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H E A LT H C A R E

Business Intelligence in the Pharmaceutical Market


Growth drivers, key organizational priorities, and vendor strategies for future growth

By Rashmi Mahajan

Rashmi Mahajan
Rashmi Mahajan is a freelance analyst based in Hyderabad, India. Previously she was a senior analyst at Business Insights and has six years of experience in business research and consulting. Rashmi holds a bachelors degree in Chemical Engineering from the Punjab Technical University and an MBA from ICFAI, Hyderabad.

Copyright 2010 Business Insights Ltd This Management Report is published by Business Insights Ltd. All rights reserved. Reproduction or redistribution of this Management Report in any form for any purpose is expressly prohibited without the prior consent of Business Insights Ltd. The views expressed in this Management Report are those of the publisher, not of Business Insights. Business Insights Ltd accepts no liability for the accuracy or completeness of the information, advice or comment contained in this Management Report nor for any actions taken in reliance thereon. While information, advice or comment is believed to be correct at the time of publication, no responsibility can be accepted by Business Insights Ltd for its completeness or accuracy.

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Table of Contents
Business Intelligence in the Pharmaceutical Market

Executive summary
The Business Intelligence market in the pharmaceutical sector Key processes in the pharmaceutical sector The uptake of Business Intelligence in the pharmaceutical sector The demand side of Business Intelligence in the pharmaceutical sector The Business Intelligence vendor landscape The future of the Business Intelligence market in the pharmaceutical sector

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10 10 11 12 12 13

Chapter 1
Introduction

Introduction

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16 17 17

Who is this report for? Research methodology

Chapter 2
Summary Introduction

The Business Intelligence market in the pharmaceutical sector

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20 21 21 22 24 25 25 26 26 26

Importance of BI in the pharmaceutical industry BI market in the pharmaceutical industry: size and growth Drivers for BI adoption in the pharmaceutical industry Enabling strategic decision making Enabling identification of latest sales forecasts and trends Increased outsourcing Attaining cost efficiency Challenges for implementing BI in the pharmaceutical industry

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Current BI trends in the pharmaceutical industry BI moving beyond operational excellence to technical areas Customized service offering by BI vendors

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Chapter 3
Summary Introduction

Key processes in the pharmaceutical sector

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Pharmaceutical processes Drug discovery Drug development Manufacturing and supply chain Sales and marketing

Chapter 4

The uptake of Business Intelligence in the pharmaceutical sector

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40 40 41 41 42 43 44 45 46 47 47 48 50

Summary Introduction Business Intelligence uptake Current BI usage Uptake by organization size Uptake by geographies Short-term BI drivers among current users Longer-term BI drivers among current users BI usage forecast BI usage forecast by components BI usage forecast by enterprise functions Planned increases in spending on Business Intelligence Plans to increase usage: case for persuasion

Chapter 5

The demand side of Business Intelligence in the pharmaceutical sector

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52 52

Summary Introduction

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Organizational priorities Cost reduction: which areas to target? Reducing SG&A costs Cost reduction priorities Business Intelligence users case studies GlaxoSmithKline management of the clinical trial process and enhancement of drug development Wyeth Pharma managing sales effectiveness

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Chapter 6
Summary Introduction

The Business Intelligence vendor landscape

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60 61 62 63 63 63 64 64 65 66 66 67 68 68 69 70 70 70 71 72 72 73 73 73 75 75 76 77 77 77 78 78 79 79

The mega vendors IBM Business Intelligence: Cognos, SPSS, ILOG, and IBM BAO Company overview Key offerings and verticals Pharmaceutical solutions and major customers Competitors Growth strategies Microsoft Business Intelligence Company overview Key offerings and verticals Pharmaceutical solutions and major customers Competitors Growth strategies Oracle Company overview Key offerings and verticals Pharmaceutical solutions and major customers Competitors Growth strategies SAP BusinessObjects Company overview Key offerings and verticals Pharmaceutical solutions and major customers Competitors Growth strategies Niche vendors Actuate Company overview Key offerings and verticals Pharmaceutical solutions and major customers Competitors Growth strategies

Information Builders Company overview Key offerings and verticals Pharmaceutical solutions and major customers Competitors Growth strategies MicroStrategy Company overview Key offerings and verticals Pharmaceutical solutions and major customers Competitors Growth strategies QlikTech Company overview Key offerings and verticals Pharmaceutical solution and major customers Competitors Growth strategies SAS Company overview Key offerings and verticals Pharmaceutical solutions and major customers Competitors Growth strategies TIBCO Spotfire Company overview Key offerings and verticals Pharmaceutical solutions and major customers Competitors Growth strategies

80 80 80 81 82 82 82 82 83 84 85 85 86 86 86 86 86 87 88 88 88 89 90 90 91 91 91 92 93 93

Chapter 7

The future of the Business Intelligence market in the pharmaceutical sector

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96 97 98 99 100 100 101 101

Summary Introduction Transition of the pharmaceutical sales and marketing model through predictive analytics Major vendors Shifting to in-memory analytics helps rapid information delivery to the sales force Major vendors Leveraging SaaS for data analytics Major vendors

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Open source paving its way into SMBs Major vendors

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Appendix
Glossary Index

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105 107

List of Figures
Figure 2.1: Figure 2.2: Figure 2.3: Figure 3.4: Figure 4.5: Figure 4.6: Figure 4.7: Figure 4.8: Figure 4.9: Figure 4.10: Figure 4.11: Figure 4.12: Figure 4.13: Figure 4.14: Figure 5.15: Figure 5.16: Figure 5.17: Figure 6.18: Figure 6.19: Figure 7.20: BI spending by big pharma in the US and Europe ($m), 20062012 Drivers and challenges for BI implementation in the pharmaceutical industry Current BI trends in the pharmaceutical industry Pharma-specific typical Business Intelligence solutions BI usage by organizations (% respondents, 2010) Current BI users by areas of operation (% respondents using BI, 2010) BI users by organization size (% respondents, 2010) BI users by geography (% respondents, 2010) Short-term factors most likely to drive BI uptake among current users Longer-term factors likely to drive BI uptake among current users (% respondents) Forecast of BI usage by components (% respondents) Forecast of BI usage by enterprise functions (% respondents) Current user plans to change spending on BI in 20102011 Case for persuasion: current BI user indecisiveness by enterprise functions Organizational priorities Is reduction of SG&A costs a high priority in 2010? Cost reduction priorities by enterprise function Business Intelligence vendor landscape Summary of the mega vendors Spectrum of Business Intelligence technologies 23 24 28 33 41 42 43 44 45 46 47 48 49 50 53 55 56 61 62 97

List of Tables
Table 3.1: Table 3.2: Table 3.3: Table 3.4: Table 6.5: Table 6.6: Table 6.7: Table 6.8: Drug discovery KPIs and BI solutions Drug development KPIs and BI solutions Manufacturing and supply chain KPIs and BI solutions Sales and marketing KPIs and BI solutions IBM Cognos Business Intelligence offerings IBM Cognos pharmaceutical solutions IBM major M&A deals, 20082010* Microsoft Business Intelligence offerings 34 35 36 37 63 65 66 67

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Table 6.9: Table 6.10: Table 6.11: Table 6.12: Table 6.13: Table 6.14: Table 6.15: Table 6.16: Table 6.17: Table 6.18: Table 6.19: Table 6.20: Table 6.21: Table 6.22: Table 6.23: Table 6.24: Table 6.25: Table 6.26: Table 6.27: Table 6.28: Table 6.29: Table 6.30:

Microsoft Business Intelligence pharmaceutical solutions Microsoft Business Intelligence major M&A deals, 20082010* Oracle Business Intelligence offerings Oracle pharmaceutical solutions Oracle major M&A deals, 200810* SAP BusinessObjects Business Intelligence offerings SAP BusinessObjects pharmaceutical solutions SAP BusinessObjects major M&A deals, 20082010* Actuate Business Intelligence offerings Actuate pharmaceutical solutions Actuate major M&A deal, 20082010* Information Builders Business Intelligence offerings Information Builders pharmaceutical solutions MicroStrategy Business Intelligence offerings MicroStrategy pharmaceutical solutions QlikTech pharmaceutical solutions SAS Business Intelligence offerings SAS pharmaceutical solutions SAS major M&A deals, 20082010* TIBCO Spotfire Business Intelligence offerings TIBCO Spotfire pharmaceutical solutions TIBCO Spotfire major M&A deal, 20082010*

68 70 71 71 73 74 75 77 78 79 80 81 81 83 84 87 88 89 91 92 92 94

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Executive summary

Executive summary
The Business Intelligence market in the pharmaceutical sector
The Business Intelligence (BI) market in the pharmaceutical industry was worth around $495 million in 2009, and is forecast to grow to $555m by 2012. Market growth will be driven by factors including the need to develop an effective and transparent information infrastructure, identify the latest sales forecasts and customer trends, attain cost efficiency, and increase outsourcing. The data-intensive nature of the pharmaceutical industry makes BI deployment more challenging than other industries. Data availability at different time periods, frequent changes in legislation, and growing consolidation in the pharmaceutical industry make the BI adoption process challenging. Besides achieving operational excellence, pharmaceutical companies are investing in BI implementation in technical areas, such as improving research and clinical performance, resource management, sales force tracking, and regulatory compliance reporting. Certain niche BI vendors, such as Partners and PureStream, serve as a re-packager of third party data sources (e.g. IMS, Wolters Kluwer, SDI Health, Brogan, etc.) in a customized format specifically to pharmaceutical companies.

Key processes in the pharmaceutical sector


BIs cross-functional data integration capability enables the various pharmaceutical processes to interact more effectively with each other resulting in overall corporate efficiency.
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In the drug discovery process, BI solutions help a pharmaceutical company maintain a database of all the molecules that have been developed and their characteristics, thus accelerating the drug discovery pipeline. In the drug development process, the application of BI consolidates clinical trial data into a single platform which enables the company to optimize resource allocation, predict the effects of diverse drug combinations and analyze risk during product development and launch. In the manufacturing and supply chain process, BI solutions monitor vast amounts of information to determine product demand, manage inventory, and meet regulatory compliance reporting and audits. In the sales and marketing process, BI solutions integrate finance (such as profit, cash-flow, and marketing cost) and sales information (such as samples, calls, and details) to generate sales force metrics to analyze sales performance. Besides these major four processes, BI is also being adopted by support processes such as finance.

The uptake of Business Intelligence in the pharmaceutical sector


Approximately 67% of the organizations surveyed by Business Insights currently use BI tools. Business Insights survey of the pharmaceutical sector found that 70% of larger organizations (i.e. more than 1,000 employees) surveyed used BI tools compared to 66% of smaller organizations (i.e. less than 1,000 employees). BI systems have widespread uptake in South America (82% of the respondents currently use BI) and Central and Eastern Europe (76%), which compare favorably with North America (68%) and Western Europe (74%).

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The leading short-term BI driver among the current users is clearly regulatory oversight, as indicated by 45% of current BI user respondents. Of current BI user respondents, 71% have indicated that launching new products and services in the existing markets is likely to influence their decision over whether to increasingly use BI tools and services in 20102011. Business Insights survey found that most of the pharmaceutical companies will largely use an operational reporting BI tool and invest significantly to strengthen their sales and marketing function through 2010 and 2011.

The demand side of Business Intelligence in the pharmaceutical sector


Business Insights survey found that reducing time to market and launching new products or services in the existing markets are the top respondents priorities, closely followed by taking advantage of opportunities in new geographic markets and reducing regulatory risk. Approximately 49% of respondents surveyed confirmed their intention to reduce SG&A costs in 20102011. There is overwhelming consensus among respondents regarding the need to reduce knowledge process services costs.

The Business Intelligence vendor landscape


The vendor landscape is heavily dominated by mega vendors: SAPBusinessObjects, IBM Cognos, Oracle Hyperion and Microsoft. IBM is restructuring its business mix towards emerging business segments such as BI and analytics through organic growth and acquisitions of vendors such as

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Cognos and SPSS. To compete with other mega vendors in the BI space, it is targeting mid-sized companies through launch of IBM Cognos Express. Microsoft is developing data analysis tools in Excel, improving collaboration experience, and targeting information workers across the organization. Oracle is expanding into the mid-market segment through launch of new capabilities: Oracle Accelerate solution and a new portal in 2009, and acquisition of Sun in 2010. SAP is shifting towards Software-as-a-Service (SaaS) BI, focused on large enterprise and upper mid-market business segments, and expanding its presence in the small- and mid-sized businesses (SMBs) sector through various launches. SAS is focused on more advanced niche technology solutions such as forecasting and predictive modeling. It is also expanding the reach of its analytic capabilities to non-SAS clients infrastructure through agreements with database management system vendors. Information Builders and MicroStrategy are focused on growing their presence in the mid-sized market segment, while TIBCO Spotfire, Actuate, and QlikTech are among the leading niche players focused on developing innovative products and services offerings. Emerging advanced analytics capability and industry/process-specific offerings will determine which vendors remain dominant in the future.

The future of the Business Intelligence market in the pharmaceutical sector


As the economy continues to recover, corporate-wide investments in advanced analytics BI technologies (predictive analytics, in-memory analytics, SaaS and open source) will increase during 20102012.

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Pharmaceutical companies are restructuring their sales and marketing operations through predictive analytics to determine the impact of promotional activities on sales in real-time in order to remain competitive. Major vendors for predictive analytics and data mining tools include SAS, IBM, KXEN, Oracle, Information Builders, TIBCO Spotfire, Angoss Software, and Netezza. Implementation of in-memory analytics to a pharmaceutical company provides rapid information delivery to the sales team and improves the average query response times as compared to traditional BI tools. IBM, QlikTech, and TIBCO Spotfire are established strong players in the in-memory technology space. During 20102012, the SaaS BI segment will continue to grow, driven by its advantages over on-premise BI offerings, such as cost effectiveness, shorter implementation cycles, user-managed self service and reduced burden on information technology (IT). SAP BusinessObjects, IBM Cognos, SAS, Birst, GoodData, Information Builders, Oco, Panorama Software, and PivotLink are major vendors that deliver BI as a service. Driven by its lower cost, the demand for open source BI products is increasing more compared to other conventional and SaaS BI tools, in particular, by SMBs. Jaspersoft, Pentaho, and Actuate are major open-source vendors that provide comprehensive BI platform capabilities comparable in many functional areas with those of mega vendors such as SAP BusinessObjects and IBM Cognos.

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CHAPTER 1

Introduction

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Chapter 1
Introduction

Introduction

The pharmaceutical industry is data intensive and challenged with information integration and mapping across the various processes. This information challenge, in addition to other industry issues such as developing new drugs, competition from the growing generic drug market and rising R&D and regulatory compliance costs, forces pharmaceutical companies to focus on technological advancements to stay competitive and profitable. Adoption of Business Intelligence (BI) tools and solutions enhances the cross functional integration between various processes within a pharmaceutical company by providing centralized information.

This report provides an overview of the BI market in the pharmaceutical sector, including its size and growth, followed by the current trends and adoption of BI tools across key pharmaceutical processes. It also gives an insight into the BI vendors, analyzing them based on their product offerings and growth strategies.

Besides the BI supply side, this report assesses the state of the BI market from the demand-side perspective. Demand-side analysis investigates the uptake of BI in the pharmaceutical sector, investments on current BI use and planned future use. This report also investigates how BI is transforming various enterprise service functions such as customer management, sales and marketing and supply chain management. The report provides insight into the activities, views, and strategies of the major BI players, and finally takes a look at the future possibilities for technological and market development in the BI space.

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Who is this report for?


This report is of interest to the following: BI users in the pharmaceutical sector; BI vendors who serve and intend to serve the pharmaceutical sector; BI service providers with domain expertise in the pharmaceutical sector; CIOs/CEOs of pharmaceutical companies assessing new or further investments in BI.

Research methodology
In the process of writing this report, Business Insights used a combined approach of primary and secondary market research to understand key drivers for the adoption of BI solutions by pharmaceutical companies and how these solutions address various challenges faced by these companies. In April 2010 Business Insights conducted a survey of pharmaceutical and life science companies operating in various processes and geographic regions, in order to gain an insight into the end-user perspective and attitudes towards BI.

Wherever the year 2010 has been mentioned, it signifies Q1 2010. For the section on acquisitions in the vendor landscape, the period from January 2008 to March 2010 has been considered.

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CHAPTER 2

The Business Intelligence market in the pharmaceutical sector

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Chapter 2

The Business Intelligence market in the pharmaceutical sector

Summary
The Business Intelligence (BI) market in the pharmaceutical industry was worth around $495 million in 2009, and is forecast to grow to $555m by 2012. Market growth will be driven by factors including the need to develop an effective and transparent information infrastructure, identify the latest sales forecasts and customer trends, attain cost efficiency, and increase outsourcing. The data-intensive nature of the pharmaceutical industry makes BI deployment more challenging than other industries. Data availability at different time periods, frequent changes in legislation, and growing consolidation in the pharmaceutical industry make the BI adoption process challenging. Besides achieving operational excellence, pharmaceutical companies are investing in BI implementation in technical areas, such as improving research and clinical performance, resource management, sales force tracking, and regulatory compliance reporting. Certain niche BI vendors, such as Partners and PureStream, serve as a repackager of third party data sources (e.g. IMS, Wolters Kluwer, SDI Health, Brogan, etc.) in a customized format specifically to pharmaceutical companies.

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Introduction
The pharmaceutical industry is challenged with information integration and mapping across the various processes. Drug manufacturers have access to both fee-for-service agreements (around 867 Data) and data delivery services such as IMS for sales and product performance information. The biggest challenge faced by these companies is to integrate this external data with their internal data sources into a common and consistent format for decision making. This information challenge, along with benefits such as resource allocation and cost efficiency, is driving BI deployment in the pharmaceutical industry.

This chapter analyzes the importance of BI in the pharmaceutical industry together with the market size and growth drivers. It also outlines the key challenges that make BI adoption difficult for the industry.

Importance of BI in the pharmaceutical industry


Weak product development pipelines and growing generics competition have increased concerns for pharmaceutical companies attempting to make up for revenue loss arising from the patent expiry of major blockbuster drugs. In addition, rising R&D and regulatory compliance costs are compelling pharmaceutical companies to look for alternatives to remain competitive, maintain profit margins, and enhance market share. The solution to most of these issues lies in a company's ability to extract knowledge from raw data in a structured format that helps translate this data into actionable information. Adoption of BI enhances the cross functional integration between various business processes within a company by providing centralized information. This enables the business processes to access more accurate and real-time information, with an ultimate goal of increased efficiency and reduced corporate costs. Key benefits for organizations adopting BI are:

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Improved data management; Improved sales performance; Breakdown of organizational silos to improve investment decisions; Reduced costs.

Traditionally, companies resorted to the following strategies to achieve the dual objective of cost reduction and revenue enhancement: Movement of information insensitive processes such as manufacturing, customer service and administrative activities to low cost locations; Spin-off or elimination of non-core activities; Consolidation of R&D centers; Acquisition of companies with robust drug development pipeline. Though these strategies have helped pharmaceutical companies in attaining the dual objectives, they usually entail additional investment in incremental improvements.

BI market in the pharmaceutical industry: size and growth


BI spending by large pharmaceutical companies in the US and Europe was approximately $495m in 2009 as compared with $359m in 2006 (Figure 2.1), and increased at a CAGR of 11.3% during 20062009. The pressure to sustain a competitive position and maintain profit margins is driving BI adoption in the pharmaceutical industry. Pharmaceutical companies are increasingly investing in BI solutions throughout the corporate enterprise, integrating internal data from R&D, sales and marketing, and finance with critical external data to enhance collaboration and real-time extraction of insights vital for improving strategic decision making processes.

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These factors will drive spending on BI adoption by large pharmaceutical companies in the US and Europe, which is expected to reach $555m in 2012.

Figure 2.1: BI spending by big pharma in the US and Europe ($m), 2006 2012
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500 BI spending ($m)

400

300

200 2006 2007 2008 2009 2010 2011 2012

Source: Business Insights

Business Insights Ltd

Figure 2.2 represents major drivers and challenges for BI implementation in the pharmaceutical industry.

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Figure 2.2: Drivers and challenges for BI implementation in the pharmaceutical industry

Source: Business Insights

Business Insights Ltd

Drivers for BI adoption in the pharmaceutical industry


Apart from establishing an effective and transparent information infrastructure, BI enables the management to make effective real-time decisions by accessing the latest sales forecasts and customer trends.

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Enabling strategic decision making Pharmaceutical companies accumulate large amounts of data during the course of R&D spanning from molecular research, clinical trials, regulatory approval, to post marketing activities. However, this data is not suitable for making strategic decisions and analysis due to the unstructured nature. To convert this enormous amount of raw data into a broadly accessible and usable format a common underlying architecture and end-user interface is required. With the amount of data continuing to grow, it is becoming increasingly difficult to integrate data from a variety of sources manually. As a result, major pharmaceutical companies are implementing BI solutions to extract realtime data, focused towards reduced time and increased effectiveness.

A shift towards a transparent information ecosystem and conversion of all company data into a common and consistent format can help in enhancing collaboration across the company to reach project milestones more efficiently.

Enabling identification of latest sales forecasts and trends In addition to providing timely access to internal data (clinical research and operational data), BI provides the senior management with insights into latest sales forecasts and customer trends. Most pharmaceutical companies depend on external sources (e.g. IMS) for critical patient-centric data such as drugs scans from pharmacies, longitudinal patient data, and weekly prescription reporting updates from information management organizations for gaining insights into latest industry trends. Companies require this data, especially when introducing new drugs, to understand patient and physician behavior. BI enables integration of this critical patient-centric data with their internal data sources to achieve strategic and operational objectives through real-time adjustments of resources. This ensures alignment of resources with promising and lucrative opportunities in the industry which expedites the process of drug development.

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Increased outsourcing Increased outsourcing in the pharmaceutical industry, driven by faster time-to-market for new products and entry into low cost emerging markets, requires BI to manage these functions with a series of specific information requirements. For instance, for outsourcing pre-clinical and clinical trials to contract research organizations (CROs), pharmaceutical companies need to take care of certain factors such as monitoring performance against milestones, resource allocation, cost tracking, and sharing clinical trial information in real-time with clinical researchers. Thus, adoption of BI enables pharmaceutical companies to manage data for outsourced functions into a single platform which ultimately improves the strategic decision making process.

Attaining cost efficiency Implementation of pricing control in the developed pharmaceuticals markets coupled with governments globally favoring generic consumption to curtail burgeoning healthcare costs has adversely affected the economic viability of the pharmaceutical companies. In a bid to sustain margins, companies are increasingly adopting effective cost management solutions. BI supports this initiative by enabling monitoring of clinical trial processes, speeding the time to market for new products, and managing supplier networks, among others. Thus, adoption of BI enables pharmaceutical companies to sustain a competitive advantage by making processes more cost efficient.

Challenges for implementing BI in the pharmaceutical industry


Companies need to develop a data warehouse that delivers BI capabilities to support business processes in the pharmaceutical industry. A data warehouse is a platform on which a company can integrate information from a variety of sources into a common and consistent format. However, the data-intensive nature of pharmaceutical industry makes BI deployment complex. Some of the key challenges in developing a data warehouse for the pharmaceutical industry are listed below:

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Most of the data sources are available at different time intervals. Internal data may be available real-time, while external data is accessible only at a fixed time period. Therefore, internal reporting needs may require a BI solution to accommodate different data sources with different time intervals; Different business units in the pharmaceutical company often analyze the same data in different ways, which makes the BI development process more challenging than for other industries; The pharmaceutical industry is highly dynamic with frequent changes in the legislation, resulting in data in a constant state of change. Therefore, a flexible BI solution is required so that such changes do not require major modifications to the process; With a variety of internal and external data sources and consolidation underway, it has become increasingly challenging to integrate data and analyze information across various pharmaceutical processes, particularly when the number of business units grows after merger.

Current BI trends in the pharmaceutical industry


Having been successfully adopted by other industries, e.g. information technology, manufacturing, telecommunications, government, and financial services, BI is finding importance in the pharmaceutical industry. The industry comprises large organizations that gather vast amounts of data, creating a need for BI solutions across the product lifecycle. Figure 2.3 represents trends prevailing currently in the pharmaceutical industry.

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Figure 2.3: Current BI trends in the pharmaceutical industry


BI moving beyond operational level to technical areas Manufacturing & supply chain Clinical trial analysis

Finance

BI implementation at operational level

Sales & marketing

Market research

BIBI implementation at at implementation technical level technical level

Sales force tracking

Moving to Regulatory compliance


BI tools BI tools

HR

Customized offering by BI vendors

Raw data Raw data Collect raw data Collect raw data Integrate the Integrate the disparate data sets disparate data sets Provide customized reports Provide customized reports

Raw data

Receives timely information Receives timely information in customized format in customized format

Raw data Third party source such as IMS, Wolters Kluwer, SDI Health, Brogan etc. BI vendor Pharmaceutical Pharmaceutical organization organization

Source: Business Insights

Business Insights Ltd

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BI moving beyond operational excellence to technical areas To achieve operational excellence, pharmaceutical companies are investing in BI implementation into technical areas, for example to improve research and clinical performance, resource management, sales force tracking, and regulatory compliance reporting. With the total spending on BI by big pharma companies in the US and Europe in 2006 at $359m and a growth rate of 11.3% (CAGR) during 20062009, it is clear that the major pharmaceutical companies have recognized the importance of BI and are speeding up the implementation of this approach across their organizations.

Access to accurate real-time information across the value chain can significantly speed up the new drug development process with the goal of both accelerating organizational growth as well as saving costs. For example, the UK-based GlaxoSmithKline has deployed clinical graphics solutions from Insightful (now a part of TIBCO Spotfire) based on S-PLUS, Insightfuls software platform for statistical data analysis and predictive analytics for clinical reporting and regulatory submission. The US-based Merck has also deployed enterprise-wide Insightfuls web-based visualization and data analysis tools for research and clinical trial processes in order to enhance drug discovery procedures. Similarly, France-based Fournier Pharma has deployed TIBCO Spotfire DecisionSite for functional genomics and lead discovery which resulted in increased speed and reliability of new lead compound characterization.

Customized service offering by BI vendors Pharmaceutical companies receive large amounts of data from third party (external) sources and they continually struggle to identify important information required for their sales force and format the information into user-friendly reports and dashboards for sales force analysis. Therefore, certain niche vendors in the BI market are emerging who serve as a re-packager of third party data sources in a customized format. These vendors offer BI solutions exclusively to pharmaceutical companies using third party data such as IMS, Wolters Kluwer, SDI Health, Brogan etc. and deliver the information in customized formats specific to the pharmaceutical industrys needs. For example, PureStream and Partners are two such BI vendors who gather data from the third party

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sources and integrate the disparate data sets and provide the customized information to pharmaceutical companies. This allows pharmaceutical companies to reduce the long process of receiving and integrating the third party data, and instead provides timely information that enable them to focus on the decision making.

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CHAPTER 3

Key processes in the pharmaceutical sector

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Chapter 3

Key processes in the pharmaceutical sector

Summary
BIs cross-functional data integration capability enables the various pharmaceutical processes to interact more effectively with each other resulting in overall corporate efficiency. In the drug discovery process, BI solutions help a pharmaceutical company maintain a database of all the molecules that have been developed and their characteristics, thus accelerating the drug discovery pipeline. In the drug development process, the application of BI consolidates clinical trial data into a single platform which enables the company to optimize resource allocation, predict the effects of diverse drug combinations and analyze risk during product development and launch. In the manufacturing and supply chain process, BI solutions monitor vast amounts of information to determine product demand, manage inventory, and meet regulatory compliance reporting and audits. In the sales and marketing process, BI solutions integrate finance (such as profit, cash-flow, and marketing cost) and sales information (such as samples, calls, and details) to generate sales force metrics to analyze sales performance. Besides these major four processes, BI is also being adopted by support processes such as finance.

Introduction
The data intensive nature of the pharmaceutical industry enhances the need to organize and streamline data. The main areas of the pharmaceutical processes which generate large quantities of data are preclinical drug discovery, clinical trials, and post marketing activities. Therefore, major companies are moving towards BI solutions that

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provide a common underlying architecture and end-user interface and integrate data from different sources.

This chapter identifies the BI needs across major pharmaceutical industry processes. Each section includes a brief description of the process and the benefits that entail from BI implementation.

Pharmaceutical processes
New drug development involves four vital processes: preclinical drug discovery, drug development, manufacturing and supply chain, and sales and marketing. BIs crossfunctional data integration capability enables the various processes to interact more effectively with each other resulting in overall corporate efficiency. Figure 3.4 represents major BI applications in the pharmaceutical industry.

Figure 3.4: Pharma-specific typical Business Intelligence solutions

Pharmaceutical business processes

Drug discovery

Drug development

Manufacturing & supply chain Real time monitoring Optimize demand and inventory Rate vendor performance Monitor regulatory compliance reporting and audits

Sales & marketing

Rapid identification of target molecule Generate up-todate progress reports and share information across the organization Streamline development and eliminate unproductive development paths

Speed clinical trials Integrate data from multiple sources and predict effects of diverse drug combinations Quicker decisions to identify the most promising compounds Reduce clinical trial costs

Real time sales force analysis Support strategic product analysis Faster response to physician's need Regulate samples and details account

Source: Business Insights

Business Insights Ltd

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Drug discovery The rapid identification of potential treatments for target indications creates a need for BI solutions that maintain a database of all the molecules that have been developed and their characteristics. This allows the pharmaceutical company to streamline development and eliminate unproductive development paths, thus accelerating the discovery pipeline. Up-to-date progress reports may be generated and shared across all the processes for disparate users. Table 3.1 represents key performance indicators (KPIs) and the benefits from BI implementation in the drug discovery process.

Table 3.1: Drug discovery KPIs and BI solutions


Relevant KPI Market research Molecule database BI solution Competitive intelligence market analysis in the pre-launch drug development process Consolidate database of all the molecules developed and their characteristics Streamline development and eliminate unproductive development paths
Source: Business Insights Business Insights Ltd

Drug development The pressure to speed products to market while keeping costs low creates a demand for a BI solution that monitors and manages the clinical trial and FDA approval process. Consolidation of clinical trial data into a single platform enables the company to optimize resource allocation, predict the effects of diverse drug combinations, and analyze risk during product development and launch. Integration of data from multiple sources also helps companies to take quicker decisions to differentiate marketable compounds from those which are less promising. Table 3.2 represents KPIs and the benefits from BI implementation in the drug development process.

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Table 3.2: Drug development KPIs and BI solutions


Relevant KPI Testing & clinical trial analysis BI solution Optimize resource allocation Predict the effects of diverse drug combinations Up-to-date progress reports for all clinical trials for a particular product Qualitative risk assessments in R&D
Business Insights Ltd

Risk analysis
Source: Business Insights

Manufacturing and supply chain With the high cost involved in manufacturing and supply chain processes, pharmaceutical companies need to monitor vast amounts of information to determine product demand, manage inventory and meet regulatory compliance reporting and audits. Application of BI solutions enables the company to determine seasonal trends, predict future demand and ensure optimal inventory levels across all product lines. BI also integrates data from supply chain, ERP, vendor source systems and Business-toBusiness (B2B) applications, and helps in analyzing vendor performance to negotiate new contracts, prices, and delivery mechanisms. Table 3.3 represents KPIs and the benefits from BI implementation in the manufacturing and supply chain process.

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Table 3.3: Manufacturing and supply chain KPIs and BI solutions


Relevant KPI Production analysis Inventory tracking Supply chain analysis Vendor performance Regulatory compliance
Source: Business Insights

BI solution Determine seasonal trends based on historical data. Predict future demand Determine optimal inventory levels across all products. Optimize sales representative sample inventory Ensure timely delivery of raw materials and packaging materials Improve production schedules through product sales analysis Vendor performance and price analysis Meet regulatory compliance reporting and audits
Business Insights Ltd

Sales and marketing The pressure to develop real time sales force analysis and compensation models creates a need for BI solutions that integrate finance (such as profit, cash-flow and marketing cost) and sales information (such as samples, calls, and details) to generate sales force metrics by which sales performance can be analyzed. Marketing data within a BI solution provides product analysis about multi-drug regimens, product synergies and cross-selling which helps analysts to determine factors such as market share, retail vs. non-retail performance, packaging and product performance. The integration of sales cost information with sales performance data enables sales analysts to regulate sample and detail counts, which accounts for a large component of cost. Table 3.4 represents KPIs and the benefits from BI implementation in the sales and marketing process.

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Table 3.4: Sales and marketing KPIs and BI solutions


Relevant KPI Demographic analysis & segmentation Product analysis BI solution Develop targeted customer profiles including demographics, behavioral data and product utilization to support sales and marketing activities Monitor consumer behavior in terms of prescription renewal and product purchases Analyze buying tendencies and treatment results for developing new drugs and product variation Determine market share and product performance Track impact of marketing campaigns on target audience Analyze performance of total prescription and new prescription activity at a prescriber level Generate sales force metrics by integrating key financial indicators and purchased sales performance data Integrate data across purchased sales information, market research, pipeline news, and technical product documentation to support sales initiatives and marketing campaigns Regulates sample and detail counts through integrated information from sample, details, and sales Analyze purchasing trends in terms of value and unit sales
Business Insights Ltd

Campaign analysis Geography, payor & prescriber analysis Sales force analysis Sales force support

Samples & details Factory sales


Source: Business Insights

Besides these major four processes, BI is also being adopted by support processes such as finance. Finance takes care of budgeting, M&A analysis, product pricing, and rebates. BI solutions integrate information from all the major processes with finance data to consolidate information about fund allocation to meet the product demand, to determine financial viability and synergies for M&A, and to measure the impact of product pricing on product consumption and prescriber/user acceptance.

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CHAPTER 4

The uptake of Business Intelligence in the pharmaceutical sector

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Chapter 4

The uptake of Business Intelligence in the pharmaceutical sector

Summary
Approximately 67% of the organizations surveyed by Business Insights currently use BI tools. Business Insights survey of the pharmaceutical sector found that 70% of larger organizations (i.e. more than 1,000 employees) surveyed used BI tools compared to 66% of smaller organizations (i.e. less than 1,000 employees). BI systems have widespread uptake in South America (82% of the respondents currently use BI) and Central and Eastern Europe (76%), which compare favorably with North America (68%) and Western Europe (74%). The leading short-term BI driver among the current users is clearly regulatory oversight, as indicated by 45% of current BI user respondents. Of current BI user respondents, 71% have indicated that launching new products and services in the existing markets is likely to influence their decision over whether to increasingly use BI tools and services in 20102011. Business Insights survey found that most of the pharmaceutical companies will largely use an operational reporting BI tool and invest significantly to strengthen their sales and marketing function through 2010 and 2011.

Introduction
Business Insights conducted a survey of pharmaceutical and life science companies in April 2010. The survey was aimed to examine how many pharmaceutical companies currently use BI and how those organizations intend to increase or decrease the use and the forecasted rate of uptake by new users. Our analysis is based on the answers provided by 91 respondents.
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Business Intelligence uptake


It was found that generics, pharmaceuticals, and drug discovery processes lead the BI uptake by life science/pharmaceutical organizations surveyed by Business Insights. The survey was aimed to determine the potential for growth for BI in the pharmaceutical industry. A large proportion of respondents who do not use BI are indecisive about future use which means a stronger case for BI usage may win them over. Also, the majority of current users plan to increase their spending in BI in 20102011, providing significant opportunities for BI vendors.

Current BI usage According to the Business Insights survey, approximately 67% of the pharmaceutical companies surveyed currently use BI tools in some shape or form (Figure 4.5). This indicates a high level of uptake, primarily driven by reduced time to market, improved sales force analysis and launching new products or services in existing markets. However, very few of the remaining 33% have plans to implement BI by the end of 2011.

Figure 4.5: BI usage by organizations (% respondents, 2010)


80 70 60 % Respondents 50 40 30 20 10 0 Currently use BI tools Currently do not use BI tools 33 67

Source: Business Insights

Business Insights Ltd

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BI has been adopted most widely by generics (78% of the survey respondents from generic companies currently use BI tools), pharmaceuticals (69%) and drug discovery (67%). Other pharmaceutical operations that have adopted BI services to a relatively large extent are professional services (64% of respondents), biotechnology (61% of respondents), drug delivery/formulation (50%), clinical manufacturing (50%) and diagnostics (44%).

Figure 4.6: Current BI users by areas of operation (% respondents using BI, 2010)
Generics Pharmaceuticals Drug discovery Professional services Biotechnology Drug delivery/formulation Clinical manufacturing Diagnostic Others 0.00 20.00 40.00 60.00 44 67 80.00 50 50 69 67 64 61 78

% Respondents currently using BI (area of operation self-selected by respondents)

Source: Business Insights

Business Insights Ltd

Uptake by organization size Given the scale of investment requirements, BI tools have been almost equally adopted by large organizations as well as small businesses: the survey found that around 66% of organizations with less than 1000 employees use BI tools in comparison with 70% of larger organizations.

In fact, mid-sized companies are increasingly adopting BI and analytics to improve competitiveness and reduce costs. Most of the BI vendors are shifting their focus to

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mid-sized businesses and are introducing products/tools made specifically for SMBs. Examples include, IBM Cognos Express, Oracle Accelerate, and SAP BusinessObjects Edge Premium. Besides these mega vendors, niche/pure-play BI vendors, such as MicroStrategy Reporting Suite, are also targeting SMBs.

Figure 4.7: BI users by organization size (% respondents, 2010)


80 70 60 % Respondents 50 40 30 20 10 0 1-999 employees Currently use BI tools 1000+ employees Currently do not use BI tools 34 30 66 70

Source: Business Insights

Business Insights Ltd

Uptake by geographies The survey found that South American and Central and Eastern European (CEE) countries have widespread uptake of BI, as shown in Figure 4.8. South American countries (such as Brazil and Argentina) and CEE countries (such as the Czech Republic and Hungary) are dominated by generic drug manufacturers. Generics also account for the largest proportion of survey respondents currently using BI tools, as shown in Figure 4.6. In addition, the large BI uptake in South America and CEE can be attributed to the fact that most of the pharmaceutical companies are investing in clinical research activities in these countries owing to the ready availability of qualified medical practitioners for conducting clinical studies and patient recruitment.

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South America accounted for the largest extent of BI users (82% of the respondents who currently use BI), compared with CEE (76%), Western Europe (74%), North America (68%), and Asia-Pacific (61%).

Figure 4.8: BI users by geography (% respondents, 2010)


100 80 % Respondents 61 60 40 20 0 Asia-Pacific North America Western Central and South Europe Eastern America Europe Rest of the World 39 32 39 26 24 18 74 76 82 61

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Currently use BI tools

Currently do not use BI tools

Source: Business Insights

Business Insights Ltd

Short-term BI drivers among current users The leading short-term BI driver among the current users is clearly regulatory oversight, as shown in Figure 4.9. Greater FDA stringency over drug safety issues has led to growing regulatory compliance and reporting requirements. BI helps pharmaceutical companies to comply with more stringent FDA programs and facilitates pharmacovigilance. For example, visualization BI tools can determine relationships between adverse events and particular patient demographics, thus helping in detecting drug safety issues.

Approximately 45% of current BI user respondents have indicated that regulatory oversight is encouraging their organizations to increase usage of BI tools/services through 2011. Increasing competition from emerging markets and increasing maturity of BI vendor offerings are also driving the uptake of BI in the pharmaceutical industry.
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Figure 4.9: Short-term factors most likely to drive BI uptake among current users
50 % Respondents currently using BI 45 45 41 40 39

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30 Increasing maturity of BI Increasing competition vendor offerings from emerging markets Regulatory oversight

Source: Business Insights

Business Insights Ltd

Longer-term BI drivers among current users As can be seen from Figure 4.10, the leading longer-term BI driver among current users is the launching of new products and services in the markets in which they currently operate. With the increasingly competitive environment, specifically from the growing generics market, the pharmaceutical companies are adopting BI tools that help in developing new drugs and developing their own generic drugs.

Approximately 71% of current BI user respondents have indicated that launching new products and services in the existing markets is likely to influence their decision over whether to increase the use BI tools and services in 20102011. Local market entry/penetration in emerging or new geographic markets and improving sales force analysis are also key drivers for BI adoption. Around 45% of current BI user respondents have indicated that the need to reduce the cost of serving existing markets is likely to influence their decision to increasingly use BI tools and services in 2010 2011.

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Figure 4.10: Longer-term factors likely to drive BI uptake among current users (% respondents)
Launching new products/services in existing markets Local market entry/penetration in emerging or new geographic markets Improving sales force analysis Reducing the cost of serving existing markets Reducing time to market Improving customer retention and cross-selling in existing markets Reducing regulatory risk 20 24 18 31 43 20 10 14 39 41 16 27 2 33

Accelerating new drug discovery Reducing cost of development Responding to economic downturn Environmental or green initiatives 0

16 14 18 4

12 10 2

10

20

30

40

50

60

70

80

% Respondents currently using BI Highly likely Very highly likely

Source: Business Insights

Business Insights Ltd

BI usage forecast The survey found that most of the pharmaceutical companies will largely use operational reporting BI tools and invest significantly to strengthen their sales and marketing function through 2010 and 2011.

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BI usage forecast by components Operational reporting is the most commonly used BI application in the pharmaceutical industry allowing users to examine events and identify patterns and relationships within the data.

As shown in Figure 4.11, of those survey respondents whose organizations currently use BI tools, 53% said that they would regularly utilize operational reporting tools by far the largest proportion of BI user respondents. About 51% of the current BI user respondents indicated very high or high usage of ad hoc querying in supporting their operations through 2010 and 2011.

Figure 4.11: Forecast of BI usage by components (% respondents)


% Respondents currently using BI 60 50 40 30 20 10 0 OLAP Dashboards Ad hoc querying Operational reporting 4 10 20 27 14 20 24 39

High
Source: Business Insights

Very high
Business Insights Ltd

BI usage forecast by enterprise functions The sales and marketing enterprise function is clearly leading BI adoption in the pharmaceutical industry. The emergence of generic drugs as well as the pressure by insurance companies and Health Maintenance Organizations (HMOs) to promote generic drugs is making it increasingly important for companies to restructure their

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sales and marketing models to strengthen consumer loyalty. Pharmaceutical companies are spending more than twice as much on sales and marketing than they are on R&D.

Of those survey respondents whose organizations currently use BI tools, 76% said that they would use BI for sales and marketing by far the largest proportion of BI user respondents, as demonstrated in Figure 4.12. About 51% of the BI user respondents indicated use of BI in corporate performance management processes through 2011.

Figure 4.12: Forecast of BI usage by enterprise functions (% respondents)


Sales & marketing Corporate performance management Website analysis CRM/contact center management Customer service & customer care Compliance & regulation HR Finance & accounting Supply chain management & operations Collections & payments 5 8 15 25 35 45 55 65 75 31 29 29 27 39 39 37 51 76

% Respondents currently using BI

Source: Business Insights

Business Insights Ltd

Planned increases in spending on Business Intelligence Respondents to the Business Insights survey provided good news for BI vendors as about 16% indicated that they would be increasing BI spend by more than 6% in 2010 2011, as shown in Figure 4.13. Approximately 39% of the survey respondents indicated 1-5% higher spend on BI while 41% indicated no change in BI spend during 2010 2011.

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To understand where this spend is likely to be made, it is critical to understand the context of this planned increase so that BI vendors can focus their sales and marketing efforts on those underlying areas. While some of the survey respondents indicated the launching of new products in existing markets to be the key driver for BI spending, for others reducing time to market, sales force analysis, and reducing regulatory risk are on the top of their agenda.

The changing regulatory and compliance issues as well as the need to keep track of sales force performance are encouraging pharmaceutical companies to use BI to improve performance. Therefore, the main vendor opportunities are in tailored advanced analytics services such as predictive analytics and in-memory processing as well as providing customized third party user-friendly reports and dashboards for sales force analysis.

Figure 4.13: Current user plans to change spending on BI in 20102011


45 40 35 % respondents 30 25 20 15 10 5 0 Decrease 6%+ Decrease 1-5% No change Increase 1-5% Increase 6%+ 2 2 16 41

39

Change in spending on Business Intelligence tools and services in 2010

Source: Business Insights

Business Insights Ltd

These findings show that most users either plan to continue as they are or increase spending; only a small number, approximately 4%, are planning on decreasing spend. This represents enormous opportunities for BI vendors in the pharmaceutical industry.
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Plans to increase usage: case for persuasion Among the current non-users, particularly in the SMBs, sharp marketing campaigns to increase the awareness of the benefits of BI usage could develop the BI mid-market significantly in 20102011. The case for persuasion among existing BI users should ideally consider the indecisiveness regarding use of BI in certain enterprise functions. For example, 43% of the survey respondents indicated that they have not yet made up their mind about using BI for compliance and regulations, and collections and payments in 2010 (see Figure 4.14).

Figure 4.14: Case for persuasion: current BI user indecisiveness by enterprise functions
Compliance & regulation Collections & payments Finance & accounting Website analysis CRM/contact center management Supply chain management & operations Customer service & customer care HR Corporate performance management Sales & marketing 0 10 12 20 30 40 50 22 35 35 35 33 33 39 43 43

% indecisive BI user respondents

Source: Business Insights

Business Insights Ltd

The above survey results indicate that significant opportunities exist for persuasive offerings specific to compliance and regulation, collection and payments, finance and accounting, supply chain management and operations, CRM/contact center management, website analysis, and HR functions. Niche players are likely to be in a strong position to seize these opportunities.

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CHAPTER 5

The demand side of Business Intelligence in the pharmaceutical sector

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Chapter 5

The demand side of Business Intelligence in the pharmaceutical sector

Summary
Business Insights survey found that reducing time to market and launching new products or services in the existing markets are the top respondents priorities, closely followed by taking advantage of opportunities in new geographic markets and reducing regulatory risk. Approximately 49% of respondents surveyed confirmed their intention to reduce SG&A costs in 20102011. There is overwhelming consensus among respondents regarding the need to reduce knowledge process services costs.

Introduction
This chapter presents the organizational priorities of life science/pharmaceutical companies surveyed by Business Insights in April 2010 and how BI initiatives can help them in achieving those critical organizational priorities. The chapter goes on to examine the planned usage of BI to reduce costs and highlights examples of how some pharmaceutical companies have successfully adopted BI applications.

Organizational priorities
In order to identify the critical user requirements, Business Insights conducted a survey of pharmaceutical and life science companies from across the globe and asked them to rate the following strategic initiatives to develop their organizations in 20102011: reducing time to market; launching new products or services in existing markets; taking
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advantage of opportunities in new geographic markets; reducing regulatory risk; local market entry/penetration in emerging or new geographic markets; reducing cost of development; improving sales force analysis; accelerating new drug discovery; improving customer retention and cross-selling in existing markets; reducing the cost of serving existing markets; responding to economic downturn; and environmental or green initiatives. Each respondent gave a rating for each area on a scale of importance of 15, where a rating of 5 meant the highest importance. Figure 5.15 reveals the results:

Figure 5.15: Organizational priorities

Reducing time to market Launching new products or services in existing markets Taking advantage of opportunities in new geographic markets Reducing regulatory risk Local market entry/penetration in emerging or new geographic markets Reducing cost of development Improving sales force analysis Accelerating new drug discovery Improving customer retention and crossselling in existing markets Reducing the cost of serving existing markets Responding to economic downturn Environmental or green initiatives 2 2.4 3 2.6 2.9 3.1 3.1 3.0

3.8 3.7 3.6 3.6 3.5 3.4

Respondent average rating (1=Unimportant - 5=Highly important)

Source: Business Insights

Business Insights Ltd

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The pharmaceutical industry has transformed enormously in the last five years in terms of IT adoption. The focus in the past has been primarily to increase productivity and bring about operational efficiencies by deploying enterprise applications at departmental levels. However, in the post-recession period, BI initiatives are the key priorities for survey respondents in order to extract real-time insights and reduce time to market. Figure 5.15 shows how respondents are intending to use BI in 20102011. On average, reducing time to market and launching new products or services in the existing markets emerged as the highest priorities, closely followed by taking advantage of opportunities in new geographic markets and reducing regulatory risk. This means that a majority of the vendor opportunities lie in providing pharmaceutical specific BI services that deliver the information in customized formats specific to pharmaceutical companies needs which helps them to speed up the drug development process.

At the same time, it is also interesting to see environmental or green initiatives being given such a low priority, which hardly offer any economic value to the enterprise. In the meantime, as market pressures demand increased innovation and shorter time to market, pharmaceutical companies will focus more on cost cutting, revenue growing and margin improving measures as a top priority.

Cost reduction: which areas to target? In the period prior to economic recovery, reducing costs and increasing profitability are the major factors for increased demand for BI and analytic tools. It is clear from the survey that most of the pharmaceutical companies are taking initiatives to reduce costs during 20102011. The companies have plans to increase the usage of BI and analytic tools to reduce costs across the organizations from knowledge process services to HR services.

Reducing SG&A costs As Figure 5.16 shows, approximately 49% of respondents confirmed their intention to reduce SG&A costs in 20102011 as a matter of particularly high priority (27% of

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respondents have no such intention and 24% of respondents are not sure about it). BI vendors can take advantage of this trend by promoting their offerings in the finance, accounting and administrative areas.

Figure 5.16: Is reduction of SG&A costs a high priority in 2010?


60 50 % respondents 40 30 20 10 0 Yes No Don't know 27 49

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Source: Business Insights

Business Insights Ltd

Cost reduction priorities Among the enterprise functions, knowledge process services (average respondent rating of 3.3 on the scale of 1-5) tops the respondent choices in terms of priority areas for cost reduction, closely followed by overall organizational cost (average respondent rating of 3.2). Figure 5.17 reveals the results.

The reduction of knowledge process service costs is a pressing priority for most pharmaceutical companies. Knowledge process services include research and development, patent design, IP portfolio analytics etc. BI vendors will need to work with these companies to ease the transition to a BI environment and help companies to identify areas where the costs can be reduced.

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Figure 5.17: Cost reduction priorities by enterprise function


Knowledge process services Overall organization Direct procurement Customer service & customer care Customer account administration Finance & accounting services Indirect procurement HR services 2.5 2.7 2.8 2.8 2.8 2.8 2.9 3.1 3.3 3.5 3.0 3.0 3.3 3.2

Respondent average rating (1 = no need; 5 = strong need)

Source: Business Insights

Business Insights Ltd

BI vendors will also need to educate and convince the pharmaceutical companies about the advantages of moving towards adopting pre-packaged pharma-specific BI and performance management solutions. For example, the clinical trials process is a crucial part of knowledge process services cost control. Pharmaceutical companies are spending millions of dollars on average on clinical trials. Adoption of BI and analytics tools for clinical trials management consolidates clinical trial information into a single information store. The resulting metrics can provide safety and efficacy data earlier in the clinical development process in Phase I and Phase II trials. This will enable companies to optimize the decision making process before investing in further Phase III trials, which are more expensive.

Business Intelligence users case studies


The following examples demonstrate how BI tools have helped pharmaceutical companies in making better business decisions in cases from research and development to sales and marketing management.
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GlaxoSmithKline management of the clinical trial process and enhancement of drug development GlaxoSmithKline is a research-based pharmaceutical and healthcare company, engaged in the production of medicines that treat six major disease areas: asthma, virus control, infections, mental health, diabetes and digestive conditions. GlaxoSmithKline is headquartered in the UK and has operations in the US. The company implemented Insightfuls (now a part of TIBCO Spotfire) cross-platform graphics solution based on the S-PLUS software platform for statistical data analysis and predictive analytics.

The decision for selecting Insightfuls S-PLUS was primarily to provide an automated and transportable graphical tool to its statisticians, clinicians, and publishing staff that facilitates data exploration, team discussion, decision-making, clinical reporting, and scientific presentation and publication.

Before implementing the S-PLUS solution, GlaxoSmithKline carried out an extensive testing phase, including two rounds of beta testing, an early adopter phase, final enhancements, and validation. Finally, in 2007, GlaxoSmithKline rolled out the SPLUS Graphics Toolkit to members of its Biomedical Data Science statistical community.

Deployment of the clinical graphics solution across drug development functional areas saved time by eliminating graphics reworking and other manual processes. It also enabled users to produce quick and customized graphics in various formats including pdf and wmf files. The time and labor savings, coupled with the real-time accurate information provided through the validated statistical graphics implementation, helped move drug candidates through the development process faster.

Wyeth Pharma managing sales effectiveness Wyeth Pharma is the German subsidiary of Wyeth, one of the major US-based pharmaceutical companies (which has recently merged with Pfizer). Wyeth focuses on researching and developing prescription medicines. The companys German head

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office is in Munster/ Westphalia and employs around 600 people. Wyeth Pharma implemented IBM Cognos 8 BI for its sales management process.

The decision for selecting IBM was primarily driven by its past experience with IBM Cognos products and also that all their requirements were covered in a single product with the option of integrating future requirements.

The implementation of IBM Cognos 8 BI gave the Wyeth sales team access to intuitively designed dashboards with traffic-light functionality and drill-down multidimensional analysis. This dashboard provided superior views of national and regional sales developments and showed them clearly in diagram form. Traffic-light functions helped to make anomalies visible through indicators using red, yellow, or green areas. By using models fed from the data warehouse in addition to the dashboards, detailed, multi-dimensional analyses can also be implemented. Drill-down functions allowed the users to go deeper into the data from the aggregated indicators at the topmost level.

The web-based deployment option of IBM Cognos 8 BI enables sales team to enter data at any time or use analyses for their sales efforts. Continuous information exchange between the sales team, sales management, and higher-level management standardized the information.

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CHAPTER 6

The Business Intelligence vendor landscape

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Chapter 6

The Business Intelligence vendor landscape

Summary
The vendor landscape is heavily dominated by mega SAPBusinessObjects, IBM Cognos, Oracle Hyperion and Microsoft. vendors:

IBM is restructuring its business mix towards emerging business segments such as BI and analytics through organic growth and acquisitions of vendors such as Cognos and SPSS. To compete with other mega vendors in the BI space, it is targeting mid-sized companies through launch of IBM Cognos Express. Microsoft is developing data analysis tools in Excel, improving collaboration experience, and targeting information workers across the organization. Oracle is expanding into the mid-market segment through launch of new capabilities: Oracle Accelerate solution and a new portal in 2009, and acquisition of Sun in 2010. SAP is shifting towards Software-as-a-Service (SaaS) BI, focused on large enterprise and upper mid-market business segments, and expanding its presence in the small- and mid-sized businesses (SMBs) sector through various launches. SAS is focused on more advanced niche technology solutions such as forecasting and predictive modeling. It is also expanding the reach of its analytic capabilities to non-SAS clients infrastructure through agreements with database management system vendors. Information Builders and MicroStrategy are focused on growing their presence in the mid-sized market segment, while TIBCO Spotfire, Actuate, and QlikTech are among the leading niche players focused on developing innovative products and services offerings. Emerging advanced analytics capability and industry/process-specific offerings will determine which vendors remain dominant in the future.

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Introduction
Consolidation in the BI market in 20072008 created four mega vendors, SAP BusinessObjects, IBM Cognos, Oracle Hyperion and Microsoft, who are investing heavily in BI and performance management technologies through acquisitions and Greenfield investments. In addition to these mega vendors, pure-play/niche vendors such as SAS, Information Builders, MicroStrategy, TIBCO Spotfire, QlikTech, and Actuate also control considerable market share in the BI space.

Figure 6.18: Business Intelligence vendor landscape


Potential acquisition target for mega vendors Mega vendors Niche vendors

Reporting

Ad hoc query & analysis

OLAP

Dashboards

Interactive reporting

Predictive analytics

Traditional BI tools

Advanced BI technologies

Source: Business Insights

Business Insights Ltd

This chapter analyzes key offerings of vendors, pharmaceutical solutions, major pharmaceutical customers, and growth strategies of mega vendors and some of the pure-play/niche BI vendors.

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The mega vendors


The mega vendors (Figure 6.19) offer traditional BI tools. However, these vendors have been incorporating advanced interactive visualization alternatives (for example, Microsoft with PowerPivot, SAP with SAP BusinessObjects Explorer, IBM with IBM Cognos Express and Oracle with Oracle Hyperion) through mega acquisitions and investments in BI platforms during 20072008. A period of consolidation and integration occurred in 2009 for most of these BI vendors, with Microsoft being an exception as it focused on developing its own BI product offerings.

Figure 6.19: Summary of the mega vendors


Vendor IBM Platform/Brand Cognos 8, SPSS Major pharmaceutical clients Bachem Holding, Coloplast, Galderma, Gilead Sciences, MAQUET, MDS Pharma Services, Onyx Pharmaceuticals, Sanofi-Aventis, Sciele Pharma, Tecan Group,and Wyeth Pharmaceuticals Chiesi Pharmaceutical, GlaxoSmithKline, Isotechnika, MedPointe Pharmaceuticals, Pfizer, Roche Diagnostics and Sanofi-Aventis Boehringer Ingelheim, GlaxoSmithKline, LEO Pharma, Polpharma and Wyeth Growth strategies Restructuring business mix to focus on emerging segments, targeting SMBs

Microsoft

SQL Server, SharePoint, Office PerformancePoint

Focusing on the mass market, bolstering data warehousing capabilities Focus on midsized companies, acquisitions

Oracle

Hyperion, JD Edwards

SAP

BusinessObjects

Aventis and Emdeon

Moving towards SaaS BI, focusing on small and midmarket segment

Source: Business Insights

Business Insights Ltd

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IBM Business Intelligence: Cognos, SPSS, ILOG, and IBM BAO Company overview IBM offers BI capabilities through its Information Management Software business segment, which includes advanced database, content management, information integration, and BI software. In the last three years (20081Q2010), the company has transformed its BI offerings primarily based on three acquisitions (Cognos, ILOG and SPSS) and the launch of business analytics and optimization (BAO) in 2009. The company is headquartered in New York, US, and had 399,409 employees as of December 2009.

Key offerings and verticals As shown in Table 6.5, IBM Cognos offers a wide range of BI solutions including reporting, analysis, dashboards, and scorecards on a single service-oriented architecture (SOA) for large enterprises and SMBs.

Table 6.5: IBM Cognos Business Intelligence offerings


Enterprise BI solutions Large Query & reporting OLAP Information mining Planning & budgeting Scorecards SMBs Reporting OLAP Planning, budgeting & forecasting Dashboards & scorecards

Source: Company information

Business Insights Ltd

Key offerings include an information infrastructure, a performance management platform and applications and blueprints.

Information infrastructure This package has five components data management, content management, data integration, data warehousing and master data management. IBM InfoSphere software is central to this information infrastructure and performs key functions such as business
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metadata sharing, end-to-end data lineage, data profiling and quality integration and key information integration tasks.

Performance Management Platform This offers three broad sets of functionalities business modeling, core BI capabilities, and access and interactivity. Business modeling involves accessing and optimizing information, organizing and capturing content, deploying and managing applications, and integrating solutions. Access is typically through IBM Information Infrastructure to a variety of data sources, e.g. message sources, relational sources, application sources, OLAP sources, and modern and legacy sources. Core BI capabilities include five functions query, reporting, analysis, scorecards, dashboards and planning. Adhoc queries are claimed to possess intuitive user interfaces having access to all data. Self-service features such as drag and drop query creation, sorting, and filtering are inbuilt.

Pharmaceutical solutions and major customers Table 6.6 represents IBM Cognos Performance Blueprints applicable in the pharmaceuticals/life sciences industry. These provide an integrated platform that utilize critical data systems including ERP and delivers the scorecard, reporting, analysis, and planning tools to optimize performance.

Some of the major pharmaceutical customers of IBM Cognos include: Bachem Holding, Coloplast, Galderma, Gilead Sciences, MAQUET, MDS Pharma Services, Onyx Pharmaceuticals, Sanofi-Aventis, Sciele Pharma, Tecan Group, and Wyeth Pharmaceuticals.

Competitors Other than BI vendors, IBM competes with vendors of performance management solutions and vendors of enterprise application systems. Key competitors are SAP BusinessObjects, Oracle Hyperion, Microsoft, MicroStrategy, Actuate, and Information Builders.
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Table 6.6: IBM Cognos pharmaceutical solutions


Pharmaceutical process Clinical modeling and resource tracking Integrated brand management Clinical trial enrollment forecasting Clinical trial forecasting Sales quota allocation Sample optimization Solution To model studies in a consistent and reliable manner For product launches and marketing productivity To analyze enrollment trends and facilitate collaboration among stakeholders. To plan trial resource allocations and expenses For managing quotas rapidly and centrally To develop and then monitor sample allocations in line with corporate revenue objectives
Business Insights Ltd

Source: Company information

Growth strategies Restructuring business mix to focus on emerging segments Since 2000, IBM has been divesting commoditized businesses such as personal computers and hard disk drives to focus on emerging, high margin business opportunities such as BI and analytics. The company is restructuring its business mix towards more profitable business segments through acquisitions of vendors such as Cognos and SPSS. It has acquired more than 100 companies through 20002008 in the software and services segment. This indicates IBMs strategy is to expand its base in high growth areas to compete with other mega vendors such as SAP, Oracle, and Microsoft.

Making inroads in the SMB space To make inroads in the SMB market, which had previously been dominated by other mega vendors such as SAP BusinessObjects, IBM launched IBM Cognos Express, a single integrated BI and planning solution in 2009. IBM conducted a Global CIO Study in 2009 involving 2,500 CIOs from 78 countries, which revealed that 83% of midmarket executives ranked BI and analytics as their top priority for reducing cost, improving productivity, and remaining competitive. SMBs have vast amounts of

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unstructured raw data but lack IT capabilities and resources to transfer them into actionable information. Thus, IBM Cognos Express will help fill the gap in a cost efficient manner.

Acquisitions Acquisitions completed between January 2008 and March 2010 represent IBMs strategy of shifting its focus from hardware to systems software for the enterprises, as shown in Table 6.7. The company completed several acquisitions to bolster its Information OnDemand strategy and enhance its BI and performance management portfolio.

Table 6.7: IBM major M&A deals, 20082010*


Year 2009 2009 2009 2009 2008 Target company Guardium, US SPSS, US ILOG, France Exeros, US Cognos, Canada Rationale Added enterprise database security technology to support IBMs Business Analytics solutions Expanded IBMs Information OnDemand software portfolio and Business Analytics capabilities Strengthened IBMs Business Process Management and SOA position Supported IBMs Information OnDemand solutions for advanced analytics capabilities Extended IBMs BI and performance management offerings

*January 2008 to March 2010 Source: Company information Business Insights Ltd

Microsoft Business Intelligence Company overview Microsoft offers BI solutions through its Microsoft Business Division (MBD). The BI solution includes the Windows Server operating system and Microsoft SQL Server as

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well as the integrations with Office PerformancePoint Server 2007. The company is headquartered in Washington, US. As of June 2009 it had 93,000 employees.

Key offerings and verticals Microsofts BI portfolio comprises BI tools and applications for large enterprises and SMBs, as detailed in Table 6.8 .

Table 6.8: Microsoft Business Intelligence offerings


Enterprise BI solutions Large and SMBs Query, reporting and analysis Dashboards Scorecards Analytics Data warehousing OLAP
Business Insights Ltd

Source: Company information

Microsoft offers four types of BI solutions: data storage and management; information delivery; query, reporting and analysis; and performance management. Data storage and management: data warehousing, OLAP, data quality and data mining through Microsoft SQL Server data storage and management platform; Information delivery: dashboards, portals, managed reporting and visualization; Query, reporting and analysis: ad hoc reporting, production reporting, and OLAP analysis; Performance management: scorecards and dashboards, through Office

PerformancePoint Server 2007.

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Pharmaceutical solutions and major customers Microsofts knowledge-driven life sciences solution for pharmaceutical companies claims to streamline operations and improve their decision making. Table 6.9 represents Microsofts pharmaceuticals/life sciences solution.

Table 6.9: Microsoft Business Intelligence pharmaceutical solutions


Pharmaceutical process Drug discovery Drug development Manufacturing & supply chain Solution Provides a comprehensive view of internal research and external literature and helps in achieving target identification Streamlines clinical trial process, including recruitment, data collection, data cleaning, analysis, and submission Integrates drug formulation data with plant capability information Enables pharmaceutical researchers to develop chemical, manufacturing and production models that optimize manufacturing processes and reduce production costs Provides a closed-loop marketing solutions framework to better integrate systems and information enabling organizations to market their product more effectively
Business Insights Ltd

Sales & marketing

Source: Company information

Some of the major pharmaceutical customers include: Chiese Pharmaceutical, GlaxoSmithKline, Isotechnika, MedPointe Pharmaceuticals, Pfizer, Roche Diagnostics, and Sanofi-Aventis.

Competitors Microsoft competes with other mega vendors: IBM Cognos, SAP BusinessObjects and Oracle Hyperion. In the BI OnDemand SaaS space, Microsoft also competes with niche players such as TIBCO Spotfire and QlikTech.

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Growth strategies BI for the mass market Microsoft aims to penetrate the mass market by offering BI capabilities bundled with other productivity tools. To achieve this, in 2009 it announced consolidation of scorecard, dashboard and analytical capabilities from Office PerformancePoint Server into Microsoft Office SharePoint Server Enterprise and rebranded them as PerformancePoint Services for SharePoint. In addition, it released Office PerformancePoint Server 2007 Service Pack 3 (SP3) in 2009, which introduced improvements in both PerformancePoint monitoring, analytics, and planning. Thus, by embedding BI capabilities into business productivity tools such as SharePoint Server and Microsoft Office Excel, Microsoft intends to increase the adoption rate of its BI capabilities.

Bolstering data warehousing capabilities Acquisition of DATAllegro and expected release of SQL Server 2008 R2 Parallel Data Warehouse in the first half of 2010 will strengthen Microsofts position in data warehousing. Through integration of technology acquired from DATAllegro in 2008, Microsoft is building a BI-focused version of SQL Server 2008 (called Project Madison) which offers advanced data warehouse functionality providing a scalable data platform spanning hundreds of terabytes of data. In addition, acquisition of Zoomix, a data quality vendor, in 2008 has further enhanced Microsofts data platform capabilities. Microsoft is working with major server and storage hardware providers including Bull, Dell, EMC, HP and Unisys to build a strong BI focused tool based on the Madison solution.

Acquisitions The acquisitions completed between January 2008 and March 2010 reinforces Microsofts strategy to bring BI to the mass market are shown in Table 6.10.

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Table 6.10: Microsoft Business Intelligence major M&A deals, 20082010*


Year 2008 2008 Target company Fast Search & Transfer, Norway DATAllegro, US Rationale Strengthened Microsofts position in the enterprise search space Extended Microsofts position in data warehousing appliances

*January 2008 to March 2010 Source: Company information Business Insights Ltd

Oracle Company overview Oracle was incorporated in 2005. The acquisition of Hyperion in 2007 established Oracle as a major player in the BI space. Oracle operates BI through its New Software Licenses operating segment, which includes the licensing of database and middleware software. It is headquartered in California, US.

Key offerings and verticals Oracle offers performance management applications, BI applications, BI foundation and data warehousing to large enterprises and SMBs as shown in Table 6.11. Oracles BI portfolio comprises the Enterprise Performance Management (EPM) solution that integrates BI foundation and data warehousing products. Oracle BI foundation products include Oracle BI Suite Enterprise Edition Plus, Oracle BI Standard Edition One, Oracle Essbase, and Oracle BI Publisher. The BI tools include interactive dashboards, ad hoc query and analysis, proactive detection and alerts, advanced reporting and publishing, real-time predictive intelligence, mobile analytics, and desktop gadgets. Data integration and warehousing products include Oracle Warehouse Builder, Oracle Database, Oracle Data Mining, and OLAP 11g Cubes.

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Table 6.11: Oracle Business Intelligence offerings


Enterprise BI solutions Large Ad hoc analysis OLAP Interactive dashboards Advanced reporting and publishing Mobile analytics SMBs Dashboard Ad hoc query and analysis Reporting Data warehousing Proactive detection & alerts

Source: Company information

Business Insights Ltd

Pharmaceutical solutions and major customers Oracles platform for life sciences and pharmaceuticals consists of features in Oracle Database, Oracle Application Server, and Oracle Collaboration Suite that include accessing distributed data, integrating, managing, and analyzing vast quantities of data, as shown in Table 6.12.

Table 6.12: Oracle pharmaceutical solutions


Pharmaceutical process Drug discovery Solution Provides advanced statistics and data mining, secure collaboration, heterogeneous data-type management and grid computing technology Clinical data integration, analysis, and reporting; complaint reporting and adverse events reporting Built-in regulatory compliance reduces risk through process validation and regulatory compliance Provides closed-loop marketing and customer-centric service

Clinical trials Regulatory compliance Sales & marketing

Source: Company information

Business Insights Ltd

Some of the major pharmaceutical customers include: Boehringer Ingelheim, GlaxoSmithKline, LEO Pharma, Polpharma, and Wyeth.

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Competitors Key competitors in the BI space include IBM, SAP, SAS, and Microsoft. Niche players such as TIBCO Spotfire and MicroStrategy directly compete with Oracles BI business in niche vertical-specific analytics offerings such as pharmaceuticals, healthcare, and retail.

Growth strategies Focus on mid-sized companies Oracle is focused on increasing its presence in the mid-sized customer segment. Since the launch of Oracle Accelerate in 2006, Oracle has added more than 7,000 mid-sized applications customers to reach more than 25,000 mid-sized customers in 2009. To support this strategy, Oracle launched new capabilities for its Accelerate solution (such as consulting Accelerate solution with HP for industrial manufacturing, Oracles Demantra and several deployment options) for mid-sized companies in 2009. In addition, Oracle introduced a new portal in 2009 focused on mid-sized companies for geographic and industry specific solutions. Further, with the acquisition of Sun in 2010, Oracle has broadened its offerings for mid-sized companies.

Acquisitions The acquisition of Hyperion in 2007 was the major deal for Oracle in the BI space. Oracle has been actively acquiring companies to strengthen its competitive positioning and expand customer base, as shown in Table 6.13.

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Table 6.13: Oracle major M&A deals, 200810*


Year 2009 2009 Target company HyperRoll, US GoldenGate, US Rationale Added domain expertise in multi-dimensional technologies for large scale financial and BI applications Extended Oracles data integration capabilities with real-time data integration solution

*January 2008 to March 2010 Source: Company information Business Insights Ltd

SAP BusinessObjects Company overview SAP became a major player in the BI market with the acquisition of BusinessObjects in 2008. The SAP BusinessObjects intelligence platform, SAP BusinessObjects XI, provides BI tools such as performance management, planning, reporting, query and analysis, and enterprise information management integrated on one common BI platform. The company had 47,578 employees as of December 2009. It is headquartered in Walldorf, Germany.

Key offerings and verticals The SAP BusinessObjects portfolio comprises BI tools and applications for large enterprises and SMBs, as shown in Table 6.14.

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Table 6.14: SAP BusinessObjects Business Intelligence offerings


Enterprise BI solutions Large Advanced analytics Dashboards and visualization Information infrastructure Query, reporting, and analysis Reporting Search and exploration SMBs Dashboards & reporting Edge Solution (BI & performance management solution)

Source: Company information

Business Insights Ltd

SAPs key BI offerings include: SAP BusinessObjects Business Intelligence: this includes Crystal Reports for formatted reporting, SAP BusinessObjects Web Intelligence for self service ad-hoc reporting, SAP BusinessObjects Predictive Workbench for enterprise mining and predictive analysis, Xcelsius for enterprise dashboards, SAP BusinessObjects Intelligent Search for search and discovery, SAP BusinessObjects Polestar for data exploration, SAP BusinessObjects Text Analysis for semantic analysis and sentiment extraction, and SAP BusinessObjects Voyager for OLAP analysis; SAP NetWeaver Business Intelligence: this includes SAP NetWeaver Business Warehouse, SAP NetWeaver Business Warehouse Accelerator, SAP NetWeaver Master Data Management (MDM), and SAP extraction capabilities; SAP BusinessObjects Information Management (IM) solutions: this helps data improvement by tracking data lineage for compliance purposes. It includes SAP BusinessObjects Data Services, SAP BusinessObjects Data Integrator, SAP BusinessObjects Data Quality Management, SAP BusinessObjects Data Federator, and SAP BusinessObjects Metadata Management; SAP BusinessObjects OnDemand offerings: this includes SAP BusinessObjects BI OnDemand, SAP BusinessObjects Information OnDemand and crystalreports.com;
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SAP BusinessObjects SME: this includes BI solutions for SMBs SAP BusinessObjects Edge (BI software), and reporting solutions Crystal Reports and Xcelsius.

Pharmaceutical solutions and major customers SAP BusinessObjects solution for the pharmaceutical industry is based on three strategies, namely risk reduction, production efficiency, and business transformation, as represented in Table 6.15. Some of the major customers include: 3Com, Albemarle Corporation, Aventis, Emdeon, GE, Orasure Technologies, and Televerde.

Table 6.15: SAP BusinessObjects pharmaceutical solutions


Pharmaceutical process R&D Solution R&D administration, drug discovery, pharmaceutical development, clinical trial management, clinical supply management and regulatory submission Procure to pay, compliant manufacturing, enterprise LIMS* and equipment maintenance Supply chain planning, contract management, order to cash, marketing, sales operations & performance analytics and field sales Medical inquiries, complaint management, incidence reporting & CAPA**, drug tracking and tracing

Operations Distribution and Sales & marketing Service

*LIMS- Laboratory Information Management System (LIMS) is a software system used in laboratories for the management of samples, laboratory users, instruments, standards and other laboratory functions such as invoicing, plate management and workflow automation. **CAPA- Corrective and preventive action (CAPA) focuses on the systematic investigation of discrepancies to prevent their recurrence (for corrective action) or prevent from occurrence (for preventive action). Source: Company information Business Insights Ltd

Competitors SAP BusinessObjects directly competes with major BI vendors such as IBM Cognos, Oracle Hyperion, and SAS in the enterprise BI space. In the BI OnDemand softwareas-a-service (SaaS) space, SAP is also countering the competitive threats from niche players such as QlikTech.
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Growth strategies Moving towards SaaS BI With the growing demand for SaaS BI tools, SAP BusinessObjects released its BI OnDemand solution (subscription-based) in February 2010 combining web-based report sharing with a hosted data warehouse infrastructure. Demand for OnDemand/cloud-based solutions that supplement traditional BI functionality of query, reporting, and analysis has been growing as it gives immediate access and does not require any software/hardware installation. SAP BusinessObjects BI OnDemand is focused on large enterprise and upper mid-sized business.

Focusing on SMBs SAP has a strategy to rapidly build its presence in the growing SMBs market. It intends to increase its revenue contribution from the SMBs from 30% in 2007 to 45% by the end of 2010. As a part of this strategy, it launched BusinessObjects Edge Premium for mid-sized companies in 2007 and then enhancements to its Edge solutions in 2009. It also plans to integrate its BI functionality and data migration tools into SAP Business All-in-One solutions for mid-sized businesses. The BI functionality will add pre-built reports and dashboards to All-in-One and the users will be able to perform ad hoc query and analysis based on up-to-date performance data.

Acquisitions Acquisitions from January 2008 to March 2010 support SAPs strategy to double its customer base by the end of 2010, as announced in 2005, and strengthen its position in the BI market, as shown in Table 6.16. It acquired BusinessObjects in January 2008, which added approximately 44,000 customers to SAP and strengthened its position in the business user segment. In the same year, SAP BusinessObjects acquired Analytics which further strengthened its Spend Analytics solution.

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Table 6.16: SAP BusinessObjects major M&A deals, 20082010*


Year 2008 Target company Analytics, US Rationale Strengthened the spend analytics in the SAP BusinessObjects EPM solutions

*January 2008 to March 2010 Source: Company information Business Insights Ltd

Niche vendors
Niche pure-play BI vendors include Actuate, Information Builders, MicroStrategy, QlikTech, SAS, TIBCO Spotfire etc. These niche players specialize in either industryspecific BI solutions (for example, TIBCO Spotfire as a BI vendor for the pharmaceutical industry) or in specific functionality within the BI platform market (for example, Actuate specializes in interactive reporting). These players offer advanced analytics and interactive visualization technologies that facilitate rapid deployment. This section of the chapter discusses key offerings, pharmaceutical solutions, major customers, and growth strategies for some of the niche players.

Actuate Company overview Actuate offers software and services to develop interactive information applications, built on an open source-based platform. The company had 497 employees as of December 2009 and is headquartered in California, US.

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Key offerings and verticals Actuate 10 is a software platform for information applications that deliver interactive content, as listed in Table 6.17.

Table 6.17: Actuate Business Intelligence offerings


BI solutions Reporting Interactive web reporting Dashboards and scorecards Data warehousing Ad hoc query OLAP
Business Insights Ltd

Source: Company information

Actuates product portfolio provides the following solutions: BI and reporting: this includes interactive web reports, brochure-quality reporting, business analytics and spreadsheet reporting; Performance management: this includes performance management products such as metrics management, root cause analysis, activity management, and BIRT OnPerformance (based on a SaaS model); Actuate BIRT and BIRT spreadsheets: Actuate BIRT is based on the Eclipse open source BIRT project, founded and co-lead by Actuate. Actuate spreadsheets involve Excel-based reporting, deployed enterprise wide or embedded in applications.

Pharmaceutical solutions and major customers Actuates enterprise reporting applications for pharmaceutical companies integrate data from the entire drug life cycle and convert it in the form of reports, web pages, webbased spreadsheets, executive dashboards, and portals (Table 6.18). Some of the major pharmaceutical customers include Chemware and GlaxoSmithKline.

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Table 6.18: Actuate pharmaceutical solutions


Pharmaceutical process Drug discovery Clinical trials Solution Provides genomic and bioinformatic data dissemination and compound status reporting Provides adverse event scoring and monitoring; patient participation and profile monitoring; blind study monitoring and trial budget management Provides IND and NDA submissions and Phase IV trial reporting Monitor GMP electronic reporting, ingredient sourcing, and spending reports and quality assurance Physician sample tracking; prescription tracking and reporting; and direct-to-consumer campaign monitoring
Business Insights Ltd

Regulatory compliance Manufacturing Sales & marketing

Source: Company information

Competitors Actuate faces competition from mega vendors such as IBM Cognos and SAP BusinessObjects. It also competes with pure-play BI vendors such as Information Builders and MicroStrategy.

Growth strategies Focus on BIRT In 2004, Actuate joined the Eclipse foundation, a community committed to the implementation of a universal platform for tools integration, as strategic developer and board member. Actuate proposed the BIRT project to the Eclipse open source community, which was approved in 2004. Driven by the growth in interactive interfaces for business- and consumer-facing web applications, Actuate is making significant investments to develop the open source BIRT project. Actuate BIRT offers options for creating Rich Information Applications (RIAs) that feature interactive content, dashboards, mashups, and more. The companys focus on developing BIRT-

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based interactive RIAs will lead to higher revenues for the company through increased customer satisfaction.

Acquisitions Actuate acquired Canada-based Xenos Group in 2009, which supports its strategy of growing BIRT-based products, as shown in Table 6.19.

Table 6.19: Actuate major M&A deal, 20082010*


Year 2009 Target company Xenos, Canada Rationale Added enterprise information supply chain capabilities to Actuates portfolio

*January 2008 to March 2010. Source: Company information Business Insights Ltd

Information Builders Company overview Information Builders is an independent software provider offering BI and enterprise integration software. It also offers solutions in the performance management, business activity monitoring and enterprise search markets. It is headquartered in New York, US.

Key offerings and verticals Information Builders flagship product is WebFOCUS, which offers standard BI components including reporting, query and analysis, dashboards, and scorecards (Table 6.20). The WebFOCUS platform claims to access over 300 data sources and delivers information in multiple formats such as reports, spreadsheets, dashboards, maps, visualizations, and predictive forecasts.

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Table 6.20: Information Builders Business Intelligence offerings


BI solutions Reporting Query and analysis Dashboards and scorecards Predictive modeling OLAP Alerts
Business Insights Ltd

Source: Company information

Pharmaceutical solutions and major customers Information Builders pharmaceutical solution enables pharmaceutical companies to combine CRM, ERP, and third-party prescription data such as Seibel, Dendrite, IMS, and I-many in a single report. Details are provided in Table 6.21. Some of the major pharmaceutical customers include: Bayer Consumer Care, Fujisawa Pharmaceuticals, and GlaxoSmithKline.

Table 6.21: Information Builders pharmaceutical solutions


Pharmaceutical process Sales & marketing Manufacturing & operations Contract management & compliance Research & development Solution Analyzes sales performance based on campaign participation. Drills down from the dashboard to provide more detailed reports Optimizes production capacity and raw materials management, improves distribution processes Monitors contract system and identifies areas of repeated rogue contracting in order to reduce pricing errors Provides real time clinical reports Performance management framework tracks research and development through KPIs integrated into a dashboard Generates financial statements and reports, manages financial performance, financial analysis and forecasting, and financial report distribution, management, and archiving Integrates and creates unified business processes and reporting
Business Insights Ltd

Financial reporting

Mergers & acquisitions


Source: Company information

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Competitors Information Builders faces stiff competition from mega vendors SAP BusinessObjects, IBM Cognos, Microsoft, and many pure-play vendors such as TIBCO Spotfire and MicroStrategy who have either introduced or matured capabilities to make interactive visualization and predictive analytic models embedded in reports and dashboards.

Growth strategies Focus on customer facing BI strategy Information Builders places a strong emphasis on the customer relationship and focuses on a customer-facing BI concept, which allows companies to leverage the information collected through BI solutions to customers. This strategy of providing self-service access to enterprise data leads to a long term relationship with customers and thus results in increased revenues. This approach to the BI market is strikingly similar to the approach currently pursued by Microsoft.

Information Builders core argument behind its positioning in the BI market is based on its assessment of ROIs derived from BI by its client base. Most companies currently use BI solutions generally for their back-office reporting needs, which have lesser impact on ROI than a self-service application that distributes operational information to customers or larger numbers of company staff. Sharing BI information with partners and customers helps in developing stronger and longer lasting relationships, which ultimately have a greater effect on the bottom line of the company.

MicroStrategy Company overview MicroStrategy provides reporting, analysis, and monitoring capabilities to large and emerging enterprises through its integrated platform, MicroStrategy 9. The company had 1,816 employees as of December 2009 and is headquartered in Virginia, US.

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Key offerings and verticals MicroStrategy offers an integrated BI platform that provides BI functionalities for enterprises and departments/workgroups, as shown in Table 6.22.

Table 6.22: MicroStrategy Business Intelligence offerings


BI solutions Scorecards and dashboards Reporting OLAP Advanced & predictive analysis Alerts & proactive reporting
Business Insights Ltd

Source: Company information

The MicroStrategy 9 platform offers the following BI capabilities for enterprises: Scorecards & dashboards: these are reports designed with broad visual impact such as tables, graphs, and gauges. They are targeted at the business monitoring needs of managers and executives; Enterprise reporting: the reporting format is designed to convey more detailed operational information than is conveyed on a scorecard or dashboard and aims to provide critical information to personnel across the enterprise; OLAP analysis: this involves cube analysis with drilling, pivoting, page-by-page, sorting and filtering capabilities that allow business users to create various 2dimensional views or slices to understand the root causes underlying the data in reports; Advanced and predictive analysis: this involves investigative queries that can analyze data in the database down to the transaction level detail, if necessary. These are targeted at business users who regularly perform correlation analysis, trend analysis, and projections;

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Alerts & proactive notifications: It includes information that needs continuous monitoring and proactive reporting to serve large populations on set schedules, business exceptions, or OnDemand.

Pharmaceutical solutions and major customers The pharmaceuticals market is one of the key verticals for MicroStrategy. It provides analytic applications that help pharmaceutical companies to improve product development and optimize their supply chains, as described in Table 6.23.

Table 6.23: MicroStrategy pharmaceutical solutions


Pharmaceutical process Customer analysis Solution Develops targeted customer profiles that have the ability to pay for the products Identifies and targets undiagnosed individuals and encourages them to get screened and tested for possible issues Analyzes product sales to determine the reasons for higher prescription rates for certain drugs Analyzes the prescription activity in a geography to make sales force adjustments according to market size or penetration Analyzes buying trends to determine the product price Provides sales performance data to support sales initiatives and marketing campaigns Analyzes product purchase trend and treatment outcomes to develop more drug and product variations Monitors consumer behavior to determine the needs that improve the day-to-day living standards of patients, especially for non-acute medical conditions Improves production schedules through product sales analysis. Ensures inventories at retail and pharmacy locations

Operations & financial analysis

Sales & marketing analysis Product analysis

Supply chain analysis

Source: Company information

Business Insights Ltd

Some of the major pharmaceutical customers include: AmerisourceBergen, AstraZeneca, Australian Pharmaceutical Industries, Boehringer Ingelheim, Catalent Australia, Eckerd, Forest Laboratories, GlaxoSmithKline, ImpactRx, Merck, Novartis Pharmaceuticals, Pfizer, Pharmacia, Prescription Solutions, Roche Italy, Roche Pharma
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Espana, Sanofi Pasteur, The Santen Pharmaceutical, Schering Espana, Upsher-Smith Laboratories, and Wyeth Pharmaceuticals.

Competitors MicroStrategy faces competition from BI pure-players primarily from Information Builders, Actuate, and QlikTech. MicroStrategy also competes directly with IT majors such as IBM, Microsoft, Oracle, SAP, and SAS.

Growth strategies Focus on developing innovative products To compete with mega vendors such as Oracle, IBM, and SAP, who are investing heavily to acquire various BI applications, MicroStrategy is focusing on R&D efforts to develop innovative products. Mobile intelligence applications is the emerging segment in the enterprise BI market. Driven by the growth of the mobile internet and mobile devices (such as the Apple iPhone, iTouch, and iPad, RIMs BlackBerry, Motorolas Droid. and Googles Nexus One), MicroStrategy launched MicroStrategy 9 Release 2 in January 2010. The company claims enhanced in-memory BI technology and faster performance in the MicroStrategy 9 Release 2 aimed at increased worker productivity.

Earlier in 2009, MicroStrategy announced another innovative launch, namely the availability of its BI reports, dashboards, and scorecards on the Amazon Kindle DX. Amazon Kindle DX is a hardware used for storing and viewing BI reports in PDF format. Such initiatives by MicroStrategy will enable the company to differentiate its products from those offered by mega vendors.

Targeting mid-market MicroStrategy recently announced a strategy to grow its presence in the SMBs segment. In 2009, it launched MicroStrategy Reporting Suite, free reporting software for departmental BI reporting applications, designed to encourage BI use among SMBs.

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The software features mature reporting capabilities that enable rapid deployment and delivery of operational and analytical reports. This initiative of offering free software is aimed at widening the availability of MicroStrategy BI software that is targeted at midsized organizations and departmental reporting applications.

QlikTech Company overview QlikTech is an independent BI vendor, based in Pennsylvania, US. The company offers in-memory analysis and reporting solutions that enable companies to monitor, manage, and optimize business.

Key offerings and verticals QlikTechs flagship product QlikView is a BI platform with built-in ETL (extract, transform and load) functionality that enables users to consolidate information from any data source.

Pharmaceutical solution and major customers Pharmaceuticals is a major vertical for QlikView and its BI solution claims to improve visibility into physician influencers and operational processes, as shown in Table 6.24.

Some of the major pharmaceutical customers include: ALK Abello, FFF Enterprises, Merck, and Merck Sharp & Dohme.

Competitors QlikTech faces competition from pure play BI vendors TIBCO Spotfire and Tableau. It also competes with Microsoft SQL Server PowerPivot (also known as Gemini), IBM Cognos Express, and SAP BusinessObjects Explorer.

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Table 6.24: QlikTech pharmaceutical solutions


Pharmaceutical process Sales & marketing R&D Solution Tracks sales and campaign performance on dashboards and scorecards Improves physician profiling and segmentation. Accelerates clinical trial processes and regulatory approvals Cross-functional data sharing with sales, marketing and pharmacological discovery Eliminates data errors and redundancies across supply chain databases Inventory management at distributors and major pharmacies Integrates production data with other business and compliance data Extends process improvement methodologies e.g. Six Sigma, Lean Implements enterprise compliance architecture Automates processes to consolidate financial reporting and follow progress towards revenue targets with scorecard KPIs

Supply chain Manufacturing Regulatory compliance Finance

Source: Company information

Business Insights Ltd

Growth strategies Focus on the Asia-Pacific region Recent major commitments in Greater China in 2009 and an earlier launch in Japan in the same year indicate QlikTechs expansion strategy in the growing Asia-Pacific region. The company announced the launch of QlikView in the Chinese language and made QlikView Personal Edition available for free download and use for personal applications to accelerate QlikViews rapid acceptance in the Greater China region. QlikTech has also increased its sales, marketing, and technical resources in the region to accelerate growth through its channel partners. It has more than 650 QlikView customers and over 50 partners in Asia-Pacific. The company intends to focus in the region, specifically in Greater China, in 2010.

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Focus on innovative products and services offerings QlikTechs innovative patented in-memory associative technology and integrated BI tools for building highly interactive applications has differentiated itself from traditional BI vendors. In January 2010, QlikTech announced the availability of its QlikView analytics application on the Android operating system. In addition to all the features provided by traditional BI mobile offerings, it leverages fully interactive drill down functionality to explore information. Earlier in 2009, QlikTech released an interactive mobile BI application built specifically for the iPhone, which competes with Oracles mobile BI tool. Such innovative offerings enable QlikTech to compete with mega vendors such as IBM, Oracle, and SAP.

SAS Company overview Incorporated in 1976, SAS is a private player in the BI software and services market. It offers data integration, intelligence storage, advanced analytics, and BI applications within an integrated BI platform. It is headquartered in North Carolina, US, and has approximately 400 offices and 600 alliances globally.

Key offerings and verticals The SAS BI portfolio comprises BI tools and applications for large enterprises and SMBs, as shown in Table 6.25.

Table 6.25: SAS Business Intelligence offerings


Enterprise BI solutions Large Portals/dashboards Reporting Query and analysis OLAP Microsoft Office integration Guided analysis Business visualization SMBs Query and data analysis Analytics Web based reporting Dashboards Visualization

Source: Company information

Business Insights Ltd

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SASs BI offering includes two components: Enterprise BI server: this is a BI solution delivered through the SAS Enterprise Intelligence Platform which supports a range of open standards and includes capabilities portals/dashboards, report viewing, report building, query analysis, guided analysis, business metadata management, and OLAP cube creation; Business Visualization: this is focused on delivering interactive visualization tools such as dashboards and scorecards, aiding business users to explore ideas and information.

Pharmaceutical solutions and major customers SAS solutions for the pharmaceutical industry transform, manage, and analyze data for drug development and commercialization, as detailed in Table 6.26.

Some of the major pharmaceutical customers include: Accovion, AstraZeneca, Daiichi Sankyo, Eli Lilly, ImpactRx, McKesson, Monsanto, Sanofi-Aventis, Solvay Pharmaceuticals, Speedel Experimenta, UCB Pharma, and XOMA.

Table 6.26: SAS pharmaceutical solutions


Pharmaceutical process Clinical data integration Drug discovery & development Drug safety Sales & marketing Solution Data integration, mapping, preparation, standardization and validation Provides an integrated solution for managing, analyzing, reporting, and reviewing clinical research information Safety solution that provides safety reporting, signal detection, and root cause analysis Implements an iterative model to identify market shifts and provides insights into customer and physician behavior
Business Insights Ltd

Source: Company information

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Competitors SAS competes directly with the other IT majors operating in the BI space such as IBM, SAP, and Oracle. Its main competition in advanced analytics comes from SPSS (now acquired by IBM), TIBCO Spotfire, and Fair Isaac.

Growth strategies Focus on more advanced niche technology solutions SASs focus on developing new advanced niche technology solutions, such as forecasting and predictive modeling, and embedding them into cross-functional and industry-specific analytical applications differentiates it from other BI vendors. In line with this strategy, SAS launched several niche Business Analytics solutions such as social network analysis, marketing campaign management, and governance, risk, and compliance solutions in 2009. To further support its strategy of developing new technologies, SAS reinvests a large portion of its revenues (22.0% of revenues in 2008) in R&D to further enhance the strength of its analytic solutions.

Expanding reach through agreements with database management system vendors SAS is expanding the reach of its analytic capabilities to non-SAS clients infrastructure through agreements with database management system (DBMS) vendors, such as Teradata, Netezza, IBM, HP, Aster Data, and Greenplum. Through these partnerships, SAS is focused on introducing new products and services expected to reduce the processing time and increase the analytic output. For example, in March 2010, SAS and Teradata introduced Warranty Analysis Advantage Program aimed at reducing the warranty cost for manufacturers. Thus, by running and optimizing certain SAS solutions and analytic processes within the DBMS vendors database engine, it assists in revenue growth.

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Acquisitions SAS is mainly focused on growth through an organic route, as indicated in Table 6.27. During January 2008 and March 2010, it acquired two companies that reflect its strategy of enhancing existing technology and expertise in specific industry.

Table 6.27: SAS major M&A deals, 20082010*


Year 2008 2008 Target company IDeaS Revenue Optimization, US Teragram, US Rationale Enhanced SASs revenue and price optimization capabilities for the hospitality and travel industry Strengthened text mining and analytics

*January 2008 to March 2010. Source: Company information Business Insights Ltd

TIBCO Spotfire Company overview TIBCO Spotfire, a part of TIBCO Software, is a pure-play BI vendor. TIBCO Spotfire was acquired by TIBCO Software in 2007 and operates within TIBCOs business optimization segment. It is headquartered in Massachusetts, US.

Key offerings and verticals TIBCO Spotfire offers BI analytics software and data visualization to large enterprises and SMBs, as shown in Table 6.28. TIBCO Spotfire offers interactive visualization, which integrate the predictive analytics and data mining technology that it acquired from Insightful and the Complex Event Processing (CEP) middleware in its parents established portfolio to develop industry specific analytic applications. TIBCO Spotfire analytics is a single platform that has distributed in-memory processing, predictive modeling, and instant interactive visualization. The platform capabilities span from ad

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hoc analysis to interactive reporting and dashboards, to domain-specific applications, to event-driven real-time analysis.

Table 6.28: TIBCO Spotfire Business Intelligence offerings


BI solutions Ad hoc analysis Interactive reporting Dashboards Predictive analytics
Business Insights Ltd

Source: Company information

Pharmaceutical solutions and major customers The pharmaceuticals market is one of the key verticals for TIBCO Spotfire. It provides analytic applications that help pharmaceutical companies discover new therapeutics, develop product pipelines, launch drugs to the market, and align sales and marketing campaigns, as shown in Table 6.29.

Table 6.29: TIBCO Spotfire pharmaceutical solutions


Pharmaceutical process Target & biomarker discovery Lead discovery & optimization Clinical trial analysis Pre-clinical & clinical study reporting Pharmacovigilance Pharmaceutical sales & marketing analytics Solution Identifies new drug targets and biomarkers, routine analysis of genomic and proteomic data Enhances screening and evaluation of chemical, biological and ADME properties Enables monitoring and analysis of complex clinical data and speeds the drug development process Provides accurate and timely reporting on pharmacokinetics, toxicokinetics, and pharmacodynamics Provides analytic and graphical environment for evaluating safety data Analyzes target markets, consumer trends, and competitors

Source: Company information

Business Insights Ltd

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Some of the major pharmaceutical clients include Amgen, AstraZeneca, Biogen, Boehringer Ingelheim, Eli Lilly, Fournier-Pharma, Genzyme, GlaxoSmithKline, ISIS Pharmaceuticals, Johnson & Johnson, Monsanto, OSI Pharmaceuticals, Oxagen, Pfizer, Procter & Gamble, and Sanofi Aventis.

Competitors TIBCO Spotfire faces stiff competition from other BI and visualization technology vendors such as QlikTech, SAS (Visual Data Discovery) and Microsoft (PowerPivot, Excel 2010, SQL Server with its VertiPaq, SSAS, SSRS and SSIS).

Growth strategies Extending position in the life sciences market TIBCO Spotfire provides innovative analytics and visualization capabilities to the life sciences industry and has domain expertise in this space. In 2009, it announced a strategic push to extend its leadership position in the global life sciences market with the release of several research and clinical analysis solutions, including Integromics Biomarker Discovery 2.0, Lead Discovery 2.0, Pipeline Pilot Connector, and Clinical Graphics 2.0. These solutions deliver integrated informatics and analysis and can speed up the drug development process by providing timely and reliable access to essential scientific and operational data. TIBCO Spotfires domain expertise in the pharmaceuticals and biotechnology industry and its innovative offerings help to extend its market position in the industry.

Acquisitions In 2008 TIBCO Software acquired Insightful (Table 6.30), which supports its strategy of expanding the range of interactive analysis tools. The acquisition added predictive analytics to TIBCOs BI portfolio. This was TIBCOs second acquisition in the BI space, after it acquired Spotfire in 2007.

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Table 6.30: TIBCO Spotfire major M&A deal, 20082010*


Year 2008 Target company Insightful, US Rationale Strengthened TIBCOs presence in predictive analytics

*January 2008 to March 2010. Source: Company information Business Insights Ltd

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CHAPTER 7

The future of the Business Intelligence market in the pharmaceutical sector

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Chapter 7

The future of the Business Intelligence market in the pharmaceutical sector

Summary
As the economy continues to recover, corporate-wide investments in advanced analytics BI technologies (predictive analytics, in-memory analytics, SaaS and open source) will increase during 20102012. Pharmaceutical companies are restructuring their sales and marketing operations through predictive analytics to determine the impact of promotional activities on sales in real-time in order to remain competitive. Major vendors for predictive analytics and data mining tools include SAS, IBM, KXEN, Oracle, Information Builders, TIBCO Spotfire, Angoss Software, and Netezza. Implementation of in-memory analytics to a pharmaceutical company provides rapid information delivery to the sales team and improves the average query response times as compared to traditional BI tools. IBM, QlikTech, and TIBCO Spotfire are established strong players in the in-memory technology space. During 20102012, the SaaS BI segment will continue to grow, driven by its advantages over on-premise BI offerings, such as cost effectiveness, shorter implementation cycles, user-managed self service and reduced burden on information technology (IT). SAP BusinessObjects, IBM Cognos, SAS, Birst, GoodData, Information Builders, Oco, Panorama Software, and PivotLink are major vendors that deliver BI as a service. Driven by its lower cost, the demand for open source BI products is increasing more compared to other conventional and SaaS BI tools, in particular, by SMBs. Jaspersoft, Pentaho, and Actuate are major open-source vendors that provide comprehensive BI platform capabilities comparable in many functional areas with those of mega vendors such as SAP BusinessObjects and IBM Cognos.

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Introduction
BI initiatives have emerged as a priority for CIOs to improve operational efficiencies and reduce costs during the economic downturn. While the BI market is mature from a vendor and technology perspective, it is quite undeveloped in terms of user adoption. Four major emerging technologies predictive analytics, in-memory processing, SaaS, and open source will reshape the BI market in the future.

Figure 7.20: Spectrum of Business Intelligence technologies


High

Rapid deployment Complexity Prediction Monitoring Analysis Reporting Low Business value High

BI technologies In-memory & SaaS Predictive analytics Dashboards & scorecards OLAP & visualization tools Query, reporting & search tools

Source: Business Insights

Business Insights Ltd

With previous chapters having established the state of the BI market in the pharmaceutical industry, identified the nature of demand, and discussed the drivers and challenges that BI face earlier, this chapter highlights the potential of BI in the pharmaceutical industry in the long term. It identifies the four key technical developments shaping the future BI market, and also outlines major vendors for these technologies and their recent developments.

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Transition of the pharmaceutical sales and marketing model through predictive analytics
Driven partly by economic recession, predictive analytics is becoming increasingly popular as the need for more accurate forecasts and optimized business processes arise. IBMs acquisition of SPSS in 2009 will further the potential of predictive analytics with new industry-focused solutions such as: Customer acquisition and retention for financial services; Improvement in patient care for the healthcare industry; Ideal location of stores for retailers and manufacturers.

At the same time, many pure-play BI vendors such as Information Builders, TIBCO Spotfire, and MicroStrategy also introduced predictive analytic models and forecasting capabilities in their BI tools. Between 2010 and 2011, the BI market will be driven by embedded analytic and predictive capabilities to determine trends, risks, and opportunities, which were not possible with historical reporting.

Cost containment issues and falling productivity are putting pressures on the pharmaceutical industrys traditional sales and distribution model involving huge promotional budgets and assertive sales forces. This requires pharmaceutical companies to restructure their sales and marketing operations to determine the impact of promotional activities on sales in real-time in order to remain competitive. Predictive analytics helps companies to manage this transition in the pharmaceutical industry and helps companies to understand physician behavior and attain cost effective sales and marketing efforts. For example, implementation of predictive analytics to sales and marketing integrates prescription data obtained from external sources with physician and sampling data collected internally by the companys own detailing efforts. The integrated data can be used to create models, which include demographic data; information such as the physicians medical specialty and practice characteristics; and other detailing data like visit history, sampling history, attendance

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at informational events, and literature requests. These models are used to determine the best prospective prescribers, enabling the company to reduce sample distribution and detailing visits. Thus, predictive analytics helps pharmaceutical companies optimize its sales resources and reduce sales and marketing costs.

Major vendors Major vendors for predictive analytics and data mining tools include SAS, IBM, KXEN, and Oracle. Certain niche players such as Information Builders, TIBCO Spotfire, Angoss Software, and Netezza are also building predictive analytics capabilities.

By the end of 2010, many BI vendors will introduce predictive modeling tools, either as stand-alone offerings or as embedded features of companies BI capabilities. Many BI vendors will add predictive modeling to their current offerings to meet the growing demand for cost reduction, risk reduction, fraud detection, and improved profitability. For example, IBM will integrate SPSS (a predictive analytics vendor acquired in 2009) within IBMs Information Management software portfolio in 2010. In March 2010, IBM launched a new predictive analytics software lab in China, which will serve as a global hub for analytics development.

Established predictive analytics vendors such as SAS, KXEN, and Angoss Software will expand their existing usability features by embedding forecasting and predictive capabilities into cross-functional and industry-specific analytical applications. For example, SAS and Accenture announced joint development of industry-specific predictive analytics solutions for the financial services, healthcare and public service sectors as well as cross-industry solutions in the customer and enterprise management domains in February 2010.

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Shifting to in-memory analytics helps rapid information delivery to the sales force
In-memory analytics is another emerging trend in BI applications. BI and data warehouse vendors are increasingly shifting to in-memory technology that increases data analysis speed. The technology also accelerates implementations and extends selfservice capabilities. The demand for fast and flexible data analysis capabilities as well as technological innovation such as the 64-bit processor which increases the amount of data that can be stored into random access memory (RAM) has largely contributed to the emergence of in-memory technology.

In-memory technology takes advantage of the large 64-bit processor memory and provides a middle-tier database that can respond directly to data requests from reports, dashboards, and OLAP analyses. Since the database is stored in the computer memory, it avoids disk access delays and improves the average query response times. For example, to maintain their position in the highly competitive pharmaceuticals market, sales teams struggle to analyze bulky data, and thereby fail to understand the prescribing habits of their customers. Implementation of in-memory analytics to a pharmaceutical company provides valuable information rapidly to the sales force a few days earlier as compared to traditional BI tools, which enables sales management to make timely and informed business decisions. This enables the company to analyze more prescriber groups and supports more end users, helping expand the scope of the database available to the sales force.

Major vendors IBM, QlikTech, and TIBCO Spotfire are established strong players in the in-memory BI space. TIBCO Spotfire has recently released the latest version of its in-memory BI platform for predictive analytics in March 2010.

Several other BI vendors such as SAP BusinessObjects, MicroStrategy, and Microsoft have either recently added or plan to add in-memory analysis capabilities.

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MicroStrategy added in-memory analysis in its Version 9 released in 2009. SAP introduced SAP BusinessObjects Explorer in 2009, which is a combination of the SAP BusinessObjects Polestar interface and Business Warehouse Accelerator in-memory database technology. Microsoft has also announced that in-memory capabilities will be part of SQL Server 2008 R2, which is expected to be released in May 2010.

Leveraging SaaS for data analytics


Interest in SaaS-based BI solutions (subscription-based model) has increased significantly since 2009, although it is still a niche segment. During 20102012, the SaaS BI segment will continue to grow driven by its advantages over on-premise BI offerings, such as cost effectiveness, shorter implementation cycles, user-managed selfservice and reduced burden on IT. SaaS-based BI models will primarily be driven by SMBs that have limited IT budgets.

Pharmaceutical companies use SaaS BI to determine commercial regulatory requirements, clinical trial operational efficiencies, measure field force effectiveness, and marketing program ROI.

Major vendors SAP BusinessObjects, IBM Cognos and SAS are the major SaaS BI vendors. There are also niche players such as Birst, GoodData, Information Builders, Oco, Panorama Software and PivotLink that deliver BI as a service. Besides, there are niche vendors, such as Partners and PureStream, who provide SaaS BI to only pharmaceutical companies. Another mega vendor, Oracle, provides BI SaaS platform to ISVs, hosting service providers and system integrators, while Microsoft is gradually moving its BI platform into the cloud through SQL Azure.

By the end of 2010, BI vendors will continue to introduce SaaS deployments of their core analytic databases. SAP integrated SAP BusinessObjects' SaaS BI products into

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one solution and launched it in February 2010 as SAP BusinessObjects BI OnDemand solution for underserved casual users.

Open source paving its way into SMBs


The demand for open source BI products is increasing compared to other conventional and SaaS BI tools, primarily driven by SMBs due to its lower cost. The growth in open source BI deployments is driven by small ISVs who are opting for OEM relationships with open-source vendors and provide BI functionality embedded in their (ISVs) own products.

Open source BI can be used to improve a number of processes in the pharmaceutical industry. For instance, a pharmaceutical company can analyze region-wide sales performance and trends based on KPIs by using an open source BI data storage application.

Major vendors Jaspersoft and Pentaho are two major pure-play open source vendors that provide comprehensive BI platform capabilities comparable in many functional areas with those of mega vendors such as SAP BusinessObjects and IBM Cognos. Other niche BI vendors are also transitioning their focus to open source-based BI products, such as Actuate (to commercial products based on BIRT).

These open source vendors are adding more enterprise-class features to their products in order to expand their customer base from SMBs to larger organizations, enabling them to compete with BI mega vendors. For example, in January 2010 Jaspersoft released a new professional edition of its core BI suite that includes a number of new and enhanced features such as auto logging for compliance tracking, a multi-tenancy deployment option, a multidimensional ROLAP component and improved ETL capabilities. In March 2010 Pentaho also announced ,the release of Pentaho Data

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Integration (PDI) 4.0 that claims to speed up the development and implementation of BI products by collapsing together all the steps in BI implementation.

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Appendix
Glossary
B2B Business-to-business

BI

Business Intelligence

CAPA

Corrective and preventative action

CEE

Central and Eastern European

DBMS

Database management system

EPM

Enterprise performance management

ERP

Enterprise resource planning

ETL

Extract, transform, and load

HMO

Health maintenance organization

HR

Human resources

IND

Investigational new drug

ISV

Independent software vendor

IT

Information technology
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KPI

Key performance indicator

LIMS

Laboratory information management system

NDA

New drug application

OEM

Original equipment manufacturer

OLAP

Online analytical processing

pdf

Portable document format

RIA

Rich information application

ROI

Return on investment

ROLAP

Relational online analytical processing

SaaS

Software as a service

SG&A

Sales, general, & administrative

SMB

Small and medium sized business

SOA

Service-oriented architecture

wmf

Windows metafile

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Index
Acquisition, 69, 72, 76 Actuate, 13, 14, 60, 61, 64, 77, 78, 79, 80, 85, 96, 102 Advanced analytics, 74 Challenges, 26 Dashboard, 71 Drivers, 24 Drug development, 33, 34, 35, 68 Predictive analytics, 92, 98 Drug discovery, 33, 34, 68, 71, 79, 89 Growth strategies, 65, 69, 72, 76, 79, 82, 85, 87, 90, 93 IBM, 12, 14, 43, 58, 60, 61, 62, 63, 64, 65, 66, 68, 72, 75, 79, 82, 85, 86, 88, 90, 96, 98, 99, 100, 101, 102 IBM Cognos, 12, 13, 14, 43, 58, 60, 61, 62, 63, 64, 65, 68, 75, 79, 82, 86, 96, 101, 102 Information Builders, 13, 14, 60, 61, 64, 77, 79, 80, 81, 82, 85, 96, 98, 99, 101 in-memory, 13, 14, 49, 85, 86, 88, 91, 96, 97, 100 Manufacturing & supply chain, 33, 35, 36, 68 Microsoft, 12, 13, 60, 61, 62, 64, 65, 66, 67, 68, 69, 70, 72, 82, 85, 86, 88, 93, 101 MicroStrategy, 13, 43, 60, 61, 64, 72, 77, 79, 82, 83, 84, 85, 98, 100 Niche vendors, 77 OLAP, 63, 64, 67, 70, 71, 74, 78, 81, 83, 88, 89, 100 QlikTech, 13, 14, 60, 61, 68, 75, 77, 85, 86, 87, 88, 93, 96, 100 Query, 63, 67, 74, 81, 88 Reporting, 43, 63, 71, 74, 78, 81, 83, 85, 88 SaaS, 13, 14, 60, 68, 75, 76, 78, 96, 97, 101, 102 Sales & marketing, 11, 32, 33, 36, 37, 47, 68, 71, 75, 79, 81, 84, 87, 89 SAP BusinessObjects, 14, 43, 61, 62, 64, 65, 68, 73, 74, 75, 76, 77, 79, 82, 86, 96, 100, 101, 102 SAS, 13, 14, 60, 61, 72, 75, 77, 85, 88, 89, 90, 91, 93, 96, 99, 101 SG&A, 12, 52, 54, 55 SMBs, 13, 14, 43, 50, 60, 63, 65, 67, 70, 71, 73, 74, 75, 76, 85, 88, 91, 96, 101, 102 TIBCO Spotfire, 13, 14, 29, 57, 60, 61, 68, 72, 77, 82, 86, 90, 91, 92, 93, 94, 96, 98, 99, 100 OnDemand, 66, 68, 74, 75, 76, 84, 102 Open source, 102 Oracle, 12, 13, 14, 43, 60, 61, 62, 64, 65, 68, 70, 71, 72, 73, 75, 85, 88, 90, 96, 99, 101 Organizational priorities, 52 Performance management, 67, 78, 81 Pharmaceutical solution, 64, 68, 71, 75, 78, 81, 84, 86, 89, 92

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