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Why Your R&D Externalization Strategy Needs Laboratory Informatics Strategy

For the last several years, a rebounding global economy combined with a growing demand for advanced therapeutics has resulted in robust pipelines and the highest FDA approval rates seen in decades.  As a result of heighted R&D activity, we are seeing more rapid commercialization of innovative drugs for patients. Congress has also recently introduced a new bill called the 21st Century Cures Act designed to further speed up approvals and remove red tape.  Medical devices are following a similar suit.  According to a Food and Drug Administration 2015 performance report, the approval rate for high-risk medical devices jumped to 98 percent in 2015, a 12 percent increase from the previous year and an almost 30 percent approval increase from 2012.

While this is good news for patients, for the lab, workflows are becoming more complex.  Why?  One reason is the rise in R&D externalization.  To fuel rapidly growing R&D pipelines, companies are increasingly turning to external partners and contract research organizations (CROs) to scale and complement their efforts. According to the 2016 Nice Insight Outsourcing Survey that included nearly 600 outsourcing-facing pharmaceutical and biotechnology executives, the level of R&D outsourcing by pharmaceutical/biopharmaceutical companies will expand significantly into 2016 and beyond.  In the survey, nearly three-quarters of respondents said they expect their companies to increase expenditures on contract research services over the next five years. Another 21% expect their level of outsourcing to remain the same, while just 6% predicted a decrease in spending on contract research services. And there are many partners involved – 75% of respondents indicated that they use as many as 10 service partners, while an additional 7% use 11-20 and 5% use 21- 30.  And the trend is expected to continue, with 64% of respondents reporting that they expect to increase the number of service partners in the future.  When asked about the reasons for outsourcing, the most often cited by survey respondents was the desire to improve quality. Other drivers included the need to increase efficiency, reduce costs and time to market, improve processes and gain access to specialized expertise.

Outsourcing – What it Means for Laboratory Quality and Efficiency

From the laboratory perspective, the mandate is to increase quality and efficiency while the complexity of the operating environment continues to grow – which are inherently opposed at a first glance.  We are generating more data using more partners than ever before.  At the same time, laboratory stakeholders expect data to be more comprehensive and to flow faster and more securely than ever before, both to satisfy the needs of external partners and to improve internal operations by managing the laboratory’s inherent complexity. The new world of laboratory informatics represents a clear break from the past, when laboratories had complete control over their information management activities. As organizations scale, the centralization of information technology and business functions increases.  In the end, this allows enterprises to control costs, enforce standards, and promote efficiency.  So when you are asked to deliver better data quality at a time when your lab is running twice the number of assays across three times as many research partners than last year– how should you respond?  The key is to manage the data.  Data is the key currency and the laboratory’s core commodity across partners.  It is the language that is used to drive decisions and move precious compounds through the pipeline.  But how do you get there from here?

Laboratory Informatics and Outsourcing

In many ways, laboratory informatics consultants play a role similar to a CRO.  Successfully designing, selecting, upgrading, implementing, integrating, validating and maintaining systems that include LIMS, ELN, SDMS, CDS, Graphing and Statistical Packages, and Reporting and Business Intelligence tools involves a combination of skill, knowledge and experience. Depending on the project, those planning and implementing it may require high levels of hands-on experience with the software systems involved, understanding of laboratory workflows, industry experience, scientific domain knowledge, business system integration skills, change management skills, and IT skills at the functional (manufacturing, development or research) or enterprise levels. Given the broad range of skills involved, it is rare for a company to have all the necessary internal personnel required to properly staff and execute a laboratory informatics project. As a result, it is common for an enterprise to hire external consultants to help “bridge the gap” by providing some of the skills required.

Like working with a CRO, simply hiring an external resource does not guarantee the success of your project. Much work and thought needs to be put into creating an overall project strategy, which includes choosing the right external partner. Gartner recently published an article on the topic of finding the right laboratory informatics consulting provider, “Bridging the ‘Skills Gap’ with Lab Informatics Consultants.” Here, Gartner outlines an effective strategic approach that will improve chances for success in laboratory IT projects, as well as providing important information on how to identify an appropriate consultant partner. Let’s review some of the highlights and consider what it all means for your next laboratory informatics endeavor.

Defining the Gap

A mere 15 years ago, laboratory informatics systems were usually configured for individual laboratories, frequently by functional staff (R&D scientists, manufacturing engineers, etc.) as opposed to corporate or functional IT personnel. At that time, there was a strong shadow IT function, and laboratories were considered somewhat of a domain unto themselves without strong corporate governance. Times have changed. The global trend towards mergers and acquisitions, along with the need for agility in a rapidly changing market, is driving more outsourcing and centralized corporate IT models. In a recent SmartLab Exchange survey of over 100 lab informatics professionals, 80% revealed that laboratory systems integration is a long term strategic goal within their organization.

Achieving the desired laboratory integration, however, presents a number of challenges:

  • Most of the legacy laboratory informatics systems currently in operation are highly customized for local use, and this customization makes scaling the systems to a regional or global architecture extremely difficult. Many of these legacy systems are also either outdated or no longer supported.
  • Corporate IT personnel do not understand the laboratory IT domain and lack laboratory process and domain knowledge.
  • Internal functional IT personnel tend to be savvy with individual platforms and workflows, but often lack the ability to scale beyond the systems they support (manufacturing – QC & QA, research, development).
  • Functional staff and/or shadow IT personnel that have configured the laboratory IT systems typically do not understand the integration points of laboratory informatics into functional or corporate IT and business systems.
  • Modern organizations are more oriented towards agility and thus often have less embedded shadow IT personnel to support complex informatics projects.

As mentioned above, the skills required to successfully execute a laboratory informatics project in modern enterprises can be quite broad and diverse. During the early design phase of your laboratory platform project, it is important to spend time understanding and documenting graphically how your enterprise operates in the laboratory domain. You must thoroughly evaluate your organization along with your project goals in order to determine where the skills gaps are located. Once this is accomplished, you then need to determine which blend of which type of internal and external resources is required for your organization’s particular project.

Resources to Bridge the Gap – the External Consultants

So, who are the consultants and how do you gauge their expertise?  According to Gartner, there are a number of different types of consultant firms that may be applicable to your informatics project, each with its own advantages and disadvantages:

Software vendors professional service groups


  • Deep proprietary software knowledge
  • Familiarity with lab IT processes withintheir specialty


  • Will typically only build what they know
  • May not understand all of the integration points into functional IT systems
  • Very low understanding of and ability to integrate into business systems

Independent Lab IT contractors


  • Familiarity with lab IT processes


  • May only be familiar with platforms they have experience in – vendor specific knowledge
  • Very low understanding of and ability to integrate into business systems

Scientific consultant firms that have experience with lab informatics projects


  • Deep scientific domain knowledge
  • Some familiarity with lab IT processes


  • Very low understanding of and ability to integrate into business systems

Laboratory IT consulting firms


  • Deep laboratory IT process knowledge acrossdifferent specialties/domains
  • Tend to have deeper knowledge of integration points between labs and business systems


  • Only understand a small set of business systems

Large IT consulting firms


  • High business system integration skills
  • Able to scale globally


  • Low lab informatics vendor knowledge
  • May not fully understand the lab and informatics domain
  • Do not have the domain knowledge to support scientific workflows

Note that some consultant companies have capabilities that extend into multiple categories. Astrix, for example, is an example of a quality Laboratory IT Consulting firm with deep scientific domain knowledge spanning hundreds of platforms, that also has the ability to assess and integrate into business processes.

Strategic Approach to Laboratory Informatics Projects

As with any business venture, a laboratory informatics project should flow from a clear vision of a compelling future state. Once the project goals have been defined, you’ll need to create and then execute a plan to bring your vision to fruition. The long-term IT strategy needs to be considered when addressing all phases of your laboratory informatics project – design, implementation, handoff, maintenance, upgrades, or outsourced professional services.

Choosing the right mix of internal and external resources is imperative to the success of your laboratory informatics project and will depend on a number of factors – your internal resources, the type of project (e.g., collaborative R&D, lab execution systems for manufacturing, etc.), the type of system being deployed (e.g., LIMS, ELN, SDMS, CDS, etc.), the functional domain (research, development or manufacturing), and/or the enterprise IT approach (local, regional or global).

You must judiciously appraise the domain capabilities of both internal staff and external consultants in order to avoid redundancy, as well as cover any skill gaps which have been identified. Carefully evaluate the trade-offs inherent in different approaches to staffing your project when determining how the skills gap will be best bridged.

A number of thoughts to consider when choosing resources to staff your project:

  • Companies often have a desire to use primarily internal resources to save money, but these resources may not be aligned with the long-term success of the projects.
  • Choosing an external resource based on cost factors alone is a mistake.
  • A software vendor’s professional service group can sometimes be a good addition to the your project staff ecosystem, especially when dealing with complex environments and scientific workflows within their software.
  • Laboratory IT firms with the right domain capabilities are necessary when working in more complex environments and integrating multiple systems from different vendors.
  • Larger IT consulting firms may be better at managing change control than you or other types of consultants.
  • Whoever is going to “own” the laboratory informatics process flows should be the one managing the domain-specific component.
  • Given the specialized approach of many consultant firms, multiple external resources are often necessary for informatics projects.

The Importance of Consultant Neutrality

Before you even begin the process of software vendor and external consultant selection, it is important to identify and understand vendor/consultant partnerships. Many software vendors have laboratory IT firms as “strategic commercial partners.” Also, many laboratory IT firms have software vendors as “strategic technology partnerships.” Most companies list their partners on their website, and it is important for you to understand the nature of these relationships before adding any software vendors or external informatics consultants to your project ecosystem. One positive benefit of these types of relationships is that they typically result in solid execution and integration for clients. However, just because a consultant firm offers the ability to effectively integrate a platform into your business does not mean that the platform they are integrating is the one that best meets your needs. You don’t want to work with a laboratory informatics firm that feels compelled to recommend specific software because

  • they know it, and thus feel more confident that they can profitably implement and integrate this software into your business; and/or
  • they want to build the relationship with the software vendor so the vendor will send them more business.

What you want instead is a laboratory IT firm that will recommend a platform to your company because they have determined through an extensive assessment process that it most closely matches your needs. In other words, you want to hire an external consultant firm that you are confident is working for you first. Towards that end, ask for at least five end-user customer references from a consulting firm and be thorough when investigating those references before hiring any consultant you have questions about. Important questions to ask yourself when selecting a consultant firm:

  • Do you trust that the third party is really independent?
  • How connected is that firm or individual consultant to a software vendor?
  • Regarding system selection, is the recommendation really a recommendation for your organization’s benefit? Or is it really a recommendation so the consultant firm can execute the project?
  • Are there exclusive or preferential deals in place?
  • Are you comfortable with the record of the vendor for long term, sustained or strategic technology development projects, or are they a better short-term partner due to vendor ties?


Like R&D, laboratory informatics projects are a serious undertaking. There are many factors that contribute to a project’s success – planning, communication, change management, vendor selection, consultant selection, etc. The legacy IT systems in place in many laboratory environments, combined with the need for modern enterprises to “go digital,” leverage large data sets and enable analytics, have created a challenging and dynamic environment. As such, for laboratory informatics projects in modern enterprises, finding and hiring quality external IT consulting firms is almost always a necessity. Like CROs in R&D, finding that specialized knowledge based on industry best practices can streamline the process significantly and deliver results more quickly.  With data being the currency of R&D, any externalization strategy must also plan for specialized R&D IT external resources.  Their expertise will ensure that as your organization scales, your R&D community is able to effectively share data and insights across partners, in the cloud, and often in a regulated environment.

About the Author

Dale Curtis Jr. is the President of Astrix Technology Group. For over 18 years, Mr. Curtis has built an impressive track record of leadership and success in high technology/scientific enterprise software sales, business development and service delivery. He has proven talent for driving innovative operational and marketing strategies, building successful teams, and rapidly developing new markets for start-up companies as well as multimillion-dollar global technology enterprises.   Mr. Curtis holds a B.S. in Chemical Engineering from the University of Virginia and an M.B.A. from the Drexel University LeBow College of Business.