Digital Transformation: The Business Imperative for Life Sciences

By Daniel R. Matlis, President

“Necessity is the mother of invention,” says the ancient proverb.  In my opinion, the corollary is: “disruption is the matriarch of transformation,” especially for the Life-Sciences industries.

The COVID-19 epidemic has been the biggest global disruption in our generation. It represents a watershed moment for transformation throughout our industry.

Disruption is the new normal. This new paradigm is forcing Life-Science companies to re-imagine the way they operate; transforming and accelerating product development, regulatory review, manufacturing, and distribution cycles aimed at improving patient outcomes.

This article is a preview of my Keynote Presentation at QAD’s Life-Sciences Executive Forum in Santa Barbara, CA

Digital Transformation is a Business Imperative

Disruption is accelerating Digital Transformation and driving Life-Science companies to adapt their culture and their systems.

Industry executives agree, Axendia’s research found that 76% of the respondents of recent poll believe that digital transformation is being accelerated as a direct result of the pandemic.

Axendia’s research also shows that companies who were already undergoing digital transformation by moving to the cloud and leveraging advanced technologies before the pandemic, were better prepared to address the issues of working from anywhere, mostly home, and having the ability to achieve visibility, control, and collaboration across their supply chains.

However, some are confusing Digitalization and Digital Transformation. To achieve the benefits of digital transformation, organizations must transform, streamline, and optimize their processes before moving them to the new technology platform.

Master Data Management is the Foundation for Digital Transformation

To succeed, digital transformation must start with master data management and governance since they are the foundation for digital transformation and data integrity. We work with many Life-Science organizations who are implementing their journey to digital transformation. Many companies have a plethora of point solutions that were implemented to address the needs of a particular functional area or department. As a result, these point solutions can have conflicting information on the same batch of product or the same raw material which leads to data integrity issues.  The challenge is identifying and resolving these issues before moving to the cloud.

Organizations cannot implement modern technology and undergo digital transformation on a foundation of bad master data.

Every digital transformation project must start with master data management and governance.

From Supply Chains to Value Networks

As Life-Science companies were looking for ways to lower cost, many shifted to global supply chains and single sourcing. But offshoring and single sourcing suppliers greatly reduce supply chain flexibility, robustness, and resilience. And in fact, single sourcing increases supply chain vulnerability.

Inflexible and rigid supply chains, where you only have one link, two points of contact in each link of the chain, you actually have additional vulnerability.

To gain resilience, we propose the transition to smart sourcing, with a focus on value networks.  Standardized and optimized practices executed across value networks drive improvements in operational efficiencies, on-time deliveries and reduces inventory, operational cost, and the cost for quality. They also require a technology foundation that provides adaptability, flexibility, and creativity to solve the problems of the future.

Having a network of suppliers that are qualified to provide raw materials or sub-assemblies or intermediates or APIs that can be leveraged throughout your manufacturing process is the desired state of the value network,

It’s also imperative that when a supplier ships the product, they also share the data associated with your product.  This includes not just a certificate of quality saying it met your standards, but actual valuable actionable insight and data that you can use to fine-tune your processes as you are manufacturing.  Processes affected may be as diverse as whether it’s primary, secondary packaging, or whether you are doing it internally or through a CMO.

This approach provides flexibility as the product moves through the distribution network that it is fully traceable – so that you don’t need magic to know how the product makes it to the provider or patient. In addition, feedback loops, data and insights enable modeling and the ability to simulate potential disruptions in the digital world so that network resilience can be built proactively instead of reacting to shortages after they happen.

Leapfrog to get to the Right Side of the Digital Divide

Another key opportunity that we have as an industry is to get on the right side of the digital divide. Life-Science organizations have a significant opportunity to leapfrog from Industry 2.5 to Industry 4.0.

How do we do that? We must leverage modern cloud technologies that help us adapt quickly and future proof and error-proof our processes. We need to transition from manual and paper-based solutions to modern cloud solutions and modern cloud architectures that leverage digital evidence.

We need to change and streamline our inefficient and cumbersome processes into effective and frictionless approaches across the entire value network. We also need to move away from outdated and disconnected systems into unified processes and data, and then move from legacy point solutions to integrated and extendable platforms.

Clouds are Comfortable

Axendia research shows that the industry is ready for the cloud. 74% of those we surveyed told us that they’re already using cloud solutions. 51% of those said that they’re cloud comfortable and 23% of respondents told us that they’re taking a cloud-first approach.

The question most chief digital officers are asking is, “Why not a cloud solution?” The remainder are what we call “cloud curious”. 26% of companies are still cloud curious and not a single respondent told us that they were averse to the cloud.

In fact, the FDA is encouraging the use of cloud solutions through their recent data and technology modernization action plans. To this end, FDA is undergoing their own digital transformation journey.

Weaving Digital Threads into a Digital Fabric

Most companies have implemented a plethora of point solutions to support specific functional areas and regulatory requirements. This alphabet soup of acronyms includes ERP, QMS, MES and LIMS, et cetera, et cetera, et cetera. Each one of these systems generates a digital thread.  However, on their own, digital threads provide limited visibility, knowledge, and insights.

These digital threads need to be woven into a digital fabric that supports improved outcomes across the entire value network, from raw materials to patient. There is a need to improve outcomes at every step of the process, as well as visibility from the shop floor to the top floor. And the way to do that is through digital transformation and transitioning from point solutions to platforms to provide that digital fabric.

Want to Learn More?

Digital Transformation is a business imperative for Life-Sciences.  However, Digital Transformation is a journey. You never end digitally transforming just like you never end continuously improving. The technology may be different, but the transformation needs to be constant.

Join me at QAD’s Life-Sciences Executive Forum in Santa Barbara, CA on Tuesday, October 12, 2021, as we dive deeper into Axendia’s insights on Digital Transformation: The Business Imperative for Life-Sciences

Contact to schedule an Analyst Inquiry on this topic.

The opinions and analysis expressed in this Briefing Note reflect the judgment of Axendia at the time of publication and are subject to change without notice. Information contained in this document is current as of publication date. Information cited is not warranted by Axendia but has been obtained through a valid research methodology. This document is not intended to endorse any company or product and should not be attributed as such.

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