The emphasis that Pharma places on technology is obvious from the money it spends. Technology research firm META Group estimates that it invests between 4 percent and 5 percent of its annual gross revenues on hardware, software and related services. Given global sales of an estimated US$492 billion in 2003, the industry's total expenditure on information technology (IT) is between US$19.7 billion and US$24.6 billion a year. Big sums are at stake -- and they are rapidly increasing. Market analyst Datamonitor predicts that the top 11 pharmaceutical companies will collectively spend almost US$7.4 billion on IT in 2005, up from US$5 billion in 2000. Their overall IT expenditure over the same period will increase at a compound annual growth rate of 6.5 percent worldwide, peaking at 8.5 percent in North America. The scale of Pharma's IT expenditure is not a problem, as long as it delivers a positive return on investment. Yet few pharmaceutical companies can claim to have realized the full benefits of the money they have spent. This is sometimes true because they have focused on the wrong goal -- they have looked for technologies that will do more things rather than technologies that will help them make sense of the data they possess. Alternatively, they have failed to set clear strategic objectives, integrate applications or even explain how to operate a technology to the people who must actually use it. However, the situation is now changing. As Ludwig Siegele, the technology correspondent of The Economist, recently observed, "Companies everywhere are rationalizing their existing IT infrastructure and keeping purse strings tight." Pharma is no exception. Most drugmakers have become much more cost-conscious, not least because they are under enormous pressure to deliver better returns for shareholders, who have seen the value of their stock plummet over the past few years. If they are going to invest billions of dollars in technology, then, they want to ensure that money is not misdirected. | 
