Standardise your LIMS and reduce total cost of ownership

Pharmaceutical companies that are planning or deploying a LIMS solution face significant challenges.

In the past, LIMS purchasing decisions largely focused on meeting the needs of individual labs, with little consideration made for enterprise knowledge sharing, compatible reporting formats or business process harmonisation from lab-to-lab. Today, companies are contending with increased LIMS adoption across more of their labs, an increasingly stringent regulatory environment and a proliferation of installed LIMS solutions resulting from company mergers and acquisitions. In addition, tighter budgets and changing economic conditions are forcing companies to curb expenses, reduce errors and improve quality. The combination of these factors is driving companies to closely examine the way in which their LIMS solutions are purchased and deployed across the organisation.

In an effort to address today's changing economic environment, the industry is witnessing growing trends toward harmonising business processes and standardising LIMS solutions. The case for implementing a standard solution on a global basis is clear. From a business perspective, one global solution enables easier access to data from across the organisation, facilitating better and more standardised enterprise reporting, lowers the cost of training and affords greater flexibility in transferring employees from one lab to another as work volumes change.

From an IT perspective, a standard configuration applied to all sites allows IT resources to develop deep expertise in one solution, making them better equipped to identify and solve problems before they occur and quicker to respond to problems when they do. In addition to improved technical expertise and product reliability, key benefits of LIMS standardisation include reduced vendor complexity, improved purchasing power, more efficient upgrades and integration to other systems, and streamlined IT management.

The benefits of standardisation have a direct impact on lowering a system's total cost of ownership (TCO), a measure of the full life-cycle costs of a particular IT asset. In addition to licensing fees, implementation costs and annual vendor maintenance expenses, TCO takes into account internal costs associated with implementation, hardware, IT support and upgrades.

Thinking in terms of TCO and looking beyond the initial purchase price and installation cost of a LIMS solution, companies gain a better understanding of the total cost of a particular solution. In fact, numerous studies have proven that the capital expense associated with any software deployment often comprises the smallest portion of a solution's TCO, yet some decision-makers continue to focus only on license cost when making a LIMS decision. Internal, non-vendor costs, on the other hand, comprise the largest portion of the TCO of a LIMS. Since standardisation impacts these costs the most, companies often consider one global LIMS solution as a way to lower the TCO of their LIMS.

Standard solution challenges

While the benefits of implementing a standard LIMS solution are evident, a global LIMS implementation can be fraught with challenges. Standardising on one LIMS requires a significant investment of time and resources. Successful deployments entail months of planning and time devoted to a review of company-wide processes, identification of best practices, system design and development, data migration and training.

Organisations deploying a standardised LIMS must also harmonise business processes across the organisation and ensure the solution can accommodate a diverse user group and geographically dispersed labs. This involves balancing the needs of individual labs and devoting time and effort to negotiating process changes across the organisation.

In early-stage R&D environments, for example, harmonisation may not be ideal and lab managers may resist corporate-led initiatives to standardise. In these situations companies implementing a standardised LIMS will need to devote significant resources to customising the solution to meet the needs of each lab. Manufacturing environments, on the other hand, are generally marked by clearly defined, repeatable processes. Achieving business process standardisation in these environments might be easier to accomplish but will still require effort to accommodate the needs of individual labs.

Is it all worth it?

Despite the challenges associated with a global LIMS implementation, more and more companies are actively undertaking initiatives to harmonise business processes and standardise on one LIMS solution. The question remains whether or not LIMS standardisation can yield the financial and operational benefits that IT managers have promised. To date, the benefits of standardisation have largely been anecdotal, with no industry data to support the notion of a global LIMS or to justify the costs associated with implementing a standardised solution.

A recent study conducted by IDC, a Framingham, Massachusetts-based research and consulting firm, entitled "Standardising on LIMS: TCO and ROI for the Multi-Lab Setting“ is the first to examine the issue of LIMS standardisation in depth. IDC interviewed senior LIMS and IT managers at leading companies across various industries that either have standardised or are in the process of standardising on one LIMS solution. These companies cited the potential for reduced IT personnel, better reporting and easier access to data as key reasons for standardising on one LIMS solution.

The results of the study, which measured the financial impact of business process and LIMS standardisation, are indeed compelling. All study participants experienced a significantly reduced TCO for LIMS, increased IT productivity and increased LIMS user productivity as a result of standardising on one solution. Altogether, the companies recognised benefits of about US$300000 per lab annually from implementing a standardised LIMS.

Cost reductions such as hardware and software savings, IT efficiency and reductions in lost inventory account for almost half of all savings. Improvements in user productivity yielded another 38 per cent of benefits.

In the area of TCO, 50percent of the benefits of standardisation were found to be in hard cost reduction, which includes expenses associated with hardware, software and IT operations. Additional savings were derived from IT staff savings. Companies that standardised were able to grow their user base without adding staff, while others were able to reduce their LIMS IT staff. On average, companies were able to improve IT efficiency by changing their user per IT staff ratio from 50to86, a 72percent change, as a result of standardisation. Other TCO-related benefits of standardisation quantified in the study included a reduction in training costs per employee, reduced contractor costs and improved inventory tracking.

The study also confirmed that, as a result of LIMS standardisation, companies could improve productivity, defined as the percentage of time IT staff devote to productive areas. User support activities, applications management and validation, time devoted to troubleshooting activities and data management were typically reduced by more than 50percent, and in some cases by 90percent


Today's economic conditions require IT managers to do much more with far less, so the stakes are high on decisions regarding the procurement and implementation of solutions such as LIMS.

Business process harmonisation and standardisation on one LIMS solution have become leading strategies for companies to not only reduce the TCO of LIMS, but also improve time to market, enable more efficient reporting and improve productivity of IT staff and end-users. While standardising on one LIMS can be a large and consuming undertaking, proper planning, devoting the right resources, and partnering with an experienced vendor are all key to mitigating risk and ensuring success. Companies have already proven that the benefits of standardisation clearly outweigh the costs, which will only encourage more companies to move in this direction. u

Jim Neville is Director of Marketing & Business Development - Informatics & Services, Thermo Electron Corp, Woburn, Mass, USA.

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