Such a tool should have enough flexibility to accommodate minor variations across the two organizations while serving as the unifying backbone. They required an ERP system that can prepare unitized study proposals, forecast resources and revenue, record billable units and hours, and generate invoices. What Ockham needed to take true advantage of the merger was a single operational system to run the entire company. Within a few months of the acquisition, the financial process of integrating the two companies was complete, but operationally they were still working as two different companies. It was a good acquisition since Ockham focused on Data Management/Biometrics and Nexus focused on Clinical Management. Let’s take the case of what North-Carolina-based Ockham Oncology was facing after they acquired a Scotland-based CRO and experienced a growth spurt. However, it doesn’t stop there-it requires a successful implementation project to take the ERP system live. Hence the first steps in addressing the profitability problem starts with the top leadership recognizing the need for an ERP solution and selecting one that is highly customizable.
#OCKHAM NEXUS SOFTWARE#
Since each CRO runs its processes differently, the focus on customizability of the software increases even more. But they are expensive and require lots of customization to fit the complex business processes of CROs.
These tools are known as enterprise resource planning (ERP) software, and major players like SAP, Oracle, and others offer solutions for many industries. Such an ERP system would arm the executives with the right business intelligence to focus on increasing profitability. What's needed is an enterprise system that can run the whole company and all its processes on a single software platform. But these tools are specific to the trials themselves, and do nothing to run the business side of the company-such as study proposal management, invoicing, customer relationship management, and other key business processes.
#OCKHAM NEXUS TRIAL#
CROs are not new to technology for running studies-for example, clinical trial management systems and electronic data capture systems. Unfortunately, many CROs are working with a combination of paper records, spreadsheets and document management software to estimate profitability and forecast revenue. This is the crux of the challenge-it requires state-of-the-art tools. The CRO must continually fine-tune their profitability model to ensure this does not happen in future studies. For example, if the CRO estimates it will take two hours of clinical research associate (CRA) time to deliver a unit, but it ends up taking three hours instead, then profit quickly evaporates. The challenge is to precisely budget the time of professionals working to deliver those units. This means that the sponsor pays a fixed amount for each unit, regardless of the effort to deliver the unit. The problem is complex because sponsors typically pay CROs for deliverables on what is known as a “unitized” basis. To gain insight into the profitability problem let's look at how CROs and sponsors interact, and how difficult it can be to measure study profitability-and even more difficult to forecast. While top line revenue growth is good, growth of profitability is important to attract and retain top talent. This trend is expected to increase to 15%, according to industry reports.īut despite rapid growth, many CROs are seeing dramatic declines in profitability-up to 50% by some estimates. The pharmaceutical industry continues to outsource more clinical trials to contract research organizations (CROs) each year-resulting in CRO growth of over 10% annually in the last five years.
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