1. Advanced Operating Models
Research Insights
LIFE SCIENCES R&D
v1.0 (July 2014)

2. Contents
Survey demographics 3
Executive summary 4
Key challenges 6,7
Functions’ impact on challenges 9,10
Functions’ maturity levels 12
Preparedness level to achieve process maturity
Overall ability to transform 18
Impact of operating model initiatives 20,21
Conclusion
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
14,15,16
22
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 2

3. METHODOLOGY
Sample of over 900 senior executives, 120 from life sciences
R&D across regions
Regions Size* Functions
10%
25%
65%
16%
84%
5001-10000
16%
63% of life sciences R&D
respondents are from North
America
84%
10000+
94% of life sciences
R&D respondents are
from larger companies
(size > 10000
employees)
*Company size defined by number of employees
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm. The respondents were selected
on the basis of their ability to make or materially influence operating model decisions, and likely range from senior executives to top
management.
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
Procurement
13%
Finance 17%
Risk 15%
Marketing
15%
40%
Operations
33% of operations
executives are
from life sciences
R&D
n=912
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 3

4. EXECUTIVE SUMMARY ► OPERATIONS ► LIFE SCIENCES R&D
Operations transformation in life sciences R&D: What are the
imperatives and means for large companies in developed markets?
Management agenda
• Compliance,
innovation and cost
most important
challenges for life
sciences organizations
according to R&D
executives
• Least pressing are
capital asset intensity,
agility and risk
management
Advanced operations can address imperatives
• Research, pre-clinical and clinical development seen
to have broad impact on company’s challenges;
medical and regulatory affairs considered key for
compliance
• Medical and regulatory affairs function more mature
than research and development; about one third of
the companies are not fully prepared to evolve their
R&D functions
• Advanced organizational structures (shared services
and BPO) seen as most common means to
transform, but radically improved use of technology
has more financial impact where applicable
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 4

5. INSIGHTS NARRATIVE ► LIFE SCIENCES R&D
What are the most pressing
company challenges?
How can functions and related
operations address them?
Which functions are most
Are those functions mature?
Are those functions ready to
Can new operating models of
those functions help them
transform? Which ones?
What can the impact of that
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
effective at it?
transform further?
transformation be?
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 5

6. CHALLENGES ► LIFE SCIENCES ► BY FUNCTION
Compliance most important challenge across functions;
innovation critical according to R&D executives
% of respondents from
various functions rating
challenge as among the
'Top 3'
Overall
Research and
development
Commercial
operations
Procurement
Ensure compliance
to regulations
Increase customer
satisfaction
Reduce capital and
asset intensity
Increase growth and
scalability
Enable company’s
innovation
Enable agility and
adaptability
0 10 20 30 40 50 60 70 80
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
n=233 life sciences executives
Manage
risk
Reduce
costs
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 6

7. OPERATIONS ► LIFE SCIENCES R&D ► CHALLENGES
Regulatory compliance seen as the biggest challenge for life
sciences companies
Importance of the challenge (% of respondents from life sciences companies stating that the
challenge is among the ‘Top 3‘ for their company )
0 10 20 30 40 50 60 70 80
Ensure compliance to regulations
Increase customer satisfaction
Reduce costs
Manage risk
Increase growth and scalability
Enable company’s innovation
Enable agility and adaptability
Reduce capital and asset intensity
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
DIRECTIONAL
Cost,
innovation and
growth seen
as the most
important
challenges
after
regulatory
compliance
n=120 life sciences R&D executives
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 7

8. OPERATIONS ► LIFE SCIENCES R&D ► FUNCTION IMPACT
What are the most pressing
company challenges?
How can functions and related
operations address them?
Which functions are most
Are those functions mature?
Are those functions ready to
Can new operating models of
those functions help them
transform? Which ones?
When will the transformation
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
effective at it?
transform further?
start?
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 8

9. OPERATIONS ► LIFE SCIENCES R&D ► FUNCTION IMPACT
Medical and regulatory affairs function addresses the single
most pressing enterprise issue
Ensure
compliance
to regulations
Reduce
costs
Increase
growth and
scalability
Enable
company
innovation
72 46 44 43
37 44 92 62
Magnitude of
challenge1
Research and pre-clinical
development
Clinical development 45 47 73 55
Medical and regulatory affairs 83 30 36 34
% of respondents stating function
can have material impact on
addressing challenge
n=120 life sciences R&D operations executives 1 % of respondents from life sciences across all functions (n=233)
stating it is one of the top 3 challenges in their company
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
DIRECTIONAL
Increase
customer
satisfaction
36
57
61
43
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 9

10. OPERATIONS ► LIFE SCIENCES R&D ► FUNCTION IMPACT
Key components of R&D operations have similar overall
impact across industry challenges
Function Impact Index* combining stated importance of challenges and stated ability of a
function to address them
푛 푥푖푗푦푗, where 푥푖푗 is the %
Clinical development
Research and pre-clinical development
Medical and regulatory affairs
* Impact of a function on company’s challenges is defined as 푓 푥푖 = 푗
of respondents who believe that improvement in the function 푥푖 will have a material impact on
the challenge 푦푗; 푦푗 is the % of respondents citing the challenge as among the 'Top 3'
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
140
166
162
n=120 life sciences R&D
operations executives
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 10

11. INSIGHTS NARRATIVE ► OPERATIONS ► LIFE SCIENCES R&D ► MATURITY
What are the most pressing
company challenges?
How can functions and related
operations address them?
Which functions are most
Are those functions mature?
Are those functions ready to
Can new operating models of
those functions help them
transform? Which ones?
What can the impact of that
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
effective at it?
transform further?
transformation be?
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 11

12. OPERATIONS ► LIFE SCIENCES R&D ► MATURITY
Medical and regulatory affairs considered mature by most;
research and pre-clinical development less so
% respondents stating the maturity of the functions in their organizations
Medical and regulatory affairs
DIRECTIONAL
Very mature Mature Somewhat mature/Immature
Clinical development
50 34 16
49 30 21
Research and pre-clinical development 43 28 29
n=120 life sciences R&D operations executives
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 12

13. INSIGHTS NARRATIVE ► LIFE SCIENCES R&D ► PREPAREDNESS
What are the most pressing
company challenges?
How can functions and related
operations address them?
Which functions are most
Are those functions mature?
Are those functions ready to
Can new operating models of
those functions help them
transform? Which ones?
What can the impact of that
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
effective at it?
transform further?
transformation be?
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 13

14. OPERATIONS ► LIFE SCIENCES R&D ► PREPAREDNESS
One-third of respondents believe their organizations are not
fully prepared to evolve further their R&D functions
% respondents stating the preparedness of their organization to mature a function
DIRECTIONAL
Fully prepared Prepared Somewhat prepared/Not Prepared
Medical and regulatory affairs 25 43
Clinical development 23 43
Research and pre-clinical development 20
n=120 life sciences R&D operations executives
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
32
34
46 34
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved.
14

15. OPERATIONS ► LIFE SCIENCES R&D ► OVERALL ABILITY TO IMPACT
Key R&D operations address pressing challenges but many
organizations not fully ready to transform
Ensure
compliance
to regulations
Reduce
costs
Increase
customer
satisfaction
Increase
growth and
scalability
Enable
company
innovation
72 46 44 43 36
37 44 92 62
45 47 73 55
83 30 36 34
Very mature or mature
Somewhat mature or Immature
Magnitude of
challenge1
% of respondents stating function
can have material impact on
addressing challenge
Research and pre-clinical
development
Clinical
development
Medical and
regulatory affairs
n=120 life sciences R&D operations executives
1 % of respondents from life sciences across all functions (n=233)
stating it is one of the top 3 challenges in their company
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
DIRECTIONAL
% of respondents
assessing maturity
and preparedness
Maturity of
process
Prepared
to mature
Fully prepared or Prepared
Somewhat prepared or Not prepared
57
61
43
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 15

16. OPERATIONS ► LIFE SCIENCES R&D ► OVERALL ABILITY TO IMPACT
Key R&D functions vary in terms of maturity, and about one
third of companies not fully ready to evolve them further
90
80
70
60
DIRECTIONAL
Medical and regulatory affairs
Size of the bubble proportional to impact
of function on many strategic challenges
Research and pre-clinical development
Clinical development
60 70 80 90
MATURITY
PREPAREDNESS
% of companies stated as very prepared or
prepared to mature in specified functions
% of companies stated as very mature or mature in the specified functions
n=120 life sciences R&D operations executives
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 16

17. INSIGHTS NARRATIVE ► LIFE SCIENCES R&D ► OPERATING MODELS
What are the most pressing
company challenges?
How can functions and related
operations address them?
Which functions are most
Are those functions mature?
Are those functions ready to
Can new operating models of
those functions help them
transform? Which ones?
What can the impact of that
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
effective at it?
transform further?
transformation be?
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 17

18. OPERATIONS ► LIFE SCIENCES R&D ► OPERATING MODEL INITIATIVES
Many executives believe advanced organizational structures
(SSC / BPO) have impact across functions
% of respondents stating the initiative can
have a material impact on the function
Business
process
re-engineering
Radically
improved
use of
technology
BPO or
SSC or
hybrid1
47 75 166
4353
4853 4352
63 162
43 60 140
5
3
28
Clinical development
Research and pre-clinical
development
Medical and regulatory
affairs
* Function Impact Index combining stated importance of
challenges and stated ability of a function to address them
1 BPO – Business Process Outsourcing, SSC – Shared Services
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
Impact
Index*
DIRECTIONAL
n=120 life sciences R&D operations executives
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved.
18

19. INSIGHTS NARRATIVE ► OPERATIONS ► LIFE SCIENCES R&D ► OPERATING MODEL IMPACT
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 19
E
What are the most pressing
company challenges?
How can functions and related
operations address them?
Which functions are most
effective at it?
Are those functions mature?
Are those functions ready to
transform further?
Can new operating models of
those functions help them
transform? Which ones?
What can the impact of that
transformation be?

20. OPERATIONS ► LIFE SCIENCES R&D ► OPERATING MODEL INITIATIVES ► PROGRESS
Operating model initiatives already in progress for most of the
functions
% of respondents; Width of the column indicates the % of respondents stating that the
operating model initiative will have a material impact on the function. DIRECTIONAL
Medical and
regulatory affairs
10
2
62
25
73
20
7
Research and pre-clinical
development
3
5
75
17
80
14
2 4
BPO, SSC, hybrid1
3
69
17
10
Tech BPR SSC, BPO or hybrid
Currently in progress
BPR
6
4
74
16
Tech
Planned in next 12 Months
Planned after 12 months
Not considered
1 BPO – Business Process Outsourcing,
SSC – Shared Services,
BPR – Business Process Reengineering,
Tech - radically improved use of technology
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
development
78
15
Clinical
5 2
2
8
82
8
2
71
17
10
Tech BPR SSC, BPO or hybrid
n=120 life sciences R&D operations
executives
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 20

21. OPERATIONS ► LIFE SCIENCES R&D ► OPERATING MODEL IMPACT
Advanced organizational structures deployed more often, but
technology has larger impact where applicable
Average $ impact, bar width proportional to percent of respondents stating that the
initiative will have a material impact
OPERATIONS - ALL
INDUSTRIES#
$109m
BPO, SSC, hybrid1
$186m
BPR
$242m
Tech
Average
$ impact
Annual $ impact is the impact of operating model initiatives in
US$ per annum including reduction of cost, capital required,
improvement of cash and revenue growth
OPERATIONS – LIFE SCIENCES
$210m
Tech
R&D
# n=365 executives responsible for industry specific operations from retail
and commercial banking, insurance, healthcare payer and life sciences
1 BPO – Business Process Outsourcing, SSC – Shared Services,
BPR – Business Process Reengineering, Tech - radically improved use of technology
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
$104m
$90m
BPR BPO, SSC, hybrid1
DIRECTIONAL
n=120 life sciences R&D operations executives
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 21

22. In conclusion
Senior life sciences executives are challenged to adapt to
a rapidly changing business environment in an economy
that remains unpredictable. They say that intense
regulatory scrutiny, increasing cost pressures, and the
need for innovation are their most important business
concerns.
This research examined how those challenges can be
tackled by three levers of operating model
transformation: technology, process re-engineering, and
advanced organizational structures. The related
transformation of operations is an untapped strategic lever
for the COO as well as the CEO.
However, it is sometimes seen as a formidable
undertaking. Few understand the “IT + analytics +
process operations” nexus sufficiently. Technological
excesses of the past (such as ERP or data warehouses)
are well documented. Some technologies are unproven,
some uses of analytics are unclear, and older technologies
are rigid and expensive to evolve. Finally, it is frequently a
struggle to scale deep analytics throughout the enterprise.
Our experience of advanced operating models,
accumulated over 15 years, clearly indicates that there are
agile and practical ways to transform.
The key is to design, transform, and run the processes that
power advanced operating models so that they closely
align with measurable business goals, thereby avoiding
saddling the company with unnecessary and often
unmanageable complexity.
This approach focuses more rigorously on the sources
of impact and deliberately disregards any practice that does
not yield material outcomes. It also takes a more objective
and holistic look at technology, analytics and organizational
practices. It leverages now-mature “system of
engagement” technologies that complement “system of
record” technologies. It treats analytics (the arc of data-to-insight-
embed insight at scale into the fabric of other enterprise
processes; it does not take the typical approach of viewing
analytics as a task and a set of technologies. Finally, it
harnesses the process and organizational levers
available from established disciplines, such as
reengineering, shared services, outsourcing, and global
delivery.
We think that there is a smarter way to transform operating
models and address the most complex strategic challenges.
This is a way for COOs to make their enterprises more
intelligent and generate material impact.
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
to-action) as a process and determines how to
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 22

23. Click here to download the research paper
About Genpact
Genpact Research Institute
The Genpact Research Institute is a
specialized think tank harnessing the
collective intelligence of Genpact – as
the leading business process service
provider worldwide - its ecosystem of
clients and partners, and thousands of
process operations experts. Its
mission is to advance the “art of the
possible” in our clients’ journey of
business transformation and adoption
of advanced operating models.
www.genpact.com/research-institute
Genpact (NYSE: G) stands for “generating business impact.” We design, transform, and run business operations including those that are complex and
industry-specific. We believe that our approach, crystallized in our Smart Enterprise Processes (SEPSM) proprietary framework, is more focused, unbiased
and agile than that of our competitors. Our solutions integrate technology, data and processes into advanced and adaptable operating models that foster
growth and facilitate better management of cost and regulations in uncertain times. The result is intelligent operations of a range of functions such as
finance, supply chain, origination and client servicing, compliance, and risk. We have hundreds of long-term clients including more than one-fourth of the
Fortune Global 500. We have rapidly grown to over 66,000 people in 25 countries with key management and corporate offices in New York City. Our global
critical mass doesn’t dilute our flexible and collaborative approach, and our management team drives client partnerships personally. We attribute much of
our success to our unique history – behind our passion for process and operational excellence is the Lean and Six Sigma heritage of a former General
Electric division that has served GE businesses for more than 16 years.
For more information, visit www.genpact.com.
Follow Genpact on Twitter, Facebook, LinkedIn, and YouTube.
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
© 2014 Copyright Genpact. All Rights Reserved.
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 23

24. Thank you
Gianni Giacomelli
CMO, SVP Product Innovation
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 24