M&A activity in the software and consulting industry is driving needless business complexity and risk
Here’s how some organizations are improving compliance, saving money and enhancing business operations in the PLS space.
Back in the 2010s, a wave of regulations hit pharmaceutical and life sciences (PLS) companies hard. And fast. They scrambled to stand up systems and solutions to meet the proliferating transparency reporting requirements. They also struggled to immediately grasp the complexities these moving parts introduced to their operations.
As a result, many PLS companies adopted these early transparency solutions that didn’t truly meet their requirements, since the creators of the software weren’t fully familiar with the unique needs of the PLS industry.
While the technology industry has always been a hotbed of mergers and acquisition (M&A) activity, the PLS transparency reporting arena has proven to be even more active. Startups and boutique consulting companies come and go, get acquired by bigger players, go out of business and pivot to wholly new operating models.
Unfortunately, these fluctuations can be problematic for the PLS companies that rely on technology products and services to run their businesses. When a key service provider merges with another, their customers often are more impacted by the disruption than their employees.
In many cases following the typical technology merger, a predictable series of events follows. The acquiring company will likely discontinue support for the products that it purchased, pushing those customers to move to its own products. In cases where consulting companies merge, clients will be similarly urged to migrate to the tools with which the acquiring firm has a relationship — otherwise ongoing support will not be available. Rarely does the client have any real choice but to comply. And these are typically the smoother types of transitions. In many cases, smaller tech and consulting companies simply go out of business entirely, forcing the client to scramble to find a replacement solution from scratch.
Software M&As usually end with clients having to spend a considerable amount of money on implementing a new tech platform, not to mention investing in a significant amount of training to master it. After expending a lot of effort, the train of business eventually keeps chugging along, but at usually a high cost. And even if the client stabilizes on the new platform, another merger is often right around the corner.
These are often tedious and costly cycles. Adopting new platforms can come with new tech and related processes that have to be mastered. The cost and wasted efforts can cost millions of dollars and make day-to-day operations a challenging task.
What PLS companies really need is a way to break free from this cycle of constantly changing technologies. Instead of chasing one new system after another, the more wise move is to stabilize on a platform that can accommodate your business’s needs without having to worry about corporate mergers impacting it. You need a stable, industry-leading platform that can be relied upon for years to come, with one implementation fee and known long-term costs. Instead of devoting countless hours to implementing new software packages, PLS companies can instead focus on what really matters — strategic initiatives which move the business forward.
The solution to this cycle of M&A-driven do-overs is a software provider you can trust. Align with a major provider who can provide much-needed stability over the long term, offering a single solution in all of your markets which allows you to scale globally. Ideally that comes in the form of a partner who can provide both the underlying technology and the know-how to help you manage it, from implementation to ongoing training.
In the PLS space, organizations quickly see that one of the most critical aspects of this ongoing relationship is whether and how the service provider includes new reporting rules and regulations as they are released. Many vendors claim that they automatically import new transparency rules as part of their product, but check the fine print: This work often requires complex change orders plus added consulting time and expense. The bottom line? Ask questions. Make sure you’re getting the capabilities you're paying for.
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