The Value of Outsourcing Bioinformatics

By Richard Holland 

April 21, 2011 | Guest Commentary | Outsourcing has long been the holy grail of companies trying to make cost savings and increase efficiencies, and never more so than in the current economic turbulence that is sweeping the globe. With reducing R&D budgets, revenue streams under threat from expiring drug patents, and general loss of consumer confidence, every biotech organization is faced with making difficult decisions about the future structure and purpose of R&D teams. Outsourcing is vital to the ongoing ability of bioinformatics teams to effectively support R&D activities within their organizations. 

Bioinformatics has traditionally been the lowest priority in biotech R&D, with the bulk of funding and development money focused on wet-lab discovery and validation processes rather than constructing and supporting the IT systems required to analyze and fully understand research data. As a consequence every bioinformatics manager will say that their group is under-resourced and constantly asked to produce more from less. When times get hard, bioinformatics teams are often the first to feel the pinch.  

The financial pressures on large pharmaceutical companies are nothing new and they look set to continue, as evidenced by recent layoff announcements from GSK and Pfizer. Eli Lilly has shuttered its Singapore R&D centre with the loss of 130 jobs, many of which were bioinformaticians. Nevertheless, many scientists report that bioinformatics positions are hard to fill. Indeed, many administrators fail to appreciate the value of hiring dedicated bioinformatics staff, perhaps believing that a graduate student can pitch in to help.  

When faced with the pressures of downsizing a bioinformatics group or boosting productivity of an existing one without any additional resources, then outsourcing key tasks is a natural decision. Offloading standalone projects or long-term support and maintenance tasks to a trusted third-party vendor can allow the team to refocus on key projects that will make the biggest difference to the effectiveness of their organisation's R&D. While outsourcing costs money, the value gained often outstrips the cost of having to carry out the equivalent work in-house.  

With their limited resources coming under huge pressure to improve productivity and efficiency, bioinformatics managers need to start looking at the ways their mainstream IT colleagues deal with the same situations.   

In the IT world it has long been best practice to hire in contractors for short-term projects with high resource requirements, or even completely outsource the entire development process to an external vendor, rather than hire permanent staff that morph into an expensive and difficult to down-size burden once the project ends. A common example of project outsourcing is corporate website and content management. It has been many years since any big organisation seriously considered directly recruiting individual graphic designers, web designers and content writers on its own staff to design and construct the company website. 

A recent report from Business Insights shows that outsourcing of key bioinformatics tasks is catching on in the biotech world and growing at a rapid rate. The bioinformatics services market grew by nearly 25% from 2007-09, a growth rate which is expected to continue until at least 2014. Total market value for bioinformatics services is expected to exceed $1 billion by then, and the market for bought-in bioinformatics content and databases will exceed $3.5 billion. 

A key driver of the trend toward outsourcing has been the provision of integrated services making easy the acquisition and integration of external data into internal systems. As the Business Insights report says, “biotechnology companies are looking for suppliers that can offer total integration of data infrastructure, which includes data sharing, data security, customization, data searching and analysis. The total package is supported by after-sales services and consultancy, which suppliers provide as a core competency.” 

However, as with all things informatics, care and attention to detail is vital when making the decision to outsource a bioinformatics project. Here are ten key points to consider when looking to outsource: 

1. Look for an established vendor with a track record specifically in bioinformatics. 
2. Don’t disregard open-source solutions as they can often offer excellent value for money. 
3. Consider data security. 
4. Know what the project is and have it well defined at the outset. 
5. Share your goals with your vendor so that they understand what you are trying to achieve long-term. 
6. Set realistic goals. 
7. Build a communication plan with your vendor. 
8. Start small, think big. 
9. Check with the lawyers. 
10. Remember maintenance and support. 

Any company facing financial or organizational pressures that mean that they cannot support internal demand for bioinformatics provision should seriously consider outsourcing, and they would by no means be alone in doing so. A precedent has been set for the use of external vendors to assist in internal bioinformatics provision and as long as the relationship is managed carefully and the projects are well-defined, there is no reason why such arrangements should not succeed. 

Richard Holland is Operations and Delivery Director for Eagle Genomics Ltd., Cambridge, UK. He can be reached at holland@eaglegenomics.com.