Project Management Assignment: Case Analysis of Digital Transformation at Merck

Question

Task: To prepare this project management assignment, student to analyse the case study and submit answers with an analysis.

Digital Transformation At Merck
AnandramNarasimhan, Charlotte Van Hautekerke and Paulo Sti Lin Liao.
“Have you ever been to hospital in Beijing” asked Holly Shi. “It is a big headache! I hate to go there!” she said, expressing anguish and frustration. “There are big facilities, but you see the crowds,” she trailed off before going on. “The crowds are massive, the long queues, oh!” she sighed before taking a deep breath and continuing. “You just don’t want to go there. You spend three hours in a queue waiting and the doctor sees you for three minutes! And, then you walk out asking yourself if the doctor actually did his job, and if you will actually get better! Psychologically it feels like the doctor has not paid enough attention.”

Like many other working moms, Holly Shih shouldered many responsibilities, having to take care of her home, get her kids to school, and be a bread winner contributing to the family’s financial position. She needed to be fit and healthy. She worked at Merck, the oldest pharmaceutical company in the world, where she was responsible for developing marketing strategies for the cardio metabolic care franchise of the company in China. One day in spring 2017, Holly had just returned to her office after the three-hour wait and three-minute consultation. As she settled down at her desk with a cup of tea, she saw an email notification that said, “Let’s transform Merck digitally!” The email captured her attention. It was an invitation to participate in a Digital Innovation Challenge competition. She hit the print button, collected the printout from the nearby printer, and left it on her table to look at later. Grabbing her laptop, she rushed to a meeting with her team. As she entered the conference room, she muttered under her breath, “transform the hospitals and healthcare.”

A Ticking Time Bomb, and a Need for a Digital Solution
For Holly, China faced a big problem in terms of healthcare:
This could grow into something much bigger and at an exponential rate if solutions are not found to address the healthcare needs of the world’s most populous country, where we see increasing affordability, a rising middle class with new consumption habits that are triggering a shift from infectious disease incidence to chronic and lifestyle diseases, not forgetting a rapidly ageing society.

Hospitals in China were classified in tiers. The top tier hospitals with the best doctors and services were tier 3. This was followed by tier 2 and 1 hospital and finally community healthcare centres (CHC), which were located in residential areas and aimed at addressing the primary healthcare needs of the population. However, patients preferred to go directly to tier 3 hospitals, even for minor ailments, thereby causing a massive logistical problem for the hospital network. The government was trying to change the situation by incentivizing patients to go to tier 1 hospitals or CHCs through free consultations and higher reimbursement rates for treatments at tier 1 hospitals and CHCs. However, the doctors at these lower tier medical centers were less competent and used less effective medication, so patients tended to go back to the tier 3 hospitals. These lower tier centers needed to be better prepared to deal with patients.

When Holly returned to her desk after her team meeting, she studied the Digital Innovation Challenge flyer that she had left on her desk and noted down some thoughts:

We need to look at a digital solution to address these capability and information gaps at the CHCs. We could help them to manage their calendar and prescriptions and provide recommendations for diagnosis and treatment. We could load primary care guidelines into the AI system to make it easier for doctors to access information that would help them make diagnoses and choose appropriate tests and therapies. The AI functions would be able to read and interpret results of tests and recommend appropriate treatments and prescriptions to the CHC doctors, who were less educated and experienced. Patients could also receive the information on their phone, and an app would make it possible to connect patients, doctors, pharmacies, etc. This was the genesis of its MyCHC platform. The ideas kept flowing, and Holly was excited. She formed a team and they started out studying the customer journey. Changes in the external environment also had to be factored in: Where were patients going for diagnosis and treatment Whatsolutions could Merck offer patientsin the face of government healthcare policy changes to rebalance the resource utilization in the different hospital tiers and CHC

Nevertheless, there was a need to focus on a therapeutically which would solve a pain point for patients and the health system and as most diabetes patients were treated in CHCs they would be highly impacted by the policies to rebalance the resource utilization. To crack the nut, the team talked to lots of people, internally and externally, including IBM Watson because digital marketing was different from conventional marketing and they felt that they could do things differently and make a big positive impact for patients anddoctors.

Holly knew that tech players like Alibaba and Baidu were already active in health consultations. But her analysis revealed that competition was limited at the CHC service level, and that no one was offering an end-to-end solution. The hospitals’ information systems in China were not synchronized or exchangeable, so the team would need to integrate a referring function in their application to allow patients to go to a top tier hospital when needed.

Since Merck was not a technology company, it would need to work with a technology partner. It considered different technology partners, including IBM, and talked to officials in the Chinese government, which also expressed interest. As Holly explained:

The strategy was aligned to our portfolio. There were a lot of benefits for the patients, and it offered the company an opportunity to kick-start a new business model and be at the forefront of digital transformation in the pharmaceutical industry. MyCHC was alive andkicking!

Merck and Digital Disruption in China
The pharmaceutical industry had historically been one of the most stable industries. It had resisted shocks that had disrupted other industries or caused them to decline. However, the last decade had been more difficult, with elusive blockbuster drugs becoming rare, and governments putting more pressure on prices, driven by rising healthcare costs and ageing populations. The industry had also so far been immune to disruption from the digital technologies and capabilities that had disrupted many other industries. But the clock was ticking, and digital disruption was knocking at the door of the 350-year-old company, which had survived two world wars, many economic crises, including the great depression of 1929 and the 2008 financial crisis. What would a science and technology company like Merck need to create the sense of urgency that would spark it into action so that it could start tapping into the new digital revolution Merck had a global footprint in healthcare, life sciences and performance materials. It would need to understand the complexities of this challenging and new digital world. This was particularly true for the healthcare business unit, which was under pressure because it had not launched a new successful product in over a decade, competition from incumbents was increasing, and technology companies were threatening to disrupt the healthcare industry. Merck would need to react fast, especially in China, where the adoption of digital technologies was transforming or even disrupting industries through changing business models. It seemed big pharma was ripe for disruption.

Merck’s Digital Transformation: MyCHC
In March 2017 the management of Merck Asia Pacific approved the launch of the MyCHC initiative, and Allan (Al) Gabor, head of Merck for Asia Pacific and a veteran with years of experience in the Chinese pharmaceutical market, would be the initiative’s sponsor. Al had retired from Pfizer in Spring 2014 after an extensive career with the pharma giant, predominantly in Asia. He had spent most of his working life in China and knew the country well. Merck initially asked him to lead its China business, then in 2016 put him in charge of the Asia Pacific region, a key mandate for Al to kick off the digital transformation journey in the region.

Holly was excited by this great news and felt certain she now had what she needed to move this initiative forward. Indeed, this was a fantastic opportunity to be a true healthcare partner and make a difference to the Chinese population and the government by bringing a digital solution that would improve the quality of healthcare services at the grassroots level. It was also exciting to open a new chapter in a company with a global footprint in healthcare, life science and performance materials. R&D and new product development had always been a cornerstone for Merck, but with no major new products in over a decade and growing competition from traditional pharma companies and a looming threat from digital technology companies, the current business model was no longer fit for purpose.

Back in China, Holly started to engage with senior managers from all functions to form a new team for this transformational project. This was not without its problems, and Holly sighed with visible frustration:
I needed to put this team together quickly so that I could get them on the same page and kickstart the project, as the original team had changed. It was really a pity that my original partner from Medical was on maternity leave and her substitute in the project couldn’t be part of the project execution due to her workload. Nevertheless, I convinced my boss and peers to allocate people to the project because it was clear that China was on the verge of a digital transformation in healthcare, with digital giants like Alibaba and Tencent making clear their intentions to become key players in the healthcare industry. The tech companies were different from the traditional pharma companies as they were moving fast, prototyping, testing, failing, improving, etc.

There was clearly a sense of urgency because the digital companies were steaming ahead, and China was ripe for digital disruption of its healthcare system and there was a need to increase healthcare access to the population. MyCHC would also prepare Merck for the coming digital platforms and potential substitution of physicians with computers powered by artificial intelligence (AI); it would allow Merck to access data and insights on patient and customer needs and real-world results of outcomes of its solutions; and it would empower patients and physicians to better manage patient health. Holly mentioned some of the challenges for big pharma companies when initiating such transformations:

Clearly, there is a need for Merck to accelerate its learning on the digital world; currently, traditional pharmaceutical companies are not agile in this dimension.
Would this reactive approach result in big pharma’s displacement by tech giants like Alibaba and Tencent Would Holly be able to realize the MyCHC ambition She said: This is how MyCHC was born. Our team designed a digital platform solution to not only address customer needs but also support the Chinese government’s ambitions based on the Healthy China 2030 policy. We gathered market intelligence, conducted interviews with physicians, and gathered observations and insights generated by all this data. We developed a digital platform with a user-friendly interface to support physicians in making diagnoses and recommending treatment, setting up appointments and engaging with the patients digitally.

This platform was prototyped and tested in hospitals and with healthcare professionals (HCPs) where we had the opportunity to improve the design of the platform features; the solution was highly praised by physicians and patients. We were ready to launch the MyCHC with a tested prototype and a validated proof of concept.

The MyCHC dashboard helps physicians to better manage their day, showing incoming appointments (in person and online) and highlights. It has a symptom check functionality to support physicians with a systematic diagnosis process to ensure no key steps for the final diagnosis are missed by guiding the physician through key questions. After this process, all possible diagnosis is shown with medication options, which saves physicians time on searching for appropriate treatments and supports physicians in explaining the diagnosis and treatment to the patients. MyCHC also allows setting up directly a follow-up appointment with automated suggestions of dates and times so that the physician does not need to manually search for free slots.

Questions
1. Unpack the: Competitive landscape for myCHC in China and assess Merck's resources and capabilities regarding a successful introduction of MyCHC in China. Analyze the context for Merck's MyCHC in; what factors do you need to keep in mind when you embark on a digital transformation project journey

2. Explain if the system is scalable in supporting current and future digital innovation given the rapid growth of the industry

3. Strategy is essential, but what about execution What are the execution steps you need to plan before embarking on any key change initiative Use a project management theory (e.g., Gilbert et al., 2008 Smarter execution: seven steps to getting results) to analyze this.

4. The China healthcare industry is prime for disruption. But, is China the best market to enter And is Merck addressing the market's needs We believe they are, but they are not alone. Will Merck be able to win Alone or in partnership 5. What project management and consulting services are available Does the system workflow represent industry best practices, and Is the feature set rich enough to support multiple service divisions and multiple domains Explain how.

Answer

A1: As per the case study analysed to prepare this project management assignment, MyCHC is a digitally transformative and visionary solution for transforming the grassroots healthcare system of China supporting their Health China 2030 policy. Also, Merck is capable to launch this platform in China and make it a success and support through its entire journey. However, in terms of the success factors, the following things has to be kept in mind:

Internal factors

Capabilities fit.

To succeed in digital transformation, a firm must acquire a wide variety of competencies that will vary in relevance based on the business environment and demands of that organisation (Benjamin & Potts, 2018).

Resources fit
An internal resource fitment relates mostly to a devoted liaison mechanism and a highly-authorized staff. In other words, ensuring that the enterprise's interface, current service platforms, and organisational architecture all communicate effectively and sustainably. However, internal resources that suit a highly approved team are essential.

Business model changes.
A business model is defined by its value creation and customer relationships, therefore redesigning and improving customer cooperation and communication are the active ones of the business model which have an influence on the whole business model as well as on the context of digital transformation.

External factors

External capabilities fit.
External skills, such as cooperation and customisation, are critical, according to the findings of a comprehensive case study. Working together towards a shared objective is an iterative process that involves the involvement of several groups. The capacity to alter products and services depending on the market demands is at the heart of customisation factors (Tagarev, 2019).

Resources fit
External resources fit can be influenced by a number of factors, including the company's history (previous strategic choices) and its faith in the trustworthiness of another firm.

Government regulations.
Among the most significant external elements affecting the company's digital transition is government laws (Waller, 2016).

Industry
The maturation of an organization, as well as its unique demands and expectations, play an important role in the digital transformation process. It's worth noting that these extraneous elements received the least attention in the publications we chose. As a result, future studies should examine the impact of digital transition in more depth and determine its valence.

A2:Versatile, accessible, and user-centric interfaces have already defined how patients and healthcare teams expected to engage with each other, therefore healthcare businesses throughout the world must fast innovate and adapt. Prepare today for the delivery of healthcare services by establishing technological infrastructure that can fulfil these demands at an ever-increasing size while simultaneously ensuring strict compliance, accepting evolving financial parameters, and avoiding interruption to clinical procedures (De Souza et al., 2012). Several sophisticated clinical communication systems now allow IT teams to establish this sort of robust, accessible and secure healthcare IT base. Clinical workflows will be automated, care teams will be networked and data will be securely transmitted from the bedside towards the EMR via these new systems. Investing in cloud services would help MyCHC with these concerns, which include a robust infrastructure and data replication.

A3 :Using Agile methodology of execution, the following six phases are crucial for project execution.

1. Concept
The first step is to develop an idea. The scope of a product owner's initiative will be determined here. As many initiatives as possible will be prioritised if there are several. Documentation will be prepared to explain essential needs with a customer, including what functionalities are offered and the anticipated outcomes. Requirements should be kept low so they can be increased to later. The product owner would also evaluate the duration and cost of possible projects during the idea stage. Prior to starting on a project, they will use this extensive study to determine whether or not it is a good idea.

2. Inception
The application development staff must be assembled once the concept has been developed. An owner of a product will verify the availability of their co-workers and select the best individuals for the endeavour whilst still giving them with the required tools and resources. It's now time for them to begin the design. User interface and project architecture are to be created by this team. Stakeholders are involved in the genesis stage of the project, when they help flesh out the specifications on a diagram and decide the product's functionality. Checking in often will ensure that all criteria are incorporated into the design.

3. Iteration
The building step, or iteration, follows. The majority of work is done in this phase, hence it tends to take the longest. As a result of this collaboration, developers will collaborate alongside UX designers to translate the product's needs and user input into code. When you begin working on a project, your objective is to get it up and running as quickly as possible. Is there a way to add even more features and tweaks It's an essential part of Agile development, which enables developers to quickly generate functioning software and make adjustments to meet the needs of the customer (Kim, 2016).

4. Release
The product is nearing its final stage of development. In order to confirm that the software is completely working, the quality control team has to conduct a series of tests. It is the responsibility of such Agile members of the team to guarantee that the code is error-free, and if any possible bugs or defects are discovered, the developers will quickly repair them. During this time, we'll do user training, which necessitates more documentation. After everything is done, the final version of the product may be put into production..

5. Maintenance
Customers will soon be able to use the new software. This will put these into the maintenance stage, where it will remain for the time being. To keep the system functioning smoothly and fix any new issues, the development team will be on hand to give help as needed. Additional training for users will also be provided by them, and they will be available to answer any questions or concerns they may have. It's possible to renew an old product with new features and enhancements over time (Kim, 2016).

6. Retirement
If a product is being replaced by new technology, or the platform itself has grown obsolete or incompatible over time, it will enter the obsolescence phase. Users will be notified first by the development team that the application is being decommissioned. The users would be transferred to a new system whether there's a replacement. End-of-life operations will be completed, and support for the current software will be discontinued (Wilson &Carmenza, 2015).

The China healthcare industry is prime for disruption. But, is China the best market to enter And is Merck addressing the market's needs We believe they are, but they are not alone. Will Merck be able to win Alone or in partnership

A4: China's national healthcare policy, Healthy China 2030, was announced in 2016 and contains lofty goals for improving the health of the Chinese. A 16 trillion RMB healthcare ecosystem seems to be the goal of the Chinese authorities by 2030, and it will be achieved by increasing preventative care, enhancing healthcare management solutions, and taking good care of critical populations, including such women and kids, who are particularly vulnerable. Because of the sheer size, volume, and rate of expansion, the Chinese market stands out as the finest place to start a business in the world. Merck is addressing the grassroots needs of Chinese economy by targeting the Tier 1 section which comprises of the majority of Chinese citizens. As a result, Merck has positioned itself to take a major chunk of the pie. However, irrespective of the size and veracity of Merck & Co, china is a major market and radically different than their western counterparts. Starting from the way Chinese citizens use healthcare services, to their healthcare journey and the cultural differences, Merck alone would find it difficult to win. However, with an appropriate partner such as Alibaba and Tencent that are Chinese megacorporation’s having global expertise and partnership would be an ideal partner to enter the Chinese healthcare economy.

A5:Project Management Consultants apply their knowledge, skills, as well as experience at different stages of the production to manage the project (Dobi, 2019) t. As a result, Consultancies have a wide range of tasks and responsibilities that are dependent on their expertise and experience. When clients seek professional advice or information on a particular technical problem or issue, they are engaging in consultation. It is possible for consultations to be quick or lengthy, with customers sitting across from the Consultancy's desk for as little as a few hours. In addition to the foregoing, Project Management Consultation is only successful and efficient when it is involved in the whole project life cycle from inception to completion..

The system workflow is a standard workflow that is adapted from western countries digital healthcare ecosystems. As a result, it follows industry’s best practices. They are also feature rich, because at each touchpoints they are providing deep integration and enriching experience for all stakeholders involved. Their services and integrations are also varied and support the entire ecosystem including patient management, health records management, outpatient department and so on.

References
Benjamin, K., & Potts, H. W. (2018). Digital transformation in government: Lessons for digital health DIGITAL HEALTH, 4, 205520761875916. https://doi.org/10.1177/2055207618759168

de Souza, C. R. B., Costa, J. M. R., &Cataldo, M. (2012). Analyzing the scalability of coordination requirements of a distributed software project. Journal of the Brazilian Computer Society, 18(3), 201–211. https://doi.org/10.1007/s13173-012-0067-5

Dobi, T. (2019). Advantages of Integrated Project Delivery and Project Management Consultancy in Managing Large Construction Projects Are Yet to Be Proven. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3419105 Kim. (2016). Software development project management using Agile methodology. Project management assignmentThe Journal of the Institute of Internet Broadcasting and Communication, 16(1), 155–162. https://doi.org/10.7236/jiibc.2016.16.1.155 Tagarev, T. (2019). DIGILIENCE - A Platform for Digital Transformation, Cyber Security and Resilience. Information & Security: An International Journal, 43(1), 7–10. https://doi.org/10.11610/isij.4300

Waller, P. (2016). Digital Government: Overcoming the Systemic Failure of Transformation. Digital Transformation Through Policy Design with ICT-Enhanced Instruments. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2803233 Wilson, N. B., &Carmenza, L. A. (2015). Agile Methodology to Develop Architecture of Information and Knowledge in Organizations (MADAIKE). International Journal of Machine Learning and Computing, 5(2), 153–159. https://doi.org/10.7763/ijmlc.2015.v5.500