Manufacturing and supply chain IT spend in the life sciences only grew a moderate 2.5% during 2013, but 2014 is looking like the beginning of an investment uptick in the industry.
Based on data from our recently conducted 2014 Life Science Manufacturing and Supply Chain IT Benchmark Guide, IDC Health insights expects investment to pick up and return to growth levels closer to historical averages, exceeding 4%, and breaking $7 billion in total IT investment industry wide during 2014.
Life science companies are exploring ways to further optimize manufacturing and supply chain processes to help alleviate several industry challenges. For example, companies are working to diversify procurement to help raw material challenges that have been causing drug shortages. Drug serialization continues to progress as a critical way to successfully reduce the explosion of counterfeit drugs plaguing the industry. Initiatives like quality by design (QbD) are top of mind, as they aim to improve quality, reduce defects, and streamline operations, edicts which are important to both the FDA and individual companies to help reduce corporate risk.With the industry under tremendous pressure to improve both the top and bottom line, all of these programs hold great long-term promise for life science companies and should help drive margin expansion in the coming years.
With investment in the space rising, dollars are being first and foremost aimed at data mining/analytics, business intelligence (BI), and dash-boarding, which all ranked as the most important technology categories directly contributing to manufacturing and supply chain success. Supply chain and manufacturing organizations plan to increase spend on data mining/analytics in 2014 than on any other technology, with an average expected increase of roughly 9.8%.
Other priority IT investment areas include quality control, data warehousing, supply chain visibility and monitoring, and demand forecasting. PLM is also rising in importance, particularly around new product global launch sequencing, as international reference pricing is completely changing the way that companies need to strategize the launch and introduction of new products. IDC Health Insights is currently conducting a separate research study examining the industry's adoption of global pricing strategies which should publish later this month.