Value of Analysis in Decision Making – Blog Post #443 by Asrar Qureshi

Value of Analysis in Decision Making – Blog Post #443 by Asrar Qureshi

Dear Colleagues!  This is Pharma Veterans Blog Post #443. Pharma Veterans welcomes sharing of knowledge and wisdom by Veterans for the benefit of Community at large. Pharma Veterans Blog is published by Asrar Qureshi on WordPress, the top blog site. Please email to asrar@asrarqureshi.com for publishing your contributions here.

Analysis is defined in any of the various ways.

• The separating of any material or abstract entity into its constituent elements

• A method of studying the nature of something or of determining its essential features and their relations

The essence is that analysis requires looking at something in great detail and from every possible angle. The purpose is to understand the components to the maximum possible extent, their interplay and relations.

Business decisions require lot of analysis in every department. One example shall help to bring the point home.

A Pharmaceutical company decides to enter into a new therapeutic segment i.e., Diabetes. It is a corporate decision and corporate-wide analysis is required to arrive at this decision finally. Given below is the snapshot of anticipated process flow. It does not include all sub-details. It is not entirely a linear, sequential model, few steps may be done simultaneously.

Marketing

First to work is Marketing. They will go through the market data from whatever sources are available to them. They will review the segment size and its growth pattern. They will review related, available products, their market size, market share, growth trend and pricing strategy. This is all desk work.

Next, they will go to market and meet few key customers to understand how the prescribing physicians see these products, how do they place them, and how do they decide which product to be given to whom.

Compiling the analysis, Marketing will recommend a set of products to be marketed. They will also recommend team structure based on the product spread.

After the products are finalized, Marketing shall prepare marketing plans for the group and products. It will include revenue and expense forecasts also.

Supply Chain

The matter shall go to supply chain who will look for sources, documentation and pricing. They will see the price change trend during the last one year or so. Supply chain shall recommend based on the availability of raw materials.

Regulatory

The same matter shall be referred to regulatory department who will look at the regulatory aspect, patent issues, registration procedures etc. and give their recommendation. 

Upon receipt of data from R&D and Quality Control, the Regulatory department shall prepare dossier for registration and submit it to DRAP for registration of product.

R & D

R&D shall be asked to study the recommended products and advise about the formulations. This will also become the basis for costing of product(s). 

As soon as the trial materials are arranged, the R&D shall make trial batches and start running stability studies. Other related studies shall be done by QC also.

Finance

Finance shall provide costing of products. It will also review the revenue and expense forecasts given by marketing and reconcile these with costing of products.

If the overall project passes the test of viability, then the commercial launch receives go ahead.

Production

Production sends material requirements and gears up for commercial production.

HR

HR places ads for team hiring, collects CVs, screens, shortlists, arranges interviews and manages hiring.

This is how teams and even products are launched in more formal organizations. This is the right way which should be adopted. However, in the real world, particularly in Pakistan, we consider this process to be too complicated. Many such decisions are taken in one sitting between Marketing and the CEO. All processes other than financial analysis are mandatory and have to be done in any case. It would be better that the financial viability is also examined before decision, rather than doing it afterwards.

This is just one example of a business decision. As you read through, you will notice the elements of analysis in it. 

Analysis is the most critical factor in all decisions, of life and business. And unfortunately, analysis is among our weakest areas. We avoid analysis individually, as teams, and as organizations. We prefer to work blindly and aggressively; both dangerous pursuits. It is high time analysis is given the place on the table it deserves.

Concluded.

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