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BMS gets closer to Accenture with $550m IT deal

By Phil Taylor , 15-Sep-2008

 

Pharmaceutical major Bristol-Myers Squibb has signed another deal with outsourcing specialist Accenture, this time tapping the firm for IT and financial support services via a 10-year contract worth $550m.

The move is yet another example of the big pharmaceutical players increasingly turning to outsourcing for many primary business functions in an attempt to streamline business processes and become more lean and agile.

Paul von Autenried, vice president and chief information officer at BMS, said: “It gives us greater flexibility, thereby allowing the company to focus on what we do best – discover and develop medicines.”

For example, last year AstraZeneca renewed a $1.4bn, multi-year deal with IT giant IBM for server hosting, storage of AstraZeneca's global scientific, commercial and supply operations and other business processes, all managed within a single infrastructure.

While much attention has been given to making functions such as manufacturing and drug development more efficient, often through judicious use of outsourcing partners, companies are now looking at all aspects of the business in order to reduce costs and control overheads.

Accenture’s in-house research has suggested that broad adoption of outsourcing across a large multinational pharmaceutical company – including IT, finance, contract management, communications, human resources and governance - can reduce costs by up to 40 per cent annually.

With the latest contract, BMS is farming out its application development and maintenance, as well as a range of finance and accounting support services across the company. It extends and expands a four-year outsourcing agreement the two companies signed in 2004 for application maintenance and accounts payable services.

That should allow the firm to achieve “a variable cost structure to address varying economic factors, such as patent lifecycles,” said Accenture in a statement.

The 2004 arrangement was followed by another deal between the two companies last year, which saw them join forces to set up a drug safety monitoring operation in India. The pharmacovigilance centre is operated by Accenture and undertakes the processing and coding of adverse event data as well as the generation of regulatory reports on safety and adverse events.

Accenture said it will provide the new services in 22 languages, covering BMS’ businesses in Europe, America and Asia.

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