Changes in global market and data explosion are influencing all aspects of business model and operational changes for life sciences clients. But when you gather data points and perspectives about these companies, ‘five hotspots’ start to emerge:
1. Global Scale
Africa’s pharmaceutical market continues to grow at a rapid pace. It will be worth $40 – $65 billion by 2020 – McKinsey & Company
China, India and Japan, the top three pharma markets poised to soar in 2015 – FiercePharmaAsia
Life sciences companies are expanding into emerging markets like China and Africa by growing sales and setting-up manufacturing facilities. As companies expand to new markets, operational executives are challenged to manage costs on a global, rather than local level, gain a 360-degree view into business operations, predict and manage costs accurately and in a timely manner.
Under the low budget operating environment with higher expectations, operations managers have limited choice but to adopt the right Target Operating Model in order to thrive. Finding the right balance between Globally Integrated Business Services (GIBS) which is the evolution of the shared services center concept and outsourcing is critical. The appropriate Target Operating Model leads to a better governance structure, effective management of risk/controls, continuous improvement and it also maximizes resource effectiveness. IBM GIBS exist today in emerging countries such as China, Russia, India, Brazil and Eastern Europe, and this globalized operating model provides fast and inexpensive entry into new markets where reporting, compliance, tax and regulatory knowledge are a critical foundation for success.
2. Mergers & Acquisitions
M&A activity in the first eight months of 2014 was USD 195 billion, against USD132 billion for FY 2013 – Burrill Report
Life sciences sectors saw 35 M & As worth $166.3 billion in the first three months of 2015 – PWC
Life sciences companies are aggressively pursuing M&A and Corporate Restructuring/Divestment strategies as a driver for growth. Take the case of Abbott Laboratories divestment and creation of the new legal entity AbbVie. At the time of separation, the two companies agreed which business systems would transfer to AbbVie and which would be operated by Abbott to support the new business entity. The result was a mix of legacy applications that were due to be terminated at the end of 2015. IBM helped AbbVie roll-out enterprise-wide standardized SAP-enabled processes, aligning supply chain, finance and procurement solutions and providing back-office process services for order to cash, purchase to pay, record to report and others. Download the case study to know more.
Life Sciences companies are rapidly embracing the digital operating model to manage interactions with suppliers, employees and end-consumers. IBM continues to invest and expand current services adding greater capabilities for digital service delivery. For example, the B2B Customer Service that digitizes clients’ order-to-invoice processes with mobile app capability for easy bill payment and scheduling; and dispute resolution capability is accessible via PDA’s and Tablets.
3. Regulatory Compliance
The Physician Payments Sunshine Act (PPSA) requires medical product manufacturers to publicly report payments made to physicians – Health Affairs
Effective, Aug.14, 2015, medical device manufacturers, importers, and device user facilities are required to report device-related adverse events and product problems – FDA
The industry is undergoing a compliance-related investment cycle, as new legislation and increased enforcement worldwide necessitate investments in human capital, software upgrades, and process integration to meet reporting requirements. Improved process maturity and streamlined operation puts firms in a better position to introduce effective governance and guidelines to improve data privacy and management of electronic information and disclosure. Financial reporting services with IBM Accelerated Financial Reporting can help improve data access, reduce costs and optimize regulatory reporting processes.
4. Consumer Insights
132% increase in the level of customer insights in the next 3 to 5 years compared to today – IBM Institute of Business Value Study
70% of survey respondents plan to invest in social media or integrated multi-channel marketing solutions – IMS Health Study
Companies need help to tap into customer data and use consumer insights to discover new drugs, improve diagnostics, manufacture high quality medical devices and release effective therapies. Ability to analyze different data types in life science including clinical trials, adverse event reports, genomic data, drug data bases – safety, toxicology, structures can help address the challenges and identify new business opportunities.
Embedding intelligence into business operations can help life science companies improve cash collection, drive quality customer interaction by generating insights on patient and healthcare practitioner data. For instance, clients can:
– Manage physician targeting for new drug launch through segmentation and profiling
– Improve ROI on marketing spend by analyzing prescriptions over time, demographics, promotions, competitor promotions, and cannibalization
– Conduct sentiment analysis to evaluate voice of customer, respond to feedback in real time and improve customer experience
5. Technology Shifts
Nearly 60% survey respondents’ rate patient apps as extremely important, while 69 percent similarly rated investments in physician apps to address life science commercial challenges – IMS Health Study
Cloud, mobile and analytics solutions are transforming the life sciences industry. Companies are looking to analytics to drive greater value from scientific, medical, and operational data. Cloud adoption is on the rise to address pain points arising from fragmentation of the value chain and the need to reduce cost.
Business process as a service combines deep process expertise, automation with embedded analytics and cloud based technology to create new forms of process composition to improve efficiency and accelerate business agility for life science clients.
If your answer is yes, to the following questions, operational transformation can help:
– Is scaling your back-office to match growth becoming a concern?
– Are you looking for help on how to manage your SG&A costs to ensure you are closer to best in class?
– Are you questioning the value you are getting from your current back-office shared services organization?
Sign-up for IBM a free assessment by writing to me Sudip Mitra, email@example.com or calling me at 1-917-415-3600
Visit ibm.com/services/bpo to know more