Increased efficiency is an ongoing goal for any organization looking to stay ahead in today’s market, especially those in the Pharmaceutical industry. There’s often a lot of focus placed on things like increasing productivity, lowering operating costs, enhancing operational efficiency and improving product-based profitability, to name a few.

On top of that, pharmaceutical organizations need to devote a considerable amount of time towards operational planning, drug commercialization, go-to-market strategy and more.

While today’s best-in-class companies conduct these operations using automated tools, smaller pharma and biotech companies end up handling these operations with manual processes. Especially for these companies, a modern Enterprise Resource Planning(ERP) system that can handle end-to-end business processes and be used to collect, track, manage, and distribute critical information across all departments is invaluable.

A few high-level benefits of a modern ERP System include the ability to

  • Standardize business processes and enable automation across different departments.
  • Monitor business processes across departments to accelerate operations.
  • Allow visibility and transparency by data sharing.
  • Establish strong collaboration across multiple departments.
  • Provide a multitude of flexibility and customization options to meet specific business requirements.

Modern ERP systems

Today’s ERP systems have evolved into powerful, agile platforms designed to integrate core and incremental business functions into one unified system. These modern ERP applications automate the flow of real-time information across departments, allowing easier collaboration and actionable insights to help drive important business decisions.

Based on experience, here are some of the differences seen in higher-end ERPs.


Different Types of ERP Deployment

01. Cloud

A cloud-based solution delivered over the internet using Software as a Service (SaaS).


  • No upfront cost for hardware and software
  • Remote access to critical business applications
  • The cloud vendor manages costs related to updating and upgrading.
  • Datacenter takes care of IT support services.
  • The company server is secured against the threat as the data is stored in the cloud.
  • Cloud services are scalable and can be consumed as per the requirement of the business.

02. On-Premise

The ERP system is installed locally in the client environment, and data is stored on internal servers.


  • More customization options are available and with greater ability.
  • The organization holds control over the implementation process.
  • Data security control remains in the hands of the organization.

03. Hybrid

Splitting ERP functions between on-premise systems and the cloud server to receive the best outputs.


  • Increased flexibility allows loose coupling among modules.
  • An intermediate cost between cloud and on-premise solutions.
  • Lesser training expenditure involved compared to cloud ERP.


percent of organizations apply cloud-based software or system architecture. Also, the application of hybrid cloud systems has escalated from 19% to 57% in 2017, a three times rise in a year.

Source: Mcafee

The role of ERP in the Pharmaceutical industry

At present, the pharmaceutical industry faces numerous business challenges including

  • Major healthcare reforms
  • Rigorous regulatory requirements
  • Incalculable market trends
  • A discerning and demanding customer base
  • Increasing global competition
  • Lower drug prices demanded by consumers

The growing consumer demand for superior-quality healthcare products at compelling costs and the competitive market makes it essential for pharmaceutical companies to streamline operations, reduce cost, and maximize efficiency.

From planning and purchasing to things like inventory, supply chain management, sales, marketing, and human resources, a modern ERP technology solution can enhance operational transparency with better collaboration across all departments.

Why do companies choose ERP?

When current systems become the reason for slowed business growth most companies start looking for other options. Some companies just want to positively change the way they function and switching to an agile ERP system can help trigger a major change.

Some additional reasons a company may choose to implement an ERP solution include

  • Improving business performance
  • Making employee jobs easier
  • Satisfying regulatory compliance
  • Improving system integration

Reasons for Budget Overrun

One of the big detractors of new ERP implementations is budget, as it can be easy to underestimate the complexity involved. There are numerous reasons for a budget overrun during an ERP implementation, including

23%of budget overruns take place due to unexpected technical issues.

22% for the additional technical necessity

20%for increased scope

17% for underrated project staffing

The benefit of ERP for Pharma companies

In an industry that is so highly regulated, implementing an ERP can help streamline your organization’s ability to operate efficiently. Below are a few major benefits that pharma companies can gain from a modern ERP

  • Streamline production floor processes leading to a higher production rate
  • Manage sales & purchases in a few simple steps
  • Closely monitor and control inventory, including raw materials
  • Minimize operational work by sending real-time data alerts across departments
  • Increase operational performance accuracy
  • Ability to perform WIP and yield quality testing for an item or group of items
  • Save time and operational expense
  • Limit material wastage with pre-expiry alerts
  • Help maintain and manage compliance
  • Track the distribution of manufactured goods
  • Enhanced customer support
  • Maintain records of all business transactions through extensive reporting
  • Allow remote access to data to help make better business decisions 24/7
  • Handle all payments including customers and vendors

Challenges implementing an ERP in the Pharmaceutical Industry

Despite widespread ERP usage, there are still companies that face difficulty moving to a modern solution. Can the same ERP implementation strategy and formula work for every business? Unfortunately not, as each organization follows a distinct process, and has unique needs and expectations.

Here are a few challenges that companies usually encounter:

  • Selecting the ERP software that best meets their companies requirements
  • Attempting to complete the implementation in one step leading to numerous unforeseen problems
  • Crossing the budget limit because of project schedule overruns due to poor planning
  • Encountering compatibility issues with different ERP modules

Don’t forget

Finally, here are some things to consider when you begin the task of finding the right solution

  1. 1.Conduct in-depth research before selecting any ERP software. It’s wise not to make a decision based on a high-level feature list alone. Rather, go by detailed research that includes an understanding of the entire project.
  2. 2.Analyze your specific business requirements. Before choosing any ERP application, define a clear vision of what you plan to achieve from the ERP Solution.
  3. 3.Work with a partner that provides a free assessment. This process gives you the ability to break down the project into easy to manage pieces.
  4. 4.Evaluate the Return on Investment (ROI). The initial investment cost in an ERP solution may seem high, but the long-term benefits more than outweigh the initial cost. Understand from what specific solutions you need, and you can more accurately determine cost.
  5. 5.Ensure appropriate personnel training. Your team needs to hold a clear overview of how to use the ERP application. Initiating a mandatory training program for all users should help solve any such issues that may arise.

Key Takeaways

The right ERP solution, along with proper planning can improve your business processes and catapult your business to the top of it’s game.

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