Trust, Outsourcing’s Strategic Advantage

Sept. 28, 2009
The ability to establish, build, and keep trust has become a strategic concern.

Consider the energy it takes to find, evaluate, and select an outsourcing provider, then factor in the amount of time and resources required to build and maintain a productive company-to-company relationship. Outsourcing is a labor-intensive process–even before the actual project work begins.

What are the critical considerations? The trend to outsource formulation, development, and manufacturing work has increased, but the level of sophistication with outsourcing can greatly vary from company to company. So what does it mean to have a successful outsourcing strategy? Without a defined process, outsourcing can feel a little like Bill Murray’s character in Groundhog Day, destined to repeat the same dreaded assignment again and again until he finally gets it right. 

What does it take for us to re-examine our outsourcing priorities and find the right partner? Recent studies suggest that price is not the top attribute in selecting an outsourcing partner , and our market research confirms the same: quality and timeliness are the most critical factors. Often thought of as a threshold attribute, quality truly is a differentiator, not a given, for outsourced pharmaceutical work. Quality as defined by audit history, GMP systems, quality assurance and regulatory expertise may differ from one firm to the next. The ability to deliver on timelines ranks second in firm selection, and then, of course, the outsourcing provider must possess the required capabilities and expertise.

So, what else should you demand from your outsourcing partner? Everyone uses the word partnership, and central to good partnership is the notion of shared concern. Shouldn’t your partner share your sense of urgency and responsibility?  Shouldn’t they hold themselves to your same standards of accountability and communication regardless of your project size? Shouldn’t they be cognizant and responsive to your specific product development goals and constraints, whether milestone-related, material-related, or financial?

Partnerships depend upon a few key concerns:
Molecular Responsibility
Our first responsibility is to the molecule. Everything flows from there. For many pharmaceutical companies facing numerous external pressures, it has become mission critical to do more with less. It can be difficult to find funds to produce more bulk active, which means clients need to work smarter and make the best choices with limited material. They need an outsourcing partner that can work smarter than the rest.

Many outsourcing providers in this market are tempted to cut corners to offer a lower bid, to promise shorter time to market, or to design a less-than-optimal proposal, in an effort to meet a client request. This may win them the transactional project, but it may end up costing the client more when things begin to go wrong. Cutting corners increases risk. We need to be about managing risk, because it’s when things go wrong that costs begin to mount.

The true cost saver is to focus on the molecule itself. We focus on where we want the molecule to be–the solution–rather than the current obstacle to getting there–the problem. Clients often have a very good idea how to address their current obstacle, and that’s great. We have to be open to the idea that it may not be the optimal solution. Problems often arrive ill-defined, and the range of solutions may be constrained by unseen pressures and constraints within the client organization. We need to address those pressures and constraints, and build higher- order solutions accordingly. As experts in our area of the drug development chain, we need to constantly remember that we can add value with solutions that not only address the technical and scientific challenges, but also speak to the broader business solutions of accelerating drug development or reducing the risk of quality issues, regulatory delay, or missed financial milestones.

The concept of responsiveness can be both company and situation dependent. A virtual company focused on speed to a specific endpoint with limited funding will feel a far greater benefit from an outsourcing firm that can take their compound and get it into an animal model in less than thirty days so that they can evaluate their product, than an outsourcing provider with capability breadth extending to late phase. Whereas a specialty or large pharma company driven by technology or capacity overflow may value responsiveness in the form of a full time equivalent (FTE) program that maintains a core group throughout a project, but allows for the flexibility to increase headcount during peak periods. 

Regardless of company type, measuring success in the context of your company goals helps to drive a culture of responsiveness. This means hiring project managers who listen effectively to understand your goals, pressures and priorities. A good project manager is part counselor. In addition to timely communication on project status and technical issues, our project management listens between the lines to ensure project success. With close project communication, access to scientists and technical personnel, dedicated equipment, or custom-designed FTE programs, your ideal outsourcing partner should make you feel like their lab is an extension of your own facility and your own team.

Through molecular responsibility and responsiveness, contracting partners build trust. Trust is a strategic advantage because it is central to relationship formation, successful partnership and ongoing loyalty.

About the Author

Kim Black-Washington | Director