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Just Other Articles - Outsourcing NOT Just for Big Business
Outsourcing has become a controversial issue and a hot topic among presidential candidates this year. But have you stopped to think how your business can benefit from the efficiency, functionality and cost savings of outsourcing? If you have, you might find that, like many others, you are already outsourcing-and enjoying its benefits.
What is Outsourcing?
Outsourcing simply means "con
What is Outsourcing?
Outsourcing simply means "con
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
tracting out" various functions of your business. It doesn't necessarily mean that you will be contracting out work to foreign countries because there are many American companies that provide outsourcing services i.e.. commercial printing services and cleaning services, among others.) The vendors who supply outsourced services may be self-employed contractors, consulting firms, temporary
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
employee services or professional service firms. One common example of outsourcing is payroll processing. Other commonly outsourced functions that can be provided by professional services firms include:
- Succession planning
- Accounting and tax preparation
- Information technology (IT)
- Consulting (i.e. due diligence, business planning)
- Distribution services
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
ension management
Manufacturing
Assembly
Staffing
Grounds Maintenance
Estate and income tax planning
Why Outsourcing Can Work for Your Business
Fortune 500 corporations are under the microscope for outsourcing thousands of jobs overseas to low wage workers, potentially leaving American workers out of work. But according to Forrester Research Inc., of the
Why Outsourcing Can Work for Your Business
Fortune 500 corporations are under the microscope for outsourcing thousands of jobs overseas to low wage workers, potentially leaving American workers out of work. But according to Forrester Research Inc., of the
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
.7 million jobs lost over the past three years, only 300,000 have been from outsourcing. With that in mind, outsourcing means something different for family and privately owned businesses. With fierce competition affecting the margins of many businesses, companies are finding that they cannot afford layers of administrative overhead dedicated to operating their core business. They are rea
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
izing that outsourcing provides alternatives to doing everything for themselves. For example, if your business is distribution, there may not be a need to employ a large administrative overhead dedicated to support functions like those listed above. Companies that provide outsourcing services are able to invest more time and resources into the specific functions that generate revenue. Bec
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
use of this, they can operate more efficiently and economically, which can help you compete more effectively than companies that do it themselves.
Information technology is a good example of this. The cost in personnel, benefits and training to keep pace in the rapidly changing world of information technology is prohibitive for most privately owned businesses. By outsourcing this functio
Information technology is a good example of this. The cost in personnel, benefits and training to keep pace in the rapidly changing world of information technology is prohibitive for most privately owned businesses. By outsourcing this functio
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
, management is free to focus its energies on the core aspects of the business-those that provide revenue-generating products and services-and leave the other areas to vendors who specialize in performing those functions.
Benefits of Outsourcing
Proponents of outsourcing cite a variety of reasons for "letting others do it." Here are some of the most important:
Cost savings - By outsour
Benefits of Outsourcing
Proponents of outsourcing cite a variety of reasons for "letting others do it." Here are some of the most important:
Cost savings - By outsour
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
ing functions that were previously performed in house, companies are often able to reduce their employee levels and related costs, such as recruitment, supervision, salary and benefits. By outsourcing a capital intensive function, you can also reduce the costs of equipment obsolescence and depreciation. A portion of your cost savings will go to the outsourcer, but outsourcing vendors have
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
a tighter control of fringe benefits and run leaner overhead structures. They also know how to deal with vendors serving the function they are providing and therefore, are able to pass on to your company the benefits derived from bulk purchasing and effective leasing.
Quality of service - Because your company is the outsourcer's customer, you will likely experience a "can-do attitude," w
Quality of service - Because your company is the outsourcer's customer, you will likely experience a "can-do attitude," w
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
ich may not always be exhibited by an in-house staff.
More capital funds - Outsourcing reduces the need to invest capital in non-core business functions, thereby freeing capital to invest in profit-making aspects of the business.
State-of-the-art technology - Outsourcers have to spend time and money on the most current equipment and on employee training to remain competitive. By outsour
More capital funds - Outsourcing reduces the need to invest capital in non-core business functions, thereby freeing capital to invest in profit-making aspects of the business.
State-of-the-art technology - Outsourcers have to spend time and money on the most current equipment and on employee training to remain competitive. By outsour
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
ing certain areas, you are assured of receiving the most efficient services and the latest technological advances within that particular function.
Price stability - By signing a contract to outsource, you will likely be able to obtain stable pricing, eliminating the future need to shop around. Stable pricing allows the company to budget operating expenses and capital purchases more accur
Price stability - By signing a contract to outsource, you will likely be able to obtain stable pricing, eliminating the future need to shop around. Stable pricing allows the company to budget operating expenses and capital purchases more accur
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
tely, while potentially preventing the likelihood of surprise expenses.
New business partners - Outsourcers clearly wish to be viewed as your business partner. And as a business partner, they share in the desire to keep your company operating at its maximum potential. Through this business partner arrangement, outsourcers are eager to introduce you to other outsourcers to assist in that
New business partners - Outsourcers clearly wish to be viewed as your business partner. And as a business partner, they share in the desire to keep your company operating at its maximum potential. Through this business partner arrangement, outsourcers are eager to introduce you to other outsourcers to assist in that
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
oal.
More time to focus on core business activities - You cannot overlook this intangible benefit of outsourcing. If a company is to be successful and profitable, management is needed to spend time planning and directing the company's business strategies and not wasting time worrying about managing certain administrative or ancillary functions.
Potential Drawbacks
As with every new sys
More time to focus on core business activities - You cannot overlook this intangible benefit of outsourcing. If a company is to be successful and profitable, management is needed to spend time planning and directing the company's business strategies and not wasting time worrying about managing certain administrative or ancillary functions.
Potential Drawbacks
As with every new sys
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
em and procedure, you have to take the good with the bad. Critics argue that outsourcing creates too much loss of control, less flexibility, questionable savings and the risk of over dependence on too few vendors. Owners of family and privately owned businesses should understand that initiating an outsourcing arrangement takes considerable management time. Finding and selecting the right
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
utsourcing company can take many months. And outsourcing companies need to be given overall directives and guidelines for what the company wants done, and therefore, some level of supervision by management will ultimately be needed. Also, if an outsourcer is replacing a function that has been historically done within the company, layoffs could very possibly affect employee morale and may
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
ause talented staff in other core areas to leave for fear of job security. In addition, be cautious not to completely eliminate the internal ability to provide the basic product or service you offer. For example, if you are a manufacturer and you have outsourced the assembly of your product, be sure you can still provide a sample of a specialty order in-house if asked to by a customer.
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
A delay of a product sample could cost you the customer's business.
One of the biggest complaints by companies that have outsourced is that there has been a mismatch between expectations and reality. When an outsourcer is marketing its services there is usually much enthusiasm and talent dedicated to solving the problems that were defined at the outset. However, once the contract is sign
One of the biggest complaints by companies that have outsourced is that there has been a mismatch between expectations and reality. When an outsourcer is marketing its services there is usually much enthusiasm and talent dedicated to solving the problems that were defined at the outset. However, once the contract is sign
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
d, the outsourcer brings in its implementation team, which often lacks the same level of enthusiasm that the sales and marketing team had. Due diligence is necessary when beginning any new business relationships. It is best to get recommendations from current customers of the outsourcer or other reliable sources in your industry.
Careful Selection Is Key
By being aware of these drawbac
Careful Selection Is Key
By being aware of these drawbac
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
s at the start of the outsourcing process, you can mitigate many of these and build outsourcing relationships that benefit your business. The key to successful outsourcing is careful selection of both the functions you outsource and the vendors you choose to supply them.
--
Paul Rich, Principal and Business Consultant
Siegel Rich Division of Rothstein Kass - Certified Public Accountant
--
Paul Rich, Principal and Business Consultant
Siegel Rich Division of Rothstein Kass - Certified Public Accountant
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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