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Jonathan Corey By Jonathan Corey • December 3, 2018

Cut the Cost of FDA Validation with a Prepackaged ERP Solution

There are many advantages from going with a prepackaged ERP solution instead of reinventing the wheel with a custom installation: Faster implementation. Best practices for a given line of business. Reduced cost. Business processes that just work.

For life science firms, however, there’s an additional reason to consider a prepackaged ERP solution: Cutting the cost of FDA validation.

All businesses should validate newly implemented business systems to ensure that they are properly configured and business processes work as expected within the system. This is part of a good ERP implementation. 

Life science firms such as pharmaceutical companies and medical device manufacturers not only should validate their systems, however, they are required to do so by FDA mandate; in addition to testing a new ERP system internally, life science firms also must have their system reviewed by a third-party auditor for FDA compliance.

“The very definition of software validation is that there’s documented evidence the system is installed and is set up as intended,” explains Archie O’Leary, vice president of sales for one of the leading life sciences validation firms, Arbour Group. “In a regulated industry, the requirement is that you prove it.”

Reducing Costs (and Risk) with Prepackaged ERP Solutions

Third-party validation for FDA compliance does not come cheap, of course.

Firms such as Arbour Group must run through a battery of tests on a newly installed ERP system to make sure that the right formulas are entered in the system for a given drug, that the drugs are manufactured in a certain way and only in approved facilities, that materials can only be ordered from approved vendors, and areas such as tracking are up to snuff in case there’s a defect in the manufacturing process.

For instance, third-party auditors check to see if the system allows them to buy something from an unauthorized vendor.

"We make sure that the vendor master is set up that you can only buy from authorized vendors,” he says. “Then when the material comes in, it has to be checked in and then quarantined and inspected to make sure it meets manufacturer requirements. Because you don't just take something off the receiving dock and throw it in to production. That's not the way life sciences works."

Areas of an ERP system such as payroll aren’t considered, because that doesn’t directly affect consumer health. But third-party auditors validate the ERP system against the long list of regulated processes that the FDA does care about.

Where pre-packaged ERP solutions can help cut validation costs is by knowing what the FDA requires and coming preconfigured out of the box to meet validation needs.

“With our prepackaged SAP Business ByDesign solution for pharmaceutical companies, they’re getting a product that is FDA-validation ready, which is important,” noted Ralph Hess during a recent interview , vice president of sales for Navigator Business Solutions. “With ByDesign plus some of the add-on product enhancements that we add, we provide a ready-to-validate platform for those young life sciences companies that are ready to go big.”

This means that there is less time spent configuring the ERP system for proper validation, and less chance that the system will run into problems with FDA validation—the system already is configured for validation. Third-party validation becomes a formality.

“I think prepackaged is the way to go,” says O’Leary at Arbour Group. “As any IT project manager would tell you, What are my risk and how do I reduce them? Well, prepackaged is certainly a way to reduce risks.”

Prepackaged ERP solutions also can reduce validation costs in a second way, too: third-party auditors already have experience with these systems, reducing the time (read: cost) required for validation.

“We have pre-configured validation solutions for systems like SAP Business ByDesign,” says O’Leary. “We’ve done enough of them that we have a test-script library that represents the more prevalent functions in the manufacturing process for a life sciences company.”

Custom systems and more generic ERP implementations certainly can be validated, of course. They just are going to require more time and effort from auditors.

“If we haven't seen it before, do we really care? No. But it's going to be expensive,” he says.

So prepackaged ERP not only cuts implementation time and delivers systems that businesses can use out of the box, they also save significant time and money for life science firms during the validation process.

This is yet another reason to choose prepackaged ERP over more generic solutions. Prepackaged solutions come with all the benefits of relying on an industry standard platform such as SAP’s Business ByDesign, but at the same time they are pre-configured for the needs of a given vertical. And that pre-configuration extends all the way to having the processes and systems

Need to know even more about FDA Compliance Software here is a page from Master Control