Investment in Data: What ROI Can Life Science Organizations Expect?
After many years of data making the headlines in business and popular media alike, data is finally making inroads in terms of corporate priorities too. Informatica’s CEO, Anil Chakravarthy, has identified the next evolution of data management with data as the new control point. It is becoming clear that organizations that take a strategic approach to data management will benefit from insight that directly influences all decision making and will also enable entirely new business models. I doubt you will find many people who disagree with Anil on this. The majority of the business world agrees that better data management means better business.
BUT – (there is always a ‘but’) data management does not come free. It takes commitment and resources. In the world of business, consumption of resources requires justification, which means an ROI must be built and delivered. This means facts and figures must be identified and calculated which will answer the question:
What exactly is the ROI of investing in my data and becoming a data driven enterprise?
The answer differs by industry and by individual organization, based on external pressures, internal culture, and also existing procedural strengths and weaknesses. In Life Sciences organizations there are different answers per division, with data playing different roles in different business processes.
For this reason, I can’t provide a complete answer to the question above. However, I can provide hints on where to look based on successful projects within our customer base.
Decrease Time to Market within R&D
Life Science R&D is driven by data: collection, analysis and submission of data to show the benefits of medicines or medical devices. Investing in the availability (integration) of high quality data across all systems and research teams enables:
- Early detection of factors that could effect market entry
- More efficient science through better collaboration across research teams
- Efficient risk based monitoring of clinical trials
- Reduced time of clinical trials through better trial management
Improve Sales and Marketing Effectiveness
Whilst R&D is about cold hard facts, the commercial arms of Life Science companies also rely on relationships. Not only does staff need to know the facts about their products, but they also need to understand the physicians and health care organizations that will prescribe their medicines and recommend their devices and treatments. Product information is important, but then so is a consolidated view of HCP and HCO. Leaders in data management here enjoy:
- Sales uplift of 5 – 7% of revenue through insight into and performance of sales teams and territories
- Reduced marketing communication costs (of up to 30%) through enhanced customer segmentation
- Increased employee productivity
Reduce Cost and Working Capital in the Supply Chain
A company that is serious about removing cost from working capital and increasing supply chain efficiency must rely on data to do so. By standardizing and integrating data over an often fragmented supply chain, clear visibility into current operations can pave the way for large improvements in planning and execution. Examples of data-driven benefits are:
- Increased insight in contracting (supplier and CMO) can add up to millions each year
- Reduction in inventory levels (and hence carrying costs and scrapping of expired materials) also delivers savings measured in millions annually.
- Better contracting through a clear understanding of total spend by vendor
I know that I haven’t captured all the benefits within this blog, nor have I provided hard facts in most cases. However, more details in terms of benefits of good data management brings to Life Sciences are documented here. This blog, and the paper, can only serve as a guideline to demonstrate there is value, but it still doesn’t answer the question that needs to be answered:
What will the benefits be for my organization?
This question can only be answered by somebody familiar with your business processes, and who can identify where poor quality data, or lack of data is creating inefficiency, introducing cost or impacting revenues through lost opportunity. If you would like to build a case for investing in data, and would like some external help or advice, please get in touch. You can get more information on our approach for identifying the value of high quality data here, or visit our Life Sciences web pages to get an overview of how data can deliver value across Life Science organisations.