The biotech and pharmaceutical industries are no stranger to risk - organizing clinical trials for medications that may never reach the open market due to inefficiency can place a significant financial burden on companies. When it comes to managing them, identifying procedures can be essential to avoiding or minimizing the financial impact of risks.
The Economist Intelligence Unit conducted a survey of senior management executives in the pharmaceuticals and life sciences industry regarding risk in their respective companies. The 65 responses were combined with those of an earlier survey of 353 executives in a wider range of other industries. It mainly focused on North America, with 65 percent of respondents hailing from the region, but also included international areas such as Europe, Asia-Pacific, Africa and Latin America.
Management is C-Level
According to its findings, the EIU reported that the ultimate responsibility of risk management was falling on CEOs, CFOs, CROs and general counsel. The survey found that the senior executives could be doing a better job of defining the company's interest in risk, ensuring that information gets to the appropriate people for assessment.
Most Time Spent on Compliance
Following controls and monitoring, compliance takes up most of their time with risk management. However, this leaves managers and executives with less freedom to watch for emerging threats that could create financial hardships. As a result, companies are failing to spread risk awareness throughout their organizations.
Mismatch Between Barriers, Risk Processes
The results showed that two-thirds of respondents had no intention of recruiting a chief risk officer, with less than one-third saying their organization has one on staff already. While breaking down the risk management silo may have been beneficial, the lack of awareness diminishes an organization's ability to understand new risks.
The Benefit of Third-Party Training
According to the U.S. Food and Drug Administration, quality systems are becoming integral to the pharmaceutical industry. In turn, risk management is a valuable component of an effective quality system.
The biotech and pharmaceutical industries can greatly benefit from outsourcing their risk management training to third-party experts. Merit Career Development offers courses specific in project risk management for the biotechnology and pharmaceutical industries. For more information, click here.
The EIU study underscores the advantages that extra training can bring to risk management in the pharmaceutical industry. With a healthy roster of subject matter experts, Merit can help executives not only manage current threads but also look ahead to potential emerging risks.
Why Using Just One Methodology Isn't Always the Answer
As projects become more sophisticated in nature and content, a host of project management methodologies have been developed to address the needs of managing these complex projects. From the early years of CPM/PERT to the current complex computer-based project management systems, we are still mired in a high percentage of failed projects. Twenty years ago, the failure rate of IT projects was 87%. Today, despite an increase in project management knowledge and methodologies, the failure rate has only dropped to 82% (Standish Group, 2009).
While project management tools and methodologies have improved vastly, the tools do not support the speed of business change. Ironically, this fast-paced and changing environment is driven by the hyperbolic increase in technology.
Despite the hundreds of project methodologies and tools available – and many home-grown methodologies developed by independent PM organizations (PMI®, IPMA, et al) – the success rate remains low. To combat this low success rate, we create even more specific and directed project management processes.
For example, on change control and requirements, for companies that adhere to and enforce a strict requirements and change control process, there has been no appreciable change in the success rate. New methodologies such as Agile serve to further complicate the landscape. All of these methodologies have proven successful in limited and controlled environments; however, when pressed into a general and expanded business world, we continue with this abysmal failure rate.
We don’t need another new methodology
We need a more adaptive approach whereby the project is planned and managed according to the project directives and the needs of the business. The Blended Project Plan approach allows project managers to adapt various project management techniques to different components of the project. We can “chunk” the project to “match” a suitable project management methodology.
For example, at a recent client site we had three distinct groups present during our introduction to Agile. One group thought that it might work but preferred their current process. The second group completely supported the approach, and the third group stated that not only would Agile not help them but neither would their current process. The first group was responsible for building the hardware, the second group developed the software, and the third was responsible for the contractual implementation of the system. So we developed a Blended Project Plan under one project manager where the hardware development was managed with a traditional waterfall approach, the software development used Agile, and the field deployment team used a contract-based methodology.
The Project Management Officer implements and enforces PM standards based on a well-intended corporate policy; however, the strict adherence to these standards often stifles the project with unneeded, distracting, and cumbersome practices that unintentionally do not provide added value to the project plan. Adapting various project methodologies to specific “chunks” of the project provides for more flexibility and added value.
A parody that can be used to help explain this is the old Risk Management adage of known/knowns, known/unknowns, and unknown/knowns. This can be expanded to:
- We know the requirements, and the approach to complete the task is known and standard.
- The requirements are known; however, the process is dependent on project constraints.
- The project requirements are not well-defined or fully understood, but once they are detailed we know how to implement
Broadly, this can be fitted to the standard project management process simplistically consisting of:
- Standard Waterfall - sequential processing of project tasks
- Compressed/Accelerated - overlapping of project tasks
- Agile - spiral development
The project components can be better managed with the Blended Project Plan approach. The chunking of the plan allows the application of different measurements and controls that are in tune with the development process. The process to develop software is not the same as the process to implement hardware; however, we try to manage them using the same process. A Blended Project Plan eliminates the “one size fits all” mentality when trying to manage projects. The standard waterfall methodology contributes to understanding the critical path and the overlapped tasks impact project costs. The use of a spiral development methodology helps to control user requirements.
The roles and responsibilities change for the PMO, the project manager, and the business partner; however, the Blended Project Plan provides a greater degree of flexibility to ensure the successful completion of the project.
Merit Career Development provides project management training to fit your needs. From the fundamentals to PMP exam preparation, we can help you improve your project management skills. Whether it’s self-paced online learning, instructor-led virtual or classroom training, or exciting simulations, Merit provides quality, innovative and interactive professional education.
Learn more about Merit's project management curriculum here.