R&D competitive intelligence

pharmafile | October 17, 2003 | Feature | Research and Development |  competitive intelligence 

There's surely no doubt that today's pharmaceutical and biotech industry is facing perhaps the most severely challenging business environment that it has ever experienced. While the productivity promise of genomics and proteomics seem some way off, business pressures continue to mount – public hostility to drug pricing, increased regulatory scrutiny, looming patent expiries, parallel trade and continuing industry consolidation. At the same time, many therapeutic areas are saturated, reducing the likelihood of achieving blockbuster potential, and even the largest of companies are suffering a drought in their pipelines that for many will signal depressed revenues and shareholder returns for at least the foreseeable future.

Understandably, faced which such an uncertain future, R&D executives are responding in a number of ways. Outside of the near industry-wide budget cuts, many are reorganising their businesses and simultaneously streamlining processes in an attempt to speed promising products to market. Meanwhile, many continue to invest heavily in new technologies, alliances and partnerships in the hope of an early pay-off or to fill gaps in the pipeline. Others have charted a course of acquisitions in the hope that sheer scale will provide an unbeatable advantage in both R&D productivity and sales and marketing dominance.

It should come as no surprise then, that with the industry in a hyper-competitive state, the most savvy organisations are seeking to improve the contribution that CTI can make to reduced risk and better, more timely decisions in R&D. Companies without an effective CTI function need to build one quickly, and those with existing groups need to ensure that they are delivering maximum value to the R&D organisation under the current conditions.

What exactly is CTI?

CTI is part of a triumvirate of complimentary functions under the broad umbrella of competitive intelligence. Competitive intelligence in general is often defined as "the ethical and systematic collection and analysis of competitors' activities and scientific, technical, business and market trends to further a company's goals". CTI focuses specifically on the kinds of intelligence that are required to formulate strategy, and plan and make decisions in the areas of basic research, discovery, pre-clinical and clinical development and during the regulatory process.

Clearly, any successful R&D organisation must be competent in all three competitive intelligence domains, but while many companies have well-developed and sophisticated marketing and business intelligence capabilities the same cannot often be said of CTI, and in many cases there is often confusion between CTI and business intelligence or marketing intelligence.

Who needs CTI and why?

As an integral part of any high-performance R&D process, everyone in the R&D organisation requires, and should therefore expect, high-quality CTI information.

Individual scientists and clinicians need good CTI in order to help them do their daily work in planning or conducting R&D activities. Project managers need to be able to direct the work of large, complex and expensive discovery and development teams in a manner that best counters or beats the competitions work. They also need to understand how to change direction when new competitive developments take place. Senior management need CTI to understand long-term trends in science and technology, understand what the competition is up to, and plan their R&D strategy accordingly. Governance bodies need CTI to help make the right go/no-go decisions at major stage gates. Key business functions need specialised help too. Business development needs it for the purposes of understanding competitive investments and deal-making, and spotting new alliance opportunities. Licensing needs CTI to understand in and out-license activity and make the best strategic moves accordingly.

Often the best intelligence comes from within, through sources such as scientific meetings, advisory boards, conferences and recruitment interviews. An effective CTI group is therefore also essential to managing the inflow of primary intelligence information from their own colleagues – analysing and re-distributing it within the company.

Clearly, any CTI function must serve a large, diverse and often very demanding client-base in a coherent and co-ordinated manner if it is to be successful in delivering value to the organisation. Often, however, CTI capability and proficiency tends to be spotty throughout the organisation. Intelligence information is usually not well shared between either individuals or functions, and there is often a high degree of duplication as each function develops its own information sources and intelligence products for its own purposes. Given the intense focus on reducing costs in today's environment, this is clearly an area where companies cannot afford such duplication.

Where you are now and where you want to go

In developing a new CTI organisation, or in examining an existing one, a capability maturity model makes an insightful tool for characterising the current function, identifying performance gaps, factoring-in best practices and determining how to chart a course for improvements and continued development.

Broadly, many CTI organisations develop through a number of distinct stages of evolution, from embryonic, where CTI is more an informal 'library services' type of operation carried out by non-professionals, to 'advanced', where CTI is fully integrated into the R&D process. In this instance, professionally-trained staff actively support individuals, project teams and management with a full suite of tailored technical intelligence products and services.

In the case where there is no existing CTI function and a new one is being formed, companies usually choose the developed or advanced models or sometimes a hybrid  where project-oriented CTI services are delivered on a local basis through a loosely connected network of searchers and analysts, and where higher-order services are delivered by a strategic analysis group serving senior management, portfolio planning and governance bodies.

Where and how to improve CTI?

Those engaged in developing new or improved CTI capabilities should take note of a number of clear characteristics that are seen repeatedly in high-performing CTI groups that deliver maximum value to their respective R&D organisations.

They use active intelligence planning as the initial step in a cyclical intelligence process that promotes performance measurement and allows value to be determined.

The most effective CTI groups have at their heart a core 'intelligence cycle', which closes the loop on the traditional 'collect, analyse, disseminate' model of competitive intelligence. The initial step requires intelligence planning: the act of proactively engaging with customers to determine their key intelligence needs, how best to meet them and in what form and time frame. This step then drives the subsequent activities of intelligence gathering, analysis and dissemination. If planning is done carefully and consistently, CTI professionals are able to complete the cycle and measure success by asking their customers how well they delivered against the defined intelligence needs using both qualitative and quantitative metrics.

CTI groups using this process seldom struggle to answer the question: 'Are we improving the value that we add?'

They are appropriately organised to serve their diverse customer base.

Advanced CTI groups have adapted their own organisations to most effectively meet the needs of their customers. Discovery, early and late-stage development teams tend to be serviced by therapeutically aligned groups of specialists who are intimate with the science at play, competitor strategy and pipelines, and their strengths and weaknesses. They are usually accomplished in chemical and biomedical patent analysis, and know how to quickly deliver a competitive landscape that can help direct a team and reduce the risks inherent in the decisions they make.

Portfolio planning, governance bodies and senior management tend to be served by more analytical, forward looking business strategists who can quickly combine many of the CTI elements to serve the broader and longer-range needs of their customers.

They serve their customers with a balanced portfolio of products.

Naturally, with such a diverse customer base, CTI groups must offer products and services tailored not only to the different zonal responsibilities (discovery, development, pre-clinical, clinical or regulatory) of their customers, but to their operational responsibilities too. As a result, the needs of senior managers interested in long-range competitive analysis and 'what if?' scenarios will demand analytical reports generated from a wide selection of secondary sources, whereas individual scientists and project teams needing early-warning intelligence receive weekly alerts gathered from primary sources or targeted intelligence reports with deep drills into narrowly-defined areas.

They grow intelligence professionals.

Although often taken from research, development or MBA stock, CTI professionals are developed purposefully. They know when to lead, they contribute greatly to effective R&D teamwork, and they are as comfortable at a Wall Street analyst meeting as at a discovery target team meeting. They are often deep analysts and strategic thinkers. It is an uncommon mix of skills that many companies struggle to develop unless they have a well-defined, competence-based career development structure tuned to the particular needs of CTI.

They have equal command of both primary and secondary intelligence sources.

Many under-developed or poorly performing CTI groups tend to focus heavily on delivering intelligence from secondary sources. To really add value to the work of their R&D colleagues, CTI professionals have to be skilled at generating intelligence from primary sources too.

Primary sources often provide intelligence that is unavailable elsewhere and provide the first sign of competitive activity – they can therefore be vitally important in assessing early trends and or validating patterns in competitive behaviour. As an example, conference elicitation provides a great opportunity for CTI groups to maximise value in primary intelligence gathering. Most R&D companies spend considerable sums of money sending their staff to conferences. Advanced CTI groups will have their professionals working diligently behind the scenes of a large conference or scientific meeting to help make the most of the intelligence gathering opportunity. They will plan and co-ordinate intelligence needs before the event, orchestrate intelligence gathering during the event and deliver the analysis after the event.

Of course, particularly sophisticated groups will be engaging in counter-intelligence to thwart the efforts of their competitors!

They deliver CTI information efficiently and effectively through the use of appropriate new technologies.

As one might expect, a high-performing CTI organisation needs to support its operations and serve its customers with top-notch technology. The key is to employ the technology to support the most important parts of the intelligence cycle.

Although a critical human eye will continue to be essential to analysts, IT solutions including text, data and image mining, intelligent software agents, statistical modelling, on-line analytical processing (OLAP) and business intelligence tools help to quickly identify and validate trends, gaps, threats and opportunities while at the same time reducing the costs of gathering raw data.

When seeking to deliver intelligence to the point of decision, organisations typically opt for semi-targeted, 'push' communications, often in the form of e-mail or web pages. High-performance CTI groups replace this passive mode of communication with portal software that allows customers to personalise and quickly access the information they need, when they need it.

Finally, technology has an important role to play in facilitating the capture and measurement of the impact, return on investment and business value of CTI. The implementation of simple feedback mechanisms such as e-forms and automated monitoring enables the relevance of specific pieces of intelligence to be measured and products and services adjusted accordingly.

CTI: essential to survival

In today's highly competitive life science environment, effective CTI can and must be a strong, strategic tool in helping companies exploit new opportunities and gain first-mover advantage in addition to sensing and warding off threats before they become real problems. Under these conditions, pharmaceutical and biotech R&D companies will need to squeeze every last ounce of value and performance from every part of their organisation in order to remain viable. Those with the most effective competitive technical intelligence functions are likely to be around a lot longer than those without…