Mid-Sized Biotech Firms Need to Trade In-House Business Solutions for Effectively Outsourced Ones

A clinical research facility performing Phase II drug studies has a number of requirements in order to complete its tasks successfully. Not least among those are well-designed and equipped laboratories to process and record the clinical test results. Yet you would not expect the highly skilled researchers who will occupy those labs to create the blueprints for these spaces. Though they may offer input, in the end it is an architect who will deliver the building plans. Likewise, a dedicated project manager will oversee the construction process and an experienced contractor will complete the building phase. Similarly, it is not the contractor who designs the tools needed for commercial construction. Even though end users rely on a particular technology, they rarely have the knowledge or experience to produce that technology. And if they did, chances are the finished product would be unusable and not adhere to quality standards.

Why should business practices be any different? The biotech industry is nothing if not specialized. Researchers require many years of advanced education to become experts in subjects so mind-bogglingly specific that they are met with polite stares and nods when discussed at dinner parties. It is unsurprising, then, that these scientists require specialized tools, specialized software, and even specialized business functions to complete their work. What is surprising is that in addition to designing the specifications for these things, they too often attempt to craft the tools, software, or functions themselves.

Perhaps it is a shortcoming of the industry, but how often have you seen a filing system so specialized that it is completely unheard of outside the facility where it was developed? How often have you seen software for specific tasks rigged together by a long list of independent developers, ex-employees, and “Jerry in Marketing who’s not bad with computers”? In biotech, standardization certainly stands in stark contrast to specialization, a fact that can lead to positions that are impossible to recruit for and render outsourcing of technical support unmanageable.

The best example of this is that of the veteran employee who claims, “It’s not a mess; I know where everything is!” How convenient that no one else does and thus his employment is ensured. The myth here is that the system is not broken but rather works well. The truth is that the system is quite broken and our so-called filefolder savant is working despite this, slowed by the dead weight of a false solution dragging behind him.

Software solutions in mid-sized companies tend to be the same: mid-sized companies begin as small companies with small needs—a filing cabinet or two, a desktop shredder, Microsoft Office 97, and a couple of old Dells running Windows XP. Then the modifications begin. First the company uses physical files to manage potential, current, and past clients. Next is the document scanner, with a whole host of Windows shared folders on an older desktop PC. Recognizing a legitimate need for increased document handling, a decision is made to implement the most inexpensive solution. When price becomes the sole deciding factor in system design, considerations such as available technical support, ability to recruit employees proficient in the use of that system, and the system’s adaptability to future growth often fall by the wayside. Rather than being considered an investment in the company’s future, the solution is perceived as a necessary evil resulting from a dire and persistent need, so it is unsurprising that this is exactly what such piecemeal solutions become: necessary evils.

An efficient and well-designed business solution will take repetitive and standardized tasks out of the hands of employees, freeing them up to handle the client relations and communications tasks that become more important as the company expands. An inefficient business solution will actually retard growth.

Perhaps worse than simply slowing the growth of your business or stunting it altogether, nonstandard in-house solutions can also expose your business, no matter what field you are in, to significant yet difficultto- quantify risk. We all have to answer to someone, whether it’s the director of regulatory affairs, the CEO, the FDA or, regardless of the chain of command, the client who ultimately pays the bills. The last answer you want to give to any of those entities is, “I don’t know.” Yet this is exactly what we set ourselves up for when we choose business solutions that cannot query an external third party for support, are under documented, frequently do not adhere to industry standards, and rely on sometimes daily maintenance and stop-gap repairs from the in-house gurus who designed them. Truly, the marvel is not that these solutions work at all, but that we expect we will not end up losing clients, going out of business, or going to court due to their failures.

Despite the temptation to design and implement our own solutions, we must strive to adhere to industry standards where they apply and to forge new standards across the industry where they are needed. This means allowing skilled specialists to do what they do best. This also means paying more initially for better data systems designed by experts, but less in the long run to free our data from said systems’ clutches for government audits, unanticipated client use, market research, and, eventually, the next big thing in industry software.

I saw an excellent example of this “standardize more, risk less” philosophy during an e-mail system transition project for which I was a team member while working for a large health care company. The project began by researching scope and feature sets and underwent a thorough risk assessment before product testing even began. The benefit of all this was that—even though we did not go with the most affordable option and we completely moved away from the antiquated e-mail administration system our company had expanded with—the chosen solution not only met our needs but was sufficiently standardized to require minimum staff training, less downtime and provide greater confidence in its extensibility for future growth than any of the other options. To say that this was a case where spending more up front, both in planning and purchase, paid off is akin to saying cake is better cooked with an oven than a light bulb: it is self-evident.

Whether in the lab or the office, results must not only be sufficient for our needs, but they must be consistent and repeatable. In biological terms, this requires a division of labor among various cell types. In staffing terms, this means tapping various resources that do a few things very well, then getting out of the way and letting them do their jobs. Jacks-of-all-trades need not apply, and if the masters charge more, they’re able to do that for a reason: they’re worth more. This holds true in any laboratory operation as well; the results must be replicable. Even the FDA’s 21 CFR Part 11 reinforces that a result unrecorded did not occur, and for results to be recorded they must be replicable.

What’s needed is a standardization of specialization. Smaller biotech firms that specialize in drug development need to rely heavily on both physical and virtual resourcing. For instance, firms may utilize independent auditors for auditing processes, GxP auditing firms for oversight of the auditing process, computer hardware and software vendors for IT support, and document management and control systems supported through external firms. Each part of the system of the biotech company needs to focus on completing whichever process it fulfills best; otherwise, worthy products and projects can too easily be lost to the shortsightedness of ad hoc solutions, perhaps well-conceived but poorly executed in most business settings.

Selective outsourcing to quality industry experts is the core skill to be cultivated here, as biotech organizations are likely to find themselves left behind by technological advances that are harder to keep up with, a genetic science curve that is wildly at odds with traditional drug development processes, and increasingly government regulations that are swiftly being standardized across the international marketplace. In the face of all this, it is not firms that can conquer that will survive and thrive, but it is those that can adapt.

Those who hire more project managers and fewer programmers, those who invest in strategic sourcing personnel and adopt risk-based approaches to vendor selection—they will be the ones poised to adapt to the ever-changing biotech landscape. They will be the companies that spend the 21st century making money instead of reinventing the wheel.