Top 5 reasons for outsourcing your R&D

Labs Explorer
Jul 25, 2017 · 5 min read

Research and Development in pharmaceutical production represented a €30000 million outgo for the United States and a €27000 million outgo for the European Union in 2013 according to UNESCO.

And, that is huge! Indeed, the innovation market is colossal, and with it, the need for R&D.

But of course, pharmaceuticals isn’t the only field involving R&D needs! We now acknowledge that scientists in all fields need to innovate. But, in order to innovate, a variety of expertise, skills and equipment are required. Things that we don’t necessarily have close in our labs. So, outsourcing your R&D naturally appears like the right solution then.

You could say it was easier to « outsource » in the past: the process of outsourcing was more of a give-and-take between two already-knowing-each-other parties : “I’m glad I could help with your GDP-tagged protein localization” and “Oh, thanks again, maybe I could give you a hand with that PCR you need to do for next friday then”.

Because we face such an abundance of service supply possibilities, we observe a change in the outsourcing process. And this change is a transition towards new digital gates or marketplaces that supports labs to find partners and/or to outsource.

As an individual you are probably aware of this shift. But still, at lab or company scale, you might be questioning the use and meaning of this transition and that is why we are telling you why you should outsource with this Top 5 reasons for outsourcing you R&D.

Benefit from the expertise and innovation of an expert company

« One can only hope that the commercialization of science will provide investigators with more channels and greater opportunities to accomplish their goals and test hypotheses. » said David R. Smith from University of Western Ontario when interrogated on outsourcing and commercialization of science.

What we can draw from this quote is that the transition to digital gates and marketplaces, where you can purchase services, will hopefully offer you (as a scientist) some advantages. For example, it should open many doors to work with different companies. And also have lots of different expertises within reach, which means making partnerships and benefiting from knowledge of experts to achieve your goals.

Interestingly enough, this analysis coincides with one of the first reason why a lab/company outsources R&D. According to a study from the R&D magazine they outsource to have expert companies performing their lab’s non-core activities.

And what outsourcing really involves is hiring a firm to perform processes that are part of a company’s or lab’s latent responsibilities.

A lab or firm that specializes in a process is probably of lower cost and improved performance on given tasks. And this brings us to the second reason for outsourcing your R&D, which is saving your money.

Optimize your costs

As Kathy Ramirez-Aguilar, CU Green Labs Program Manager at the University of Colorado Boulder said: « Two general components of overhead costs [are] administrative costs (capped at 26%) and facilities costs (not capped) ».

The process of outsourcing R&D reduces cost and enhance performances in a given activity according to many companies.

Not having to pay for a facility or the equipment used for punctual projects has proven to be a capital savier for companies. In addition, they can spare money on wages and training for specific devices.

It adds up pretty well if you know that in its electronic version from February 15, 2017, the United States Code of Federal Regulations stipulates that « during the time that equipment is used on the project or program for which it was acquired, the non-Federal entity must also make equipment available for use on other projects or programs ».

In the main, we should all consider facilities and equipment for an outsource purpose as of now.

Avoid capital investment

On the one hand, while a lab practices exclusively one process, they can invest in large or expensive devices that can be paid for by offering the service to other labs.

And on the other hand, contracting with another company means a lab does not have to buy large equipment which represents a major long term investment.

From another point of you, if you do have money to use for a large equipment that you are going to use daily (or so) you should consider outsourcing the expertise. That could help remunerate the significant investment.

And, if you are interested in what are the benefits of outsourcing your use of big lab equipment don’t hesitate to read our publication on the subject.

Concentrate on your core expertise

Companies and labs can identify their core expertise by looking at what they can do to develop new hypotheses, products and/or services.

When you outsource the tasks that are not part of your core expertise you are able to concentrate on the ones that are part of it.

And in the meantime, people that are working in your lab are free to engage in whatever other important task they need to do.

How is that ? Because they have time. In short, outsource to keep your resource!

Develop strategic alliances

Choosing an outsourcing partner means creating a relationship between labs and/or companies. And that can be very useful for building a consortium for example.

Among other things when looking for project funding money, especially when you know that as a general guideline for European projects, a minimum of 3 partners from 3 different member states are required for the assembly of a dossier according to the recommendations of the European Commission.

As you read through this, you probably grasp the main message about outsourcing your R&D needs : there are a lot of advantages, and here we only commented the five most essential.

Then, you might begin to understand that outsourcing your R&D and seeking partnership are two very close notions.

The bottom line is the choice can be complex of how and with whom to outsource, but every lab can leverage from expertise, equipment or technology provided by the right partner.


Originally published at www.labsexplorer.com.

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