Industry | Life Sciences - IT Consulting Services and … ·  · 2016-03-08Industry | Life Sciences ... benefits that Industry will obtain by outsourcing their IT needs to Service

Industry | Life Sciences

Abstract

The Indian life sciences industry is today the fourth largest globally in volume terms and 13th largest in

value terms and continues to grow annually at 14%. The industry is making significant IT investments

to support this growth.

This paper surveys the IT usage in the life sciences industry. It describes the opportunity in the

market, the gaps that the Industry is facing currently in the services offered by IT Service providers

and how the Industry is coping with these gaps. The paper concludes by highlighting the expected

benefits that Industry will obtain by outsourcing their IT needs to Service Providers.

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IT trends in Indian Life Sciences

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The life sciences industry in India is esti-mated to be worth around INR 61,000 crore, growing at an annual rate of 14%.

In terms of world rankings, the domestic

industry stands 4th in terms of volume and 13th in value terms. The ranking in value terms could also be a reflection of the low prices at which drugs and pharmaceuticals are sold in the country.

According to the latest data published by

Department of Industrial Policy and Promotion (DIPP), the cumulative drugs and pharmaceuticals sector attracted foreign direct investments (FDI) worth INR 56,500 crore during April 2000 to April 2013. A highly organized sector, a number of pharmaceutical companies are boosting operations in India and the size of the industry is expected to touch INR 288,000 crore by 2017.

Pharmaceutical companies have developed Good Manufacturing Practices (GMP) compli-ant facilities for the production of different dosage forms. In addition to having GMP, WHO, several Indian companies have also been obtaining plant approvals from international regulatory agencies like US FDA, MCA (UK), TGA (Australia), MCC (South Africa).

A highly fragmented industry, the Indian pharmaceutical industry is estimated to have over 10,000 manufacturing units, where around 8,000 units manufacture formulation drugs, while the balance are involved in manufacturing bulk drugs. Small and medium enterprises (SMEs) account for around 80% of the production in terms of volume and 40% by value. Key pharma companies are located primarily in the western region, followed by the south.

Top IT Priorities

Pharmaceutical companies need to keep up with their constantly changing industry dynamics to stay viable and competitive. Pharmaceutical companies face the challenges of simultaneously reducing costs, increasing revenues, improving operational efficiencies, shrinking drug pipelines, patent expiration, getting new products to the market faster, lowering supply chain costs, driving brand awareness and consumer loyalty, and meeting regulatory and security requirements.

With these growing challenges, pharmaceutical companies are compelled to adopt the advanced and latest IT technologies and automation levels to stay ahead of the competition. The role of IT is not limited to only being a supportive tool for operational activities, but also to be a strategic tool as well as a major enabler for organizational change, improved quality, and cycle-time reduction. IT solutions allow these companies to tap into their huge databases and deliver easy-to-comprehend insights to improve business performance and maintain regulatory compliance. Not only the large pharmaceutical companies, but small and medium scale enterprises (SMEs) are also realising the importance of IT and using it in one way or the other.

Courtesy: Feedback Business Consulting

- Life Sciences

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Industry - Life Sciences

Introduction Top Functions where IT Practices

Life Sciences industries are using IT across various functions like Production, R&D, Quality, Supply Chain, Finance, HR and Sales & Marketing. However, R&D, Supply Chain and Sales & Marketing are the three functions where usage of IT becomes critical as the huge amount of data generated by these verticals and complexity of their business processes

Research and development: The race to develop new drugs, compete with generic drugs, and put forward their own generic drugs has resulted in companies doubling their investment in R&D, making it even more important for these compa-nies to streamline their costs and increase their profit margins. In the R&D department, a huge volume of data and documents gets generated with respect to drug formulations, chemical compounds for drugs, details for clinical trials, etc. Several large drug companies are also joining forces with biotech companies by forging research alliances, allowing them to take advantage of the biotech industry’s scientific advances and expertise in drug delivery. Finally, the pharmaceutical industry is increasingly outsourcing the manufacture of drugs, thereby enabling greater allocation of funds to R&D and marketing, while also raising the stakes to ensure the quality of outsourced production. As a result of all these mergers, alliances, and outsourcing initiatives, these companies are now dealing with an overwhelming volume of information from many sources thrown together into one giant pool—a pool that is becoming increasingly difficult to manage. IT enables efficient management of this data and easy accessibility of documents. It also helps to generate holistic models from these diverse set of data on real time basis.

Supply Chain: Usage of IT is considered a prerequisite for the effective control of today’s Supply Chain. High inventory levels and product obsolescence costs, high manufacturing and logistics costs, looming regulatory mandates and collaborations with channel partners, which could include suppliers, intermediaries, third-party service providers and customers, are the major areas of concern for life sciences companies. As a result of these challenges, life sciences companies are now deploying IT solutions in manufacturing areas that have traditionally been carried out manually.

Pharma companies are compelled to rethink their supply chain and IT strategies and develop more collaborative models that enable them to be more agile, flexible and compliant.

Another area of concern for pharma companies relates to theft and counterfeiting. The need for serialization of primary packaging materials to avoid counterfeiting is driving investments in Track and Trace (Barcode / RFID) technologies and Mobility solutions.

Sales and Marketing: Life Sciences companies are focusing their efforts on sales and marketing activities. In fact, industry estimates indicate that pharmaceutical companies are now spending more than twice as much on marketing and administration, than they are on research and development. Pharma companies are initiating efforts to directly reach consumers, while still trying to drive increased physician adoption. The proliferation of generic drugs and of information available to consumers through the Internet – as well as the pressure from insurance companies and HMOs to fill prescriptions with generic drugs is making it increasingly important for companies to target their marketing strategies to strengthen consumer loyalty to the brand-names of drugs that previously led the market.

Moreover, the pharmaceutical business has the largest sales force of any industry. By adopting IT tools, companies are able to improve their marketing practices and empower their sales force to communicate and collaborate efficiently.

Courtesy: Feedback Business Consulting

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White Paper Industry - Life Sciences

Introduction Major IT Trends

Today a number of IT solutions are commonly used in life sciences industries. Some of the popular ones are ERP, SCM, CRM, SFA, LIMS, DMS and Analytics. Companies are moving towards usage of solutions that make them stay ahead of their competition and ease the regulatory process.

Analytical tools like BI (Business Intelligence) and Product Life cycle management system (PLMS) are also gaining momentum. BI provides the pharmaceutical companies with the ability to analyze vast amounts of information they already have, to make the best business decisions. The software allows these companies to tap into their huge databases and deliver easy-to-comprehend insight to improve business performance and maintain regulatory compliance.

Product Lifecycle Management system ena-bles pharmaceutical companies to have a uni-fied view of their entire product development lifecycle, with the ability to view and trace every product detail throughout the entire process. It provides the capability to both manage and cen-tralize product information. This help pharma-ceutical companies to address some of the most essential needs, including hastening the time to market, lowering overall operation and produc-tion costs and realizing quality standards such as QbD (Quality by Design).

Advances in instrumentation through minia-turized biosensors and the evolution in smart phones and their apps are resulting in increas-ingly sophisticated health-measurement devices. Life Sciences companies can deploy smart devices to gather large quantities of real-world data not previously available to scien-tists. Remote monitoring of patients through sensors and devices represents an immense opportunity. This kind of data could be used to facilitate R&D, analyze drug efficacy, enhance future drug sales, and create new economic models that combine the provision of drugs and services.

Technology and mobile providers are offering services such as data feeds, tracking, and analy-sis to complement medical devices. The new generation of wireless sensors will be able to provide more sophisticated real-time insight.

Technologies such as cloud computing and social media are already making headlines. Cloud services provide the companies with an ideal opportunity to switch from capital-intensive information technology to a more var-iable operational cost model. To reduce costs, even the smaller companies will look to IT com-panies as hosts of services, thereby sharing the costs with other companies. On the other hand, Social media in life sciences helps in building confidence as companies can go beyond their organization to engage with patients and healthcare practitioners.

Life Sciences companies need a collaborative IT infrastructure to grapple with the problem of data generated from highly heterogeneous sources. One of the biggest challenge of life sciences businesses is to have data that is consistent, reliable, and well linked. The ability to manage and integrate data generated at all stages of the value chain, from discovery to real-world use after regulatory approval, is a fundamental requirement to allow companies to derive the maximum benefit from the technology trends. Data is the foundation upon which the value-adding analytics are built. Effective end-to-end data integration establishes an authoritative source for all pieces of information and accurately links disparate data regardless of the source - be it internal or external, proprietary or publicly available.

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White Paper Industry - Life Sciences

Introduction High Focus areas from Future Technology Standpoint

Courtesy: Feedback Business Consulting

IT Usage depends on Company Size

Large companies are going through IT transformation and looking for solutions to help them gain competitive advantages. Regulatory norms/ compliances, Drug coun-terfeiting, Timely delivery of product to market and low operating cost are the major concerns for large firms in today’s economic environment.

Many large life sciences companies in India have already deployed software such as ERP, SCM, CRM and are into their next evolutionary phase to adopt collaboration, communication and analytics and are in the process of integrating software like SFA, Business intelligence, E-procurement and QoS (Quality of service) with ERP. They are also adopting technology solutions like Cloud computing, Social media and Big data.

data, Mobility solutions to lower IT operating costs and serve customers better.

With the increasing usage of cloud com-puting technology among small compa-nies, the gap of IT maturity is also mini-mizing between the large and small Phar-ma firms, who can now buy software so-lutions, including ERP, over the cloud and pay only for what they use.

About a decade ago, Small and Medium enterprises (SME) in Pharma were con-servative in their IT spending. IT was con-sidered a communication technology, but today the situation has changed to a great extent. SME Pharma firms have re-alized that IT can play a considerable role in aiding in better product development as well as business management, giving them an edge over the increasing com-petition.

However, most small and mid-size play-ers find it hard to justify their investment in ERP, especially big-ticket solutions from the likes of SAP and Oracle, as they operate on thin margins. In order to ad-dress their requirements, several smaller players have emerged that offer ERP so-lutions designed to meet their needs at affordable price points.

Large life sciences companies spend

approx. 2-3% of their turnover on IT,

whereas SMEs spend 0.2-1% of their

turnover on IT. However, with the

increasing awareness of benefits

derived by implementing IT, the %

spend on IT is expected to increase

among SMEs.

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White Paper Industry - Life Sciences

Introduction

Life sciences companies expect IT service providers to

be technology partners and possess good industry

knowledge to provide end to end services, which

result in high ROI.

Companies need technology providers who pos-

sess good domain knowledge and understand

their business operations well. This will assist

companies to identify and suggest the business

process/areas where IT implementation is critical

with minimal investment leading to increased ROI

Solution provider should possess a technically

sound team with industry expertise. and They

should also have the right automation level to

suggest/develop/design the appropriate IT solu-

tion for the concerned division, which is required

to meet the business objectives. The service pro-

vider needs to study the operating functionality of

the segment of interest and based on the study,

develop comprehensive solutions and services,

which can sustain the complexities of the business

and lower costs

Companies wish to understand the value proposi-

tion they can derive by implementing the IT solu-

tion. They would like to determine the return on

investment/ business value derived from adoption

of IT in any business process

Companies need technology solutions like cloud

computing, mobility, virtualization, which reduce

the IT operating operational cost. IT service pro-

vider should possess correct automation level and

scalable and extensive architecture that helps in

reducing application development time, service

downtime, thereby reducing IT operating cost and

increasing the profitability

The Challenges Faced in IT Practices

Identifying right business process

that needs automation

Identification of right product/

solution that fulfills the need

correctly and optimally

Resistance to change/ adoption of

new technology specially by medium

& small companies

High IT operating costs

Segregation between regulated and

non-regulated IT process

Identification of a right technology

partner/service provider

Companies expectations from IT Service Provider

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White Paper Industry - Life Sciences

Introduction Experience with IT Service Providers Presently

Companies look up for IT service providers for

various services like Consulting, Testing,

Application development, Management and Up

gradation, Business process services, Packaged

implementation, Infrastructure management, etc.

Experiences of the companies on key services

offered by IT service providers are as follows:

Consulting: By leveraging their domain

knowledge and expertise, service providers have

helped Pharmaceutical companies to achieve

business transformation. They reinvent their

operating models and processes to adapt to

changing market conditions, enhance productivity,

unlock innovation and drive corporate perfor-

mance and value.

Testing: Testing services have helped in

performance optimization of new and existing IT

processes, which have enabled life sciences

companies in increasing the efficiency of the

business process, reduce business and IT

operating cost, and increased ROI.

Application development, management and up

gradation: Software's available in the market

do not meet the need of ever changing business

environment. Hence, time and cost-effective

customized applications offered by the IT service

provider help in addressing functional gaps and

achieve business goals effectively. By application

management and up gradation services, IT service

providers have helped in reducing service

downtime, reduced recurring cost and enhanced

performance.

Packaged implementation: By completing the

project on time and as per the budget, IT service

providers have enabled to achieve maximum

benefits while minimizing risk and total cost of

ownership.

Infrastructure management: Helps to build

and manage a highly available, scalable, reliable,

cost effective and secure IT infrastructure that is

capable of meeting the dynamic needs of

businesses in a multi-sourcing scenario.

The experience of life sciences companies

has so far been satisfactory with the current

IT service providers.

Companies also claim of achieving 20-25%

increase in their profitability by availing

these IT services.

However, there still exist certain dissatisfac-

tion areas which needs to be addressed,

Unresponsive behavior of the vendors who

are awarded AMC contracts resulting in

delays in servicing

Inadequate domain knowledge of the IT

service provider resulting in application

failure, long service downtime, reduces ROI

thus affecting the overall profitability of the

business

Long implementation time thus effecting

the project budget and ROI

Lack of technical expertise among the

technicians is a major issue. The technicians

are sometimes not in line with the project

manager thus affecting the overall project

profitability.

Inadequate automation level and IT

architecture resulting in reduce efficiency of

the current IT process, long application

development time, long service downtime

thus impacting ROI

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White Paper Industry - Life Sciences

Steps taken by life sciences companies to bridge the gaps

Now a days rather than looking for just a solu-tion provider, companies are looking for risk sharing partner who can share the risk; in case something goes wrong rather than simply taking his fees and walk away after project completion.

Penalty is imposed on the IT service provider, hence resulting in improvement

Large companies develop an internal IT team who continuously monitor the performance of the project using agile and scrum methodology. Companies along with service providers have started developing a working model of the actual project to find out the realistic measures about the actual project to reduce the risk involved.

A few large companies have developed an in house IT team to take care of their IT needs so as to guard against delayed or unresponsive services and mitigate outsourcing costs

A few Companies while outsourcing the work, transact with couple of vendors to mitigate the risk cost or schedule with one service provider and keep an ancillary available

In case, if none of the option works out they replace the vendor

To conclude, the advantages companies expect by outsourcing their IT to service providers

An organization will need the support of an IT partner offering a full range of services to master the 'digitized' business environment that is the new face of the life sciences industry to become a lead-er. Service integrators will need to play an industry-defining role, by transforming into a ‘master of the pharmaceutical business game’ to stay relevant in the emerging industry. The industry today seeks to leverage on business transformation capabilities of full service integrators for:

Help in bringing down the total cost of ownership (TCO) of IT Assets, and increase the return on investments (ROI) on the IT initiatives

Simplification, streamlining, consolida-tion of application portfolio and associat-ed business processes to align with the business needs and objectives

Core IT team is free to focus on their core business, thus enabling sustainable growth

Ease down the regulatory process ena-bling them to timely reach the market and stay ahead of the competition

Access to global best practices and IT strategies

Experience best-in–class service delivery at door- step

In depth understanding & knowledge of the concerned industry vertical, right au-tomation level and IT architecture, busi-ness experience & technical expertise of the technicians and good after sales sup-port can help them in gaining clients

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Techwave Life Sciences Practice

We work with our clients in their stra-tegic initiatives to create reliable long-term IT services relationships. Clients work with us to create the right processes that are personalized and flexible. We supplement these processes with the right values and a commitment to excel – which are long term relation-ship requirements. Together, we cre-ate new capabilities for our client to fall back upon and realize their IT initiatives. Techwave brings a unique combination of attributes to the market with its agile, flexible and easy to work approach.

White Paper Industry - Life Sciences

Big Data & Analytics Application Development Customer Relationship

Management

Digital

Enterprise Information

Management (EIM)

Enterprise Performance

Management (EPM)

Enterprise Resource

Planning (ERP) IT Infrastructure

Management

Validation Services

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