Three R&D Productivity Drivers for Life Sciences

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Three R&D Productivity Drivers for Life Sciences

In our previous blog, we discussed why resource capacity management and project portfolio management are critical success factors for improving R&D productivity in the life sciences industry. In this blog, we discuss challenges and best practices for resource planning, project and portfolio management. In a follow up post, we will discuss software tools.

Resource planning and forecasting practices of 12-14 leading biopharma companies and CROs were benchmarked in two separate studies conducted by Tufts Center for the Study of Drug Development. Directors and executives of R&D operations from participating companies confirmed that ‘resource capacity planning is becoming more strategic and integral to managing projects’.

In another study by Insight Pharma, biopharma company executives reported ‘increased pressure for optimizing their project portfolio performance’. Ninety percent of the participants said they expected the pressure to increase further.Given increasing utilization of CROs, globalization, collaboration with research institutions and academia, how do life sciences companies plan and manage their resources, projects, and portfolios for pipeline productivity? What can they do to improve their current practices?Challenges of Resource, Project and Portfolio Management Practices in Biopharma:

  • In most life sciences companies, projects and resources are managed in an ad hoc or informal basis. So, lack of process maturity is a challenge. This is partly because projects in early discovery phases have poorly defined gates and stages, or line managers do not want to be bothered with Gannt charts or formal process.
  • Professional project and portfolio management is undervalued and often perceived as a ‘nice-to-have’ or only needed for projects that make it to clinical development. James Samanen, a PPM expert in the biopharma industry, argues “Project and portfolio management is just as important in discovery as it is in development, especially since the development portfolio is determined in discovery.”  This is an all-too-rare perspective in the industry.
  • As projects transition from research to development, project management becomes a necessary evil. Process-focused CRO’s have well-defined processes and project management practices for their services. Yet, in many life sciences companies, a consolidated and integrated view of all internal and external projects in the portfolio is not captured, analyzed, optimized, and tracked in a systematic way.
  • Use of CROs does not eliminate the need for a core project portfolio management and decision analysis function. On the contrary, overall resource and portfolio optimization of all projects becomes more of a strategic necessity. Why? Because the whole R&D process becomes a collection of projects and resources (whether they be internal and external) with varying levels of time, cost, and risk dependencies.
  • Knowledge erosion is real. Nowadays, people change companies or careers more frequently than ever. It may take 2-3 leadership teams to see a single project from discovery to development and commercialization. What happens when the portfolio has a few dozen or more projects? What if there are a dozen CROs are involved in R&D process? In this era of significant pharma restructuring (300,000 pharma jobs have been lost in the past decade alone), institutional knowledge is lost with every fresh wave of restructuring. The pitfall of not managing projects and resources in a central repository and tracking project portfolio history is that valuable knowledge is lost over time.
  • In centralized management environments, R&D funding is controlled and coordinated by a centralized team. One of the potential pitfalls can be that portfolio decision making is too far removed from R&D. Another is that information flow is unidirectional. These challenges result in a communication gap between strategic planning and execution. Consequently, long-term strategy with an “optimal portfolio” lacks a true quantifiable and risk-managed understanding of how that strategy aligns with the current and future potential operational capacity.
  • Project leadership and decision analysis professionals don’t have the proper tools to manage dynamic portfolios effectively. It’s not uncommon for MS-Excel and MS-Project to be considered sufficient tools for resource planning, PPM, and decision analysis. While they are good starters, spreadsheets and project management tools were not designed with predictive analytics capabilities required for resource capacity management and strategic project portfolio optimization.

Best Practices

Those biopharma companies that strive for R&D excellence adopt a resource planning and project portfolio management process that has four integrated and iterative sub-processes:

  1. Resource Capacity Management
  2. Project Portfolio Analysis
  3. Portfolio Optimization
  4. Continuous Improvement
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Resource capacity management involves obtaining and maintaining an accurate view of resource utilization and project timelines. Project portfolio management involves analyzing project/portfolio trade-offs, performance, value, and risks. Portfolio optimization is about selecting and prioritizing the right projects. As in every process that is optimized, continuous improvement requires tracking progress, measurement, and refinement.

Below are Technology Multipliers’ observations on best practices of organizations with R&D excellence:List

  • As projects transition from discovery to pre-clinical development to the clinic, process maturity transitions from ‘ad hoc’ to ‘managed’, ‘defined’, ‘measured’, and ideally ‘optimized’.
  • As portfolio size grows to a few dozen or more projects, coordination of resource planning and PPM is staffed with professional project managers and decision analysts who are predictive analytics savvy.
  • Executive management, project leadership, and decision analysts have a standard forum and procedures to review project demand, resource conflicts, internal and competitive risks, and project priorities. Typically, this forum is referred to as the Project Approval Committee (PAC) or Portfolio Review Board (PRB).
  • Resources, projects, and portfolio management span strategic, tactical, and operational dimensions. Existing project status and resources are tracked on a weekly basis for operational planning and scheduling. They are reviewed on a monthly basis for tactical planning and on a quarterly basis for strategic planning. Strategic planning usually has a one to twelve year forward looking window. New projects additions to the portfolio are evaluated on an ad hoc basis. At the strategic level, the entire project portfolio is reviewed and optimized on an annual basis by the PRB and senior management.
  • Project leadership and decision analysis are equipped with proper tools that enable collaboration with resource and project information, capture resource dynamics, risk, variability, and cost. This should include the ability to run realistic “what if” simulations and to guide the optimization process. Tools address business requirements at operational, tactical, and strategic levels.

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Bottom line: Making smart go or no-go decisions in life sciences R&D requires understanding the impact of changes to resources, timelines, and project portfolios. Companies that deploy resource planning and PPM best practices are more likely to improve R&D productivity in the current climate – a climate of significant change to the life sciences landscape where new and better portfolio management methods are sorely needed.Open publish panel

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VisibilityPublicPublishMarch 23, 2020 1:29 pmPending ReviewAuthoradminKerim TumayTankut TümayMove to Trash3 Revisions

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