Although many think of cloud computing (SaaS, IaaS, PaaS) as a 21^st century invention, its development was more of a gradual evolution that began back in the 1950’s when multiple users on “dumb” terminals were connected via a central mainframe computer. Today, cloud computing has taken the business world by storm, offering to improve business agility and scalability, increase computing power, storage capacity, and scientific collaboration, all while reducing the Total Cost of Ownership (TCO).

According to RightScale’s 2017 State of the Cloud report, which surveyed 1002 IT professionals about their current adoption and future plans involving cloud computing, 95 percent of businesses now use cloud technology in one form or another – 89 percent of businesses are using public cloud technology, 72 percent are using private cloud, 67 percent have a hybrid cloud strategy. Clearly, the cloud has become an essential part of modern IT ecosystems.

The cloud has effectively allowed businesses to outsource part (or even all) of their IT function to third parties. In the cloud-based business model, the days of IT managers going to the data center to tinker with hardware or install and manage software applications in on-premise servers are gone. The data center, software applications and servers are now often in the cloud, and being managed by third parties on an “only pay for what you use” service plan. This allows organizations to focus more on their core business and lower operational costs. Given the success of the cloud in reshaping the modern business environment, many organizations are beginning to enlist the support of third-party Managed Service providers (MSP) as well that allow companies to outsource even more non-core IT-related business activities.

Generally speaking, the more applications a company moves to the cloud and the more Managed Services providers are utilized to manage IT functions, the more cost savings and operational efficiencies are realized. That said, outsourcing all IT function as Managed Services and moving all business software to the cloud isn’t necessarily the best option for every enterprise. There are a number of factors to weigh in determining the right amount of cloud technology and IT outsourcing to implement in your business model. This is especially true for the laboratory environment, where workflows often utilize legacy informatics applications that are managed and maintained by the company IT department.

Let’s explore some of the factors which determine the appropriate level of cloud adoption and IT outsourcing for laboratories.

Laboratory Informatics in the Cloud

In the laboratory environment, there is increasing pressure from business stakeholders to reduce costs, while at the same time increase workflow efficiency and quality. In addition, R&D externalization strategies have led to a situation where labs are collecting enormous amounts of data from multiple partners, dramatically increasing the complexity of laboratory workflows. An increased focus on laboratory informatics solutions is helping to meet these challenges, yet traditional on premise architecture for these systems is often costly and time-consuming to put into practice, while providing limited business agility and scalability.

Given these challenges, one might imagine that cloud-based technologies would already be a mainstay in laboratories. Yet, cloud adoption in the laboratory environment has been much slower than the rest of the enterprise, especially in large organizations with complex IT environments. Informatics vendors have been behind the curve with regards to integrating their solutions into cloud-based platforms, and this had led to a situation where many laboratories are currently using legacy informatics solutions that are not cloud-friendly. Moving many of these legacy systems to a cloud-based platform is not really feasible in practical terms.

Technology providers have begun to respond to market demand by developing cloud-based laboratory informatics solutions as Software as a Service (SaaS) offerings. However, upgrading a legacy system in a company with a complex IT environment to a cloud-based offering is no small project. Many organizations lack the IT skills to accomplish this on their own, and there has been a hesitancy towards making the upgrade as a result. Fortunately, whether the deployment utilizes public, private, or a hybrid cloud architecture, quality laboratory informatics consultants exist that can make the process of upgrading legacy systems to the cloud far more cost effective and efficient.

For organizations looking to upgrade, there are a number of important benefits that flow from utilizing a cloud-based informatics system:

• Disaster recovery – built-in to the system for business continuity assurance
• Work from anywhere – allows laboratory staff to work from anywhere they have internet access
• Reduced cost – eliminates high fixed cost of both hardware and software, excess IT overhead, and ongoing maintenance costs
• Global availability – allows easy integration across the enterprise
• Scalable services – you only pay for the time and functionality you use
• Highly configurable – customizable for workflow optimization

Managed Services for Operational Efficiency and Cost Reduction

Once a cloud-based informatics solution has been implemented in the laboratory, organizations may want to consider going further down the road of outsourcing non-core services. The option exists to outsource the bulk of your IT department function to a Managed Services provider. However, a fully managed services solution is not ideal or practical for every business.

The first service that organizations will typically consider is user support for their cloud-based informatics systems via a help desk. Laboratory Informatics vendors that offer systems such as electronic laboratory notebooks (ELNs), Laboratory Informatics Management Systems (LIMS), SDMS (Scientific Data Management Systems) and others often are not equipped to provide the level of service you need over time. As a result, Managed Service providers with a high level of expertise in laboratory informatics systems have moved to fill this niche and offer L0-L3 user support services. This offers the convenience of one point of contact for all software and cloud-provider issues. It’s important to note that laboratory informatics systems are highly specialized software; and thus, highly specialized informatics expertise is a critical requirement for your user support Managed Services provider. This is especially true for large companies with a very complex IT environment and extensively customized informatics systems.

In addition to a help desk, Managed Service providers specializing in laboratory informatics systems, such as LIMS, ELN, SDMS, etc. also provide services such as:

• On-site laboratory equipment management – equipment repair, maintenance and calibration; inventory management
• Enterprise Application Lifecycle Support for Lab Systems – integrated application and database migration, management, maintenance and security. Includes deployment and development of application updates and patches.
• Organizational Change Management – provides for management of the organizational changes involved in switching to outsourced Managed Services.

While more and more companies are choosing to reduce costs and improve operational efficiency, scalability and agility by jumping on the Managed Services bandwagon, in some instances, outsourcing via Managed Services doesn’t make sense for an organization. Take, for example, a large company with an extremely knowledgeable IT department, a highly complex IT environment, highly-customized code in their legacy informatics systems, along with many integrations with instruments and other internally managed systems. Sometimes companies like this don’t even have their systems documented, so it would be very difficult, if not impossible, to train a third-party to provide Managed Services. For such a company, continued reliance on their skilled IT staff who already know the ins and outs of their current system is probably the best option.

Nearshoring Managed Services

Scientific companies looking to outsource help desk or other Managed Services for their laboratory environment may be tempted to consider offshore providers. Offshoring Managed Services, while offering significant cost savings, can lead to less than ideal results due to language, cultural and technical barriers. In addition, offshoring locations usually have significant time zone differences, which prevent on-site or normal business hour services. Another option, which provides comparable cost savings but with none of these challenges, is nearshoring. In this instance, the Managed Services provider is located outside the United States, but close enough to be within same-day flights and similar time zones. Nearshoring has the potential to offer the operational efficiencies of a domestic Managed Services partner, but with cost savings comparable to offshoring.

Astrix Technology Group offers expert nearshoring solutions for Laboratory Informatics Managed Services out of its Costa Rica office. This nearshoring office location offers a number of important benefits for Managed Services:

• Cost Savings: Significant cost savings over our domestic teams, with the same technical capabilities
• Strategic Location: Similar time zone as mainland U.S. (central time zone) allows phone communication during normal business hours
• On-Site Availability: Same day flights and ease of travel in and out of the US for on-site client work
• Good Cultural Fit: Bilingual education system assures that our team speaks fluent English
• Solid Technical Resources & Leadership: Costa Rica team members have extensive training and experience with laboratory informatics projects, along with access to all the necessary technical resources.
• Stable Connection: Economic stability, along with solid internet redundancy, utilities and infrastructure
• Governance: The Astrix near shore team in Costa Rica are not contractors, they are full time employees of Astrix and part of the same organizational hierarchy as the US team.

Nearshoring with a leading domestic informatics consultant like Astrix offers these cost savings, combined with the peace of mind of knowing that your nearshoring team is part of a trusted domestic laboratory informatics company with over 20 years of successful project experience.

Conclusion

We live in a time where connectivity through technology is coming to dominate our world and economy. The internet and cloud technologies are spawning the rise of an Everything-as-a-Service (SaaS, IaaS, PaaS, etc.) business model that allows companies to reduce costs and increase operational efficiencies by outsourcing the aspects of their business that are not core competencies.

Due to highly skilled staff, complex IT environments, and lack of cloud-compatible software from informatics vendors, R&D and analytical laboratories have lagged behind the rest of the enterprise in adopting this new cloud-based, outsourcing business model. Pressure from business stakeholders to reduce costs and improve operational efficiency, scalability and agility are beginning to change this dynamic, however, and informatics vendors have responded with new cloud-compatible scientific informatics systems.

One thing is clear – outsourcing via the cloud and Managed Services is here to stay. As economic volatility and uncertainty continue to grow, companies will continue to adjust with outsourcing to facilitate better agility and scalability, as well as a renewed focus on core competencies to drive the profit cycle. Utilizing cloud-based applications and Managed Services allows laboratories to focus on what they do best – the science. As such, it is inevitable that we will see these services grow in the laboratory environment into the future.

About the Author

Rob Knippenberg is a Managing Director for Astrix Technology Group in the Informatics Professional Services Practice.  He is focused on customer informatics solutions delivery through strategic partnerships with many of the top scientific software and services providers. Mr. Knippenberg brings to the role over 25 years of experience in scientific software project and program management, directing widely distributed global teams.  During his career, Mr. Knippenberg has worked with hundreds of commercial, academic, and government institutions delivering scientific informatics solutions to many thousands of scientists