This continues a series of guest columns from practitioners and bloggers I respect. The category - The Real Deal - describes them well.
This time it is Nagaraja Srivatsan who is Vice President & Practice Leader, Life Sciences at Cognizant, a leading outsourcer – and a sponsor of this blog. He writes about the significant opportunities to rethink product development in Life Sciences
“Among the major strategic challenges facing global life sciences companies today is how to reduce the cost and time-to-market associated with bringing new products to market. The process averages nearly $900 million and 10 years of research and development for every major product.
As many industries before them, life sciences companies are being forced to answer a few fundamental questions: Which business processes are core to operational success, and perhaps more importantly, which are not. If a task is non-core, then it is likely a candidate to outsource to a trusted specialist which by harnessing a lower cost, highly skilled global talent pool can deliver superior outcomes. Taking this approach enables life sciences companies to then reallocate resources to core activities.
Historically, life sciences companies were comfortable outsourcing tasks in the clinical trial process to Contract Research Organizations (CROs). As life sciences companies started to create process standards, they looked at specific functions or business processes in the execution of clinical trials to outsource. This was called the Function Solution Provider model.
Today, the global economic crisis is changing the competitive equation. Amid resource constraints, life sciences companies are facing heightened pressure to speed new molecular entities through the regulatory approval process. They need a mechanism to increase the velocity of outcomes that arise from the clinical trial process to accelerate the transformation of costly R&D into revenue- producing activities. They now realize the “not-invented here syndrome,” which had limited outsourcing to CROs, reinforced an expensive and inflexible cost structure. They now know that not everything previously deemed core to their business was so. As a result, many companies are reassessing and re-defining what is core. And finding several areas which can be moved out including Clinical Data Management, Clinical Analytics and Medical writing, Submissions Management Support, Product Complaint Centers, Safety Case Processing and Safety Reporting.
How can life sciences companies embrace a more flexible business model to handle these newly considered non-core activities? We suggest a framework called “The In (sourced)-Out (sourced), Here (high-cost locations like U.S. and Europe)-There (low- cost locations like India and China)”. The graphic below shows an example across the 4 quadrants (click on graphic to enlarge)
Here’s how this model could work in clinical operations. Start by examining key business activities, taking an end-to-end perspective. For instance, with Clinical Data Management they need to evaluate activities starting with study planning, set-up, panel recruitment and study execution and through data clean-up, analysis, reporting, closure and reuse. Life Sciences companies then need to decompose these processes into sub-processes and assess the best location where the process should be executed – Here ( in close proximity to stake holders) or There (executed remotely) and also evaluate if this process is core and needs to be executed (inside the organization or outsourced). This must be done for each and every activity.
Core sub-processes stay “Here” and “In”; non-core are moved “There” and “Out” to trusted partners. This is true across the industry, whether product development occurs in high-cost locations in the U.S. and Europe or lower cost regions of the world like India. The challenge is maintaining consistency of process across the product development lifecycle so that product quality doesn’t become a victim of necessary cost containment initiatives. In life sciences, as you can imagine, you cannot tolerate quality short cuts.
So, what are the critical success factors for a successful global service partnership? It’s the usual things (to name a few): proper governance; effective process; resource management; risk mitigation; and of course, delivering value – outcomes that could not be achieved otherwise. Some key steps include:
o Meeting/Exceeding required service levels: Bringing the right domain, talent and the tools can ensure exceptional quality of service.
o Measuring success: By establishing key performance metrics and rigorously measuring and monitoring them, life sciences companies can quantitatively demonstrate engagement success.
o Meeting regulatory requirements: You need to have the right audit process as well as quality system. Domain experience ensures that you are compliant with all audit rigor required by global regulatory agencies.
Judiciously applying the In-Out, Here-There approach will enable life sciences companies to elevate their operational efficiency, reduce costs and deliver higher quality products that sustain competitiveness in any economic cycle.”
He can be emailed at NSrivatsan AT cognizant.com
“IT Lite”
Julia King writes a timely piece in Computerworld where she is Executive Editor.
“What's in is "IT lite," which includes Web 2.0 technologies and services that are cheaper and easier to implement, mix and match. It also includes software from no-name, up-and-coming vendors; open-source tools and applications; and an ever-widening variety of tools for mapping, chat and more that are available for free on the Internet.”
BTW Julia started at Computerworld 15 years ago around the time I joined Gartner and it is always a pleasure to catch up with her as we did for this article. She is one of the few media folks who has consistently followed enterprise technologies.
June 23, 2009 in Industry Commentary | Permalink | Comments (0) | TrackBack (0)