Competitive success for a Contract Research Organization (CRO) entails unlimited process
improvement to sustain excellence.
Chapter One describes the generic business environment CROs operated in which customers
dictate the pace of competition through asking for higher standards of quality, speedy
delivery, reliability, and lower prices, as markets are becoming increasingly saturated.
Opportunities for market growth and maintaining market share, are testing experiences for all
CROs. This imposes the tenets of theories and models on CROs so as to understand the
critical factors that have a statistically significant effect on their bottom-line figures. CROs
need to take note of causal factors drivin g time and costs, even at the height of their success.
Therefore, Chapters Two and Three present informative writings on the tenets of best-practices
and activity-based management, because best-in-class principles must be reviewed
to contemplate which risks to take; which new ideas to implement; which critical factors will
drive success, and which will challenge the myths distinctive to the contract research
environment.
Informative writings, documented as background information, were used to evaluate the
results presented in Chapter Five. During the construction of a model for a CRO in the final
Chapter, an attempt is made to explain phenomena experienced in everyday life and to discern
aspects necessary to sustain competitive success in contract research. For the purpose of this research a model is defined as a set of statements that make explanatory or causal claims
about reality, statements that aim to represent everyday phenomena as accurately as possible,
and simplify our understanding of the CRO business environment. This research is aimed at
developing a management model to explain the particular phenomena applicable to a
pharmaceutical CRO and can be classified as an empirical study, analyzing existing primary
and numerical data, gathered from a case study.
Although management models are well described in literature, this research adds value to an
aspect still to be researched, i.e. a management model comprising the most applicable best-practices
for a pharmaceutical CRO. Because throughput time is of utmost importance in
clinical drug research programs and because time consequently generates costs, an activity-based
methodology is considered the best-in-class information tool to gather the necessary
data for the calculation of time and cost factors for a CRO.
The results presented in Chapter Five, analyzed with a statistical linear regression model
using univariate and multivariate analyses to discern which variables have a statistically
relevant effect on time and cost factors, were used to formulate the management model in
Chapter Six. The productivity model presented shows that if the productivity of the
operational divisions imitates the output of the most productive division, the profit can almost
be doubled, or conversely, the same profit can be maintained but, with a reduction in the
number of full time employees.
This holds win-win benefits for the company and the customer, especially if cost can be used
as leverage in a competitive market. Pricing is a complex instrument because of the two-sided
conflict and competitive nature of the buyer -seller relationship where the oneâs gains
are the otherâs loss. The researcher evaluated time, costs and pricing to make pricing a win-win
element through which improved throughput efficacy can provide greater customer value
and higher profits to the shareholder.
Secrecy agreements are signed between CROs and sponsoring companies and therefore
project information is the intellectual property of the sponsoring company. This limiting
factor inevitably made a case study approach for this research project a necessity. Research information should preferably have been included from different CROs worldwide, and a case
study approach may be regarded as not meeting minimal design requirements for comparison.
However, a single, well-designed case study can provide a major challenge to informative
writings and theory. It can provide new insight into traditional concepts and figments of the
imagination, and identify statistically significant cost drivers to sustain the knowledge base to
make recommendations on the optimization of resource utilization. As CROs enter foreign
markets, global harmonization of clinical trial standards serve to provide uniformity in
processes in trial execution. Guidelines reach beyond the sponsoring country to regulate
quality and ensure uniformity of trials globally. Thus, the results obtained from FARMOVS-PAREXEL
case studies can be extrapolated to other CROs and the model formulated, as a
result of global uniformity enforced by regulations universally applicable to CROs.
The project was important because in the quest for developing new drugs, CROs compete
inter alia as providers of choice on timelines and price. The interpretation of the results
emphasized that factors traditionally perceived as cost drivers, may not have statistically
significant effect on time or cost factors. The synergy between techniques applied from the
theoretical fields of accounting and project management, i.e. to quantify and optimize
resource ut ilization, provided the information to formulate a unique management model for a
CRO. The lack of outcome based research results, from a management perspective, on
resource consumption during the execution of bioavailability studies, emphasizes the
importance of this research project.
The research results indisputably prove that concepts and traditions need to be tested with a
statistical linear regression and productivity model as the core logic of a management model
for a CRO. The results conclusively indicate that a management model with a customer focus
for a pharmaceutical CRO is a necessity to align financial performance measures, which are
pivotal in the alliance with the customer and shareholder.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:ufs/oai:etd.uovs.ac.za:etd-05162005-163927 |
| Date | 16 May 2005 |
| Creators | Jacobs, Yvonne Leonie |
| Contributors | Prof. J.A.A. Lazenby |
| Publisher | University of the Free State |
| Source Sets | South African National ETD Portal |
| Language | en-uk |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.uovs.ac.za//theses/available/etd-05162005-163927/restricted/ |
| Rights | unrestricted, I hereby certify that, if appropriate, I have obtained and attached hereto a written permission statement from the owner(s) of each third party copyrighted matter to be included in my thesis, dissertation, or project report, allowing distribution as specified below. I certify that the version I submitted is the same as that approved by my advisory committee. I hereby grant to University Free State or its agents the non-exclusive license to archive and make accessible, under the conditions specified below, my thesis, dissertation, or project report in whole or in part in all forms of media, now or hereafter known. I retain all other ownership rights to the copyright of the thesis, dissertation or project report. I also retain the right to use in future works (such as articles or books) all or part of this thesis, dissertation, or project report. |
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