The Changing Pace of Decisions in Business
Over the last year, with a pandemic hitting most, if not all nations across the globe, there is a significant change taking place out of sight of most people. Board rooms and company leadership in most industries are now faced with having to make faster decisions than ever before. This change stems from the sheer volume of radical shifts in the economy, the social make-up of the country, a pandemic and a variety of natural disasters ranging from massive forest fires to hurricanes that batter many coastal areas.
One of the most timely examples of dealing with these changes can be found in the Pharmaceutical Industry. At the outset of the pandemic, there were almost 2000 drug trials taking place across the globe. These trials represent billions of dollars in investments made by the pharma companies and could potentially have positive health consequences to much of the planet’s population.
When the pandemic hit, most of these trials were significantly disrupted. It is difficult to test people if you cannot safely bring them into controlled clinical environments to be monitored and have treatments administered.
Most pharmaceutical companies were faced with having to make several critical assumptions to avoid losing their investments:
How long will the pandemic last? The longer it lasts, the more delays the drug trials will have and the less time the companies will have to monetize their patented treatments. In addition, the trials will have a delayed cost which overloads future budgets as new compounds enter development.
Do I push forward with my trials now or push the “pause button” and for how long? Pushing forward means that pharma companies have to increase their investment in patient recruitment and testing at a time of uncertainty and having treatment conflicts with the pandemic.
Should I shut down my drug trials? Shutting some of them down would allow the company to preserve its cash in what may be a significant economic downturn, yet it erodes portfolio value and prevents potentially efficacious medicines to reach patients in need.
…and so many others.
With new data about all of the disruptions being made available on a daily basis, the pharmaceutical industry must find a way to make ever faster decisions about how to adjust course.
One can pose similar questions to the airspace, automotive, communications and banking industries. Any industry making large scale investments in an environment with an uncertain outcome is vulnerable.
Spending weeks making critical decisions can negatively impact a company by many millions of dollars.
This leaves most industries having to answer yet another critical question. What tools are available to help me pivot quickly to an ever-changing environment? Almost all companies use excel as a gathering point for data and to implement simple forecasting models, but this tool is not designed to scale to the level needed. Products like Crystal Ball and @Risk are built as add-ons to Excel and are designed to extend the modeling capability but they remain limited by the short comings of Microsoft Excel.
These limitations include:
An inability to share data and forecasts between projects in real-time.
The inability to test different scenarios across the portfolio without having to go change each of the individual projects/assets
The static nature of Excel models forces modelers to manually adjust all down stream activities such as other trials and the market when delaying one trial
The ability to scale to millions of simulations to test assumptions about the projects and the market
An inability to trace project changes in a portfolio over time which is key to understanding the context with the ever-faster pace of change
What is needed is a tool that addresses these needs and adds several additional benefits in a fully integrated package. These include:
The ability for a company to efficiently evaluate “what-if” scenarios within a sandbox environment
Artificial intelligence to streamline how data makes it into the analysis of a project and/or portfolio
Interactive visualizations that enable the status and analysis of a project to be reported and most important, understood by those who have to make decisions.
Seamless real time sharing of data across individual projects and across an entire portfolio
By taking a fully integrated approach to optimizing a company’s assets and critical investments, companies can adapt to the constant changes of todays pandemic hindered environment. The company can leverage creativity by prototyping options and testing new assumptions in a safe environment. Ultimately, the company can stay on top of risk and optimize the value of its assets and thus gain competitive advantage.