Actionable information: A core asset in the life sciences industry

IDC Health Industry Insights Community –

As top tier pharmaceutical companies continue to outsource non-core competencies and the definition of a core competency continues to constrict, it is becoming apparent there is essentially no competency that is considered truly core across the industry. Virtually every activity can be outsourced to an external vendor. At the same time, the historic life science blockbuster business model is rapidly fading into the sunset and pharmaceutical companies continue their transformational gyrations in pursuit of any semblance of mid- to long term sustainability. We expect that the future (as little as 5 years out) will look much different than the present and may end up with a distinctly different market metrics (including possibly a vastly different P/E model).

Doom and gloom aside, there remains one industry asset with the potential to deliver the returns needed to regain long term sustainability. Advances in technology have created an avalanche of data that shows no sign of slowing. Companies that can effectively extract the diamonds from this avalanche (i.e. defensible information supporting safe and effective new therapeutic solutions) will still receive substantial returns from their investments (including nichebuster revenues). From this analyst's perspective, the rapid growth of knowledge-based tools (e.g. enterprise search, operational analytics, predictive modeling, etc.) is a clear validation that companies that are best able to transform their data into actionable information and knowledge have a shot at long term sustainability.

Continuing growth of M&A, partnerships, alliances, and other collaborations is requiring organizations to take a new look at their management of data and information. Effective collaboration will be key in this new distributed future, bringing new challenges to controlled data access and security as well as new complications in the creation and protection of intellectual property. Clouds and portals are the new ecosystems and interfaces in this new world and team approaches have already become the new norm as the complexity of efforts have rapidly exceeded the capabilities of any one group or one organization. Doing everything internally (FIPCO) is a clear relic of the past, a change that has taken less than a decade to occur.

Both independently and at the request of leading pharma companies, life science vendors have recognized the need for IT and informatics to more effectively help to analyze and transform available data into actionable information and knowledge. New vendor tools are getting larger, smarter and more complex, embedding accumulated knowledge and automating complex analytical processes to eliminate low level processes that were previously performed by high cost human resources. With key decision points still requiring human intervention, it is critical for these key individuals to have the best information available at the point of decision making. The best data of the moment will increasingly guide decisions, reducing the risk of failure and increasing the likelihood of both near term and long term success (i.e. new therapeutic solutions with their supporting revenues).

While the creative and "ah ha" insights generated by humans will not likely be replaced by computers for at least a generation (no fear of HAL or Terminator in the life science industry except in the movies!), key industry innovators can use all the help they can get in getting to their "ah ha" moment. Actionable information increases the likelihood of getting there sooner and sooner is better.

As always, alternate opinions and comments are welcomed.

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