Compliance offers a pathway into drugs
The pharmaceuticals industry should be a lucrative market. Companies use state-of-the-art equipment, have massive budgets and are heavy consumers of everything from printers to storage. So why are they so hard to sell to? Nick Booth reports
Selling drugs, whether legal or illegal, is often a bit like selling IT. You start with a few freebies, to give a taste of what is available, and pretty soon the customer is hooked.
That is when they start craving ever more powerful solutions to get the same results. A cynic might be tempted to start watering down the offering, to increase the profit margin on every package.
Sometimes you can take the money and give nothing tangible in return, but customers can’t complain as they don’t know what they were expecting in the first place. This is known in dealing circles as ‘doing a millennium’ on the customer.
You can rebadge cheaper stuff to make it look like the genuine article. Pretty soon, you will be driving around in a BMW, inviting suspicious looks from people who wonder how you made your money so quickly. All too soon, the game is up. Someone else will try to muscle in on your patch, and it’s kill or be killed. If you’re not careful, you could find yourself floating in the channel.
Well, OK, selling drugs and selling IT are not that similar. Selling IT to companies which sell legal drugs is not remarkably different to many other sectors. Like banks, pharmaceutical companies tend to be multinationals which use state-of-the-art equipment. Budgets are not a problem, but expect to be made to jump through all kinds of hoops to win the business.
The time you gain in not having to quibble over prices is lost elsewhere. Attending lunches and schmoozing clients come with the territory. You weren’t doing anything that weekend were you?
Compliance offers a pathway into drugs
The pharmaceuticals industry should be a lucrative market. Companies use state-of-the-art equipment, have massive budgets and are heavy consumers of everything from printers to storage. So why are they so hard to sell to? Nick Booth reports
The pharmaceuticals industry shares many of the characteristics of the retail and manufacturing sectors. It has a complicated supply chain, which various IT vendors have promised to tighten through portals and measuring technology such as radio frequency identification (RFID).
It also has a huge data management and storage requirement. High-end workstations are necessary for scientists and engineers, and IT salesmen have to fake knowledge of complicated subjects such as 3D-modelling and gene splicing. This is all well established and won’t surprise anyone.
Collaborative working, sales and marketing and supply chain/distribution problems are all old hat in pharmaceuticals and need only a cursory discussion – of which more later. It’s more instructive to look at the new areas of opportunity emerging.
Compliance is a major problem, according to Tim Wickes, managing director of Zequel, a software company which helps firms tackle the regulations that threaten to devour their spare time.
Wickes made his fortune in storage, and sees this area as the next big growth market in IT.
“The deluge of regulations and legislation is becoming an insufferable pain in the butt for all companies,” said Wickes. “So if there is any pain-killer on the market, it gets focus.”
IT policies are nothing new at pharmaceutical companies, but the need for policy management across organisations is becoming critical.
What are the regulatory issues? In the UK we all know about the Financial Services Authority (FSA), but the Sarbanes-Oxley regulations in the US are going to create massive problems over here. We can thank Bernie Ebbers and his chums at Worldcom for this new obsession with regulation. But Wickes said it’s creating a whole new raft of business opportunities for resellers.
“There will be a lot of margin available for not that much effort,” he commented. “We work with our resellers as partners. We merge our specialist knowledge with their vertical market knowledge and work together to get the business.”
Compliance offers a pathway into drugs
The pharmaceuticals industry should be a lucrative market. Companies use state-of-the-art equipment, have massive budgets and are heavy consumers of everything from printers to storage. So why are they so hard to sell to? Nick Booth reports
Smart 421 is a Microsoft partner that specialises in helping organisations migrate to more powerful computing platforms. This is a must for companies requiring a compliant database that can be interrogated by any number of enquirers without suffering a loss in performance. The work Smart carried out for the diagnostics division of Bayer Healthcare, moving its database from a Microsoft SQL Server 2000 platform on to a .Net framework, offers a case in point.
Other areas that may create opportunities include health and safety, the disposal of electronic equipment and staff grievance procedures.
“The list is endless,” said Wickes. “The big issue is to get the agreement of staff to comply with policies and to have a signed record of that agreement. If you don’t, the board of directors will be held personally liable for any infringement.”
One company, Cryoserver, tackles the compliance problem by offering ‘forensic’ email management. The technology is akin to an aircraft’s black-box flight recorder, which stores an audited copy of all email running, into, out of and around an organisation, and is as searchable as Google. Forensic means, literally, ‘for the court’, so perhaps the technology is aimed at pharmaceuticals giants that may be involved in extensive litigation.
Cryoserver recently put a black box in at Ransom, the natural products company, whose finance director was concerned about the legal requirements relating to the integrity of data.
“It saves the company money by speeding up dispute resolutions,” said Michael Decker, managing director of Cryoserver. “You may one day need to provide forensic evidence for a potential court action, so your email retention period is indefinite.”
In a large company, in which teams of people are in constant email dialogue, retaining all email indefinitely presents a massive headache.
It would be tough for any company, but drug companies tend to be more diverse and spread out than most. Take Colorcon, a private company that makes the coating for slow-release tablets. It has its headquarters in the US, and labs in the UK, continental Europe, Asia-Pacific and Latin America, employing 1,200 people worldwide.
Drug companies always have problems recruiting scientists, who are in short supply. They are often available abroad, so companies employ remote access technology to hook them up.
The problems with this mobile environment are well-known. Laptop users are difficult to lock down. They bypass security measures and introduce all kinds of code into an organisation’s systems.
This all became too much for Russell Ryan, global Windows administrator at Colorcon, when the Netsky virus struck.
“Someone had caught it on their laptop on the day it came into the wild and when they connected to the network, it overloaded one of our mail servers,” said Ryan.
This was good news for reseller PCS Business Systems, which sold and installed Websense Client Policy Manager for Colorcon.
The problem with the pharmaceutical industry is that it is conservative, according to Alan Evans, lead for pharmaceuticals at Atos Consulting.
“Companies prefer to take a wait-and-see approach before taking the plunge. The good news for channel resellers is that once the technology and benefits become proven, pharmaceutical companies will line up to make sure they are not left behind,” he said.
This is great if you sell content management systems, but a disaster if you are hoping to push an unproved entity like RFID. “RFID is still a wait-and-see technology, with precious little RoI [return on investment] for manufacturers,” he said.
In fact, pharmaceutical manufacturing plants have previously been a technology-free zone. However, the adoption of manufacturing execution systems has removed the black hole to supply chain visibility in traditional ERP systems.
How will this be important? The priority for pharmaceutical companies is tracking, tracing and combating the counterfeiting of products. This demands more robust and repeatable RFID performance. Once the technology has proved itself there will be another gold rush, according to Evans.
But don‘t expect wider adoption until about 2008, so you have time to take a holiday.