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IDC: Life Sciences R&D Research

February 23, 2014

IDC Health Insights announced the availability of a new IDC MarketScape report, “IDC MarketScape: Worldwide Life Science R&D Strategic Consulting Services 2013 Vendor Assessment,” (Document # HI246518), the final report of a three-part life science R&D IDC MarketScape series. The new report seeks to compare major service providers with each other, based on criteria that should be important to life science companies when considering the selection of a strategic consulting partner to help provide guidance for strategic, operational, and tactical transformation issues within the R&D space. Vendors evaluated in this report include: Accenture, Boston Consulting Group (BCG),Cognizant Technology, Solutions, Deloitte, HCL Technologies, IBM, iGate, Indegene, Infosys, L&T Infotech, McKinsey, PriceWaterhouseCoopers (PwC), Syntel and Tech Mahindra.

Of the estimated $14 billion worldwide IT outsourcing life science services market, strategic consulting in the R&D space is expected to contribute almost $1.4 billion in 2013. When combined with BPO and strategic consulting services, IDC Health Insights expects that the total IT services market will continue to grow at double digit rates over the next five years, with an average annual growth rate of 12%. Strategic consulting services cover the entire life science R&D value chain with offerings ranging from drug discovery to clinical drug development to drug safety to regulatory compliance and beyond. These services are increasing and expanding in importance as the life science companies transform themselves in pursuit of long term sustainability.

According to Alan Louie, Ph.D., research director of IDC Health Insights’ clinical development, technology, and strategy research, “As part of the ongoing industry transformation, strategic consulting in the life sciences is continuing to grow rapidly as companies seek to smooth transitions and optimize operational and business performance, with a hope of regaining long term sustainability. In combination with BPO and ITO efforts, effective use of external resources is becoming a critical component of life science corporate strategies for success. The selection of optimal partners to develop and help execute these increasingly externalized complex business strategies will contribute significantly to a company’s success in the future.”

With BPO, IT outsourcing, and external partnerships and collaborations increasingly the norm, strategic consulting services are evolving to incorporate new business best practices and expanding organizational footprints, while concurrently optimizing both cost and organizational agility. While some general pressures exist for life science companies to consolidate their vendor ecosystem into a limited number of preferred providers, the high profile nature of strategic consulting has limited consolidation efforts in this area. Where appropriate, leading IT service providers are actively and aggressively working to expand their offerings to include strategic consulting capabilities, typically in areas adjacent to vendor service strengths.

According to IDC Health Insights, key attributes that life science companies are looking for in their service providers include:

Deep, life science industry and/or technology-specific knowledge (where appropriate) in the area of interest
Practical understanding of application, platform, framework, and infrastructure best practices where needed
Operational experience in the area of interest, as appropriate
Understanding of the life science business at both company and tactical levels
Access to industry-adjacent best practice knowledge, where appropriate
Ability to deliver both strategic guidance and direct implementation support for the project of interest
Strong reference-able clients
At the next level, additional factors that life science companies may consider during their vendor selection include:

The ability to work effectively with multiple stakeholders (including competing service providers) to drive transformation initiatives regardless of organizational boundaries
Internal agreement on the relative importance of quality versus cost in the selection of the service provider
The ability to deliver a unified service capability over multiple service or geographical areas
The potential to seamlessly expand services delivered across BPO, ITO, and strategic consulting as part of preferred vendor relationships
Compatible corporate cultures
Historic corporate relationships that could impact vendor selection
Over the near term, IDC Health Insights expects that the use of external services will continue to grow as organizations seek to navigate through increasingly complex global, regulatory, and operational ecosystems. Leading vendors, as preferred partners who understand their sponsor’s business almost as well as their sponsors and have the capacity to deliver superior services, will be key to helping their clients succeed, both now and in the future.

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