Title

AWS re:Invent 2022 - Demonstrating the real enterprise value of cloud at Merck (PRT260)

Summary

Merck, in partnership with Accenture, has embarked on a cloud acceleration program called Blue Sky, aiming to transform their IT landscape and drive business innovation.
The Blue Sky program is not just about cost savings from infrastructure but also about modernizing work processes and IT spend profiles.
The program involves a systematic evaluation of every application, retiring what's unnecessary, moving eligible applications to the cloud, and modernizing for full-stack automation.
A business case was developed to capture over $275 million in annual savings over a 39-month period.
The program is executed in tranches, with each phase building on the success of the previous one and scaling up efforts.
A rigorous financial framework was established in partnership with finance to validate and capture real value, not just theoretical savings.
The program has evolved from proving technical feasibility to building a credible business case, and now it's shifting towards discussions of business transformation with the business divisions.
The ultimate goal is to leverage cloud capabilities to improve Merck's core mission of saving and improving lives, such as enhancing scientific research and manufacturing processes.

Top-down sponsorship and advocacy from executive leadership, including the CEO, have been crucial for the program's success.
Demonstrations of cloud capabilities to non-technical leadership have been effective in garnering support and understanding of the program's value.
The partnership with finance from the start has been key, ensuring that savings are real and validated, not just theoretical.
The decision to drive the transformation centrally from IT initially, rather than distributing it across the business, helped build capability and credibility.
Talent and skills development within Merck's own workforce, alongside partnerships with third parties like Accenture and AWS, have been important for maintaining control and expertise.
The program's naming, "Blue Sky," reflects the vision of looking beyond the cloud to the broader business outcomes and impacts.
The approach to value capture is structured and scales beyond simple cost savings, focusing on efficiencies, cost avoidance, and hard savings, which are then reinvested into the business.
The program's success has set the stage for a shift from IT-driven discussions to business transformation conversations, with the business and divisions becoming more involved.