The pandemic demonstrated the strategic importance of the life sciences industry. Its innovation, focus, and dedication came to the fore. Despite the successes achieved, the industry is facing an uncertain environment – several strategic issues are shaping its future and how it creates and shares value. These strategic issues include:
- Pricing and access. As healthcare costs rise, insurance and public health systems increasingly scrutinize drug prices. Access to medicines remains a key issue, particularly in developing countries;
- The need for improved R&D productivity has led to a focus on innovation and collaboration
- Regulatory compliance can be expensive and time-consuming. Regulatory scrutiny has increased and includes an additional focus on data integrity and transparency
- Advances in technology are transforming the industry with personalized medicine and digital health. New business models are emerging to capture the technological opportunities and improve patient health
- Rising costs of goods, tight labor markets, and ongoing supply chain issues weigh heavily on the industry and challenge its ability to create value;
- Globalization – the challenges are forcing even more globalization, with issues in regulatory compliance, supply chain management, and market access.
- Changing demographics and the need to improve service models and treatments are calling for changes to business models and approaches.
Response to the Challenges
Life sciences companies are responding to these issues with many differentiated strategies. Getting these strategies right is fundamental. The need to better understand the performance of strategic and operational activities has never been greater. This is easier said than done. The challenge of delivering “one version of the truth” across programs aimed at maintaining growth and margins, attracting, and retaining the best talent, building supply chain resilience, etc. is daunting. The range of systems, diverse data sources together with inflexible data repositories (data lakes, lakehouses, etc) exacerbate the problem (we explore some of the issues with data repositories in another blog).
One of our customers, a global top 5 pharmaceutical company by revenue, battled to provide this insight. Delivering “One version of the truth” for key strategic, operational, and financial activities was extremely difficult. Data was spread across many diverse systems, several different ERPs, and supporting systems. There was no common data or system structure, making it difficult to combine data from these various systems. As a result, there were frequent differences between the results and analysis produced by the various functions, regions, and business units, e.g. marketing results differed from sales, which differed from finance which differed from distribution. Without this foundation of agreed data, it is nearly impossible to:
- Understand whether various strategic initiatives were producing the desired results
- Understand operational results and where corrective action was needed
- Make optimal capital allocation and investment decisions
- Maximize the value of the business
The company was introducing GBS (global business systems) for Finance, HR, and other functions to help manage and control the quality of data and improve reporting. Their solution however was years away and required migration to a new ERP system and reduction of satellite and supporting systems. The executive leadership could not tolerate this timeframe.
A Big 4 consultancy was engaged to help deliver “one version of the truth” quickly and at a reasonable cost. They chose the r4apps platform to build the solution due to its unique capabilities including:
- The ability to deliver client results faster underpinned with an agile, flexible solution allowing them to respond to a fast-changing environment
- Enabling a more effective approach that requires no blueprinting/conceptualizing of the solution, saving many weeks, and minimizing timescales, cost, and risk by working in small incremental steps and allowing changes “on the fly”
- Semantic integration
- No code
Unfortunately, cases like this are all too common and likely to increase given the range of strategic challenges. According to Deloitte the life sciences sector is undergoing fundamental changes, particularly wrt data and reporting while McKinsey recognizes some of the improvements that have been made but stresses the need to go further and faster. Harvard Business Review recognizes the challenges of financial reporting.
Just as with our customers, life sciences companies need simple, inexpensive, effective data ecosystems combined with the ability to orchestrate and compose solutions as required from modular interchangeable components (Gartner refers to this as a composable architecture.) The r4apps platform is the most cost-effective approach to meet these challenges.