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Jim Miller is president of PharmSource Information Services, Inc., and publisher of Bio/Pharmaceutical Outsourcing Report.
Service providers must focus on delivering a superior customer experience.
I recently finished reading Walter Isaacson's biography of Steve Jobs, the co-founder and visionary leader of Apple. As I read the book, I sought to glean insights on what it was that made Jobs and Apple so fabulously successful over the past 10 years. The answer, the book makes clear, is Job's fanatical and obsessive focus on the user experience: ensuring that Apple products had a broad range of features, were fun and easy to use, and made a statement about the person using them. The superior customer experience that Apple products deliver has enabled the company to grow rapidly while commanding higher prices than its competitors and earning the best profit margins in the consumer-electronics industry.
For Jobs, one of the fundamental principles for maximizing the user experience was maintaining Apple products as closed systems. Apple products are designed as an integrated system such that only hardware and software developed or approved by Apple will work with them, thus ensuring that all elements will work well together. This is in sharp contrast to the PC world, in which computers running the Microsoft Windows operating system can accept peripheral equipment and run software programs from thousands of suppliers. The open system environment of the PC world gives the customer far more choices than Apple's closed system, but is more likely to lead to problems, such as system crashes and the inability to print documents because of compatibility problems between the various pieces of hardware and software. The open environment also has led to the commoditization of the products themselves, driving down prices and making the PC world marginally profitable at best.
Applying Apple concepts to contract service providers
The closed-system idea struck a chord because of its potential relevance to the integrated service model taking hold in the contract services industry. Both large and small bio/pharmaceutical companies are embracing the idea of buying services as a bundle rather than on an individual basis, for example, having the same contractor develop and manufacture early clinical supplies of the drug substance and drug product. For small bio/pharmaceutical companies, the bundled model offers the opportunity to get their development candidates to the proof-of-concept decision point much faster while overcoming their deficiencies in project management and development expertise. For large bio/pharmaceutical companies, buying a package of services promises to reduce the costs of identifying, qualifying, and managing a network of service providers by reducing the total number of providers in the network.
This trend from the "open system" world where bio/pharmaceutical companies themselves had to work out scheduling and compatibility issues among service providers to the "closed system" of integrated service providers (ISPs) can be transformational for drug development and for the service providers themselves. For the ISP model to really work, service providers must take ownership of the entire customer experience. So, executives of CROs and CMOs offering a one-stop-model must dedicate themselves to answering three key questions:
Precisely defining a superior customer experience will probably require some market research, and the answer will differ across customer types and service offerings. We can be pretty sure, however, it will center around value, price, meeting deadlines, communication, and technical expertise. Once these have been defined, successful companies will develop metrics to measure them and to manage those metrics.
The key to answering the second question is the ability to break down the functional silos that have characterized drug development. The different functional areas have traditionally "thrown the project over the wall" to the next sequential step in the development process, such as when the process chemists ship the API to the toxicologists for preclinical testing or to the formulators for drug-product development. An ISP focused on the customer experience will ensure that the different functional areas work closely together from the start in both technical matters and project management and scheduling. For instance, the ISP will have its medicinal chemists and formulators work together early in the process to identify and resolve potential solubility issues.
Further, the ISP will use its cumulative experience to anticipate and plan for problems the minute a new project comes in the door, or, even better, during the request-for-proposal (RFP) process. While every project and compound is undoubtedly different, the breadth and depth of experience that most CROs and CMOs claim to have should enable them to know where to expect problems and how to account for them in the project schedule and commitment of resources, and to prepare the customer's expectations accordingly.
No doubt the key to achieving these objectives is for ISPs to establish multi-discipline project teams to evaluate and manage projects as they come through the door. The multidiscipline approach truly leverages the advantages of having all elements of the projects in the hands of a single provider. ISPs that do not use multidisciplinary teams are little more than loose confederations of independent service providers.
If questions one and two are answered successfully, dealing with question three should be much easier. If the ISP delivers on its promise, it will have no problem getting repeat customers, and its reputation should spread around the industry. A positive scorecard of customer experience metrics should help convince new clients that they are choosing the right service provider for their projects.
CMO and CRO executives who have not yet read the Jobs biography will be well-advised to do so. While you may not want to mimic his management style, understanding his focus on the customer experience and how to achieve it will serve you and your company well.
Jim Miller is president of PharmSource Information Services, Inc., and publisher of Bio/Pharmaceutical Outsourcing Report, tel. 703.383.4903, Twitter@JimPharmSource, email@example.com.