Twenty years ago, I worked for a top 10 pharmaceutical company implementing an enterprise project management tool and a resource management capability across R&D. At that time, pharma executives and managers were being asked to not only focus on the science but also to “run R&D like a business”. Back then we needed tools to understand:
- How many resources are needed?
- What kinds of resources?
- How do we handle things if work is outsourced?
- How will priorities and resource needs shift if a project is canceled, etc.?
As a result, large pharmaceutical companies spent millions of dollars implementing project management software and resource management tools. Then came the Great Recession of 2008, and Pharma was not spared its effects. Cash became tight. Maintaining these capabilities became cost-prohibitive. Companies could no longer sustain a central group of 20 people or more just to support a planning and resource management tool. To cut costs, many companies dissolved their central resource management groups, and some got rid of their resource management software. But those familiar questions remained:
- Do I need to hire more resources?
- Will my hiring plan cover my need for resources?
- What is the impact on my resources if certain studies were to start up this year?
- Will my annual budget be enough to pay for the resources required to deliver on my portfolio of projects?
- If we buy an asset or a company, what does my resource picture look like?
Challenges in Project Management in the Pharmaceutical Industry?
Two problems loomed large. The first problem was the lingering fear of the total cost of a large, cumbersome resource management tool. This cost came rom purchasing and implementing the tool. But more significantly, it came from maintaining it year after year.
The second problem was that the industry was changing. In years past, large and mid-sized pharmaceutical companies were fairly static. Their organizational structure of divisions, functions, and roles changed slowly, if at all. Now, companies had to be leaner. This led to mega-mergers, such as Pfizer and Wyeth and Merck and Schering, culminating in lots of layoffs and reorganizations.
Pharmaceutical companies were going to need to be as lean and flexible as possible from an FTE perspective. The numbers bear this out. There has not been significant growth in headcount over the last ten years for pharmaceutical companies. Some even shrank with regards to the total number of employees. Collectively, the biggest companies in the field have added workers over the past 10 years, but only a few:
As Pharma companies evolved, new business models appeared. Biotechs and clinical-phase start-ups began to become more common than the legacy big-pharma models. These small companies couldn’t afford a large number of FTEs or multi-million-dollar tools to handle resource management, but still needed a way to manage their resources.
Resource Management Solutions Need to Change
Resource management capabilities needed to evolve at the speed of the industry, but the elephant was still present in the room. Pharmaceutical resource management organizations and tools were still old-school. Created 10-20 years ago, they were not designed to evolve quickly. As reorganization happened, the resource management structure and models could not quickly change to reflect the new organization.
There is no doubt that every pharmaceutical company should have a planning and resource management tool. It’s as necessary as a finance system, an HR system, etc. When you spend millions to hundreds of millions of dollars on R&D, having a resource planning and management tool just makes sense.
As the industry continues to evolve, pharmaceutical and biotech companies need resource management solutions that are efficient and scalable. The user interface must be simple and easy to use. Doing basic configuration changes should be accessible to anyone with basic Excel skills. Enhancements should be continuous and easy to implement.
To be both efficient and flexible, the resource management tool should be managed by functions (i.e. the users), not a central resource management group. Functions should be able to make simple changes to algorithms without having to write code.
As we move toward the future, pharmaceutical companies continue to need robust resource management solutions. There are resource management tools out there that do evolve with ever-changing business needs. Companies need to make sure they are finding the one that works best for them.