's IT team, with business managers and SAP, spent a lot of man hours making sure that the supply-chain solution works efficiently. Ranbaxy spent over Rs. 4 crore on high-level consultancy to ensure that we got a world-class supply-chain solution to run our operations. I felt that it was one of the most crucial factors in mapping out Ranbaxy's growth strategy.

 

In my career of over three decades, I haven't seen as smart a use of IT in many developed European nations and the USA. Not many companies incorporate SAP's Advanced Planner and Optimizer (APO) into their IT environments to help them achieve a greater In fact, we had a hard time finding the appropriate people to work on the project.

 

It is worth reiterating that Ranbaxy is one of the few companies that generates a crew of people who understand APOs better than anyone else in India. Only the APO makes it possible to cope with a situation where so many new products and R&D projects are introduced into the system everyday. Our SCM is the most critical link on which Ranbaxy's success depends.

 

So, to answer your question, in the future, we expect the same kind of foresight from our IT team, where they will deliver the best tools to assist us achieve our target of Rs. 25,000 crore.

 

Brian Tempest:

IT is certainly not just a utility. It has honed organizational efficiency in Ranbaxy. For example, Ranbaxy in the US faces a great deal of competition from giants in the generic business. We do business in generics with 14 to 15 companies to maintain, at least, a 10 percent market share. For this, we need to have robust yet agile IT systems which help us deal with customers online. Businesses must see that IT is not only a differentiator, it can help do business faster, better and more accurately. That's why no company can afford to keep a CIO out of its key strategic teams. In our case, we really see no reason why a CIO should not contribute to the company's strategy. Ranbaxy's CIO is a member of the Pharmaceutical Business Committee (PBC), a group that includes top managers who develop strategies for the growth and expansion of our business. The CIO plays a crucial role in the PBC. He is someone who can add a great deal of value to the business, especially when it comes to expansion, mergers & acquisitions or even scaling-up of operations. Our CIO reports directly to the president of the company (Malvinder Singh) and the president reports to the CEO, that's me.

Brian Tempest:

At Ranbaxy, we try to benchmark these processes, at the macro level. With projects like regulatory compliance and information  security, there is very limited justification we can afford. You just can't afford to reject making an investment in IT that promises a more secure and compliant organization. Nonetheless, payback is still questioned. The return on investment in these cases is not directly proportionate to what you've put down. I am not denying that we don't look at justification. We take both a top down and a bottom-up approach because, after all, we have to defend our decisions with our investors and shareholders.

Brian Tempest:

It's essential to calculate the return on any investment that you make whether it's in IT, marketing, sales promos, or even personality development. ROI for an IT project can be calculated in many ways. I think it is passé to calculate ROI on the basis of direct benefits, since one can see how efficiency and productivity have improved after putting an IT system in place. First, it's important to determine whether the goal of an IT project has been met. If it has, half your ROI is achieved. At Ranbaxy, we justify our investments based on the income they are expected to generate in terms of savings or in boosting sales.

Brian Tempest:

When we introduced SAP, it proved to be a lengthy process. We underwent lot of stress before we realized that we needed to be more focused. Finding APO was the way to success. Putting APO in place brought in real value. Most companies find this difficult and Ranbaxy learnt a lot during that journey. These are complex pieces of software and they need a higher level of involvement and attention