How do companies use capability building to manage enterprise wide projects? Below, we cover how a capability works and the tenets to make these projects successful.
The biotechnology industry has attracted more than $300 billion in capital recently. In particular in the last 3 years, investments in biotech have tripled from $27B to $67B bringing biotech companies into the limelight for breakthrough drug therapies.
For biotech companies, the path to commercializing a drug and generating revenue is a long, difficult, and arduous path with many challenges to overcome along the way, starting with development of drug, organizing and funding trials, infrastructure to support commercial operations, and ultimately regulatory approvals.
Startup biotechs have to carefully plan and fund infrastructure projects needed to achieve commercial success. They have to set up enterprise capabilities at the right time to scale up for commercial operations and put adequate processes, procedures, and systems in place to run the organization successfully as it grows. That journey to go from a clinical stage to commercial operations requires many resources and organizational components in order to deliver on the mission of providing innovative medicines to patients.
What is a Capability?
Biotech companies often have a portfolio of projects that are reviewed annually and granted funding based on what is most important at that point in time. Once a drug passes into Phase 3 trials, the probability of commercial success becomes more likely. This is the time when a company must establish business capabilities.
A Capability is a cross-functional structure or system that provides a clearly defined way of operating in the organization, such as integrated procedures and systems, efficiency, and automation to achieve repeatable and scalable cross-functional process. One very common example of a capability in biotech is implementing an ERP system.
So how do you know if you are working on a project that supports capability building? An initiative/project is considered a Capability if it meets ALL of the following four criteria:
- Aligned with Corporate Goals: Aligns corporate vision and strategic initiatives; something everyone is moving toward
- Enterprise Wide: Focus of initiative impacts more than one business area and requires cross-functional involvement
- Requires Pooled Funding: Requires pooling funds across multiple business areas to build an investment (ROI)
- Enabled by Technology: Requires technical infrastructure, system with ongoing support, or technical resource expertise
Introducing Capability PMO
As companies embark on and invest in capability building, the project-based mindset must transition to cross-functional business initiatives. As this transition happens and the organization grows and matures, the use of portfolios and/or programs to manage enterprise-wide projects should be considered and embraced.
Organizations should establish a dedicated function that focuses on managing the process to run Capability projects. The Capability PMO would support the organization holistically to ensure the right projects are funded at the right time and assigned necessary resources to support corporate goals and vision.
Furthermore, Capability initiatives/projects are redefining the role of a Project Manager. The role of the “Capability PM” is not just to deliver a project, but to be a business partner, equally vested in the outcome and result of the initiative. The Capability PM works with the business to create a repeatable and compliant business process by developing standards to operationalize a function or business area.
Having a Capability PMO will help biotech companies set up a methodology and standards to manage enterprise-wide programs to ensure timely, consistent, efficient, and effective delivery of intended projects with the right people.
Why Do Biotechs Need This Standardization?
In order to scale-up, biotechs need consistent delivery, cost efficiency, visibility, and standardized processes. Managing capability-driven programs in this manner and with cross-functional oversight improves cost efficiency by facilitating budget planning and tracking of projects to ensure every dollar is put to the best possible use. It also provides the visibility to align an organization with its goals, provide easy access to project documentation, help manage risks proactively, and enable quicker decision-making.
This overall improved management of resources ensures optimized results, alignment to overall goals, and stronger cross-business collaboration, as well as optimizes the opportunity for on-time and on-budget project delivery. If you’re interested in learning more about capability building and how to manage programs and projects in a way that optimizes resource effectiveness and enhances operational efficiency, let’s chat.
Contributions by Julia Hoffman