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December 2012

Reflecting on Clinical Research Industry Headlines of 2012

Addressing CRO Challenges with Services Resource Planning

December is often a time to reflect on achievements, ponder on lessons learned, and set goals for the New Year. It is as if Charles Dickens' A Christmas Carol has saturated the subconscious and I expect the Ghost of Christmas Future to appear this evening and tell me what I missed when all of the telltale signs were there.

For resource managers within clinical research organizations (CRO), all signs are particularly focused on the transformations underway in the market. To echo Wolfram Eberstein's latest blog series, CROs are facing unprecedented levels of challenges in regards to regulations, corporate mergers, growth, and increased outsourcing.

How these changes will affect cost and performance should be of concern. Here's a quick review of some of the headlines of 2012 that emphasize the degree of urgency.

  • The results from sweeping regulatory reform are in. In Europe, the impact of the EU Clinical Trials has been such that CROs are seeing their manpower costs essentially double (Telegraph Media Group, 2012).
  • Marketing dynamics are changing. According to a Booz & Co. survey targeting pharmaceutical sales and marketing executives about their commercialization strategies; 60% of respondents are expecting their service models to change, and as a result, estimate corporate strategies to rely heavily on "innovative pricing" (FiercePharma, 2012).
  • The pressure for transparency and reliability is paramount. Phase II costs range between $4,000 to $20,000 per patient. According to Timothy Scott of Pharmatek Laboratories, "…the reliable supply of clinical trial material (CTM), whether manufactured in-house or outsourced to a contract manufacturing organization (CMO), absolutely critical" (FierceBiotech Clinical Trials, 2012).

What might the creepy ghost forecast tonight knowing what we know today about new costs, technologies, and solutions? What might I be able to do about it as soon as I wake?

We know that services resource planning (SRP) technologies are now available and have been designed to assuage many of these concerns directly. Not by implicitly reducing costs or making magically accurate predictions. Rather, SRP takes off where enterprise resource planning (ERP) and professional services automation (PSA) fail at recognizing the resource challenges of project-based organizations that need to link business operations from end-to-end.

During their evaluation of available enterprise-focused software offerings, analyst firm IDC has defined SRP solutions as an important tool for CROs:

"SRP systems pull three major business components ‒‒ resources, projects and clients ‒‒ together into one system supported by strong analytical and collaborative capabilities. Integration is the key to removing to driving more effective business strategy, and beyond strategy, an integrated system provides a solid operational foundation often preventing problems from getting out of control and enabling proactive business decision-making" (IDC, 2012).

Will implementing a system designed to manage and predict capacity and resources for CROs keep the Ghost of Christmas Future from appearing in your dreams this week? Perhaps not… I do know, regardless, you will be sleeping better with an SRP solution than without one in 2013.

To learn more about SRP for CROs download the Planview Approach to Services Resources Planning for Clinical Research Organizations. Dive into the five functional areas an SRP solution must have to help CROs produce effective resource planning practices.

What market changes/challenges are you reflecting on within your CRO? What steps are you taking to improve resource planning in 2013? Share your thoughts by leaving a comment below.

EU red tape making drugs impossible, The Telegraph Media Group, February 13, 2012 (as cited by Planview Approach to Services Resources Planning for Clinical Research Organizations)
Pharma sales execs: Current model is broken; changes are coming, FiercePharma, March 21, 2012
eBook: Supplying Global Clinical Trials Keys to Avoiding Costly Delays, FierceBiotech Clinical Trials, April 2012
IDC Executive Brief: Services Resource Planning: Systems for Effectively Managing a Project-based Business, June 2012

4 Dashboards Vital to Profitability for Tech Services Companies

In the first section of this two part series, 13 Key SRP Metrics Vital to Profitability for Tech Services Companies, I outline specific metrics necessary to measure performance across multiple business units for successful resource planning within Technology Services organizations. This blog will discuss the top dashboards required to provide visibility of those key metrics, giving the current status and historic trends needed to support effective decision making.

For a comprehensive view into business performance, technology services companies should use the dashboards to look at information from four perspectives.

  1. A top-level business perspective dashboard will typically focus on the financial performance of the business. It should monitor revenue and margins, as well as unbilled work in progress and future revenue forecasts. Controls should be in place to avoid revenue leakage. Monitoring on-time submission, review, and approval of timesheets is critical.
  2. A client perspective illustrates the revenue and margin achieved from projects delivered to them, their satisfaction levels, and their current demand for additional services.
  3. A service perspective summarizes all projects being delivered for each service line. The demand for and profitability of each service can then be determined, as well as any changes needed to be made to increase the margins achieved. The actual daily rates achieved by each role should be monitored against targets. Non-billable effort such as rework should also be tracked.
  4. A resources perspective is critical. As a global services company, increasing the utilization of resources across each region is the key to driving revenue and profit. Creating global resource pools that can be utilized on projects across the world can reduce local headcount and increase productivity. Each day a resource is on the bench equals lost revenue that can never be regained. Ultimately, every Technology Services organization should attempt to drive up their resources billable utilization, as every 1 percentage increase you can get from resources goes directly to the bottom line in terms of profitability. Getting good visibility of future demand and the knowledge and experience required to deliver it successfully will allow the most effective planning of resources.

The dashboards outlined provide access to the 13 key metrics critical to the profitability of Tech Services organizations. When considering a software solution for services resource planning (SRP), I recommend Tech Services organizations include these 13 metrics and dashboards on their list of requirements. Look for a solution with in-depth reporting and analytics capabilities that provide visibility into information that helps drive decisions that are most important within the organization.

What's on your dashboard software? Is information readily available? Share by leaving a comment below.

Related post: 13 Key SRP Metrics Vital to Profitability for Tech Services Companies

Going Hybrid, and I’m Not Talking about Cars (it’s about the Cloud) - The Cloud: Not Just for Startups AnymoreThe word "hybrid" typically conjures images of the Toyota Prius (only for now if Ford has anything to say about it), but in the world of enterprise software it is about evolving business models. Actually, and more importantly, going hybrid is about bringing more value to customers by providing them with choice -- the choice of cloud-based or on-premise software deployment models. Over the past several years we at Planview have put this hybrid approach at the core of our business. We have embraced SaaS as a transformational business initiative, but at the same time continue to embrace the on-premise model as well. Providing choice is ultimately about being customer-driven versus fighting industry-centric religious wars about business models and technologies. Without question, going hybrid has brought more value to our customers, partners, and shareholders. For more on this transition and how a cloud-hosted approach made it happen, see my recent article on WIRED.

The Cloud: Not Just for Startups Anymore

"Clearly cloud-based software solutions are here to stay. Whether in consumer or enterprise markets, the cloud has transformed the way we deploy and consume software applications. For enterprise customers, cloud-based software radically…" Read the full article.

Optimizing Your Resources: Learn from the Military

Now more than ever, organizations are asked to do more with less. Pressures mount, competition is building, and there seems to never be enough resources to tackle what needs to be done. Then, when resources are finally allocated to strategic work, the work ends up getting delayed because the people are pulled off on emergencies, managers' pet projects, and other interruptions.

10 Proven Military Strategies for Better Resource Management: Avoiding Custer's Last StandThe industrial age only took root in the 19th century, and the formal organizational structures we know and love didn't begin until the 20th century. And resource management hasn't evolved much since then except for matrix reporting and project-based work, which are fairly recent concepts.

But there is a place we can turn to for advice. Military strategy has been around for thousands of years, at least as far back as Sun Tzu (500 BC), and through the ages of Alexander the Great, Julius Caesar, Hannibal, Napoleon, and on to the present day ‒‒ each commander learning from and building upon the principles that came before.

Many of these principles deal with the effective use of limited resources. Business leaders can look to these principles to solve what is arguably their #1 problem: resource constraints.

From Sun Tzu's 13 principles to Napoleon's 115 maxims, to the countless other strategies, there are hidden gems of resource management advice that is as relevant today as they were back then.

Complexity theory states that complex systems have simple roots. In line with this, Sun Tzu said:

"There are not more than five musical notes, yet the combinations of these five give rise to more melodies than can ever be heard.

There are not more than five primary colors (blue, yellow, red, white, and black), yet in combination they produce more hues than can ever been seen.

There are not more than five cardinal tastes (sour, acrid, salt, sweet, bitter), yet combinations of them yield more flavors than can ever be tasted."

It is the same with strategies and tactics; a select few principles can be used in countless combinations and variations.

Napoleon knew this all too well and is often cited as the greatest military strategist in history, despite his notable losses at Waterloo and Russia. His principles gave birth to many of today's most commonly used military strategies.

There are countless other military principles that apply to resource management as well. In looking through them, and in the spirit of Sun Tzu's simplicity, I've narrowed thousands of years of principles and maxims down to what I feel are the ten core strategies directly applicable to resource management that can be used in a multitude of combinations. From "Economy of Force" to "Concentration of Force" to "Divide and Conquer," these strategies, when understood correctly, are powerful ways to optimize your resources. Take a sneak peak in this latest infographic and download my new white paper, 10 Proven Military Strategies for Better Resource Management: Avoiding Custer's Last Stand.

I'd love to hear your thoughts. Is your organization struggling with making the most effective use of limited resources across major projects, minor work efforts, and ongoing support and "keep the lights on" work? Once you read the white paper, I'd love to know which strategy(s) you are currently employing, or have decided to try, and which are most useful. Are there other strategies not listed that you've used with success?

P.S. If you haven't yet taken a few minutes to share your experience in the new benchmark study on the State of Resource Management and Capacity Planning, I invite you to do that now.

The survey, which is being conducted by Appleseed Partners and OpenSky Research, and is sponsored by Planview, will remain open until December 10th. We want to hear from you! Participate in the study by clicking here.