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Why procurement strategy is good medicine for the life sciences industry

By making procurement more strategic companies can drive innovation and growth.

Overview

Life sciences players need to abandon the idea that procurement is a purely transactional function and recognize its importance as an enabler of business strategies and innovation. By having procurement collaborate with both suppliers and internal business partners in an expanded ecosystem focused on innovation, and equipping it with advanced digital technologies and the right talent, they could realize dramatic top-line growth.

Read the full report: Why procurement is good medicine for the life sciences industry.

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Key Findings

As the critical bridge between the business and its suppliers, procurement is uniquely positioned to capture and help drive revenue-generating ideas. As procurement functions evolve, they will:

  • Enable business strategies. A thin front line of top-talent procurement thinkers, embedded within the business and with deep knowledge of both leading business practices and supplier capabilities, will collaborate both internally and with key suppliers to find new ways of getting new drugs to market faster. Lengthening the exclusivity period for new blockbusters by just one quarter could realize, on average, $1.4 billion in additional annual revenues.

  • Deliver value through innovation. By actively scouring the globe for new ideas and insights, procurement’s category strategists will generate incremental value beyond cost reduction..

  • Enable decision making with digital technologies. Four key types of digital technology—Cloud, real-time analytics, sensors and embedded software, and cognitive systems—will support a more strategic and collaborative procurement function.

Recommendations

Take five practical steps now to maximize the potential long-term benefits of a strategically transformed procurement function.

  • Align procurement’s objectives with those of each functional business area.

  • Build procurement’s operating model around the new skills required for its new focus.

  • Implement a talent program that embeds business partnering and strategy development expertise in each functional business area.

  • Integrate key suppliers with a mutually beneficial value proposition into your business.

  • Define a digital procurement strategy and design a roadmap that leverages supplier analytics and collaboration platforms.

Authors

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Tom Papa
Tom Papa is a managing director in Accenture Strategy and is the global lead for the Life Sciences Procurement practice. He specializes in the area of procurement transformation and has more than 22 years of procurement and supply chain experience, both as a practitioner and a consulting professional. Tom holds a B.S. in Economics from Rutgers University in New Jersey.