2016 North American Enterprise Quality Management Solutions for the Pharmaceutical Industry Customer Value Leadership Award

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1 2016 North American Enterprise Quality Management Solutions for the Pharmaceutical Industry Customer Value Leadership Award 2016 NORTH AMERICAN ENTERPRISE QUALITY MANAGEMENT SOLUTIONS FOR THE PHARMACEUTICAL INDUSTRY CUSTOMER VALUE LEADERSHIP AWARD 2016

2 Contents Background and Company Performance... 2 Industry Challenges... 2 Customer Impact and Business Impact... 2 Conclusion... 7 Significance of Customer Value Leadership... 8 Understanding Customer Value Leadership... 8 Key Benchmarking Criteria... 9 Customer Impact... 9 Business Impact... 9 The Intersection between 360-Degree Research and Best Practices Awards Research Methodology Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices About Frost & Sullivan Frost & Sullivan We Accelerate Growth

3 Background and Company Performance Industry Challenges With the increase in outsourcing budgets, companies from several industries, including pharmaceutical and medical device, are sourcing and managing ingredients and parts from suppliers around the globe. Companies currently procure raw materials and parts accounting for about 50 80% of the total product cost from suppliers in the global market. Currently, 80% of the active pharmaceutical ingredients used in the manufacturing of finished goods in the United States are sourced from abroad. This significantly adds to the complexity of the pharmaceutical supply chain. Moreover, a growing volume of finished operations, especially in the pharmaceutical industry, is being executed by contract manufacturers. Complexities in procuring raw materials, contract manufacturing, finished goods manufacturing, and overall supply chain management pose several challenges, significantly increasing the number of quality incidents, product recalls, and warning letters. In the pharmaceutical industry alone, there was a 135% increase in product recalls from 1999 to Today, the biggest challenge to innovation stems from managing complexities within the supply chain. Companies are thus looking for improved visibility to better manage quality across the entire supply chain. Under such circumstances, quality management vendors that can provide customers with enhanced visibility, control, coordination, and execution for outsourcing as well as contract manufacturing, helping them manage quality and manufacturing processes across the entire supply chain are strongly poised to secure a leadership position in the market. Customer Impact and Business Impact Price/Performance Value Sparta Systems competitive advantage stems from the breadth of its portfolio. The company provides more solutions and options compared to standalone quality management vendors. For customers leveraging different technology platforms, it provides a large number of options and ensures flexibility from a technological standpoint. Sparta Systems has three foundational platforms: TrackWise enterprise quality management solution (EQMS), the company s flagship product; Stratas, a cloud-based portal (a new product that ties to the supplier extension strategy); and 123Compliance. Stratas runs on Amazon Web Services (AWS) and creates a bridge between TrackWise and the cloud platform, offering more flexibility to customers than competing solutions and optimizing workflows inside these organizations while streamlining operations with external parties and suppliers. 123Compliance runs on the Salesforce.com platform. Going forward, Sparta Systems seeks to focus on these three foundational platforms and get them interconnected. For customers, their suppliers, and the suppliers suppliers, Frost & Sullivan We Accelerate Growth

4 there will thus be one continuous loop of quality event facilitating communication not only internally but across the entire quality ecosystem. Sparta Systems refers to this interconnected ecosystem as the Quality Business Network (QBN) and Sparta is focused on delivering solutions that enable quality stakeholders to connect to it. This helps customers expand their overall competence across the network leveraging Sparta Systems installed base. Companies can follow a four step evolution towards the connected ecosystem. The first step involves leveraging of the standalone TrackWise EQMS solution by customers to secure a strong control over their internal quality issues. The second step is initiated when companies want to expand and manage their relationships with external suppliers and vendors across the network. Sparta Systems customers have access to information on vendors that they have direct relationships with. The company is well positioned in this area, with several customers leveraging its on-premise solution, deploying Stratas Supplier Collaboration, a portal type technology, and reaching out to the suppliers they work with, within its infrastructure. The third step in the evolution involves further expansion of network connections, which enables customers to communicate and manage quality across the network when they do not have much direct control over the people they are interfacing with. The fourth step covers the entire ecosystem of managing quality across not only the business network but also globally. This enables customers to bring all the data together and get real-time notifications when there is a quality issue, whether it is internal or external to the organization. The interconnection and visibility brought about by the QBN helps customers understand the impact that each stakeholder has on the manufacturing process and product quality. As the QBN continues to grow, Sparta Systems customers will be able to generate analytics reports as well as trending reports, helping them make real-time decisions on quality events. For instance, if customers want to see how a supplier is performing, they can access the relevant information irrespective of the location of the data set or the workflow. Customers can also generate reports on the entire network across these different platforms. Substantial increase in the volume of real-time actionable insights available to customers on the QBN improves their visibility, control, coordination, and execution and ensures enhanced efficiency (enabling supplier risk management and facilitating greater collaboration with suppliers, contract manufactures, and partners on activities that impact quality), insight (simplifying global performance analysis across the supply chain and enabling a risk-based approach for identifying and mitigating risks), and growth (simplifying the integration of quality norms as customers expand through acquisition and globalization). Customer Ownership Experience To enhance the ownership experience for its customers, Sparta Systems product development roadmap focuses on three key areas continuous product innovation, Frost & Sullivan We Accelerate Growth

5 integration and connectivity, and user experience. Sparta provides a suite of application program interfaces (API)s that allow partners certified in the Quality Connect program to integrate Sparta solutions with other mission critical applications.. The company intends to integrate 123Compliance with TrackWise to ensure greater flexibility for customers. For instance, customers wanting to use 123Compliance Complaints functionality on the Salesforce.com platform will be able to route complaints into the TrackWise quality management system. Sparta Systems strongly focuses on enhancing the ownership experience for different customers (casual users, regular users, and so on). For instance, for its next major release of TrackWise 9.0 in the second half of 2016, Sparta Systems is redesigning the desktop of the TrackWise application to give it a new look and feel that will make it more intuitive. This will enable even a casual user (using the application only once or twice a month) to know exactly where to go and get all the tasks done (such as reviewing and approving a record). The new version of TrackWise also has an Installation Qualification (IQ), Operational Qualification (OQ) package, which provides for an automated and continuous validation suite for the testing of all code as its developed, improving overall product quality. This will enable Sparta Systems to perform the validation and IQ, OQ documentation for its customers within days of all major and minor releases. For Stratas, Sparta Systems is continuing to create new workflows to enable better collaboration between suppliers and customers. Moreover, with a strong focus on mobility, Sparta Systems has come up with mobile applications for TrackWise and a responsive design for its other cloud platforms. The company also supports new browsers, databases and the most recent Crystal Reports, as well as recent versions of Oracle and SQL. It lays strong emphasis on providing its customers with enhanced data visibility through a robust reporting tool, QualityView, which is the business intelligence (BI) solution on the quality data integrated into TrackWise. Some of the larger customers that already have their own BI solutions, such as Tableau or Cognos, need the quality data in a reportable format so that they can seamlessly integrate the data set into their own BI solutions. Sparta Systems Quality Data Sync, a separate reporting database, takes the data from TrackWise and enables their integration into the other reporting tools without compromising on TrackWise s performance. Such unparalleled product attributes have helped Sparta Systems instill a sense of ownership and pride among its customers while providing choice in reporting capabilities. Customer Service Experience Sparta Systems works closely with its customers and partners to enhance its service proposition. The company offers strong customer support and training. Its flexible and comprehensive support services range from business assessment and planning to implementation. SpartaCare is a comprehensive portfolio of managed off-site support services offered by Sparta Systems to assist customers in effectively running and Frost & Sullivan We Accelerate Growth

6 maintaining their licensed software solutions. The company has a dedicated team of experts and a Technical Account Management team to proactively deal with all issues. The company s success is largely attributable to its pool of experts, who leverage their unmatched industry expertise and work closely with customers through the software ownership life cycle. This helps them understand every aspect of the customer s business and position Sparta Systems to devise a model that is best suited to address customer needs and ensure quick implementation. Sparta Systems customers can thus have their systems up and running quickly while ensuring a short payback period. Sparta Systems flexible and scalable platform also ensures faster adaption to rapid technological advances compared to competing solutions. This positions its customers to scale easily, grow quickly, and update their business processes with evolving market trends. Some of the services offered by Sparta Systems are system implementation, validation, data migration, integration, process optimization, pre-configured solutions deployment, and package solutions. Offering a wide array of services to its customers strengthens the company s potential to expand the scope of applications for its solutions going forward. Customer Acquisition Sparta Systems success in accurately analyzing customer requirements and designing value-adding EQMS solutions is underscored by the successful deployment of TrackWise EQMS across the North American pharmaceutical and medical device industries. With changing industry dynamics, Sparta Systems has remarkably scaled up its services, helping life science companies with centralized and consolidated tracking, workflow management, and regulatory reporting solutions for all critical business processes impacting their manufacturing operations globally. Currently, 45 of the top 50 pharmaceutical and 13 of the top 15 medical device companies use Sparta Systems TrackWise EQMS. The solution helps customers comply with regulations such as 21 CFR Part 11, GMP, GLP, and GCP, improve product quality, and reduce costs while streamlining quality processes, consolidating redundant systems, and reducing manual operations to improve top-line revenue generation. Sparta Systems has leveraged its twenty years of domain expertise to document quality management business process best practices which they call Process Designs. These workflow configurations are out-of-the-box and enable a streamlined deployment life cycle, resulting in the quick implementation of its EQMS solution. Regulated industries only tend to focus on the critical issues affecting their overall ability to ensure compliance. However, they tend to overlook the lower- and medium-end quality issues that affect their overall ability to reduce the time-to market for their products. However, using Sparta Systems solutions, customers can significantly increase the number of quality records (by about 34%), which improves their overall visibility of what is truly affecting the quality of their products. Sparta Systems significantly reduces the average time (by 44%) taken to process and evaluate quality issues and making prompt Frost & Sullivan We Accelerate Growth

7 decisions, thereby also reducing the overall inventory of quality incident records by 7%. Customers ability to collect and process data helps drive continuous process improvement and launch a superior quality product in the market. We chose Sparta because not only did the company demonstrate that it could fulfill everything we needed for our inventory tracking project, but it was configurable right out of the box. It was a solution we could easily and quickly expand for many years to come, as Ferring s quality and compliance needs evolved, said Flemming Simonsen, Global Quality Assurance Director, Ferring International Center SA. Some of the leading pharmaceutical companies that have reaped huge benefits by deploying Sparta Systems EQMS solution are Johnson & Johnson, Pfizer, AstraZeneca, Novartis, Teva, Baxter, Bayer, Abbott, and Roche Pharmaceuticals. With one of the highest customer retention rates (more than 98%) in the industry and a robust and continuously expanding customer base, Sparta Systems is expected to further strengthen its position in the market going forward. Growth Potential Sparta Systems is an established leader in the EQMS space. Globally, the company has more than 700 implementations and about 825,000 users in 30 countries. With more than $100 million in revenue, over 250 employees, and domain expertise of more than 20 years, the company can understand every aspect of its customers businesses. Historically, Sparta Systems has focused on securing large enterprises as its clients. However, 123Compliance has enabled it to cater to a number of smaller organizations that do not want to run software on premise. The 123Compliance platform targets mid-market customers that probably do not have as many customization/configuration needs as large companies but have processes that are more standardized and can be turned on relatively quickly compared to a large-scale TrackWise implementation. The company has expanded into other key verticals where it sees a lot of similarities in how companies operate and can probably leverage Sparta Systems quality management solution. This means, Sparta Systems has been successful in not only promoting customer value leadership in the life sciences industries but also drawing the attention of leaders from a wide range of other industries such as discrete electronics, consumer products, chemicals and agrochemicals, oil and gas, energy, contract research, aerospace and defense, government agencies, and manufacturing. The company caters to market leaders such as Applied Materials, Emerson, Alstom, P&G, PepsiCo, Philips, Medtronic, CareFusion, and Agilent Technologies among others. The high level of customer satisfaction that Sparta Systems solution enjoys across a plethora of industry verticals boosts the company s growth potential in this market in the coming years. Frost & Sullivan We Accelerate Growth

8 Conclusion Leveraging its expertise in developing an integrated and reliable suite of innovative quality management solutions, Sparta Systems has secured an edge over its competitors by creating a virtual QBN that provides ultimate choice to customers by connecting internal quality management processes to quality ecosystem partners. QBN benefits for network participants such as efficiency, insight, and visibility enhance the overall value proposition for Sparta Systems customers and sets high standards in the market. The company has ramped up its capabilities to render unmatched customer value and consolidate its position in the quality management market by enabling all participants in the quality ecosystem to collaborate more efficiently on quality issues anywhere, anytime, and on any device, thereby helping them improve their operational efficiencies and overall business results. By providing overall visibility into what is truly affecting the quality of a product, participation in the QBN enables companies to efficiently manage their global growth. Moreover, the network value of the QBN enables manufacturers to facilitate collaboration among the different silos within their businesses, anticipate market changes, plan strategically, respond effectively to changing market conditions, and finally ensure overall quality. Because of its strong overall performance, Sparta Systems is recognized with Frost & Sullivan s 2016 Customer Value Leadership Award. Frost & Sullivan We Accelerate Growth

9 Significance of Customer Value Leadership Ultimately, growth in any organization depends upon customers purchasing from your company, and then making the decision to return time and again. Delighting customers is therefore the cornerstone of any successful growth strategy. To achieve these dual goals (growth and customer delight), an organization must be best-in-class in three key areas: understanding demand, nurturing the brand, and differentiating from the competition. Understanding Customer Value Leadership Customer Value Leadership is defined and measured by two macro-level categories: customer impact and business impact. These two sides work together to make customers feel valued, and confident in their products quality and long shelf life. This dual satisfaction translates into repeat purchases and a high lifetime customer value. Frost & Sullivan We Accelerate Growth

10 Key Benchmarking Criteria For the Customer Value Leadership Award, Frost & Sullivan analysts independently evaluated two key factors Customer Impact and Business Impact according to the criteria identified below. Customer Impact Criterion 1: Price/Performance Value Requirement: Products or services offer the best value for the price, compared to similar offerings in the market Criterion 2: Customer Purchase Experience Requirement: Customers feel like they are buying the most optimal solution that addresses both their unique needs and their unique constraints Criterion 3: Customer Ownership Experience Requirement: Customers are proud to own the company s product or service, and have a positive experience throughout the life of the product or service Criterion 4: Customer Service Experience Requirement: Customer service is accessible, fast, stress-free, and of high quality Criterion 5: Brand Equity Requirement: Customers have a positive view of the brand and exhibit high brand loyalty Business Impact Criterion 1: Financial Performance Requirement: Strong overall financial performance in terms of revenues, revenue growth, operating margin and other key financial metrics Criterion 2: Customer Acquisition Requirement: Customer facing processes support the efficient and consistent acquisition of new customers, even as it enhances retention of current customers Criterion 3: Operational Efficiency Requirement: Staff is able to perform assigned tasks productively, quickly, and to a high quality standard Criterion 4: Growth Potential Requirements: Customer focus strengthens brand, reinforces customer loyalty and enhances growth potential Criterion 5: Human Capital Requirement: Company culture is characterized by a strong commitment to quality and customers, which in turn enhances employee morale and retention Frost & Sullivan We Accelerate Growth

11 The Intersection between 360-Degree Research and Best Practices Awards Research Methodology Frost & Sullivan s 360-degree research methodology represents the analytical rigor of our research process. It offers a 360- degree-view of industry challenges, trends, and issues by integrating all 7 of Frost & Sullivan's research methodologies. Too often, companies make important growth decisions based on a narrow understanding of their environment, leading to errors of both omission and commission. Successful growth strategies are founded on a thorough understanding of market, technical, economic, financial, customer, best practices, and demographic analyses. The integration of these research disciplines into the 360- degree research methodology provides an evaluation platform for benchmarking industry players and for identifying those performing at best-in-class levels. 360-DEGREE RESEARCH: SEEING ORDER IN THE CHAOS Frost & Sullivan We Accelerate Growth

12 Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices Frost & Sullivan Awards follow a 10-step process to evaluate award candidates and assess their fit with select best practice criteria. The reputation and integrity of the Awards are based on close adherence to this process. STEP OBJECTIVE KEY ACTIVITIES OUTPUT 1 Monitor, target, and screen Identify award recipient candidates from around the globe Conduct in-depth industry research Identify emerging sectors Scan multiple geographies Pipeline of candidates who potentially meet all bestpractice criteria 2 Perform 360-degree research Perform comprehensive, 360-degree research on all candidates in the pipeline Interview thought leaders and industry practitioners Assess candidates fit with best-practice criteria Rank all candidates Matrix positioning all candidates performance relative to one another 3 Invite thought leadership in best practices Perform in-depth examination of all candidates Confirm best-practice criteria Examine eligibility of all candidates Identify any information gaps Detailed profiles of all ranked candidates 4 Initiate research director review Conduct an unbiased evaluation of all candidate profiles Brainstorm ranking options Invite multiple perspectives on candidates performance Update candidate profiles Final prioritization of all eligible candidates and companion best-practice positioning paper 5 Assemble panel of industry experts Present findings to an expert panel of industry thought leaders Share findings Strengthen cases for candidate eligibility Prioritize candidates Refined list of prioritized award candidates 6 Conduct global industry review Build consensus on award candidates eligibility Hold global team meeting to review all candidates Pressure-test fit with criteria Confirm inclusion of all eligible candidates Final list of eligible award candidates, representing success stories worldwide 7 Perform quality check Develop official award consideration materials Perform final performance benchmarking activities Write nominations Perform quality review High-quality, accurate, and creative presentation of nominees successes 8 Reconnect with panel of industry experts Finalize the selection of the best-practice award recipient Review analysis with panel Build consensus Select winner Decision on which company performs best against all best-practice criteria 9 Communicate recognition Inform award recipient of award recognition Present award to the CEO Inspire the organization for continued success Celebrate the recipient s performance Announcement of award and plan for how recipient can use the award to enhance the brand 10 Take strategic action Upon licensing, company may share award news with stakeholders and customers Coordinate media outreach Design a marketing plan Assess award s role in future strategic planning Widespread awareness of recipient s award status among investors, media personnel, and employees Frost & Sullivan We Accelerate Growth

13 About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages almost 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 31 offices on six continents. To join our Growth Partnership, please visit Frost & Sullivan We Accelerate Growth

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