Agile Business Process Management and Lean Compliance

By David Stokes

Regulatory compliance is a necessity for most organizations, none more so than in the Life Sciences industry. Even as the green shoots of economic recovery appear it is increasingly important that small-to-medium manufacturing, sales and distribution organizations learn to balance the need for compliance with an on-going ability to sustain cost effective operations. As companies come to terms with increasing financial, environmental and employment regulations there are valuable lessons to learn on how to balance the apparently conflicting objectives of operational flexibility and regulatory compliance.

The days of Life Sciences companies making unrivalled and unquestioned profits are long gone. Even before current discussions on health care reform and the cost of drugs and devices, Life Sciences companies were under significant competitive pressure to reduce research / development, manufacturing and sales/distribution costs.

Just like companies in other innovative sectors (high-tech, consumer electronics, transportation/logistics etc) there is a need to achieve a balance between on-going regulatory compliance and business process efficiency. Where in the past this was tackled by one-off business process re-engineering (often as part of implementing a new ERP system) there is now a need to constantly optimize business processes to respond to a variety of internal or external factors including:

• Internal re-organization, possibly as a result of merger, divestiture or acquisition,
• Internal innovation, either in terms of new products, new production technologies or new business processes,
• External change factors, including new products or different business process models introduced by competitors.
• Changes in regulations, including the re-interpretation of existing regulations in the face of new technologies or enforcement initiatives.

In the case of the latter, Life Sciences companies constantly introduce new products, processes or technologies and the most successful organizations are adept at interpreting regulations to suit changing circumstances. It is this that places the 'c' in cGMP (current Good Manufacturing Practice) and which allows best-in-class Life Sciences organizations to stay ahead of the game, ensuring that their business processes are agile, efficient and compliant - what Business & Decision have termed "Lean Compliance". The concept of "Lean Compliance" can just as easily be applied to the business processes that support the regulatory compliance needs of SOX or even ISO in a discrete manufacturing firm.

For small-to-medium companies in other sectors to leverage similar business process management approaches it is necessary to employ:

• Techniques that allow the use of agile business processes,
• Technology that supports the use of Lean Compliance.

In terms of agile business process management, it is possible to develop Business Process Management models which allow the performance of business processes to be monitored in near real-time. Analytical techniques are used to determine the underlying cause of changes in business performance and flexible systems allow changes to be quickly made in order to align business processes with internal or external changes.

Business & Decision's Adaptive Business Process Management Model

Such models need to be supported by the use of systems and technologies that provide the business intelligence needed to allow changes to be quickly detected and for business processes to be quickly changed to meet new challenges, including change in regulation. This is considered to be best-in-class in large Life Sciences organizations, but these techniques can be employed in other sectors and by small-to-medium organizations.

While large organizations have traditionally met these challenges by the use of multiple integrated systems and technologies, it is now possible to use integrated, standards-based systems and technologies to provide not only the transaction based business processes traditionally employed by ERP or CRM systems, but also the built in KPIs, business intelligence and workflow needed to support agile business process management and lean compliance (e.g. Microsoft Dynamics AX and Oracle Fusion applications/middleware).

The best time to build in compliance supporting adaptive business processes into an organization is during the deployment of new enterprise systems. Taking advantage of the standard processes resident in the core applications can help simplify this task. Although this may look and smell a little like the "Business Process Re-Engineering" train of days past, it is in fact a paradigm change in mind set. Minimizing fixed process while maximizing adaptive processes is essentially the art of not over thinking the need i.e.by only supporting the absolute requirements of the business vs. the perceived or institutionalized process needs.

This is important for small-to-medium business looking to quickly respond to any upturn in their market while assuring compliance with a changing regulatory landscape. While it has taken a number of years for some Life Sciences organizations to achieve this, other companies can learn from this and leverage newer, more adaptive  systems and technologies to accelerate their adoption of such best-in-class techniques.

As global markets position themselves for a rebound, now is the time to be evaluating your adaptive abilities and to ensure your firm is flexible enough to meet the needs of the changing economy.

Info.bdna@businessdecision.com