Skip to Content
Business Trends
Author's profile photo Mandar Paralkar

Why Life Sciences Companies Are Turning to Business Networks

Mandar Paralkar, Vice President for Life Sciences and Healthcare, SAP

Supply chain collaboration is crucial to enable efficient operations for many companies, and collaboration technologies such as business networks are playing an increasingly important role in many sectors. However, few are more mature in their collaboration capabilities than the life sciences sector. In a recent IDC survey,[1] 71% of participants from life sciences companies were using a business network – 6% more than in any other sector.


But why is adoption of business networks such as SAP Business Network so high among life sciences companies? And how is this collaboration technology helping transform both business and patient outcomes?


Managing outsourced manufacturing operations


According to the IDC survey of life sciences companies, 30% of manufacturing is currently outsourced, with another 19% expected within two years. To effectively meet global demand, the ability to effectively collaborate across both owned and outsourced business functions is critical. This expansion in outsourcing therefore means that companies must find ways to collaborate closely with multiple trading partners.


While life sciences companies tell IDC that they have poor to non-existent collaboration with 41% of their outsourced manufacturing partners, this is a key priority area. For this reason, many businesses are turning to business networks to improve collaboration across their value chains.


Moving towards a more knowledge-centric approach

Collaboration is key to innovation in the life sciences industry. Whether developing new vaccines or ground-breaking treatments, the ability to share ideas and data from clinical trials is crucial to accelerating development and cutting time to market.

That’s why many life sciences companies are using business networks to take a knowledge-centric approach to improving supply chain processes for new drug development, clinical trials, and transfer to commercial operations outside the enterprise. By using networks to share data in real time, people from different organizations and in different parts of the world can work as one, unified team.

Transforming patient experiences with new care models

New patient-centric care models and telehealth approaches mean that life sciences companies are becoming data providers. The growing adoption of medication adherence apps, smart Internet of Things–based solutions, and connected drug delivery systems are transforming patient experiences. However, these innovations depend on the reliable and timely delivery of an accurate digital thread for drug product, substance, and business process data.

In addition, according to IDC, 51% of life sciences companies use data from deployed products to identify usage patterns. These insights help inform the development of new and improved products to support better patient outcomes.

Collaboration technologies such as business networks allow better access to data for both innovative procurement and sourcing applications and product development teams. They also make it easier for teams to work together to turn that data into innovative products and services.


Meeting stringent regulatory requirements

Collaboration is key in a sector where drug development cycles are long and regulatory approval procedures are complex. To meet stringent compliance requirements, it’s critical to meticulously record quality checking information both within your own operations and across outsourced operations in your upstream supply chain. In addition, there is growing regulatory pressure for life sciences companies to track sustainability metrics, such as carbon footprints, across the partner ecosystem.

Business networks enable digitalized distribution of compliance information linked to quality management and environmental impact in a way that meets strict regulatory requirements. What’s more, in the IDC survey,[2] 42% of participants using business networks said that better collaboration results in improved data accuracy, while 36% said that it helps them address quality issues earlier.

Safeguarding supply chain resiliency

From the COVID-19 pandemic to geopolitical and climate change events, recent years have seen significant disruption for life sciences supply chains. And in this turbulent business environment, visibility and collaboration across both owned and outsourced operations is crucial. If you are to take steps to address supply issues before they become problems, the ability to identify potential disruption events at an early stage is key. According to the IDC report, 62% of companies said that poor collaboration limits their ability to respond effectively to disruptions.


For this reason, many life sciences companies are investing in business networks that help them closely monitor inventory and transportation status. This helps them ensure smooth operations and take action in an agile way to mitigate the impact of supply constraints when necessary.


Learn more

Visit us online to learn more about how SAP Business Network can help you create a more agile, resilient, and sustainable supply chain.

[1] “Business Networks Help Power Collaboration and Resiliency in Life Sciences,” IDC Info Snapshot, 2023,


[2] “Driving Best-in-Class Supply Chain Collaboration with a Business Network,” IDC e-book , 2023,

Assigned Tags

      Be the first to leave a comment
      You must be Logged on to comment or reply to a post.