• 20-20 Insights

Leveraging to Improve 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 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 • Adopting predictive capabilities through have to become much more flexible, conducting 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 R&D organizations to such as clinical research organizations (CROs), deliver break-though molecules has never been global services companies and other develop- greater. As a result, they must become much more ment partners. The decision to source particular efficient; open; standardized; innovative; continu- activities is usually made on a trial-by-trial basis, ously improving; and flexible and adaptive.

cognizant 20-20 insights | november 2011 With these objectives in mind, R&D organizations The service provider can be internal — typically have been asking 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 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, and This white paper explores the concept of it has grown to become the most widely accepted service 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 can questions but also to inform the development provide significant value for the implementation of 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 the management entails, its benefits and how it can service management concepts described by ITIL be 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 end as provide guidelines for how to choose between of this white paper. The reasons that a service these two options. model can be applied so well to clinical develop- ment include: Further, we will suggest some elements that we view as critical success factors for how to • The customer-provider relationships that implement 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 as choosing different paths to do so. their key provider for clinical trials execution. • The integration of IT capabilities into clini- Service Management: cal development business processes to Definition & Benefits enable enhanced electronic data capture Service management is the practice of transfer- (EDC), data analysis, trial management and ring day-to-day management responsibility of monitoring, etc. operations to an internal or external provider as The increasing use of external vendors, a strategic method for improving effectiveness • which highlights the need for trial and efficiency. The organization that has direct sponsors to think and act in a service responsibility 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 vendors. to as the customer. The organization that accepts service level targets and meets requirements to There are significant benefits that the use of a provide service at the negotiated level is regarded service management model can bring to a clinical as the service provider.

cognizant 20-20 insights 2 development organization. The main benefits • Increased focus on business outcomes: By include 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 service levels. This generates more frequent, activity of services definition and the service streamlined and effective conversations, in supply chain (i.e., how the services will be ful- which both the customer and service provider filled), the service provider typically identifies start using the same language and increase elements that are common across services, their alignment. which in turn enables the provider to gener- 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- tations and roles and responsibilities in order ment: Putting in place a service model is for the services to be provided, consumed not an endpoint but rather a starting point for customers and providers to continuously and supported in an effective and efficient fashion. This, in turn, leads to better and more work on improving their services, such as the meaningful interactions, in which both parties way they are introduced and the way they operate in a more collaborative manner. are delivered to the customer. Continuous 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.

Speed of Adoption rate is intentionally kept low to enable all Adoption rate is generally high, but it can vary depending 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 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. • Limited improvement against resulting in shared, re-usable the organization, typically • Services align well with the current state. and scalable services to generating more support new or changing organizational resistance. customer’s business process • Lays foundation only for activities, making it easy to requirements. • More resource intensive and services definition to align • see how they fit in. with functionality and Faster to realize increased requires more work upfront • Lower resource requirements will require more work in efficiencies and cost savings. before services can be to implement. later phases to build true • Stronger fit with ITIL released into production. service management on this framework used for managing foundation. services and support.

Figure 2

The pros and cons of each model are compared in While there is no right or wrong model, choosing Figure 2, above. one that is not aligned with your organiza- tion will detract from the success of the service Introducing service management can result in management initiative. To help in making that multiple benefits, as indicated in the previous choice, we have provided some decision criteria section. To achieve these, it is important to choose (see Figure 3, below). the model that fits best with your organizational capabilities and maturity. It is certainly possible Critical Success Factors for a company to start with the functional model for Implementation and evolve into the shared capability model. To achieve the intended benefits, it is important However, it is important to choose the model that for the service management model to be fully presents 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 will objectives of the business. greatly enhance the probability of a successful

Determining 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 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 ? • 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 implementation. In this section, we will address Using the ITIL methodology as the de facto two very important critical enablers of success. standard of ITSM allows clinical development organizations to: Leveraging the ITIL Methodology With the introduction As indicated previously, the ITIL methodology is • Define and differenti- the 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 widespread adoption since its publication two and price. lifecycle approach to decades ago. Indeed, because of its success, • Optimize services ITIL has become synonymous with IT Service through standardiza- managing services, Management (ITSM), of which it is one of the best tion. allowing for more practices. • Drive cost reduction robust management Pharmaceutical R&D organizations can leverage through service- of demand and its the ITIL methodology, as it offers a consistent, centric delivery of changes. This paves capabilities. repeatable, controlled and measurable process the way to a more for delivering services. It does so while managing • Shift away from orga- operational costs and capital investments to meet nizational reactivity. efficient way of business requirements. With the introduction Transform the IT prioritizing activities of its latest version, ITIL introduces a lifecycle • organization into a approach to managing services, allowing for more to achieve business true partner with the robust management of demand and its changes. objectives. business. This paves the way to a more efficient way of pri- oritizing activities to achieve business objectives. Treating the Implementation as Transformation Leveraging ITIL to define services, and using ITIL Implementing a service management approach processes to support and manage the defined will have a major impact on the organization. Not services, can help clinical development orga- only will your team have to start thinking and nizations realize significant benefits and even communicating in terms of services, but they will competitive advantage. The journey begins with also have to change their mindset about what defining the service portfolio, which encom- they do on a daily basis and how they deliver passes 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 model the present situation, defining goals to improve with new roles, processes existing services or introducing new services to and tools. One other reason to treat support current and future business activities. One other reason to treat the implementation as The definition of a service portfolio by the clinical the implementation as a transformation is that development organization will drive the devel- a transformation is that this will be a gradual opment of the business and technical service this will be a gradual process, typically taking catalogs, which is managed by the service catalog process, typically taking management process of ITIL. Analogous to direct several years to transition several years to transition marketing catalogs of online merchants and through the different through the different mailed catalogs, business and technical service maturity levels. Therefore, maturity levels. catalogs serve as a tiered and structured pre- it will be essential to sentation of services to customers, with varying take the necessary steps business requirements and price points. The to keep the momentum going until the initia- identification, negotiation and institutionaliza- tive’s completion and the achievement of its tion of services and service levels to align with objectives. the customer’s requirements and price points Some of the key elements needed to enable this encourages the adoption of other ITIL processes transformation and ensure its success include: to effectively and efficiently deliver on service commitments. • Leadership: High levels of leadership involve- ment will be required to implement the new

cognizant 20-20 insights 5 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.” benefits with a decisions in a timely manner • Communications and training: Introducing a throughout the implementa- 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. behavioral and cultural in terms of marketing the ini- Because of this, it will be important to devote tiative and the new approach sufficient attention to communications and change to ensure that to other parts of the extend- training. the changes “stick.” ed enterprise (including cus- tomers and suppliers). A good starting point is to identify different 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 : 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- service management focus on people change formation programs will show signs of failure management throughout at some point in time. The key to successful 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 as well as new ways stated objectives, so in order with appropriate counter-measures, in a timely to beat the odds and deliver fashion. The guidelines provided above will help 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 get-go to devote sufficient Service Management in Action 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 Case Study >> Deploying Service Management for a Large Pharma Company’s Clinical Operations

Business situation well as identification of priority services and The 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 design service management initiative in IT. The clinical and facilitated sessions with service owners development organization launched its own and service managers to populate templates service and initiative to implement a with high-impact and customer-focused service 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 the nization. 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 and management expertise to define the strategy governance. Lastly, stakeholder assessments and drive the implementation for the new service were conducted, and a change management model. and communication plan was developed for use during the implementation. Objectives • Implementation: We assisted the client with The goals for the clinical development organiza- developing the first release of its service tion’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 service Approach 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 • Release of Version 1 of the service catalog, generated on how to deploy the services and 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 Case Study >> Creating a Service Portfolio and Catalog for a Major Biotech’s R&D Arm

Business Situation catalog design and the service maturity model This client is among the world’s largest multi- were made to align with the organization’s national biotechnology companies and a global propensity for change. The design of services leader in genetic disorders drug research. The was conducted with identified service owners company is engaged in a corporate-wide service and service managers before negotiating with management initiative to develop and implement customers on the warranted service levels. We IT service management processes. Its research also populated the service portfolio and catalog and development organization is leveraging the to support the negotiated service levels and global IT service management program and has allow for seamless visibility for supporting ITIL launched its own initiative to define and implement processes. services, including a supporting architecture. The • Implementation: We led the development of client engaged us to provide service management the service portfolio and catalog structure and expertise to architect services to better support assisted the client with the development and clinical research customers and leverage vendors negotiation of the first release of services. All more effectively. supporting materials to create and implement the services, along with a maturity model for Objectives the services, were implemented. We developed The objectives for the service management communications material for the executive initiative included the following: staff, promotional material and sponsor • Map existing business functions, processes updates. Training for key team resources was and applications. also performed to ease the transition from a vendor-led initiative. • Define a service portfolio and service catalog structure. Outcome 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, which Approach 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 • Implementation of the service maturity model. also generated a service model, implementa- 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 • Design: We analyzed the existing business and reduce cost. process and support structure and supporting A more robust operating model, enabling applications and validated that the existing • 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 Looking Ahead onstrated by the companies highlighted in the case studies above, this approach is setting them Clinical development organizations in the on the path to improving relations with their pharmaceutical industry are feeling relentless customers and suppliers, while at the same time pressure to increase productivity and reduce increasing the effectiveness and efficiencies of costs. This paper has introduced the concept of their operations. service management and how it can be applied to achieving these objectives. As has been dem-

About the Authors Thierry Kahane is a Principal in Cognizant’s Life Sciences Business Consulting Practice, with 12 years of 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 sciences value chain, with a particular focus on R&D (clinical development) and sales and marketing (new commercial models and closed-loop marketing). Thierry has established credentials in design and delivery of strategic initiatives, the of large and complex enterprise transforma- tions, as well as change management and communications. He holds an MBA from Columbia and a master’s in commercial from Brussels University. He can be reached at [email protected].

Som Chandra is a Senior in Cognizant’s IT Management Consulting Practice. He has 12 years of experience in service management, business process and IT service architecture, as well as IT in the financial services, life sciences and manufacturing industries. Over the years, he has worked on numerous programs to design, build and deliver ITSM solutions and other strategic initiatives at Fortune 100 companies. Som has a bachelor’s of science and master’s degree in information systems from The Ohio State University and is ITIL Managers certified. He can be reached at [email protected].

About Cognizant

Cognizant (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 . Headquartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50 delivery centers worldwide and approximately 130,000 employees as of September 30, 2011, Cognizant is a member of the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.

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