Edge Outs Pharma Applications

If you want something done right, have someone else do it.

That’s the idea behind a hosted applications service announced today by Edge Dynamics and IBM that essentially puts a pay-as-you-go spin on managing channels and customers in the multi-billion-dollar pharmaceuticals manufacturing industry.

As part of its channel commerce management (CCM) effort, the service promises to take care of such things as customer relationships, drug safety issues and quick access to multiple data sources –- all for a subscription fee.

The on-demand service will also help small and large pharmaceutical companies comply with complex government regulations, including Sarbanes-Oxley, said John McGrory, Edge Dynamics president and CEO.

Sounds like a good idea, although drug manufacturing companies may not be beating down the door to sign up for completed hosted services. Most prefer to keep their channel information close to home and managed by in-house solutions, a service also provided by Edge Dynamics.

They may also be put off by reports of service outages at Salesforce.com, which is one of the better-known hosted customer relationship management (CRM) services.

“It’s definitely not mainstream yet, although there is an interest from our customers,” said McGrory, noting that he is keeping an eye on the problems currently affecting Salesforce.com.

Rather than jump into the hosted waters with two feet, many drug companies will take a “hybrid” approach and mix hosted with on-site applications. Drug manufacturers “will keep some of it on premise for reasons of compliance and control or sensitivity of their data,” he added.

Edge Dynamics has been in the CCM business for about three years, providing in-house applications to Bristol-Myers Squibb, Purdue Pharma, King Pharmaceuticals, and others. The company’s in-house software usually sits on top of a drug manufacturer’s enterprise resource planning (ERP) system to manage customer records and channel issues.

For its on-demand service, the company will work with IBM to offer its software and tools through IBM’s Applications On Demand Platform, which automates the applications and takes care of such things as security. Applications range from basic channel management software to programs that manage core channel commerce management policies.

Edge Dynamics is taking a delivery-agnostic approach that is focused on providing the full range of options, said Joshua Greenbaum, principal analyst with Enterprise Applications Consulting in a statement.

The on-demand approach benefits a small company since there are little or no startup costs to get access to the same applications used by some of the larger players.

Larger companies can also benefit by subscribing to hosted services that focus on individual channel issues, such as customer relations or government regulations, said McGrory.

In fact, compliance with government regulations may be the strongest reason companies make the jump from in-house to hosted.

“The heightened regulatory requirements around Sarbanes-Oxley over the last few years are causing them to highly scrutinize the way they are doing things,” said McGrory.

Efforts to comply with new and evolving Sarbanes-Oxley rules is fast becoming a budget-breaker for many small companies, according to a study released yesterday by the Greater Boston Chamber of Commerce.

Keeping pace with government regulations can cost a small firm 2.5 percent or more of its annual budget and chip away at research and development efforts, said the study, which focuses on Massachusetts biotech and life sciences companies.

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