Effects of Legislation on HR Outsourcing The stated goal of the Patient Protection and Affordable Care Act (PPACA) is to give more Americans ac

Finding the ideal partner Kwicien, Jack . Employee Benefit Adviser ; New York  Vol. 10, Iss. 2,  (Feb 2012): 44.

ProQuest document link

ABSTRACT For example, if your business currently offers group benefits and you see that your firm is currently passing up a

huge opportunity by not offering voluntary benefits, perhaps partnering with a firm that specializes in these

product lines would make sense. The alliance partner presumably has: domain expertise; carrier relationships;

technological capabilities; and sales channel partners, for example. And the alliance partner candidate in turn may

be looking to affiliate with a larger firm that has: benefits plan design expertise; access to different carrier

relationships; and a large number of group benefits clients who are undoubtedly making plan changes that create

benefits gaps which could be satisfied by voluntary benefits offerings. Clearly these two businesses would be

synergistic, and could greatly benefit from each other's expertise and relationships. That would also be true of

businesses such as a property and casualty broker, a retirement planning firm, a human resource consulting

practice, or even a small payroll company.

Don't be afraid to "think outside the box" when it comes to considering potential alliance candidates. Today's

competitor or administrator or vendor may be tomorrow's ideal strategic partner depending upon what you are

trying to accomplish. Think broadly and strategically about what will benefit your clients and customers most in

the future. Don't focus on the way you conduct business today. Think about how you want to be conducting

business two or five years from now and the roadmap that will get you there.

As we talk with benefits advisers all over the country, the forward thinking, select few are looking at their existing

customer base, capabilities, and their own business models and are contemplating methods to adapt their

practices. They are evaluating their client value proposition in light of today's market realities and emphasizing the

expertise and capabilities that they possess and that will be relevant today and several years from now. I think

there is real value to this kind of self-examination. If you do not think your firm can be objective in evaluating its

capabilities, contact us and we will assist you. An ideal alliance partner candidate would possess some or all of the

following characteristics: FULL TEXT Many of us are growing tired of the colder weather just as we grow weary of the grind of health care reform

updates and downdrafts. And all of us are ready for the economy to improve in a meaningful and sustained

manner. In some respects it is our winter of discontent. Not to mix literary references, but it is the best of times

and it is the worst of times. Which will it be for you? That depends on whether your glass is half empty or half full.

And it depends on whether you have a plan to succeed.

Last month we discussed business planning and the need for a succession plan. That seems to have resonated

with a number of you given that so many readers are grappling with how to morph their business model while

growing their revenues. We provided the rationale for having a written business plan and explained that it is both a

strategic and tactical exercise that serves a multitude of purposes. We provided an outline of the potential content,

and we discussed succession planning.

This month, we want to address strategic alliances as one aspect of business planning, expanding your

capabilities, and adapting to the market conditions. In an ideal world, a strategic alliance will permit you to

enhance your value proposition and your client offering without having to build or buy the resources, skills and

capabilities. And ultimately, your alliance partner might be a great merger candidate at some point in the future.

Consequently, developing an alliance might be your personal succession plan or even your exit strategy. So

selecting the right alliance partner requires focused consideration of the attributes of the ideal partnering

relationship. The strengths and opportunity areas of your business will determine who the ideal candidate will be.

Evaluating potential candidates is about finding business partners that have complementary practices. This way

both businesses benefit from not having to spend time or money on building a new entity.

Self assessment

As we talk with benefits advisers all over the country, the forward thinking, select few are looking at their existing

customer base, capabilities, and their own business models and are contemplating methods to adapt their

practices. They are evaluating their client value proposition in light of today's market realities and emphasizing the

expertise and capabilities that they possess and that will be relevant today and several years from now. I think

there is real value to this kind of self-examination. If you do not think your firm can be objective in evaluating its

capabilities, contact us and we will assist you. An ideal alliance partner candidate would possess some or all of the

following characteristics:

* Complementary domain expertise

* Synergistic products or services

* Carrier relationships (preferably not of the duplicative variety)

* Compatible technological capabilities

* New sales channels or markets

* Compatible management style, business model, structure and corporate culture

* Shared vision for the future of both of the businesses involved

Invariably the best place to start is with an honest assessment of the strengths and weaknesses of your business

today. Only you are likely to really know where the gaps in your firm's capabilities exist and how to bridge those

gaps. And be honest with yourself. Treat it as though your life depended upon it, because in many respects, your

financial livelihood does.

The ideal partner

Depending upon the nature of the strengths and deficiencies of your business will largely determine who the ideal

alliance partner candidate will be for your specific business practice. So the evaluation of potential merger

candidates is largely about finding business partners that have complementary or synergistic business practices,

wherein both businesses benefit from not having to build a new practice with all the attendant time and expense

associated with the creation of a new business entity.

For example, if your business currently offers group benefits and you see that your firm is currently passing up a

huge opportunity by not offering voluntary benefits, perhaps partnering with a firm that specializes in these

product lines would make sense. The alliance partner presumably has: domain expertise; carrier relationships;

technological capabilities; and sales channel partners, for example. And the alliance partner candidate in turn may

be looking to affiliate with a larger firm that has: benefits plan design expertise; access to different carrier

relationships; and a large number of group benefits clients who are undoubtedly making plan changes that create

benefits gaps which could be satisfied by voluntary benefits offerings. Clearly these two businesses would be

synergistic, and could greatly benefit from each other's expertise and relationships. That would also be true of

businesses such as a property and casualty broker, a retirement planning firm, a human resource consulting

practice, or even a small payroll company.

The state of ultimate compatibility may not be achievable in all cases, but the parties should strive to come as

close as possible to approaching the business and the strategic alliance with a single and like-minded purpose.

After all, you may all be working together for another 10-15 years and you are certainly linking your financial

fortunes together in a nearly inextricable manner. You may as well be comfortable with each other and enjoy

working together while presumably making yourselves wealthier. Clearly you would not ally yourself with another

firm unless you were convinced that the financial rewards were significantly greater than going it alone. But on the

other hand, there is no reason to pursue greater wealth if you will be miserable in the process. This comes under

the heading of 'life is too short.'

Value proposition

Here are some of the key strategic benefits that can result from a strategic alliance:

* Strengthen the management team

* Acquire new skills and expertise

* Broaden the product set

* Increase the top-line revenue potential and accelerate growth

* Achieve operational efficiencies

* Improve profitability

* Qualification for more lucrative carrier contracts and contingencies

* Enhance technology capabilities

* Perpetuate one or both businesses

* Provide an exit strategy

All these are valid reasons to consider a strategic alliance. Which applies to your business? Is there more than one

reason that applies to your circumstances?

Don't be afraid to "think outside the box" when it comes to considering potential alliance candidates. Today's

competitor or administrator or vendor may be tomorrow's ideal strategic partner depending upon what you are

trying to accomplish. Think broadly and strategically about what will benefit your clients and customers most in

the future. Don't focus on the way you conduct business today. Think about how you want to be conducting

business two or five years from now and the roadmap that will get you there.

Yesterday's message will not resonate amidst today's clamor about reform and change. You need to position

yourself as a change "agent" – a change management expert that provides prudent guidance during periods of

uncertainty. That has to be part of your value proposition in today's environment. Otherwise, can you honestly say

that your clients consider you their trusted adviser? If not, they may just find another organization that engenders

that kind of trust. If change is coming anyway, maybe now is a good time to reinvent yourself.

I know that our industry has been a cauldron of change over the last 35 years, and Darwinian logic still applies: the

strong and the prepared will survive. As for the rest, well we have a fairly good idea what will happen to the rest. If

you are an antelope, you don't have to be faster than the lion. You just need to be faster than the slowest antelopes

in your herd. Would you rather adapt or become extinct?

Consider forming a strategic alliance as a method for adapting your business to the new market realities.

Reach Kwicien of Daymark Advisors at [email protected]

Credit: By Jack Kwicien DETAILS

Subject: Business plans; Succession planning; Corporate planning; Business models; Health

care policy; Candidates; Alliances

Business indexing term: Subject: Business plans Succession planning Corporate planning Business models

Publication title: Employee Benefit Adviser; New York

Volume: 10

Issue: 2

First page: 44

LINKS Linking Service

Database copyright  2022 ProQuest LLC. All rights reserved. Terms and Conditions Contact ProQuest

Publication year: 2012

Publication date: Feb 2012

Section: YourBusiness

Publisher: SourceMedia

Place of publication: New York

Country of publication: United States, New York

Publication subject: Business And Economics–Management

ISSN: 1545-3839

Source type: Trade Journal

Language of publication: English

Document type: News

ProQuest document ID: 922256598

Document URL: https://www.proquest.com/trade-journals/finding-ideal-

partner/docview/922256598/se-2?accountid=14872

Copyright: (Copyright c 2009 SourceMedia, Inc. All Rights Reserved.)

Last updated: 2021-09-13

Database: ProQuest One Academic

18 BioPharm International www.biopharminternational.com September 2010

Perspectives on Outsourcing

D o

n F

a rr

a ll /G

e tt

y I

m a

g e

s

A fter your R&D team has had a “Eureka!”

moment, the first order of business is

to engage in process development and

production of the product for clinical supply.

Perhaps that moment came a few years ago and

now you need to ensure that you can supply

enough product to meet commercial demand.

Do you choose to build or retrofit your own

manufacturing plant or do you buy via out-

sourcing to a contract manufacturing organiza-

tion (CMO)? This complex decision shouldn’t

be made lightly because it could affect nearly

everything about your business, including your

company’s financial situation, intellectual prop-

erty position, and business and product goals.

THE CURRENT MARKET In 2009, many small- to medium-sized bio-

pharmaceutical companies struggled to raise

funds for their product development and man-

ufacturing projects, while large, financially

stable companies reigned in spending and

reassessed their pipelines. The building of new

manufacturing facilities decreased, possibly

reflecting changes in business philosophies as

well as a reduced ability by the pharmaceutical

and biotech companies to prog-

ress with construction.1,2 At the

same time, the global CMO market

declined to approximately $2.6 bil-

lion, a reduction from years past.3

In general, CMOs saw a drop in

requests for proposal, more sensi-

tivity to pricing from potential cli-

ents, and there was (and continues

to be) increased level of competi-

tiveness amongst CMOs. At least

one CMO closed its doors (QSV

Biolog ics). Mergers and acquisi-

tions also changed the landscape

of the CMO business, as CMOs of

all sizes and capabilities were integrated into

larger pharmaceutical or biotech companies

( Watson Pha r maceut ica ls/E den Biodesig n;

Merck/Avecia; Recipharm/Cobra).

Today, the business environment seems to

be on the rebound: interest in pipelines includ-

ing biologics remains strong, and for compa-

nies considering outsourcing, CMO capacity

is broadly available (though, perhaps because

of the acquisitions of 2009, capacity may not

remain readily available). Process economics

continue to improve through leaps in produc-

tivity and the acceptance of new production

technologies. There is a wider array of product

types requiring cGMP manufacture, includ-

ing the emergence of biosimilars as originator

product patents expire. But the industry has

learned some valuable lessons as a result of the

tumult of 2009. Companies remain cautious

when evaluating requirements for risk shar-

ing, product quality compliance, and business

partner compatibility. Cost-containment is still

paramount and everyone is looking to manage

their project budgets efficiently.

HOW TO DECIDE When deciding whether to build your own

capacity or buy it from a CMO, prioritization

of what is most important to you as a com-

pany should be key. Although your available

budget and the return on investment must be

considered, your choice shouldn’t be made on

potential costs alone. Several factors should be

weighed before you make your choice:

• Risk tolerance: Are you willing to put some

(or all) of the responsibilit y for product

development and manufacturing into the

hands of a trusted partner?

• People/exper tise/core competencies: Can

you assemble a team to execute various proj-

ect tasks, or do you require support from an

Build Versus Buy in the Current Biotech Market Environment Factors such as production scale and intellectual property must be considered when deciding whether to build your own capacity or buy it from a CMO

Maria Lusk is a director of client management at Eden Biodesign, a part

of the Watson Group, Liverpool, UK,

919.806.4234,

[email protected]

20 BioPharm International www.biopharminternational.com September 2010

Perspectives on Outsourcing

external source for things like

basic process development and

manufacturing, or for specialized

activities like fill-and-finish?

• Manufacturing scale and pro-

duction forecast: How much of

your product will you need to

complete your clinical trials or

to support commercial demand?

Will your company have avail-

able capacity at the proper pro-

duction scale to meet your needs?

• Technology: What technologies

will be required to manufacture,

test, and finish your product?

Do you already have the appro-

priate science and equipment in

place? Do you have the budget

and time to obtain the required

technology, or is partnering with

a CMO the best option?

• Ti mel i ne s: Is t here pressu re

from investors or the market to

achieve a clinical or commercial

milestone by a particular date?

How will the required project

tasks fit with the expected time-

line? Will building or retrofitting

a facility fit with the timeline, or

do you need to use a CMO to

achieve your milestones?

• Geography/cultures/currencies/

com mu n icat ion: Does closer

necessar ily mean better? A re

currency exchange rates critical

to your project budget? Are you

prepared to communicate across

various time zones and possibly

cultural influences?

• Regulatory affairs (RA)/clinical

sites: What is your target market

and will you need to include

severa l locat ions a rou nd t he

globe in your plan to submit a

regulatory filing? Do you need

to have your own facility and

R A staff in the same location

as the clinical sites? Is there a

CMO out there that can fully

support your regulatory plans?

• Intellectual proper ty/control:

Does you r compa ny w ish to

control its IP completely, or are

you willing to share your know-

how with a trusted CMO part-

ner? Will you grant a license to

a business partner who will take

your product through to com-

mercialization, or do you prefer

to maintain control, including

manufacturing, throughout the

product’s lifecycle?

• Number of products and their

development/clinical phase: You

should plan for success, but the

“what ifs” of failure also need

to be considered. Do you have

one or two products in the early

phase of development, or is your

por t folio well balanced w it h

products in all stages of clinical

development and clinical trials?

It does not make sense to build

a new facility if your pipeline

cannot support it.

GREENFIELD OR RETROFIT? If you have the option to build a

facility from scratch (“greenfield”)

or to retrofit an existing space, you

must carefully scrutinize what is

available to support the production

of your product. A greenfield facil-

ity will be fit for purpose from the

beginning, but various challenges

may arise for a company that cho-

ses to build, including keeping to

the construction budget and time-

line; employing people with the

proper background to ensure that

the facility is fit for purpose; and

training staff to install, validate,

and operate equipment. On the

other hand, it may be more dif-

ficult to retrofit an existing space

because the existing space must

be able to accommodate the new

equipment while perhaps main-

taining (and re-validating) some

of the legacy infrastructure (e.g.,

clean-in-place and steam-in-place

skids, utilities, tanks, water supply).

Any compromises in facility design

will need to be weighed against

planned production and regulatory

requirements.

If you do decide to build, consider

that there are several manufacturing

technologies to choose from:

• Disposable, single-use, or limited-

use manufacturing equipment:

Some of the benefits of these

components and systems include

a low initial capital outlay, fast

installation, and reduced routine

operating costs, because these can

reduce or eliminate the require-

ment for cleaning or cleaning

validation. Although the use of a

completely disposable production

train is not common, biotechnol-

ogy companies are beginning to

investigate this as an option.4 For

particular types of products such

as viral vaccines, disposables are

indispensable.

• St a i n le ss – steel systems on ly:

Stainless-steel systems are proven

for manufacturing products reli-

ably and reproducibly; the tech-

nology is common, so process

transfer between manufactur-

ing sites (internal and external)

is relat ively st ra ight for wa rd,

and these systems can support

various types of products. But

consideration should be given

to budget and timeline require-

ments for installation because

they tend to be expensive and

time-consuming to order, install,

and validate. Cleaning will be

a continuous challenge for the

lifetime of the system.

Before making the decision to buy, get to

know your potential CMO partner. Ask questions

and be prepared to answer some, too.

September 2010 www.biopharminternational.com BioPharm International 21

Perspectives on Outsourcing

• Hybrid systems consisting of dis-

posable and stainless-steel com-

ponents: This option seems to be

the most popular for manufac-

turing biopharmaceutical prod-

ucts.4 Systems can be designed

to meet your facility and prod-

uct requirements, using a “best

of both worlds” approach.

Before mak ing your decision

to build or retrofit, consider that

regardless of the equipment you

choose to install, maintenance

and mater ials supply w ill be a

continuous endeavor. Planning

for time and costs to operate and

maintain these systems should be

included in your overall product

lifecycle design.

ARE CMOS THE ANSWER? An alternative to building or ret-

rofitting a facilit y is to partner

with a CMO. Indeed, innovator

companies have started looking

at the strategic benefits of engag-

ing CMOs to support their prod-

ucts throughout their lifecycle:

in general, it is likely t hat t he

CMO’s facilit y and qualit y sys-

te m s a l r e ad y me e t r eg u l ator y

requirements, including interna-

tional regulations; an innovator

company c

Collepals.com Plagiarism Free Papers

Are you looking for custom essay writing service or even dissertation writing services? Just request for our write my paper service, and we'll match you with the best essay writer in your subject! With an exceptional team of professional academic experts in a wide range of subjects, we can guarantee you an unrivaled quality of custom-written papers.

Get ZERO PLAGIARISM, HUMAN WRITTEN ESSAYS

Why Hire Collepals.com writers to do your paper?

Quality- We are experienced and have access to ample research materials.

We write plagiarism Free Content

Confidential- We never share or sell your personal information to third parties.

Support-Chat with us today! We are always waiting to answer all your questions.