“Being a partner has given vendors permission to underperform.”

It is most fashionable these days to describe all business relationships as “partnerships.” It doesn’t matter if we are licensing a compound, handing off functional operations to a CRO or buying a piece of software, we are always doing it with “partners.” I suppose the paper distributor who supplies our paper towels is our “cleanliness assurance partner.” While we can dismiss this language as the marketing cover-up that originated its usage, we cannot so easily dismiss how misperceptions resulting from this language have become an obstacle to the theoretical concept behind the word.

Everyone wants to be our partner these days, even when they are simply selling us a product or service. I have to wonder what is wrong with being “just” a provider or a vendor these days? The glib answer is that somehow partners provide us “more”, while in my observation they actually provide us less. Being a partner has given vendors permission to underperform, especially to the unreasonably high expectations they have set for themselves with this partner language. By being our partner, more can be blamed on us and less on them. Being “all in this together” somehow has shifted more oversight, more responsibility, and more strategy burdens onto us and away from the vendor. It’s a marvelous marketing ploy. Woe to all of us if the IRS announces tomorrow that they have now become our partner! Or to use the Latin, caveat socius!

Symptoms

The partnering game plays out in clinical research information technology in a myriad of ways. First off, all the software vendors are of course now our partners, not our vendors. This has become a business necessity because a) (see above) everyone is a partner, and b) they are under-performing as simply “vendors.” So claiming the partner mantle is an attempt to avoid attention on their:

—  inadequate support performance

—  stagnant product performance

—  need for a steady revenue stream

—  slow product migration /enhancements

—  serially monogamous innovation.

The state of clinical IT products and services in 2009 is a stagnant pool, and the algae are starting to grow on the edges. Most vendors of EDC, CTMS, ePRO, AES and related tools are evenly modest in their support capabilities: every sponsor has learned that the quality of service they receive from a vendor depends entirely on who the vendor project manager is that month, that help desks consist of thinly prepared outsourced staff, and that vendor training is increasingly automated and automatic.

Meanwhile product lifecycles have matured. It is not an exaggeration to say that the functions and features of the leading tools in all clinical IT spaces today are barely distinguishable from those 7-8 years ago.

Money of course is a key contributor. Vendors need to partner with us because they need a steady stream of revenue. One cannot sustain a software business in our industry by selling large boluses of perpetual licenses because you’ll run out of biopharma customers too quickly. So the game is to get sponsors to subscribe to a variable-dependent service (per trial, per program, per year, per something) so that the income will never end. Much better (from their marketing perspective) for us to think of this company you will never stop paying as being a partner, rather than a vendor.

Partnering is a great method for distracting the customer from what is missing in the product strategy (which is harder to hide if they admitted that, after all, they are a product supplier). As the core products stagnate, customers are making longer lists of desired (or required) functional enhancements. They want to see a practical vision for technology migration, and especially now, technology integration. But enhancements and integrations are not in the vendors’ fundamental interest. There is simply not enough money to be made in helping out with these things – the revenue to be made will never cover the engineering costs.

This is compounded by the vendors’ “serial monogamy” approach to functionality: vendors develop, or enhance, or acquire a functional solution one at a time, without particular regard to interoperability or revisiting their customers’ needs every once in a while. Vendors are still approaching our market one silo at a time, even when the shape of sponsor clinical development is rapidly morphing into…well, something unknown, but definitely something not well-served  by automating the 1970’s. So not only are sponsors not satisfied, but the vendors themselves are starting to drift, as the end of innovation sucks the energy out of the market.

Worsening

Gee, that sounds like a dark picture on today’s vendors. Perhaps, but it is realistic. And sponsors are feeling the situation getting slowly worse. Why would this be?

—  Takeovers, spun as “consolidation”, which is supposed to be good for us (mimicking sponsors perhaps?), leading to, at a minimum, enormous distraction, and usually to overlapping sets of software and therefore delayed product growth strategies or enhancements, as well as confused support services.

—  Tough financial times – true for everyone, but software vendors who never did understand the actual clinical research application of their products are now less likely than ever to hire or retain the “subject matter” professionals who otherwise are not programming or selling.

—  Sponsor disarray – the tough times and takeovers affecting sponsors means fewer sponsor resources for vendor management, informed contract management, internal process analyses and continuous improvement, and so on. This results in poor policing of the vendors and poor communication management between even the best vendors and deepest sponsors.

First, Change the Language

How do we get out of this mess? The first step lies in the language: we are not partners with our software vendors, we are buying something from them. We have expectations for what we are buying which they need to meet. This needs to be managed not as if we were lawyers in the same law firm, but rather as customer and provider. We are most definitely sitting across the table from each other, not side by side. As promising as the partnership mystique has seemed, the results have simply not been there, and a return to buyer and seller is not demeaning or a failure, but rather an ancient, proven method of achieving buyer satisfaction.

And More

The good news is that there are practical steps for sponsors, easily within our grasp, to reclaim control over a software market we depend on, but which has gone flat. These steps take a little money, but mostly they take willpower:

—  Dedicate internal resources fulltime to projects that manage, specify, or implement new information technologies into the clinical research process

—  Insist on transparency from the vendors – we have the right as customers to know their true plans, their staffing (and qualifications thereof), how and why they price their services, what is the likelihood of enhancements, and so on

—  Professionalize vendor management internally, and understand this is a fulltime job without which our software or service providers will fail us

—  Take back the initiative on vendor contracts from the vendors.

Despite the rise in power and scope of sponsor contracting groups, they generally have not helped this situation I have described because they do not sufficiently understand either the software business or clinical research operations. For instance, if software enhancements are not in vendors’ fundamental interest, then sponsors need to structure a relationship that makes it so, including considering taking back the strategic leadership of this vendor space.

If we can’t get what we want from vendors, it means we are not applying our vast resources of talent and money to get it. This is not rocket science. It’s not even drug discovery. Rather, maybe clinical development really is too small a market to leave to the vendors, and too important to us to leave it to them.

What will make the vendors cooperate with such radicalism? Vendors must remember that it isn’t scary anymore for a sponsor to change EDC vendors, even enterprise commitments, on the fly. It is happening regularly now. Such changes have always frequently happened in the ePRO space. And it would not be that much out of the question to do so with CTMS (because none are satisfactory) or AES (because they are all the same). So caveat venditor as well.

Let’s take the energy we’re spending hugging our partners and turn it towards communicating with, and managing, our vendors effectively to deliver what clinical development needs in the coming years.