Case Studies > Forecast Automation and Optimized R&D Pipeline

Forecast Automation and Optimized R&D Pipeline

Customer Company Size

Large Corporate

Product

Vanguard Predictive Planning

Tech Stack

Monte Carlo simulation
Web-based environment

Implementation Scale

Enterprise-wide Deployment

Impact Metrics

Productivity Improvements
Cost Savings
Digital Expertise

Technology Category

Analytics & Modeling - Predictive Analytics

Applicable Industries

Pharmaceuticals

Applicable Functions

Product Research & Development
Business Operation

Services

Software Design & Engineering Services
System Integration

About The Customer

A top-20 global drug developer needed a solution to address typical industry issues: large monetary investments, technical and regulatory uncertainty, and managing a portfolio of products at varying stages of development. The company is a major player in the pharmaceutical industry, dealing with the complexities of drug development which involves significant financial investments and long timelines, often spanning over a decade. They face the challenge of navigating through technical and regulatory uncertainties while managing a diverse portfolio of potential products at different stages of development. The company sought a more efficient and effective way to handle these challenges, aiming to optimize their R&D pipeline and improve decision-making processes. They approached Vanguard Software to explore the possibility of implementing a system that could provide advanced modeling and simulation capabilities to better inform their management decisions.

The Challenge

The company wanted the ability to analyze a range of potential outcomes in two separate areas. Pharmaceutical R&D decision making is perhaps the most perplexing and high-stakes responsibility in the modern enterprise. The reasons are no secret: Drug developers make huge investments, some with 10-year development timelines, or more. They face extreme technical and regulatory uncertainty about these investments. Meanwhile, they must cross-manage a vast portfolio of potential products at varying stages of development. Drug development pipelines are massive risk portfolios dotted with a few hard-to-see, and harder-to-realize, opportunities for reward. This can frustrate even advanced portfolio management processes. It is impossible to know, for example, which projects will make it to market, fail to gain regulatory approval after years of investment, or never make it out of the discovery phase. Despite these unknowns, the pressure to replenish pipelines with high-potential future revenues is relentless. Facing these odds, one top-20 global drug developer approached Vanguard Software about the possibility of a system that could address this challenge. Along with many other attributes, the company wanted a system that could apply advanced modeling and simulation to complex drug-development data. The end goal was to better inform management decision making. At the time, the company was targeting several challenges. According to an Associate Portfolio Management Director with the company who spoke recently with Vanguard Software: “Our existing system was time-consuming. It was difficult to update and maintain the data, and it offered little flexibility as far as managing what-if scenarios. It was not able to provide some of the more advanced analysis that we wanted. We had to do that in Excel.”

The Solution

The company wanted the ability to analyze a range of potential outcomes in two separate areas: line items on the Profit and Loss (P&L) statement and expected R&D spending, taking timeline uncertainty into account. They aimed to understand the probability of each possible outcome and model individual and aggregate outcomes under multiple scenarios, known as 'what-if' testing. They sought a full-scale Monte Carlo simulation for operational and strategic planning, a web-based environment, and the ability for potentially dozens of users to collaborate on the same data. The existing software system was inadequate, as were the spreadsheets they used for modeling and simulation. The company also wanted to optimize its selection and prioritization of R&D projects with less effort and more clarity. The highest value projects needed to move forward to maximize sustainable future revenue, while lower value projects needed to be identified and discarded to avoid draining resources. The result was project and portfolio forecasts that more accurately predicted the measure of uncertainty, providing more effective decision-making. Vanguard Software delivered a system that enabled the company’s R&D Portfolio Managers to test different courses of action, perform sensitivity analyses, and get an automated roll-up of projects into a multi-year, company-wide projection of future operational and financial performance.

Operational Impact

The system enabled R&D Portfolio Managers to test different courses of action and see how decisions might affect the likelihood of clearing development hurdles, sustaining losses, or changing expected values at various stages of development.
Portfolio Managers can perform sensitivity analyses to quantify the effect of specific drivers on specific outcomes.
Managers can get an automated roll-up of projects into a multi-year, company-wide projection of future operational and financial performance.
Vanguard Predictive Planning integrates well with the company’s other critical systems and provides a flexible platform that supports future enhancements.
The system supports 'evergreen' portfolio and data management, as well as rolling processes that inform decisions throughout the year.

Quantitative Benefit

75% drop in labor hours dedicated to data updating and maintenance.
Improved cost-benefit analysis due to range-of-outcomes comparative analyses.
Improved multi-year investment planning and better balancing of R&D investment with liquidity and other capacity constraints.