Business Process Management
Tue, 10/09/2007 - 11:35am
Is it the answer to what ails you?
Senior Vice-President, Marketing
For many people, a trip to the doctor's office for a physical often ends in a doctor's summary of, "your tests were pretty good, and you seem pretty healthy, but…" followed by a directive for a little more exercise, potential change in diet, or a potential condition to be aware of. Often this if followed by the caution that, while the patient might be in good health now, old habits need to be replaced by a new approach to keep the patient healthy and to ward off potential new ailments. This analogy can easily be applied to pharmaceutical and life science organizations today as they struggle to become more agile and deal with the complexities of the marketplace. New market dynamics, competition and regulation present a myriad of forces that require a new approach that extends beyond traditional processes and applications to unlock new value.
The pharmaceutical industry enters late 2007 attempting to address a highly competitive global market place, increased price pressure, pipeline development challenges, impending patent expirations, and enormous costs of new development as well as associated sales and marketing costs to bring products to market. Add increasing regulatory pressure, coupled with the recent high profile recalls including Vioxx by Merck and Viracept by Roche, and the scope and scale of the problem escalates dramatically.
The Drive To Deliver Better Business IntelligencePharmaceutical companies have attempted to address these problems with key technologies including ERP for resource planning, product lifecycle management, as well as complex models to mine and model data, provide reporting and root cause analysis, alerting, and to deliver greater business intelligence (BI). The early to mid 2000s specifically have seen the rise of spending and deployment of business intelligence and analytics to address a host of issues from new product development, to metrics management, compliance reporting and comprehensive clinical trails. In many cases, this technology application of BI and data warehouse capabilities with application of complex analytics models and data marts has produced substantial business return, yet organizations are still not enjoying the repeatable and measurable benefits that business intelligence was expected to provide. There are number of key reasons for this including:
Many BI and analytics efforts are trapped in silos. This is due both to the limitations of the underlying applications below and the inability to roll up a consistent view of metrics from multiple sources. The result continues to be multiple versions of the truth and low penetration of truly pervasive business intelligence tools. Industry analysts point to BI penetration of approximately 25% of users in the organization, and dozens of point solutions for BI.
Most intelligence and metrics are not actionable. Existing functionality is great for monitoring static and historical data which is drillable for analysis and able to provide alerts on changes in metrics after the data warehouse refreshes, but any sort of corrective action requires humans to take action. For example, solutions exist to monitor drug discovery or testing and monitoring of outlying data, but most are silo applications and only call attention to a status or change in condition. Alerts in email are great, but of limited long term value.
Almost no notion of process management or automation exists which allows for people to create explicit processes and then automate their execution or account for exceptions. There are packages that help automate rote work associated with R&D administration on the front end of a development cycle, and reporting roll ups that help aggregate regulatory compliance reporting at the end of the drug development cycle. In the middle, are millions of human activities that can and should be automated and provide people with capability to manage the actual process on their own terms.
Aligning Metrics To Actual Work ConditionsMaybe most tellingly, the reality for most pharmaceutical and life sciences companies is that the metrics and performance management initiatives they are tracking are often not actually related to how people work. How can you have a consistent metric definition for drug development when each product development cycle and related clinical tests are different?
For most organizations of scale, metrics have different definitions across divisions, best practices are not captured, and the critical intellectual property that provides the basis for competitive advantage is trapped in the heads of people. Best practices are not captured, much less repeated or monetized. Often the impact of this situation does not become known until key employees leave, quality issues are uncovered in supplier sourcing and drug discovery, or regulatory issues arise which force an examination of actual business processes and the people who support them.
As a result, many organizations are turning to business process management to address the gaps in existing applications and to unlock and replicate intellectual capital that is trapped in people's heads about how the business works, and how it might work more effectively. According to a recent IBM study of CEO's, the best source for new ideas for business improvement comes from employees. Process management provides the means to take advantage of this intellectual capital to drive immediate results.
The idea of business process management may conjure a variety of associations and raise the specter of yet another round of high price consultants desending across various parts of the R&D, clinical trials, supply chain operations or marketing to talk about process improvement and re-inventing the wheel. However, the reality is much more simple and productive. It starts with allowing employees of all levels and skills to model the process of how they work today, be it structuring and executing a clinical trial or running a sales division, in order to provide a view into the human and system steps required to execute on their part of the business. These process models then become the specification to build a working process solution that can be deployed rapidly - often in as a little as 90 days - in order to drive business results.
Enabling end users to specify process and requirements, as well as metrics, user interfaces and forms allows them to build a solution custom to their needs and significantly reduces requirements gathering and IT cycles for development and deployment. Perhaps as importantly, these solutions work with and take advantage of existing legacy infrastructure and systems from ERP and manufacturing to CRM and general ledger systems to unlock the power of data and attach it to core business processes. By taking advantage of existing systems, there is an ability to deliver solutions quickly as well as close the gaps across silos which exist both at the technology level and across departments and business units.
While a technology solution developed and deployed in months, not years, is a potential sea change unto itself, the real impact comes with the ability of business users to make changes to real time processes in flight with little or no IT involvement. Users have the ability to collaborate via instant message, chat and forums in context of the process, not in email, in a way that drives constant improvement and also provides an audit trail. This result is constant optimization and on-going improvement based on real world data and conditions, not just more reports, meetings and analytics, followed by long IT development cycles.
The True Value Of Business Process ManagementLeading pharmaceutical and life sciences organizations are just now beginning to recognize the ability of business process management to change the way people work and to make their organizations work more effectively. This starts from the initial work around drug development and discovery, quality management, and the execution of clinical trials all the way through organizational readiness, and product launch as drugs come to market.
Process also helps the major organization functions tackle common problems from employee on-boarding, the HR hire to retire lifecycle, sales operations, customer call center, capital expense planning, as well as constant monitoring for Sarbanes Oxley and associated compliance rules and regulations which are incumbent in all aspects of the business.
As pharmaceutical organizations move to become more agile and competitive, they will increasingly focus on process management as the key to capture and replicate core intellectual property and the power of their people to drive business improvement that is sustainable and repeatable. Much like the suggestion from the doctor to add a little exercise to maintain a healthy body, the addition of process to make explicit many of the best practices and processes that already exist inside of companies will ensure continued health and financial returns to the entire pharmaceutical sector.