Cover Story

IT in pharmaceuticals

Having cut their teeth on ERP, pharma companies are looking to improve their secondary sales systems, says Priya Jain.

Any pharma company worth its salt has an R&D wing that conducts research on new entities, treatments and geographical territories, as well as country-specific research and modification of existing delivery mechanisms. Then there’s the regulatory department, where the requisite filing is done for getting drugs or treatments approved, or doing the country-specific documentation for registering drugs in those countries.

Other important functions include quality auditing (QA) and quality checking (QC), which incorporates quality checking of incoming materials like raw materials and packaging materials; this is done during the process and before the product leaves the premises. In the QA domain, when a pharma company registers in a particular country, regulatory teams from that country come down for an audit of its factories and processes. Apart from that, like any other business, processes include procurement, manufacturing, distribution and accounting.

Laying the foundation

"Employees want to access information when they are on the field, so we need to put the appropriate security mechanisms in place" - Radhakrishnan Menon Group Head, IT Biocon

From the IT perspective, the most important application in a pharmaceutical company is the ERP system. States Radhakrishnan Menon, Group Head, IT, Biocon, “An ERP application handles manufacturing information from capturing the requirement, procuring the material, getting the material, putting it into the plant to the respective batches, and going through the quality assurance check and dispatch.”

"Our home-grown ERP application expedites management decisions as information is available online" - Deepak Salwan DGM, IT Alkem

Opines Deepak Salwan, DGM, IT, Alkem, “Our home-grown ERP application—called ECOM, for Enterprise Combined Object Model—covers all the modules and functionality of each and every department in itself. We have achieved a lot in terms of sales and growth after the ECOM implementation, and work efficiency has risen. The system expedites management decisions as information is available online…it has created job satisfaction for all employees.”

Before upgrading to SAP R3, Lupin had disparate IT systems. Recalls Suneel Aradhye, GM for IT at the company, “We went live on the SAP R3 version 4.6C from April 1, 2003. The initial implementation took eight months; IBM did the implementation for us, and thereafter we took over. The system includes applications such as sales orders, collection purchase inquiry, order generation and goods receipt.”

BW and workflow

"Top management should be aware of the new role of IT. Unless they take it as the cost of doing business, our hands are tied" - Suneel Aradhye GM, IT, Lupin

After ERP, Business Warehouses (BW) are the next big thing, as are workflow applications. BW reporting systems are being used at most pharma companies for trend and analytical reporting, simulated what-if scenarios, quotes for tenders, exports, and day-to-day processes. BW also has procedures for benchmarking performance with peers in the industry, analysing the last three and half years of data, and so on.

Data Marts are being used in conjunction with BW. These are repositories of data gathered from operational data to fulfil the need of a particular department or group within an organisation.

Aradhye says, “For reporting we have SAP BW 3.5. This is being used by our business analysts as a reporting system. Although we have not thoroughly utilised it, we are working on several aspects. We started utilising the system with a Data Mart for many of our business lines, and are now planning to make use of it for business planning and simulation.” They are in the process of improving the system so that they can meet the requirements of top management—GM, VP and above—who avoid granular reporting in favour of summarised reports in the form of dashboards, graphs and charts.

Workflow systems have also proved to be versatile support tools for the pharma industry as these can be localised. The systems are being used for employee processes, decision-making, approvals, and other pre-sales requirements. They are like portals where you can publish something for providing information to everyone. The systems have capabilities wherein the moment somebody introduces a concept or product or project, others can immediately view it right away and react. These systems help reduce paper usage and e-mail traffic.

Lupin has been using Lotus Domino Workflow for over three years, and all employee-specific services such as leave application, travel requisition, voucher approvals, and entitlements such as mobile reimbursements get processed through Workflow. They have also developed an appraisal system using Domino Workflow. Capex approvals—depending on the value of the Capex—goes through different layers of approach.

The Workflow system has also been used innovatively at the pre-sales level. According to Menon, “In pre-sales we have the data of customers, we monitor the visits made by our representatives, we track the samples sent to customers, we check their feedback using Lotus Notes’ ‘sample tracking workflow.’ What happens is that as a sample request comes to the marketing department, they post it and then production makes the sample. It is later tested by the quality assurance department and sent to the concerned party.”

IT implementation at the Biocon Group

System details: The core application includes ERP, which has been developed in-house in April 2001 and caters to 400 users. Earlier, it was using FoxPro-based applications for its ERP requirements. The ERP and their Laboratory Information Management System (LIMS) was developed in-house with Visual Basic as the front-end and SQL server 2000 as the back-end. The LIMS application was developed in August 2004. It has an Intranet application on ASP.net that is basically an employee portal. The mailing system used is Lotus Notes, and the current version of 6.5 was upgraded in 2005. For the clinical lab it uses the LIMS application. For clinical trials there are some modules developed in-house. It is in the process of evaluating Clinical Trial Data Management Software which will help to cover the entire lifecycle of the clinical trials process. It has also bought C&F (Clearing & Forwarding) software from Sarjen Systems, Ahmedabad. In addition, Biocon has a Lotus Notes-based project management system for R&D projects. It uses Lotus Notes-based workflow automation for a project tracking mechanism. Lotus Notes is also used for controlling and maintaining all the manuals relating to statutory and regulatory requirements Tech details: Since 1996 it has invested in 16 HP-Compaq Proliant servers, and in December 2005 it invested in eight blade servers. The core applications are residing on HP blade servers which consist of four P-20s and four P-30s. Biocon invested in blades for consolidation and ease of manageability purposes. All the core applications—the ERP, LIMS and mailing system—run on the Microsoft cluster mode to ensure high availability. These are two similar or identical machines running the same application either in the active-active mode or active-passive mode so that if one fails the other takes over automatically, thus preventing interruption in work. Biocon has a central warehouse, 12 depots, two manufacturing units, and a small human pharmacological unit at Sagar Apollo Hospital in Bangalore; it is planning to have one more office in the same city. Right now it is using a microwave link to connect to multiple offices, and is in the process of implementing fibre-based connectivity. For the Internet it has taken two connections; one is a 2 Mbps radio link provided by the Software Technology Parks of India, the other is an additional fibre link of 2 Mbps from VSNL which is in the process of implementation. It is using bandwidth of 4 Mbps from multiple ISPs to ensure redundancy and high availability. It is looking for service providers for inter-office connectivity. As of now it has an extended LAN, and plans to go in for WAN shortly. It has implemented Active Directory Services from Microsoft, on which it will have access control levels. Biocon has an in-house IT team of 21 people which includes five outsourced staff for desktop maintenance, 10 members in the development team, and six on the hardware in-house team. Since operations are very critical and it needs 24x7 services, as of now it is maintaining and monitoring IT infrastructure through its in-house capabilities, but since demands are increasing it is thinking of outsourcing remote management services (like monitoring of servers) to third parties. The annual IT budget last year was about Rs 5 crore. The company spends about 1 percent of its turnover on IT. In future, it intends to go in for a BI tool for analysis of information and for planning.

Managing secondary information

In pharma companies, primary sales information—the information from the depot to the stockist—is available through the ERP system, but there is a need to track secondary sales, i.e. data from doctors. This secondary sales information is required to ensure that a pharma company’s marketing personnel do not dump unnecessary stock onto distributors.

For this, field representatives have to be in a position to access information and push updates back to the HO. To this end, pharmas are planning to spend on Sales Force Automation (SFA). This, along with Supply Chain Management, is the next step in their effort to plan by geographical territory. There have been cases where Indian pharmas have used cellular networks innovatively (using SMS) for this purpose. One of the other means that companies are also looking at is investing in PDAs to improve the efficiency of their sales force.

For instance, Alkem is planning to go in for PDAs from Reliance for its field force. Explains Menon, “Pharmas need to analyse information and identify requirements like data analysis. Projecting marketing information though SFA does most of it; we are also pl anning to spend on business intelligence tools.”

Companies are also looking to integrate their systems through internal enterprise portals. Such portals make user administration easier by helping to push information to end-users. Informs Aradhye, “We are in the process of developing an organisation-wide portal called SAP Enterprise Portal which will integrate all our systems: Lotus, SAP BW, etc. With the portal we will have a specific home page depending on the user’s authorisation; he will be able to access all relevant systems through a single sign-on.”

IT’s new role in pharma

In order to cope with competition, and to keep pace with the growing scale of businesses, globalisation, multi-location situations, and complexities due to expansion, organisations are trying to do things differently. Most of the companies that we spoke to have felt the need for a mind-shift among management and the upper echelons to accept that IT is an integral part of business. “Top management should be aware of the new role of IT. Unless they take it as the cost of doing business, our hands are tied. If they consider IT as a cost centre and a burden, things will never move. Today, the IT department is still not a part of the decision-making body. The sheer scale of business is such that unless process-orientation becomes an integral part of business, it will be difficult to support day-to-day activities,” comments Aradhye.

Security is very much on the IT manager’s mind in pharma as in other industry verticals. With businesses operating across geographies, security is a bigger concern than ever. “Employees want to access information when they are on the field, so we need appropriate security mechanisms in place,” says Menon. At Lupin they have implemented Active Directory Services as they are using Windows Server. This along with access control levels keeps the company secure. “We also monitor usage of various mobile storage media,” continues Menon.

The pharmaceutical industry needs to comply with numerous regulations. With this comes the issue of change management. To incorporate new technologies, pharmas need to conduct feasibility studies. Other concerns include controlling costs within the IT infrastructure and deploying fresh technology. Salwan adds, “For an IT manager it is a task to co-ordinate with all operations and departments. He needs to tackle concerns along with the regulatory department, keep track of security aspects related to data and networks, and provide disaster recovery and high availability of data and communication to all other departments.”

IT has benefited these companies by enabling managers in other departments to keep pace with business as it scales with no addition whatsoever to the service function or staff in accounts, finance or HR. The same networks are handling almost twice the data/transaction volumes. Although these companies have not done any ROI calculation, the benefits are evident. To complement this, the companies are focussing on retraining their IT teams in the latest skill-sets.