A photo illustration with a mix of small and large white gears on a blue background. Three of the gears are labeled, "software," "outsourcing,," and "feedback" and there is a finger touching the "outsourcing" gear.

Leveraging Contract Research Organization Relationships

Developing CRO relationships to accelerate new product development

Contract research organizations (CROs) provide a wide range of services on a contract basis, including testing, inspection, certification, research support, consulting, problem-solving, and clinical trials. CROs provide a significant benefit to labs by providing skilled relief for the constant pressure on resources, time, and focus faced by most lab managers. While CROs are profit-driven businesses, they can often provide valuable assistance to labs because they specialize in specific areas of lab services, staff to deliver those resources efficiently, and have significant experience delivering the services they offer. 

There are significant benefits to partnering with CROs. Many service providers offer access to unique resources, like specialized instruments and specific expertise, that can be used only when the lab requires them, rather than making expensive investments in capital equipment and highly skilled scientists just for a short-term project. Building working relationships with CROs also provides the opportunity to do peak shaving—to have equipment and staff available to address the majority of the needs, rather than make the investments to address peak needs. The CRO can address the work required during peak needs. Working with CROs also enables lab managers to become more aware of opportunity costs. By outsourcing some of the work, the lab manager can enable the lab staff to execute from their strengths, and to defragment the work schedules. A CRO can also execute an extra project that would otherwise be postponed or canceled due to insufficient capacity. 

Before searching for the right CROs with which to partner, the lab manager needs to make some decisions about what kind of work is most beneficial to outsource. The lab needs to understand the required competencies to seek, how much they can afford to spend, the speed of execution they need, and the degree of collaboration they seek. Thinking clearly about these needs in advance will greatly improve the lab’s ability to communicate needs and differentiate potential CROs. 

Focusing on the required competencies and methods may be the most straightforward part of preparing to outsource services. Lab managers usually have clear insight into the technical expertise required to execute the work. It is important to decide if outsourcing routine testing or innovative problem-solving better serves the lab. CROs can be found to do either, but rarely both. Whichever way is more important, the lab manager will need to clearly communicate any needed methods, validation, or other quality management requirements. The lab manager can then discuss the breadth of skills, depth of skills, and quantity of work with potential CRO partners. 

It can be challenging for labs to manage the costs of outsourcing. One way to reframe these costs is to consider them investments. The lab will invest in the potential CRO partner to obtain specific benefits for specific projects. It is important to have clear communication with potential CROs about how the work will be priced. There are significant differences between specific quotes and estimates, and when payment will be due. It is important to be clear from the beginning about costs and payments to ensure that financial misunderstandings don’t harm the CRO relationship. 

From the CRO perspective, scope of the project is a key part of the business model. For the CRO, scope drives their cost. It will be vital for the lab manager to have a clear understanding of the project scope, be able to clearly communicate the scope, and work with the CRO to have both metrics to measure any scope creep, and a mechanism to change the scope, if needed. 

Another key aspect of partnering with a CRO is speed and time. Most CROs have carefully balanced project timelines to try to keep all of their customers satisfied with delivery on work. For the CRO to build accurate timelines, they must understand the urgency of the project. If labs require short turnaround times (TAT), lab managers should expect to pay more. It is also important to have clear understanding from the beginning of a project about the degree of responsiveness expected from the CRO. Different projects require different levels of communication and responsiveness about issues or observations from the technical work. One effective metric when evaluating different CROs is to ask for their average TAT, and the percentage of work delivered after the expected due date. This will provide insight into how that lab manages the project timelines. 

Different kinds of projects require different degrees of collaboration and cooperative learning. Simple testing may require no collaboration and little communication. Cooperative research may require significant collaboration and ways to share learning and technical risk. At the beginning of more cooperative projects, lab managers need to establish the points of contact for communication, the expected levels of sharing and learning, and establish how the project will be managed. Project management can be led by either the lab or the CRO, as long as the degree of integration, communication expectations, and levels of documentation are clearly understood. For larger projects, a kick-off meeting prior to the start of work, and a wrap up meeting are good practices. 

Finding the right CRO partner can be challenging. There are many different CROs out there, and they have different levels of expertise, and different approaches to the work. It is vital that the lab clearly communicate their needs, the degree of flexibility they need, and their expectations about project management, process management, and cooperative learning. CROs have many different work processes, ranging from commodity testing with a minimum of communication or flexibility to custom research which can have significant interaction and overlap. Labs can build different relationships with different types of CROs to take advantage of the strengths offered in the CRO market and best address the lab’s needs. 

Partnering with a skilled CRO can bring significant benefits to the lab. Outsourcing can reduce the demands on people, instruments, and time, while enabling the lab to pay only for what is required. By understanding the real internal costs and any opportunity costs, lab managers can properly value any potential outsource. Once the decision is made to outsource some aspect of the work, it is very valuable to invest in the relationships with the right CROs to partner for success. 

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