The cost and time it takes to develop a new drug nearly doubles every nine years, according to Eroom’s Law. Staying competitive while going ‘beyond the pill’ for customers during this period is often a challenge for pharmaceutical companies.
Pharma firms have been witnessing, and leveraging, cloud technology developments to try and overcome these cost and time hurdles. Gartner predicted in 2017 that by 2019, more than 75% of life sciences R&D IT organizations would have adopted cloud-first application deployment strategies. As of September 2019, the forecast figure of 75% was superseded by 11% to stand at 86% according to a research report by Accenture titled ‘Technology Vision 2019 for Life Sciences.’
What makes now—a year after the 2019 Gartner forecast—the right time for pharmaceutical companies to move to the cloud? Here are the pressing issues propelling pharma companies to shift from legacy on-premise ERP solutions to the cloud.
1. Securely store large quantities of sensitive information
Traditionally, pharma companies have been wary of using external networks/software-as-a-service (SaaS) solutions because of concerns related to:
- Data security and integrity
- Control over—and access to—data
- Regulatory compliance
An increasing number of companies are now realizing that cloud environments are actually more secure than on-premise solutions. They are also acknowledging the incredible role ERP can play in improving process efficiencies in the pharma industry. One reason is qualified, reputable cloud service providers who offer continuous security monitoring and incident response. They can identify security issues quickly and apply patches and enhancements in a uniform way with automatic upgrades—these are aspects few pharma company IT departments can manage themselves.
2. Speed up the drug development process, without compromising efficacy or safety
The traditional concept of a 10-year drug lifecycle isn’t feasible anymore. Instead, researchers are now constantly seeking ways to conduct mission-critical R&D work in significantly shorter spans of time—an ask cloud-based pharma ERP solutions are capable of helping to fulfill, by streamlining purchase requests, improving collaboration with partners and suppliers, optimizing resource utilization, and allowing you to focus your human capital on your core competencies.
3. Become agile, flexible and scalable, on-demand
Most drug manufacturing projects have fluctuating budgets and resources. Cloud ERP solutions for pharma companies enable them to quickly scale up and scale down resources and team strengths depending on a project’s specific requirements. Such solutions also make it easier for companies to speed up go-to-market strategies and enter newer geographies.
4. Reduce capital investments and operational costs
Studies show maintaining an application in the cloud reduces cost by almost 40% when considering the actual usage versus required usage. Deploying cloud-based ERP solutions eliminates additional hardware and associated maintenance cost, resulting in productivity and operational savings. The quality and breadth of technologies that reliable cloud service providers offer will help decrease the overall cost of cloud computing and data storage.
5. Comply with strict and dynamic regulations
Cloud-hosted data is extremely secure and enables pharma companies to meet various compliance and regulatory requirements by providing them with:
- Enhanced visibility and control over their business processes – From acquiring the materials or products for production through final delivery to the customer
- Improved data security and access controls – To prevent/control the breach of data security through a complete set of security features including access controls, data encryption and server-based processing
- Increased traceability and quality control – Product traceability is critical in a compliance-regulated environment. A comprehensive framework is necessary to manage product innovation through product data management, quality process controls and product traceability.
According to a 2019 GlobalData study, “the total healthcare cloud computing market size is forecast to be almost $35 billion in 2022, growing at a Compound Annual Growth Rate (CAGR) of 21.7% between 2018 and 2022.”
This gives empirical evidence that healthcare organizations and networks view investing in cloud computing technology as an increased priority. The study also states that the pharmaceutical cloud computing market size is expected to grow at a CAGR of 20.9% between 2018 and 2022—from $4.7 billion in 2017 to $12.1 billion in 2022.