In the past, pharmaceutical organizations used spreadsheet or pen and paper-based and/or homegrown solutions for laboratory asset management, and faced complex scientific and business challenges. Recently, however, they began migrating to professional asset management software solutions to quickly identify what equipment is in the laboratory, where it is and how often that equipment is being used.
The laboratory asset management software landscape is expected to be US $0.6B in size in 2017, and is made up of three different types of software solutions:
- End-to-end software asset management
- Lab information management systems (LIMS)
- Various reporting tools
Lab asset management software has the potential to improve instrument utilization, and if integrated well with other systems/solutions, it can strengthen overall lab strategy and management. Normally, the average utilization rates of 60% across different instrument types is the norm but through the use of software, it can be improved to 85%.
The lab asset management software landscape can be perplexing, especially in terms of supplier representation. The supplier landscape is typically made up of three different types of suppliers with varying capabilities:
- Suppliers offering niche tools. They usually focus on specific aspects/functionalities within the larger set of offerings included in asset management solutions, and lack the scale/stability offered by larger vendors. These suppliers basically bring an incomplete niche feature set – often lacking a broader set of functionalities such as asset tracking across different categories of lab instruments, inadequate reporting skills, etc.
- Suppliers offering complete asset management tools. These suppliers offer solutions that have the capability to capture utilization data from networked instruments in the lab. The solutions also offer reports that capture and present utilization trends, comparative analysis and asset performance insights.
- Suppliers traditionally Lab Information Management Software (LIMS) suppliers. These suppliers are focused on sample/data management rather than asset management. Few suppliers mention asset management capabilities; instead they ‘integrate’ with asset management solutions to optimize lab asset productivity.
Perkin Elmer, Agilent Technologies (iLab Solutions), and Nuvolo Technologies are the leading software providers in this space. They are highly focused in terms of product offerings and pharmaceutical focus, and have matured and focused investment plans in the domain. Rather than adopting a full home-grown approach toward software development and services, these software providers showcase impressive partnerships with service and platform providers. Their deals in the pharmaceutical domain, global spread and success stories with large enterprises and SMBs have seen them evolve into market leaders.
The supplier selection process for finalizing an inventory management software provider involves an assessment of the specific traits of different supplier groups in an effort to judge the supplier’s fit to a buyer’s custom preferences and requirements. In terms of deals, with approximately 80% of the total deals signed, bundled deals (product along with service) remain the most favored model of engagement. When it comes to negotiations, re-negotiating contracts with suppliers through a competitive bid process is an established norm – this also ensures that the buyers make relevant choices in a landscape that continues to rapidly evolve and re-define itself. Deals are predominantly competitive in nature, even if buyers have opted to continue with their incumbent supplier. As of 2013, approximately 82% of deals have been competitive.
The market is experiencing increasing consolidation activities in the supplier landscape – the days of standalone contracts for asset management, information management (LIMS) and content management (CM) will soon be over. Smaller vendors with solid capabilities will be acquisition targets for larger suppliers who either want to develop capabilities inorganically, or spread their portfolio across an entire stack of lab software offerings. However, consolidation of the entire portfolio of lab software offerings can also deliver the next phase of savings for the matured buyers, and savings opportunities ranging between 3%-15%, on renewals have been reported by various suppliers.