Is Innovation Without Transformation Insanity?media.accelrys.com/.../axendia-is-innovation...fin.pdf · Innovation can be defined simply as a "new idea, device ... Identifying a unified

TRUSTEDADVISORSTOHEALTHCAREANDLIFESCIENCEEXECUTIVES

©2017Axendia,Inc.

Insanity:“Doingthesamethingoverandoveragainandexpectingdifferentresults”

AlbertEinstein

ISINNOVATIONWITHOUTTRANSFORMATIONINSANITY?By:EllynMcMullin,ResearchAssociate&DanielR.Matlis,President

ABSTRACTDoestransformingideasanddiscoveriesintoinnovativeproductsthatimprovepatientoutcomesordelightcustomersandconsumerswhilereducingcostandimprovingROIexciteyourshareholders?Theanswerisobvious;thesolutionsmaynot.Forscience-basedcompanies,acceleratinginnovationcycleswouldresultinshavingyearsandmillionsofdollarsinexpensefromproductR&Dtodelivery.

Acceleratinginnovationcyclesrequiresamajorshiftfromcurrentbusiness, technologyandregulatorymodels. So,isinnovationwithouttransformationinsanity?

To fast-track innovation, companies need to be open tonew ideas and have awareness of new and emergingsystemsandtechnologies.Theymustdevisethemeansto create a harmonized approach tomanaging scientific,process and regulatory intelligence across the productlifecycle. Shiftingfrompointsolutions,thatonlyaddressthe needs of a specific department or function, to anintegratedinnovation-basedapproachmayprovidethesolution.When companies transform innovation cycles by creating synergies across theorganization, rationalizing or integrating point solutions, an integrated science-awaresystembecomesaninvestmentratherthananexpense.IS INNOVATION WITHO UT TRANSFORMATION INSANITY?

Innovationcanbedefinedsimplyasa"newidea,device,ormethod".Innovationcanalsobeviewedastheapplicationofbettersolutionsthatmeetnewrequirements,unarticulatedneeds,orexistingmarketneeds.Amoreexpandeddefinitionof innovation is “somethingoriginalandmoreeffectivethat"breaksintothemarketorsociety”.i

In themedicalproducts industry, innovationcanbedefinedas theability toconsistentlycreateanddeliverhighquality,safe,effectivemedicines,devices,treatmentsandcurestothepatientsinanefficientandtimelymanner.

In the consumer products industry, innovation can be defined as changes regarding theproductor theserviceproductionprocess. Itdoesnotnecessarilyhavean impacton thefinalproductbutproducesbenefitsintheproductionprocess,generallyincreasingproduct

©2017Axendia,Inc.2

ISINNOVATIONWITHOUTTRANSFORMATIONINSANITY?

quality and productivity resulting in reduced costs, i.e. automobile produced by robotscomparedtothatproducedbyhumanworkers.ii

Insanity:“Doingthesamethingoverandoveragainandexpectingdifferentresults”AlbertEinsteiniii.Thecostofbringinganewproducttomarketishighandevenmorestaggeringwhenyoufactorinthemanyiterationsthatdonotmakeit.

According to the Pharmaceutical Research and Manufacturers of America (PhRMA), in2003thecostofbringingnewdrugstomarketwasestimatedat$800Millioniv. By2016,thesenumbershadmorethantripledtoover$2.6Billionv.

This trend is equally challenging in CPG.According to Forbes, the average cost of a newproduct that was successfully launched for the average CPG company in 2012 was $71million. TheR&Dinvestmenttobringanewproduct tomarket isroughly4Xthecostoffive years agovi. As innovation cycles continue to accelerate, it has resulted in shorterproductlifecyclesbutthepromiseofreductionsinexpenseisstilltobefullyattained.

Thisbusinessmodelisnotsustainable!

The research and development (R&D) process in science-based companies is oftencomplex, demanding and arduous - which means there are significant opportunities totransformit. Accordingtoindustrydata,theoddsofsuccessfullybringinganewdrugtomarket are extremely low. Only 12% of drugs entering clinical trials ever make it topatients.viiNon-LifeSciencebusinessesaverageabouta75%project failuretoeverreachmarket.viii

Aprimarychallengeof innovation inscience-based industrieshasbeen turningdata intoscience and science into valid models. To address these innovation challenges, manycompanies turned to technology by digitizing processes. However digitizing ineffectivelegacy processes simply means that you do the same thing over and over again at anacceleratedrate,whileexpectingdifferentresults.

Digitizingineffectiveprocessesisacceleratedinsanity…

Imaginethevalueofhavingtoolstoreducethenumberoffailedcompoundsdevelopedandprogressing through the pipeline to finding the “one” winner. Are you aware that theanswermayliewithinreach?STOP DIGITIZING, START TRANSFORMING! Formany companies, accelerating innovation cycleswould represent amajor shift fromcurrent businessmodels. Many organizations lack a harmonized approach tomanagingscientific,processandregulatoryintelligenceacrosstheproductlifecycle.Butisinnovationwithout transformation madness? Pushing innovation through antiquated business,

©2017Axendia,Inc.3

ISINNOVATIONWITHOUTTRANSFORMATIONINSANITY?

Fordatatohavevalue,andyieldactionableintelligence,theunderlyingstructuremustbeactivelymanaged.

technologyandregulatorymodelsisnoteffective.Acceleratinginnovationcyclesrequiresthetransformationandalignmentinbusiness,technologyandregulatorymodels.

For the sake of “expediency”, many organizations have merely digitized rigid legacyprocesses, rather than transforming, integrating and implementing solutionsdesigned tomeettheneedsoftoday’sglobalandcollaborativeecosystem.Inotherwords,theysimplydigitizeinefficientprocesses,executethemfasterandexpectdifferentresults.Toaccelerateinnovation,shortenproductdevelopmentcyclesandincreasetherateofnewproduct introductions, science-based organizations must transform their innovationengines.Gainingintelligencefromthevastamountsofexistingdatamaybethekeytothenextsuccessfulproduct.

Yet,itisnotenoughmerelytohavedata,evenverylargeamountsofit.Whatisneededisintelligence that can be applied to answering scientific, process and business relatedquestions.Darkdataisatypeofunstructured,untaggedanduntappeddatathatisfoundindatarepositoriesandisnotbeingused,analyzedorprocessedandthushaslittlevaluetothe enterprise. Dark data is useless data. On the other hand all visible data is notnecessarilyrelevant.

For data to have value, and yield actionable intelligence, the underlying structure andmeta-datamustbeactivelymanaged. Visibledatamustbecuratedandsupportedacross

the entire process - R&D to manufacturing tocommercialization (post market) AND back with afeedbackloop.Thiswouldrequirethedevelopmentand adherence to standard taxonomies across thetotalproductlifecycle.

Connectingthedatadrivesintelligenceandsupportscontinuous innovation and transformation. ReadInnovation Through Digital Continuity-The Key ToBio-PharmaTransformation?

ORGANIZATIONAL CHALLENGES Traditionally, companies have been structured in “silos” with each functional arearesponsibleandincentivizedtocompleteaspecificstepintheprocess.Oncecompleted,the“end-product” is catapulted to the next functional area to perform the next step in theprocess.Thispatternisrepeateduntilthelaststepintheprocessiscompleted.

Thissequential,waterfallapproachleadstotheproliferationofpointsolutions,customizedtoaddresstheneedsofaspecificdepartmentorfunctionalareas. Communicationacrosssilos is typically done via status reports conveying “old” information for steps alreadycompleted.Inreality,thisisaveryinefficientmodel.

©2017Axendia,Inc.4

ISINNOVATIONWITHOUTTRANSFORMATIONINSANITY?

Connectingdataencourages

cooperationandinnovation.

Amajorchallengeisnottheavailabilityofthetechnologybutrathertheneedforvisionandleadership,knowhowanddisciplinetodrivethetransformation.

Amajorchallengeisnottheavailabilityofthetechnologybutrathertheneedforvisionandleadership, knowhow and discipline to drive thetransformation. Many organizations suffer fromorganizational inertia,whichmakes it difficult to changeand implement processes, standards and systems thatenable accelerated innovation cycles. There is a need tofoster an intelligence based culture whose goal is toconsistently create and deliver high quality, safe, andeffectiveproductsinanefficientandtimelymanner.Inotherwords-acultureofInnovation.TECHNOLOGY CHALLENGES Thetransformationfromstand-aloneapplicationstointegrated,holisticplatformsrequiresnotonlytheeliminationofculturalandbehavioralbarriersbutalsotechnologicalbarriersbetween functional areas. Innovative organizations must look at new platforms thatsupportaunifiedapproachratherthanspecificapplicationstosolveaspecificproblem.

The implementationofacultureof innovationrequiresa fully integratedplatformwithafeedback loop throughout an organization. This can be a major adjustment for manyscience-basedcompanies.However,movingtoamodeloffocusingonasolutionofdigitalcontinuity instead of process steps accelerates innovation. Decision makers think andexecutedifferently,theyactcollaborativelyandpromotecommunicationeffectively.Whenthesiloshavebeenbreachedandthenewmodelofconnectedintelligencehasbeenappliedacrosstheentirelifecycle,theresultisfasterinnovationandquickergrowth.

Connectingusefuldatadrivesintelligence,supportsinnovationandstreamlinesdecisionmaking. ThisrequiresaMasterDataManagement plan and Governance to ensure that theunderlying data structure retains integrity and is activelymanaged. A fully realized integrated platform approach canserve as the knowledgemanagement framework that ensurescollaboration and access to product and process informationoverthetotalproductlifecycle.

Connecting data sources up and down the product lifecycleencouragescooperationandinnovation.Tobemosteffective,afeedbackloopmustbepartof the ongoing communication. The resulting closed loop process is a collaborative andconcurrent approach that allows science-based companies to leverage information forbetterdecision-makingand improvedmarketoutcomeswhile simultaneously supportingshorterinnovationcycles.

©2017Axendia,Inc.5

ISINNOVATIONWITHOUTTRANSFORMATIONINSANITY?

THE CHALLENGE OF INNOVATIVE SOLUTIONS

When companies realize that their disconnected labor-intensive paper solutions are notonlytime-consuminganderrorpronebutcostlyindevelopment,innovationandspeedtomarket,theyarefacedwithamyriadofchallenges.

Wheredoesonestart?Forscience-drivencompaniesthismaybeatthelaboratorywhereideasareturnedintothenextinnovationandrelevantdataisfoundationaltotheproductdevelopment process. Identifying a unified lab system that not only replaces papernotebooksbydigitizing the content but allows for a flexible,multi-disciplinary approachthat includes all laboratory related capabilities in a connected manner improvesinformation sharing/reuse, data protection, process documentation and overallproductivity,enablingdigitalinnovationandcollaborationwhilereducingwaste.Theoptimalsolutionwillincludeaneyetowardsinnovationacrosstheentiredomainandthroughout the product life cycle from Research and Development to Quality andManufacturing.

Anopenplatformallowsa company to integratedataapplications,processesandpeopleacrosstheorganizationaswellasexternalorganizations. Datasourcescanbeintegratedwithdataconsumingapplicationsfromthebusiness,manufacturing,laboratoryandqualityareas.

CONCLUSION

Toremaincompetitive in today’smarket,acompanymustcontinually look to the future.The“Aha”momentsthatsparkthecreationofanewproductorprocessdonotgenerallyhappeninavacuum.

To retain their edge in the marketplace, pioneering companies need to share dataconsistently across the organization (and their partner ecosystem). The challenge ischangingthefocusofthecorporationtooneoftechnology-driveninnovation.

Withthecostofbringingnewproductstomarkettriplinginthelast10years,thecurrentmodelisnotsustainable!

Theopportunitytotransforminnovationliesinturningdataintoscienceandscienceintovalidmodels. Toaddress“innovationchallenges”,companiesmustshift fromdigitizationtodigitaltransformation.Digitizingineffectivelegacyprocessesonlyservestodothesamethingoverandoveragainat anacceleratedpace, andexpectingdifferent results. AlbertEinsteinwouldlikelycalldigitizingineffectiveprocesses“acceleratedinsanity…”

Acceleratinginnovationcyclesrequiresamajorshiftfromcurrentbusiness,technologyandregulatorymodels. So, is innovationwithout transformation insanity? Yes, itwould soappear. Just as carmanufacturershad to change their approach tomanufacturingwhenrobots becamemore sophisticated, Life Sciences, Consumer Products and other science-

©2017Axendia,Inc.6

ISINNOVATIONWITHOUTTRANSFORMATIONINSANITY?

based industries must transform and embrace new and emerging models, systems andtechnologies. Theymust create harmonized approaches tomanaging scientific, process,regulatoryandmarket intelligenceacross theproduct lifecycle. Shifting toan integratedinnovation-basedapproachmayprovide thesolutionwhileshavingyearsandmillionsofdollarsinexpensefromR&Dtodelivery. This white paper was written by Axendia, Inc. and was sponsored by BIOVIA, a brand of DassaultSystèmes. TheopinionsandanalysisexpressedinthisresearchreflectthejudgmentofAxendiaatthetimeofpublicationandaresubjecttochangewithoutnotice.Informationcontainedinthisdocumentiscurrent as of publicationdate. Information cited is notwarrantedbyAxendiabuthasbeenobtainedthrough a valid research methodology. This document is not intended to endorse any company orproductandshouldnotbeattributedassuch. AboutAxendia: Axendia, Inc. is a leading trusted advisor to the Life-Science and Healthcare industries. We providetrustedcounseltoindustrystakeholdersonBusiness,RegulatoryandTechnologyissues. Formoreinformation,visitwww.axendia.comorcontactusatinfo@axendia.com

ReadAxendia’sblog:Life-SciencePanoramaathttp://LSP.axendia.com

FollowusonTwitterattwitter.com/axendiaandLinkedInatlinkedin.com/company/axendia-inc.

©2017Axendia,Inc.AllRightsReserved.ThispublicationiscopyrightedbyAxendiaInc.andprotectedbyUnitedStatescopyrightlawsand international treaties. Thisdocumentmaynotbe reproducedorpostedon anotherweb sitebeyond the sponsors’withoutpriorwrittenconsentfromAxendia.Unauthorizedreproductionofthispublicationoranyportionofitbyotherpartiesmayresultinseverecivilandcriminalpenalties,andwillbeprosecutedtothemaximumextentnecessarytoprotecttherightsofthepublisher.

PublishedMarch2017

ihttps://en.wikipedia.org/wiki/Innovationiihttp://bgi.inventta.net/en/innovation/iiihttps://www.brainyquote.com/quotes/quotes/a/alberteins133991.htmlivThepriceofinnovation,DiMasi,Hansen,GrabowskiJournalofHealthEconomics22(2003)151–185https://fds.duke.edu/db?attachment-25--1301-view-168vInbiopharmaceuticalresearch,ifatfirstyoudon’tsucceed,tryagain,AndrewPowaleny,August17,2016http://catalyst.phrma.org/in-biopharmaceutical-research-if-at-first-you-dont-succeed-try-againvihttp://www.forbes.com/sites/loracecere/2013/12/11/new-products-more-costly-and-more-important/-1e19e3e9797fviiInbiopharmaceuticalresearch,ifatfirstyoudon’tsucceed,tryagain,AndrewPowaleny,August17,2016http://catalyst.phrma.org/in-biopharmaceutical-research-if-at-first-you-dont-succeed-try-againviiihttps://hbr.org/2011/04/why-most-product-launches-fail