Case Studies

Business Model Assessment: Reevaluating Strategic Direction

Challenge

A major pharmaceutical manufacturer reevaluating its strategic direction was interested in assessing the possibility of adopting a services-based model for commercial and government contract operations and government pricing. Initially, the manufacturer requested an evaluation of its readiness for adopting such a model for several key operating processes and IT systems from a risk and structural perspective. For those operational functions that would be enhanced by a services model, the manufacturer asked for insight into commercially-viable vendors in the marketplace capable of delivering the required expertise and cost savings.

Solution

Blue Fin Group performed a comprehensive evaluation using our Services Fitness methodology involving analysis across six domains for each area under consideration. The domains of analysis include process, data, organization, location, technology and applications. The fundamental questions across all domains are:

  1. What aspects of the domain need to be retained by the manufacturer to mitigate risk?
  2. What aspects of the domain may be administered by a service provider in order to realize cost savings with limited risk exposure?

The BFG team evaluated these questions for each domain within the contract operations and government pricing areas to differentiate between those functions that are strategic or risk-prone, and therefore best retained by the manufacturer, and those that are repeatable or transactional, and are therefore candidates for a services model. Blue Fin Group provided an evaluation of the risks and benefits associated with the adoption of a services model for those functions identified as outsourcing candidates along with the client’s readiness. We assigned each identified operation several key success factors, including risk management, key productivity indicators and a regulatory compliance profile. Potential vendors in the marketplace were then scored according to their capabilities within each identified success factor.

Results

Roadmap to the future: The manufacturer now has a comprehensive understanding of the best-fit service-based solution framework for the specific processes, systems and organization of their business model. Blue Fin Group provided a roadmap for the phased implementation of services solutions and process optimization. The client used our objective recommendation and analysis, including a rigorous, analytical business case, to initiate and prioritize implementation planning and secure management alignment.

The Blue Fin Group Difference

Focus on the manufacturer: The Blue Fin Group approaches outsourcing assessments with a unique perspective. Our primary focus is to assist manufacturers in determining those processes or systems that can be outsourced based not on what the market offers, but on the areas matching organizational goals, the suitability of a given process, and the risk profile of the manufacturer. The market is inundated with vendors willing to take on pharmaceutical operations, but many lack the experience and knowledge of the industry, and perhaps more importantly, understanding of the complexity, dependencies, and risks involved in commercial contracting and government pricing operations. It is important to identify which tasks can be safely and efficiently executed by third parties, and which require a trained and experienced in-house team to execute.

The knowledge and experience for thorough, efficient analysis: Our deep knowledge of the contract administration and government pricing space allowed us to analyze the client’s key functional areas for a potential services-based model. The Blue Fin Group team had a breadth of experience covering all aspect of contract operations, government pricing and systems, allowing us to identify those organizational pain points and risks that would recommend for or against a services solution.

We are objective: Unlike many consulting firms, we never accept referral or finders’ fees from vendors. Our partners and staff have the experience of system and service implementation, but as a specialized management consulting firm, we come with none of the conflict of interest that naturally plays a role for system implementation and services providers. We always work objectively and in the sole, best interest of our clients. We do not come with a pre-disposed solution as many vendors or larger consultancies do, and we understand the broadest range of the needs and capacities in business and apply tailored solutions that have relevance and longevity.

For more information, or to discuss how Blue Fin Group can assist your organization, contact Rich Carlson, Managing Partner, Blue Fin Group.

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