New Generation Business Process in Life Sciences
“Paper on Glass” terminology has been a focus in last decade for information technology to convert all physically signed forms into software content, adhering to compliance guide lines. This decade is all about Digital. When I refer to “Digital,” I mean storing historic business data about objects of interest, capturing sensor data to reduce human intervention, tapping into events relevant for decision-making and building on these existing investments. Now we are adding machine intelligence, based on learnings to automate entire business processes. The Life Sciences industry is evolving with rise of New Generation Business Process (NGBP) with a vision to equip an enterprise to compete and prosper in the Digital Age. In Life Sciences, I would like to share two such NGBP; one is the Circular Economy and other is Pay-by-Outcome.
Traditional Supply Chain processes in Life Sciences are linear in nature starting with Active Pharmaceutical Ingredient suppliers, and contract manufacturers participating in inbound logistics. Then manufacturing sites are involved for production and outbound logistics consisting of a 3rd party logistics provider network through wholesalers, retail pharmacy and hospitals. However, new business models for biologics are evolving where manufacturers dispatch drug and devices directly to hospitals, large companies have in-licensing and out-licensing agreements with research firms, suppliers and distributers that are involved in selling and shipping goods directly to end customer locations. Also, reverse logistics is very critical in the Life Science industry with returns, recalls having regulatory and brand implications, along with chargebacks and rebates that have huge business impact.
So, the Circular Economy where transparency, such as knowing the provenance and traceability of material batches that can be tracked and traced right from ingredient suppliers to the consumption of finished products, with various value chain entities involved is becoming increasingly important especially with scenarios like cold chain.
In the medical device sector, the recycling of waste is equally important where environmental and eco-friendly guideline adherence can help improve brand image of the company. By enabling supply chain managers to make the right decision at the right time would help to optimize supply chain costs, improve efficiency and gain some market share for the drug and device sectors.
Customer service is the new way of marketing, and at times service sales of medical devices can outperform equipment sales. Products are becoming intelligent and connected whereas maintenance is a shifting paradigm from preventive to predictive, leveraging machine learning algorithms. Similarly, service contracts are also undergoing a change with performance and outcome-based billing. The support involved with field reps servicing equipment and providing spare part replacement as cost of service, along with service efficiency impacts profitability. Servicing equipment and machines helps the manufacturer increase its share of medical device life-cycle spend. The Life Sciences industry is shifting its focus from products to services for closer proximity and intermittent communication with end consumer.
Pay-by-outcome business processes are critical in today’s era of providing value-added services where new entrants like Google, Amazon, and Apple are penetrating further into Health Sciences domain areas, even with Gamification technology. Health insurance companies are aligning with drug and device manufacturers to measure improvement in patient outcomes, so they can adjust their business model with a carrot and stick approach, implementing rewards and minor penalties where merited. Even regulatory agencies are getting aligned with technology like artificial intelligence and improving their guidelines for software vendors as their goal remains to ensure patient safety. To monitor after sales service, the “Equipment as a Service” concept is evolving rapidly with dashboards and cockpits to monitor, and provide alerts based on machine intelligence.
NGBP is critical for advancement and gaining competitive differentiation to boost market share. However, a system of record capturing a single source of truth needs to be in place first with a digital core for supply chain, manufacturing or the service line of business with trust and transparency across the enterprise. Then only, companies will be able to innovate based on insights and collaboration outside their four walls, to deliver incremental value for business milestones, making change management effective.
SAP Leonardo brings new technologies and services together leveraging a cloud platform to help fast track these new generation business process and power their digital transformation journey. SAP’s innovation services can offer accelerators tailored to the Life Sciences industry, providing fast prototypes to address predefined uses that use like the Internet of Things (IoT), Machine learning and design thinking methodology that enables infusing ideas into such new generation business process. For more information, visit- https://www.sap.com/services/leonardo-innovation.html
SAP Life Sciences also has a strong partner ecosystem that can foster innovation leveraging SAP technology for relevant sub-segments like animal health, generics, diagnostics but in the end, adoption of such new generation business process like the Circular Economy and Pay-By-Outcome with be determined by customers willing to co-innovate with SAP sooner than later. I am looking forward to crafting additional such NGBP in Life Sciences, working together with our customers and partners to bring creative and innovative ideas to Life.