Life Sciences

From potential to performance by design Life Sciences Report TCS AI for Business Study

2 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report About the TCS AI for Business Study TCS surveyed senior executives at nearly 1,300 companies in 12 sectors across 24 countries, approximately half of which had annual revenues over US$5 billion . This report includes study findings from 90 survey respondents in the Life Sciences industry . What’s driving AI implementations? How is AI redefining the Life Sciences industry? How are employees, skills and roles shifting? What customer engagement AI trends are emerging? Where is AI strategy headed in Life Sciences? Are business results aligning with aspirations?

3 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report Additionally, seeking to find correlations between a company’s business success and its approach to implementing artificial intelligence, each executive’s company was ranked alongside the others in that same industry for its financial success, as measured by a combination of revenue growth and profit growth over the last three years. These “Pacesetters” represent the top 34% of companies — 31 companies – among the Life Sciences executives we surveyed. Where relevant, this report notes differences between the industry’s overall survey answers and the responses of its Pacesetters. The findings in this report reflect a survey sample of 90 senior executives — CEOs, divisional and business unit heads, and senior VPs or VPs with profit-and-loss responsibility — working for major Life Sciences companies headquartered in the following countries:  Australia  Belgium  Brazil  Canada  Chile  Colombia  Denmark  Finland  France  Germany  India  Ireland  Japan  Luxembourg  New Zealand  Spain  Sweden  Switzerland  UK  USA

The transformative potential of AI

5 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report An optimistic outlook on AI’s impact Q. How would you compare AI's potential impact on your business model with the following technological developments: Internet; smartphone. Q. Which of the following is closest to how you're feeling about AI's potential impact on your business? Few technology advancements have gripped the public imagination like artificial intelligence. The majority of senior executives in the Life Sciences industry believe AI’s impact on their business model will be greater or equal to earlier disruptive technologies, and about half are optimistic about its potential . 57% 69% believe the impact of AI will be greater than or equal to smartphones say they are optimistic or excited about AI’s potential impact on their business believe the impact of AI will be greater than or equal to the internet 48%

6 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report Humans, not AI, expected to remain the competitive differentiator Q. In your business, which of these statements most closely matches your own expectations for how AI will impact decision m aki ng in the next 3 -5 years? Most Life Sciences executives believe that rather than replacing human workers, AI will augment and enhance human capabilities, enabling people to focus on higher-value activities that require creativity, empathy, and strategic thinking. expect AI to make more tactical decisions, freeing up workers to think more strategically believe human intuition and creativity will remain central to their company’s competitiveness 23% 49% Nearly three-quarters of Life Sciences executives say human creativity or strategic thinking will remain their company's competitive advantage. 72%

7 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report Executives want to innovate and make money with AI While innovating with AI is among the top priorities, Life Sciences executives are less focused on using AI to spur innovation and grow revenue than are executives in other industries. On a 10-point scale between “optimization” and “innovation,” Life Sciences executives averaged 5.84; the average for all other industries was 6.79. Q. On a scale of 1 to 10 — where 1 is solely interested in using AI to lower costs and optimize operations and 10 is solely focused on spurring innovation and revenue growth — where would your company's current approach toward AI fall? 34% 26% 16% 25% 6% 32% PACESETTERS Life Sciences 32% 29% Solely or mostly focused on using AI to lower costs and optimize operations Focused on optimization, but with an eye toward innovation Focused on innovation, but with an eye toward optimization Solely or mostly focused on using AI to grow revenue and spur innovation Life Sciences Pacesetters closely followed their industry’s trends: of respondents at Pacesetter organizations said they were primarily focused on innovation 61% 39% said they were more interested in using AI to cut costs

8 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report Productivity is an AI benefit, but quality will be its lasting value Life Sciences executives are more focused on using AI to enhance productivity than they are on using it to improve quality, especially as compared to other industries. But over time, the more balanced the approach to integrating AI – through optimization, productivity, innovation and quality – the better the outcomes and the elevation to excellence. QQ. On a scale of 1 to 10 — where 1 is solely focused on using AI to improve quality and 10 is solely focused on using AI to enhance productivity — where would your company's current approach toward AI fall? On a 10-point scale between “improving quality” and “enhancing productivity,” Life Sciences executives scored an average of 7.00, compared to the 6.89 average across other industries. Life Sciences Pacesetters are starting to focus more on quality than their industry peers, however, scoring 6.87 on this scale. 51% 22% 12% 14% Life Sciences PACESETTERS Solely or mostly focused on using AI to improve quality Focused on quality, but with an eye toward enhancing productivity Focused on productivity, but with an eye toward improving quality Solely or mostly focused on using AI to enhance productivity 16% 16% 16% 52%

9 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report Personalized interactions are top AI customer focus areas 9% 19% 31% 36% 26% 33% 18% 3% Al-designed go-to-market strategies Gaining insights by analyzing customer behaviors and data More personalized, Al-driven interactions with our products/services themselves More personalized interactions/engagements for post-sales support (other than chatbots) More personalized interactions/engagements with our marketing initiatives (other than chatbots) Chatbots for product/service support Chatbots for marketing/sales support We are not exploring the use of Al in any customer interactions Q. In what ways are you exploring AI's impact on your relationships with customers? When it comes to customer engagement, organizations say they’re moving beyond commonplace chatbots. While chatbots for sales and product support remain important to Life Sciences companies, their use is being supplanted by other AI-driven means to accomplishing these goals. 45% P A C E S E T T E R S 39%

The journey to AI

11 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report One size fits one? AI adoption strategies vary AI is not plug-and-play technology with a one-size-fits-all strategy, and the findings from Life Sciences executives reflect their varied approaches to AI. Over a third favor establishing an enterprise-wide AI strategy, but almost a quarter want bold experimentation and fail- fast methods. Q. Rank three areas in order of importance to your company's leadership regarding the use of AI in the enterprise. want to establish an enterprise-wide Al strategy to maximize its benefits to the company 34% 24% 23% 18% want to stay true to their purpose and success model in exploring how they might leverage Al want to experiment and take risks with Al to maximize its benefits want to wait and see how Al gets used in their industry and follow the lead of others

12 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report Fast or slow, Life Sciences organizations are adopting AI Q. What is the state of implementation for AI- enabled operations in the following areas of your company? of departments are planning Al implementations 27% of corporate functions have Al implementations in-process or completed 65% While the pace of AI adoption differs, the ultimate objective is overwhelmingly consistent. The vast majority of Life Sciences executives (92%) have AI implementations planned, in process or already completed.

13 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report A gap between aspiration and reality Q. Looking at your organization overall, which most closely describes your company's current relationship to AI? 1% say it’s currently a differentiating factor for business transformation 17% haven’t even moved beyond the initial AI exploration phase Only 40% are cleaning up their data and moving it to the cloud The merging of reasoning and recognition intelligence into generative models offers tremendous potential to help companies reimagine entire value chains and transform the way they do business. But most Life Sciences respondents say they have a long way to go to realize these outcomes. 3% P A C E S E T T E R S

14 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report What’s hampering AI progress? Life Sciences executives say short-term thinking , their current IT service providers , and their current IT infrastructure are slowing their overall AI efforts. Q. What are the top 3 challenges to making effective use of AI in your company? Short-term thinking Current IT infrastructure Current IT service providers Customers’ expectations Industry standards/regulations Current IT infrastructure 1st 3rd 2nd Life Sciences All others

15 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report Generative AI brings its own set of challenges 48% of Life Sciences executives surveyed expect up to half of their employees to be using GenAI on a daily basis within the next 3 years . Life Sciences executives say that GenAI has demonstrated to them their lack of IT readiness for AI more generally. Q. In three years, what percentage of your employees do you believe will be using/interacting with Generative AI capabiliti es on a daily basis? Q. Rank the top 3 statements, which most closely reflect how recent attention to Generative AI (specifically) has changed you r c ompany's assessment of AI's benefits and risks more generally Life Sciences All others Top ranked GenAI adoption concerns Lack of IT readiness Security and privacy focus 1st Ethical and responsible AI use Ethical and responsible AI use Compliance challenges Increased focus on talent development and training Increased investment in AI research and development Cultural shifts Redesigned customer experiences Reevaluation of business strategies and models 2nd 3rd 4th 5th

Balancing risk with opportunity

17 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report Making way for AI Q. Have you given any thought to how your company's strategic direction needs to be revised due to AI's potential benefits or risks for your organization or your industry? 70% of Life Sciences companies are currently reworking or are planning to rework how they operate across the enterprise Introducing such powerful technology into organizations comes with a great weight of responsibility. Extensive preparation and stringent governance that foster trust in outcomes and investment values must go hand in hand with AI adoption. Life Sciences businesses are not only aware of the changes involved, but actively planning for them. 84% P A C E S E T T E R S

18 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report Homegrown implementation prevails for now Q. On a scale of 1 to 5, how much are you relying on external vendor and partnerships (including academic or government partn ers ) for your AI implementations and how much are you doing in-house?; Q. Are you planning to create your own enterprise- specific LLMs for use in Generative AI implementations? say they are relying solely or mostly on in-house talent to implement this new technology 47% plan to create their own enterprise-specific LLMs for use in GenAI implementations 51% As AI preparation turns to implementation, organizations face numerous decisions to achieve the right mix of artificial intelligence and investment. Despite the complexity, nearly half of Life Sciences companies are likely to rely on internal teams to develop and implement AI — even for tasks as difficult as creating their own enterprise-specific large language models (LLMs). 58% P A C E S E T T E R S

19 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report Implementation metrics fall short Life Sciences executives say they need better KPIs to measure the success of their AI implementations. Without KPIs, organizations will struggle to demonstrate AI’s value and gain internal traction for its adoption. Only 20% say they have “good enough” metrics and KPIs for their current stage of AI deployment. 4% said they aren’t even aware of any useful metrics for AI implementations. Q. Which statement most closely matches how you feel about measuring the success of and financial return on AI implementations? 76% say they need better metrics to measure the success of their Al implementations 27% need better financial KPIs for Al-enabled operations 31% need better non-financial KPIs for Al-enabled operations 18% need both

20 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report Navigating ethical, security and privacy dimensions The debut of sophisticated AI applications has intensified the focus on security and privacy concerns, and the ethical dimensions of AI use have also garnered significant attention. Most senior Life Sciences executives prefer global standards, debating whether specific use cases are better covered at this scale or more locally. Q. Which regulatory landscape is most appropriate for your business's use of AI? 39% prefer global Al standards regulating specific use cases and outcomes 47% prefer global Al standards, plus specific regional controls 13% prefer a heterogenous environment of local regulations 1% think it's too early or unnecessary to regulate Al

21 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report A regulatory partnership between industry and government A majority of Life Sciences executives think regulations should be jointly established between industry voices and government agencies. Close to half also think academic expertise deserves a seat at the table given how complex this technology already is and how quickly it is evolving. 60% Government 52% Industry 49% Academia 33% NGOs Q. Which organizations should be involved in establishing regulations about AI?

22 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report TCS recommendations Based on this research, here are our recommended next steps. Embrace an AI strategy based on prioritized initiatives and use cases that have the potential to drive tangible business outcomes. Focus on the business value, not the technology Invest not only in the necessary technology and infrastructure but in a culture that embraces change, experimentation, and continuous learning. Make your business & culture AI-ready Consider the broader strategic value of AI initiatives and how they can be used to improve operational efficiency, reduce risk, and enhance decision-making — all of which can contribute to overall business performance. Adopt a more strategic approach Let business and IT staffs focus on core competencies and strategic objectives, seeking partnerships and external expertise where appropriate, rather than shouldering the entire burden of AI implementation internally. Don’t go it alone Implement AI with the goals of expanding revenue, opportunity, and innovation, which offers the potential to create new jobs and enhance human capabilities. Plan for success, not scarcity Leverage more modern AI to deliver highly personalized, proactive and more value- added experiences across the customer journey for competitive differentiation and to build long-term loyalty. Create higher-level relationships with customers

23 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report Demographics: revenue and role Revenue representation (in USD) Role representation CEO Unit/divisional head SVP/VP (P&L responsibility) $500m to $1bn $5bn to $100bn Life Sciences n = 90 2% 57% 40% 16% 27% 58% $1bn to $5bn $100bn+ 1%

24 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report Demographics: 24 countries represented in the study Note: All countries except for Austria, Mexico, Netherlands, Norway are included in the Life Sciences sample United States Canada Mexico United Kingdom Ireland Germany/Austria Switzerland France Netherlands Denmark Spain Luxembourg Belgium Norway Sweden Finland India Australia New Zealand Japan Colombia Brazil Chile Total = 1,272 Life Sciences = 90

25 TCS AI for Business Study TCS AI for Business Study – Life Sciences Report Demographics: 12 industries represented in the study Banks, Financial Services & Insurance Communications, Media & Information Services Consumer Packaged Goods Energy & Resources Healthcare Life Sciences Logistics Manufacturing Retail Technology Travel & Hospitality Utilities n = 1,272

About the study Executive champions Dr. Harrick Vin Chief Technology Officer, TCS Abhinav Kumar Chief Marketing Officer, TCS Siva Ganesan Senior Vice President and Head, AI.Cloud, TCS Krishna Mohan Vice President and Deputy Head, AI.Cloud, TCS Sankaranarayanan “Shanky” Viswanathan Vice President and Head of Business Innovation, Chief Technology Office, TCS Nidhi Srivastava Vice President and Head of Offerings, AI.Cloud, TCS Suranjan Chatterjee Global Head, AI.Cloud Engineering, TCS Ashok Krish Head, Advisory and Consulting, AI.Cloud, TCS Serge Vatin-Perignon Global Head, TCS Thought Leadership Institute Get more insights If you would like to get additional research based on the TCS AI for Business Study, visit on.tcs.com/2024-global-AI-study For more information or any feedback, email the TCS Thought Leadership Institute at TL.Institute@tcs.com The TCS AI for Business Study explores how companies around the world are looking at the strategic implications of AI technologies and how they are responding to its transformative potential. A survey of 1,272 senior executives with profit-and-loss responsibility at their companies was conducted November 28, 2023, through January 17, 2024, with responses from 24 countries across 12 industries, exploring the strategic implications of artificial intelligence and their expected impact on large, for-profit enterprises. Some data presented will not add up to one hundred percent due to rounding, and not every answer is included in the findings reported. About the Thought Leadership Institute Since 2009, the TCS Thought Leadership Institute has initiated conversations by and for executives to advance the purpose-driven enterprise. Through primary research, we deliver forward-looking and practical insights around key business issues to help organizations achieve long-term, sustainable growth. For more information, visit tcs.com/insights/global-studies For the most up-to-date content and news, download the TCS Perspectives app for your iOS and Android device. About Tata Consultancy Services Tata Consultancy Services is an IT services, consulting and business solutions organization that has been partnering with many of the world’s largest businesses in their transformation journeys for over 56 years. Its consulting-led, cognitive powered, portfolio of business, technology and engineering services and solutions is delivered through its unique Location Independent Agile™ delivery model, recognized as a benchmark of excellence in software development. A part of the Tata group, India's largest multinational business group, TCS has over 601,000 of the world’s best-trained consultants in 55 countries. The company generated consolidated revenues of US $29 billion in the fiscal year ended March 31, 2024, and is listed on the BSE and the NSE in India. TCS' proactive stance on climate change and award-winning work with communities across the world have earned it a place in leading sustainability indices such as the MSCI Global Sustainability Index and the FTSE4Good Emerging Index. For more information, visit www.tcs.com