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Leveraging Service Management to Improve Clinical Development Operations


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Service management frameworks can help clinical development organizations improve customer relationships, increase productivity and reduce costs.

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Leveraging Service Management to Improve Clinical Development Operations

  1. 1. • Cognizant 20-20 InsightsLeveraging Service Management toImprove Clinical Development Operations Executive Summary which increases complexity even further. Most pharma R&D units are not set up in a way to take The challenges within the R&D function of phar- full advantage of these new ways of operating maceutical companies are well understood. The and thus struggle to find one-off approaches and total cost for developing a new drug exceeds $1 solutions to the challenges they face. billion due to the stringent requirements for large clinical trials. At the same time, the pipeline for There is general agreement that the pharma R&D new “blockbusters” (defined as drugs with market model has to be completely reinvented to suc- potential of more than $1 billion in annual sales) cessfully address these challenges, adjust to the targeting the general population has pretty much industry’s new realities and continue to produce dried up, and pharmaceutical companies are new products efficiently and cost-effectively. increasingly developing drugs that address the To improve R&D “yield” in generating high- needs of specific smaller populations, a trend value, patient-centered and regulatory-approved called personalized medicine. treatments, R&D organizations must find a way to more quickly and effectively move from data to The impact on R&D departments has been decisions by focusing on activities such as: staggering: Not only do they have to find ways to do more with less, but at the same time, they also have to become much more flexible, conducting • Adopting predictive capabilities through adaptive trials, signal detection or predictive research on larger numbers of specialty clinical trial planning. compounds. They also have to operate in a much more connected environment, wherein they col- • Providing data and insights at the point laborate with other companies, usually smaller of need through R&D mobility solutions, biotech firms, university research centers, etc., adaptive monitoring or portals. to discover and develop these compounds. • Bringing market insights to R&D more consistently through market-aligned R&D and While in the past clinical development was clinical trial feasibility. primarily performed in-house, leading pharma companies now rely on a host of external vendors, In sum, the pressure on CROs to deliver break- such as clinical research organizations (CROs), though molecules has never been greater. As a global services companies and other develop- result, they must become much more efficient; ment partners. The decision to source particular open; standardized; innovative; continuously activities is usually made on a trial-by-trial basis, improving; and flexible and adaptive. cognizant 20-20 insights | october 2011
  2. 2. With these objectives in mind, CROs have been The service provider can be internal — typicallyasking difficult questions, such as: another group within the same company — or external to the company. With an internal• How will I be able to effectively serve the provider, the company must decide whether the different therapeutic units that rely on my customer will pay for the services, typically in services? the form of a cost chargeback. In the case of an• What activities should I keep in-house vs. external provider, the customer will, of course, outsource? On the basis of what criteria will I pay for the services provided. Providing services make these decisions? through a service management model requires the establishment of service agreements, which• Do I have to continue investing in new technol- are contracts stipulating to a great level of detail ogies, or is it more cost-effective to leverage the expectations from both the customer and external providers, for example, through cloud service provider of the other party. computing?• What operating model will I put in place for The use of service management originated in the activities I keep in-house to achieve my the information technology (IT) space, with the objectives? objective of enabling better strategic alignment between the business and IT departments. ITIL• How will I ensure that the vendors I employ (Information Technology Infrastructure Library) are successfully aligned with the business has been used by IT organizations as a best-prac- objectives I have to meet? tices framework for IT service management, andThis white paper explores the concept of it has grown to become the most widely acceptedservice management and how it can be applied approach to IT service management in the world.not only as a framework to answer these key The ITIL framework and its best practices canquestions but also to inform the development provide significant value for the implementationof a new operating model that improves clinical of service management operating models.development operations of large pharmaceuti-cal companies. We will touch on what service Based on our experience, we believe that themanagement entails, its benefits and how it can service management concepts described by ITILbe applied to clinical development. We will also can be applied very well to the world of pharma-introduce a framework describing two options for ceutical clinical development, which we will dem-how to introduce service management, as well onstrate with two case studies detailed at the endas provide guidelines for how to choose between of this white paper. The reasons that a servicethese two options. model can be applied so well to clinical develop- ment include:Further, we will suggest some elements thatwe view as critical success factors for how to • The customer-provider relationships thatimplement this new model. Finally, we will provide have emerged in many pharmaceutical compa-two case studies of bio-pharmaceutical companies nies, with the therapeutic areas as customers,that recently have adopted this model, each to be serviced by the clinical organization aschoosing different paths to do so. their key provider for clinical trials execution.Service Management: • The integration of IT capabilities into clini- cal development business processes toDefinition & Benefits enable enhanced electronic data captureService management is the practice of transfer- (EDC), data analysis, trial management andring day-to-day management responsibility of monitoring, etc.operations to an internal or external provider asa strategic method for improving effectiveness • The increasing use of external vendors, which highlights the need for trialand efficiency. The organization that has direct sponsors to think and act in a serviceresponsibility for defining and agreeing to service management mode when they set up con-level targets for the services rendered is referred tractual agreements with these as the customer. The organization that acceptsservice level targets and meets requirements to There are significant benefits that the use of aprovide service at the negotiated level is regarded service management model can bring to a clinicalas the service provider. cognizant 20-20 insights 2
  3. 3. development organization. The main benefits • Increased focus on business outcomes: Byinclude the following: documenting services in terminology familiar to the business, and by describing their value• Improved communications with customers: and benefits in a language easily understood Introducing a service management model by customers, the provider shifts the focus requires the service provider to work with its from functionality, to business outcomes. customer(s) in terms of understanding their needs and requirements and corresponding • Streamlining service activities: Through the activity of services definition and the service service levels. This generates more frequent, supply chain (i.e., how the services will be ful- streamlined and effective conversations, in filled), the service provider typically identifies which both the customer and service provider elements that are common across services, start using the same language and increase which in turn enables the provider to gener- their alignment. ate efficiencies and lower costs by eliminating• More clarity around roles and responsibili- duplication. ties: The service model requires the customer and service provider to clearly articulate expec- • Setting the stage for continuous improve- ment: Putting in place a service model is tations and roles and responsibilities in order not an endpoint but rather a starting point for the services to be provided, consumed for customers and providers to continuously and supported in an effective and efficient work on improving their services, such as the fashion. This, in turn, leads to better and more way they are introduced and the way they meaningful interactions, in which both parties are delivered to the customer. Continuous operate in a more collaborative manner. improvement usually includes identifying and• Better marketing of services to customers: eliminating gaps and overlaps in services. Services are introduced to customers through a service catalog, which lists available ser- Service Management Framework for vices and their key features. Generating and Clinical Development maintaining the service catalog drives service Based on our experience, we have developed a providers to better articulate and define the framework that shows two key options for clinical services to be offered, using phrasing that res- development organizations that want to adopt a onates well with customers. service management model (see Figure 1, below).Characteristics of Functional and Capability Service Models Functional Model Capability Model Services are defined to closely follow the existing Services are defined based on the underlying capabilities Service working activities of the service provider. These needed to deliver business outcomes, in order to increase Definition activities are usually functionally aligned with the re-use and streamline operations. business processes of the customer. Service-level information is used as an indication of Detailed SLAs are introduced with different levels of the availability and supportability of services offered service available for customers and spanning various levels Use of SLAs by the provider, but it is not captured in binding of service availability, supportability and cost. Customers agreements. choose among service levels based on their needs/ requirements and available budget (e.g., bronze-silver-gold). The starting point is to turn the current offerings into a The starting point is to transform current distributed Starting structured, marketable catalog of capabilities aligned capabilities into a service-centric organization, ensuring Focus with R&D activities and evolve them into streamlined introduction of services from the top-down in a controlled services at a later stage. fashion. The initial goal is understanding customer needs, The service support approach and back-end processes are Service defining them and then releasing a catalog of services developed at the onset of the initiative, to provide the basis Support that addresses these needs. Support of the services is upon which the services can be introduced and managed. viewed as a secondary priority. Adoption rate is intentionally kept low to enable all Adoption rate is generally high, but it can vary depending Speed of parties to adjust and learn from the new model. on business readiness and the customer’s and provider’s Adoption capacity and capabilities. Driver of The driver is the business or a mixed The driver is typically the IT organization. Initiative business/IT group.Figure 1 cognizant 20-20 insights 3
  4. 4. Advantages, Disadvantages of Functional and Capability Service Models Functional / Activity Model Capability Model Pros Cons Pros Cons • Services are easily • Limited to no shared services • Development of services • More difficult to implement, recognizable by customers, benefits. focused on capability, and with a larger impact on leading to lower resistance. resulting in shared, re-usable the organization, typically • Limited improvement against and scalable services to generating more • Services align well with the current state. support new or changing organizational resistance. customer’s business process • Lays foundation only for requirements. activities, making it easy to services definition to align • More resource intensive and see how they fit in. with functionality and • Faster to realize increased requires more work upfront efficiencies and cost savings. before services can be • Lower resource requirements will require more work in released into production. to implement. later phases to build true • Stronger fit with ITIL service management on this framework used for managing foundation. services and support.Figure 2The pros and cons of each model are compared in While there is no right or wrong model, choosingFigure 2, above. one that is not aligned with your organiza- tion will detract from the success of the serviceIntroducing service management can result in management initiative. To help in making thatmultiple benefits, as indicated in the previous choice, we have provided some decision criteriasection. To achieve these, it is important to choose (see Figure 3, below).the model that fits best with your organizationalcapabilities and maturity. It is certainly possible Critical Success Factorsfor a company to start with the functional model for Implementationand evolve into the shared capability model. To achieve the intended benefits, it is importantHowever, it is important to choose the model that for the service management model to be fullypresents the best fit, both with the current situa- embraced by all parties. Based on our experience,tion and with the short- and long-term strategic we have identified critical success factors that willobjectives of the business. greatly enhance the probability of a successfulDetermining the Right Service Management Model Criteria Questions to Consider • How established are the communication processes and channels to understand, Relationship with prioritize and address customer needs? Customers • How close is the alignment between the service provider activities and customer needs? • Is there clarity and agreement on who “owns” the customer relationship? • Is there a clear understanding of which activities are core vs. non-core? Operational • How well are processes documented and followed? Maturity • What is the level of comfort with continuous process improvement? • Are different roles and responsibilities within the organization clearly defined? Organizational Clarity • Are the leadership teams within the different supplier organizations aligned on the priorities relating to service fulfillment? • How much of the service supply chain does the main provider control? • How well aligned around customer priorities and needs are the different Provider Complexity suppliers that need to collaborate to provide and support the services? and Alignment • What is the level of experience with managing different suppliers (including vendors) in servicing customers?Figure 3 cognizant 20-20 insights 4
  5. 5. implementation. In this section, we will address Using the ITIL methodology as the de factotwo very important critical enablers of success. standard of ITSM allows clinical development organizations to:Leveraging the ITIL Methodology • Define and differenti- With the introductionAs indicated previously, the ITIL methodology isthe most widely accepted approach to IT service ate service levels to of its latest version,management in the world. ITIL has enjoyed meet requirements ITIL introduces a and price.widespread adoption since its publication two lifecycle approach todecades ago. Indeed, because of its success, • Optimize services managing services,ITIL has become synonymous with IT Service through standardiza-Management (ITSM), of which it is one of the best tion. allowing for morepractices. • Drive cost reduction robust managementPharmaceutical R&D organizations can leverage through service- of demand and its centric delivery ofthe ITIL methodology, as it offers a consistent, capabilities. changes. This pavesrepeatable, controlled and measurable process the way to a morefor delivering services. It does so while managing • Shift away from orga-operational costs and capital investments to meet nizational reactivity. efficient way ofbusiness requirements. With the introduction • Transform the IT prioritizing activitiesof its latest version, ITIL introduces a lifecycleapproach to managing services, allowing for more organization into a to achieve business true partner with therobust management of demand and its changes. business. objectives.This paves the way to a more efficient way of pri-oritizing activities to achieve business objectives. Treating the Implementation as TransformationLeveraging ITIL to define services, and using ITIL Implementing a service management approachprocesses to support and manage the defined will have a major impact on the organization. Notservices, can help clinical development orga- only will your team have to start thinking andnizations realize significant benefits and even communicating in terms of services, but they willcompetitive advantage. The journey begins with also have to change their mindset about whatdefining the service portfolio, which encom- they do on a daily basis and how they deliverpasses documenting the provider’s offering and value to customers. As a result, the implemen-capabilities. The service portfolio management tation must be treated as a real transformation,process emphasizes strategic thinking to assess focused on establishing a new operating modelthe present situation, defining goals to improve with new roles, processesexisting services or introducing new services to and tools. One other reason to treatsupport current and future business activities. One other reason to treat the implementation asThe definition of a service portfolio by the clinical the implementation as a transformation is thatdevelopment organization will drive the devel- a transformation is that this will be a gradualopment of the business and technical service this will be a gradualcatalogs, which is managed by the service catalog process, typically taking process, typically takingmanagement process of ITIL. Analogous to direct several years to transition several years to transitionmarketing catalogs of online merchants and through the different through the differentmailed catalogs, business and technical service maturity levels. Therefore,catalogs serve as a tiered and structured pre- it will be essential to maturity levels.sentation of services to customers, with varying take the necessary stepsbusiness requirements and price points. The to keep the momentum going until the initia-identification, negotiation and institutionaliza- tive’s completion and the achievement of itstion of services and service levels to align with objectives.the customer’s requirements and price points Some of the key elements needed to enable thisencourages the adoption of other ITIL processes transformation and ensure its success include:to effectively and efficiently deliver on servicecommitments. • Leadership: High levels of leadership involve- ment will be required to implement the new cognizant 20-20 insights 5
  6. 6. service management model. One key enabler is implementation. These team members will also to create alignment among the key leaders to have to act as change agents to make sure ensure they lead by example and set the pace they bring along their peers in the organiza- for the program by maintaining urgency, focus tion. It will also be important to identify quick and excitement. Leaders are also expected wins wherever possible and celebrate these to allocate adequate levels with the broader organization. Overall, the Overall, the team of investment (dollars and team will have to balance the goal of achieving resource time) for execut- financial/operational benefits with a strong will have to balance ing the transformation. They focus on and measurement of behavioral and the goal of achieving will be expected to make cultural change to ensure that the changes financial/operational trade-off and prioritization “stick.” decisions in a timely manner benefits with a throughout the implementa- • Communications and training: Introducing a service management model will introduce strong focus on and tion. Finally, the organiza- many new concepts, as well as new ways of measurement of tion’s leaders will be needed interacting with customers and suppliers. in terms of marketing the ini-behavioral and cultural tiative and the new approach Because of this, it will be important to devote sufficient attention to communications and change to ensure that to other parts of the extend- training. the changes “stick.” ed enterprise (including cus- A good starting point is to identify different tomers and suppliers). stakeholder types and their needs from a com- • Organization design: Introducing and operat- munications and training perspective. After ing a service management model will require that, a plan can be developed, outlining the the establishment of new roles (for example, communication and training activities that “service owners”) and responsibilities in the target all impacted stakeholder groups. It will organization. Additionally, as the services are be important to also communicate with leaders defined and organized into logical groupings, in other impacted organizations to ensure many will see the value of aligning the organi- they are aware of the initiative and get their zation accordingly to ensure that the internal buy-in to contribute to service development provider group is set up in the best possible and delivery. Communications with customers way to deliver the services. should be a two-way street, including marketing • People change management: Implementing a of the services, as well as gathering feedback service management model is challenging and based on their usage. time-consuming, making it a Introducing a necessity to place a strong Based on experience, we know that 100% of trans- formation programs will show signs of failure service management focus on people change at some point in time. The key to successful management throughout model will introduce the effort. Many transfor- execution is to anticipate and expect these many new concepts, mations fail to achieve their challenges and be prepared to address them with appropriate counter-measures, in a timely as well as new ways stated objectives, so in order fashion. The guidelines provided above will help to beat the odds and deliver of interacting with successfully against increas- ensure this happens in the right way and at the customers and ingly higher expectations, right time. suppliers. it is imperative from the Service Management in Action get-go to devote sufficient amounts of time and resources to the change In the next section, we will describe two case management aspects of the transformation. studies based on recent engagements we completed in the R&D units of key pharmaceuti- Having a fully dedicated team for the transfor- cal clients. mation is typically a pre-requisite for successful cognizant 20-20 insights 6
  7. 7. Case Study >>Deploying Service Management for a Large Pharma Company’s Clinical OperationsBusiness situation well as identification of priority services andThe client is a Top-10 global pharmaceutical ITIL processes for deployment. Following this,company that had embarked on a corporate-wide we developed the template for service designservice management initiative in IT. The clinical and facilitated sessions with service ownersdevelopment organization launched its own and service managers to populate templatesservice strategy and initiative to implement a with high-impact and customer-focusedservice management model as part of its ongoing descriptions of services. We provided best-journey to become a world-leading research orga- practice ITIL/process guidance and drove thenization. Lacking the necessary expertise, the completion of gap identification and analysis,client engaged us to provide service management as well as documentation of process flows,(including ITIL), transformation and change process-process relationships, metrics andmanagement expertise to define the strategy governance. Lastly, stakeholder assessmentsand drive the implementation for the new service were conducted, and a change managementmodel. and communication plan was developed for use during the implementation.Objectives • Implementation: We assisted the client withThe goals for the clinical development organiza- developing the first release of its servicetion’s service initiative included the following: catalog and helped drive implementation. We also provided advice to the client to execute• Providing its business partners and customers a reorganization aimed at aligning the orga- with high-quality business services, essential nization with the major service categories. for supporting clinical trial operations. Materials were developed for key communi-• Ensuring quality on-demand responses to cations, including sponsor updates, presenta- customer needs through a service catalog. tions to the client staff, customer introduc- tions, etc. We also conducted workshops and• Reducing cost and increasing flexibility and provided training to the team resources, which efficiency of service delivery and support. greatly enhanced their knowledge of serviceApproach management and how to make sure the different components work well together.• Strategy: We conducted interviews and surveys to gather and analyze information Outcome related to applications, customers, future The client organization is well on its way to imple- needs, etc. and to build a baseline document menting the new service management model and assessing the organization’s current state. We has already achieved the following: also facilitated a large executive workshop to decide on the future services and imple- • Implementation of the new organization. mentation approach. Recommendations were generated on how to deploy the services and • Release of Version 1 of the service catalog, which is now being used as a template by other adopt the service management framework groups in the clinical development organiza- using the functional option, as well as the type tion. of transformation effort needed to put the new operating model in place. • Increased service management knowledge throughout the organization.• Design: We analyzed current-state activities and processes and made recommendations for • Implementation of key support processes the overall approach of the implementation, as throughout the R&D organization. cognizant 20-20 insights 7
  8. 8. Case Study >>Creating a Service Portfolio and Catalog for a Major Biotech’s R&D ArmBusiness Situation catalog design and the service maturity modelThis client is among the world’s largest multi- were made to align with the organization’snational biotechnology companies and a global propensity for change. The design of servicesleader in genetic disorders drug research. The was conducted with identified service ownerscompany is engaged in a corporate-wide service and service managers before negotiating withmanagement initiative to develop and implement customers on the warranted service levels. WeIT service management processes. Its research also populated the service portfolio and catalogand development organization is leveraging the to support the negotiated service levels andglobal IT service management program and has allow for seamless visibility for supporting ITILlaunched its own initiative to define and implement, including a supporting architecture. The • Implementation: We led the development ofclient engaged us to provide service management the service portfolio and catalog structure andexpertise to architect services to better support assisted the client with the development andclinical research customers and leverage vendors negotiation of the first release of services. Allmore effectively. supporting materials to create and implement the services, along with a maturity model forObjectives the services, were implemented. We developedThe objectives for the service management communications material for the executiveinitiative included the following: staff, promotional material and sponsor updates. Training for key team resources was• Map existing business functions, processes also performed to ease the transition from a and applications. vendor-led initiative.• Define a service portfolio and service catalog Outcome structure. The client is currently using ITIL processes and• Define services and document a service supporting an application implemented by the maturity roadmap. IT department to support the services, whichApproach were designed and implemented within the R&D department to reduce the cost of IT. Specific• Strategy: We conducted a series of workshops achievements include: and interviews to validate business architec- ture, as well as gather and analyze informa- • Implementation of Version 1 of the service tion related to business processes, customers, portfolio and catalog. business applications and projected needs. We also generated a service model, implementa- • Implementation of the service maturity model. tion and maturity model to transform the unit • Implementation of a service-centric organiza- into a service-centric organization using the tion model. shared capability option. • Leveraging vendors to fulfill service support and reduce cost.• Design: We analyzed the existing business process and support structure and supporting applications and validated that the existing • A more robust operating model, enabling a higher level of outsourcing of non-core IT applications, processes and activities activities. supported R&D needs. Recommendations for service architecture, service portfolio, cognizant 20-20 insights 8
  9. 9. Looking Ahead onstrated by the companies highlighted in the case studies above, this approach is setting themClinical development organizations in the on the path to improving relations with theirpharmaceutical industry are feeling relentless customers and suppliers, while at the same timepressure to increase productivity and reduce increasing the effectiveness and efficiencies ofcosts. This paper has introduced the concept of their operations.service management and how it can be appliedto achieving these objectives. As has been dem-About the AuthorsThierry Kahane is a Principal in Cognizant’s Life Sciences Business Consulting Practice, with 12 yearsof management consulting experience in designing and delivering complex business and IT transfor-mation programs across life sciences and other industries. He has expertise across the life sciencesvalue chain, with a particular focus on R&D (clinical development) and sales and marketing (newcommercial models and closed-loop marketing). Thierry has established credentials in design anddelivery of strategic initiatives, the program management of large and complex enterprise transforma-tions, as well as change management and communications. He holds an MBA from Columbia BusinessSchool and a master’s in commercial engineering from Brussels University. He can be reached Chandra is a Senior Consultant in Cognizant’s IT Management Consulting Practice. He has 12years of experience in service management, business process and IT service architecture, as well asIT operations management in the financial services, life sciences and manufacturing industries. Overthe years, he has worked on numerous programs to design, build and deliver ITSM solutions and otherstrategic initiatives at Fortune 100 companies. Som has a bachelor’s of science and master’s degree ininformation systems from The Ohio State University and is ITIL Managers certified. He can be reachedat CognizantCognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process out-sourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered inTeaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industryand business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50delivery centers worldwide and approximately 118,000 employees as of June 30, 2011, Cognizant is a member of theNASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing andfastest growing companies in the world. Visit us online at or follow us on Twitter: Cognizant. World Headquarters European Headquarters India Operations Headquarters 500 Frank W. Burr Blvd. 1 Kingdom Street #5/535, Old Mahabalipuram Road Teaneck, NJ 07666 USA Paddington Central Okkiyam Pettai, Thoraipakkam Phone: +1 201 801 0233 London W2 6BD Chennai, 600 096 India Fax: +1 201 801 0243 Phone: +44 (0) 20 7297 7600 Phone: +91 (0) 44 4209 6000 Toll Free: +1 888 937 3277 Fax: +44 (0) 20 7121 0102 Fax: +91 (0) 44 4209 6060 Email: Email: Email:© Copyright 2011, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by anymeans, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein issubject to change without notice. All other trademarks mentioned herein are the property of their respective owners.