Contributed Commentary By Philip Martin

July 28, 2017 | Decades ago, who could have predicted the rapid pace of scientific advancements in our understanding of diseases at the molecular level? The scientific, technical, and regulatory challenges related to drug development have created complexities. According to a recent Deloitte study, the return on investment from research and development fell dramatically in 2016 to 3.7% from the high of 10.1% in 2010. The overall likelihood that a drug entering clinical testing will eventually be approved is estimated to be less than 12%. The message is clear; getting new drugs through the approval process has become more challenging, the consumer market is changing year-on-year, and the associated costs of taking a drug from the discovery stage to pharmacy shelves is staggering. 

But there is some good news for the Pharma industry. In December 2016, Congress passed the biggest health care reform act since Obamacare. The 21st Century Cures Act authorized $6.3 billion in funding, mostly for precision medicine and biomedical research run by the National Institutes of Health (NIH). It aims to speed up the drug and medical device approval process, especially for diseases with unmet medical needs. What does this imply? New funding, new research, and many new projects.

Pharma Project Management Challenges

Project management for drug development is highly specialized and still a relatively new practice. From a project delivery perspective, there are many ongoing and new challenges. Oftentimes organizations, particularly at the executive level, lack an appreciation of the importance of project management. That posture may cause a lack of sponsorship from the top, essential in being able to aptly report progress and financials to the board and investors.

Also, complex compliance and regulatory processes require massive coordination between R&D, regulatory, legal, finance, supply chain, sales, and marketing. Research projects and resource pools that are geographically distributed and disconnected without an overarching resource management function often hamper this coordination. IT and back-office functions, including Contract Resource Organization (CRO), are often outsourced, adding to the complexities of coordination/communication. Lastly, organizations may lack specialized pharmaceutical project management skills that make it more difficult for progress and reporting.

EPMO (Enterprise Project Management Office)

PM Solutions has carried out Project Management Office (PMO) surveys every year since 2007, making their empirical data useful and insightful. In 2016 they reported that, “…PMOs have consolidated their position as a strategic partner with the majority of organizations either having PMOs or are planning to implement one in the coming year.” The study also indicated that for those PMOs that have been in place for more than five years, expansion of responsibilities and improvements in results are “remarkable.” Their value is rarely questioned by the organization; they are more likely to engage in tasks that impact strategic planning, governance, and portfolio management.

Eighty-five percent of respondents said they have a PMO with an additional 30% of respondents planning to implement one within the next year. The age of the PMO seems to have a direct correlation between the PMO and its capability. PMOs in high-performing organizations tend to be more established (6 years vs. 3 years’ experience). Most PMOs report to a VP or higher, with 49% reporting directly to the C-level. Undoubtedly strong executive management commitment and support is one of the key criteria for success.

The reality is that if a pharmaceutical company does not have an enterprise-wide PMO to govern the overall portfolio of related projects then they should. The aim to this approach is the central coordination of all aspects of the projects in an organization. It becomes the single point of success or failure and the single source of truth. The biggest challenges PMOs face are that they’re seen as overhead and their organizations continue to be resistant to change. The PMO covers the three areas critical to any pharmaceutical project’s success: scientific operations, client services, and resource management.

Functions and Objectives of a Successful EPMO

As owner of the program roadmap, a successful PMO should provide direction and oversight of project management policies, procedures, and templates. This means, among other activities, coordinating project initiation, planning, reporting, and closing phases of all projects. The office should be accountable for the creation of auditable and traceable documentation through all research and development project phases. And finally, it should be able to provide a comprehensive report.

As the program moves forward, the enterprise PMO should be responsible for overall administration of all components involved in the program (i.e. web site, war rooms, collaboration); the alignment of projects against strategic objectives; portfolio and performance tracing; resource management; training and coaching in concert with Human Resources.

There are a number of key objectives for which a PMO should be responsible:

• Alignment to Strategic Objectives: How aligned are projects and the portfolio to a firm’s strategic objectives?
• Process Alignment: How useful, consistent and comprehensive are the company’s project management processes across the entire enterprise?
• Program/Project Roadmap: A Project or Program Roadmap is a simple presentation of the project objectives and project goals alongside a timeline.
• Performance Management: How well do the projects add value to the overall organization and how well does it reward teams and individuals for contribution to successful projects?
• Organization architecture/modeling: Defining the organization’s roles and responsibilities and agreeing an unambiguous organization chart.
• Staff Culture: How well understood is the objectives and role of the PMO and how does the organization encourage, recognize, and develop good behaviors?
• Information architecture: Ensuring that the organization have ready access to and make good use of project information for their decision-making.

A lot has changed in the pharmaceutical industry in the past 20 years, and yet in so many ways the fundamentals have stayed the same. A new drug cannot be released without going through strict regulatory processes. Generics are challenging the industry as a whole. Discovering new exciting compounds is rare. Pharmaceutical companies, like members of other industries, are intensely competitive and under more scrutiny than ever before for better value. New emerging markets are being explored while scientific research has become more results-oriented. We have now entered the era of project management in the pharmaceutical industry. It is time to go found an Enterprise Project Management Office (EPMO). Do it now before you are left behind by your competitors.

Philip Martin founded Cora Systems in 1999.  In his nearly 20 years of experience in the enterprise portfolio, program and project management (EPPM) industry, Cora has delivered award-winning solutions and services to government agencies and large-scale global organizations, including life sciences, healthcare, and engineering & construction. Today over $10 billion of projects are being managed on Cora’s platform, which provides clients’ management teams with a single version of truth across diverse project programs and portfolios that often straddle dozens of locations and countries. He can be reached at pmartin@corasystems.com.