Six Steps to Reduce the Risk of Outsourcing Abroad

Sept. 14, 2010
Sage advice on pharma partnering, from the trenches.

Many pharmaceutical manufacturers get nervous when outsourcing to emerging markets. And rightly so. Different cultures, different languages, different business attitudes and ethics . . . it’s enough to make the most seasoned industry veteran think twice. Prior to working with a foreign service provider, I treat them as I would a prospective employee. A few short pieces of sage advice “from the trenches”:

1. Meet them in person: This is not always possible, but do make the effort. A small project may not be worth your time (given some of the other key indicators below). But if it’s a larger project, by all means try to visit them. This face-to-face relationship will pay dividends in future communications.
2. Trust, but verify:
If you cannot visit personally, have an independent third-party auditor visit the facility and give you their impressions. Several auditing companies are now available in India, China, Brazil and Russia, just to name a few geographies. You may want to use these auditors to audit the actually project in real time (clinical trial, manufacturing project, etc) to have another set of eyes watching.
3. Check references: Like a potential new hire, check their references.  Ask for multiple references of past projects similar to your own. When calling the referred company, be sure to speak with various people in the organization to get multiple opinions and see if they are consistent. Unlike an employee reference, there are no federal guidelines preventing you from asking the hard questions, so ask away!
4. Set detailed expectations, and keep the bar high: Be very clear on your expectations, both verbally and in writing. Develop a time line of specific deliverables in advance. Most important, hold weekly teleconferences to monitor progress. Take careful meeting minutes and share with all parties, noting specific action items needed along with the due dates and the person responsible. Always have a detailed agenda prior to the TC to keep things on track. Always insist on the highest quality output so they do not cut corners.
5. Provide template reports: If you want specific information presented in a specific format, do not leave that up to your vendor. Provide them templates of the specific information you need completed. Your chances of getting the exact info you need will increase dramatically.
6. Expect delays: Even the best plans can be derailed by several events. Customs delays. Festival time (especially true in India). Holidays (especially true in Latin America). Build delays into your project schedule, giving “false deadlines” to your vendor. If your project includes written reports, leave time to Americanize these reports. Even though English is the language of business in many countries, it is still not American English. Spelling, grammar, and sentence structure will all have to be modified to generate a high-quality report.

The industry is full of high-quality, well-intentioned service providers in many countries. Typically it’s simply a difference in business expectations and cultural norms that delay or derail projects. If the first project does not meet you expectations, don’t give up. You just spent months training your vendor how you want things done. The next project will be better.

About the Author

Jim Worrell is CEO of Pharma Services Network, a provider of strategic global outsourcing services to the biopharm industry. With an emphasis on emerging markets, Jim has been involved with hundreds of projects around the world.

About the Author

Jim Worrell | CEO