Council Post: Three Best Practices When Outsourcing In A Life Science Company

Leen Kawas
5 min readJan 11, 2023

Leen Kawas | Entrepreneur, Inventor, Innovator and Leader | Managing General Partner at Propel Bio Partners.

It’s common knowledge that life science companies are higher-risk ventures and typically take a long time to get to a point where they can see profits or any sign of revenue. It’s an industry that requires specialized talent and sometimes significant infrastructure.

As such, leaders in this industry need to use strategies that can reduce costs and provide access to top talent who can help increase the quality of the work and the probability of succeeding. I have repeatedly seen where life science companies follow a traditional corporate chart and start hiring people with the hope that the gaps will be filled. Other companies take a more radical approach and outsource everything.

These models could potentially work, but are they the most efficient? Do they lead to the highest quality results? Will they provide the best possible outcome to all stakeholders? What is the infrastructure required to bring the function in-house? What equipment, software and hardware are needed?

Companies that stand out are the ones that have leaders who take the time to ask these questions; learn processes, workflows and tasks; set organizational goals; and leverage technologies to advance their products efficiently and cost-effectively. They outsource strategically. They build organizational structures that are adaptable and can withstand an environment where funding can be hard to access.

Outsourcing can help companies be more dynamic when it comes to the continuously changing nature of business and the shifting demands of an evolving industry. However, it’s important to outsource wisely and ensure you’re prepared. Here are some strategies that can help you successfully build an organizational network if you’re considering outsourcing:

1. Understand workflows, key functions, stakeholder needs, budgets, timelines and goals.

Leaders need to understand these details to communicate effectively with their teams and make decisions that empower their organization. When managers have a clear understanding of stakeholder needs, timelines and goals, they’re better equipped to identify the right outsourced talent and affect change in the company.

Why is this important when you’re making outsourcing decisions? These factors will help you determine the key functions that need to remain in-house, which are typically the ones that have the most significant influence on quality, timelines and budgets.

Understanding stakeholder needs, timelines and goals can also help you decide whether you should go with a full-service organization or target specialized groups that can handle parts of the workflow. I’ve found that full-service providers can be good options for smaller teams or really large companies. Smaller teams might not have the resources to hire people internally to manage, so they might start with a full-service provider to minimize project management demand internally. Larger organizations can also be successful with a full-service provider model because they typically take over a whole unit and become a true extension of the company.

However, working with specialized boutique organizations also has benefits. These organizations typically include working with highly experienced individuals who are entrepreneurs just like you. This helps establish a structure that creates accountability between internal and external groups. They also often provide a sponsor and transparency, and companies might find this option more cost-efficient as well. Boutique companies can also give you the flexibility to put some functions on hold if there’s a need to save resources or slow down to make a strategic decision.

Leaders need to ask themselves which outsourcing model is the best fit for their corporate structure and stage. Determine if the goal of the collaboration is a top priority for the organization. In other words, do you need to have more transparency and access, or is it a project that can be managed with a more hands-off approach? Consider the resources your company has as well.

2. Build a dynamic responsibility matrix and clear communication and escalation plans.

Outsourcing goes beyond initial logistics and financial factors; significant planning needs to be applied before outsourcing can be leveraged effectively. Before outsourcing a particular function, a company needs a clear understanding of exactly what needs to be outsourced. As you select your vendors or contractors, create a responsibility matrix and sync it with everyone involved. This will ensure alignment, eliminate any future confusion and save you from hidden or surprise costs coming from a lack of understanding of the responsibilities you’re outsourcing.

This should be done before any contracts are signed. Once the contract is signed, clear communication and workflow plans are vital. Challenges will arise, and you need a guide on how to manage them. Your workflow should be proactive, not reactive. To ensure this, create critical escalation plans so any issues can be identified and addressed quickly and efficiently. It’s essential that you have an internal project manager or point person who manages budgets, timelines and stakeholders-and who can escalate and resolve any challenges the team might face.

3. Take the time to know external partners before committing to the relationship.

External partners are an extension of your team. Make sure you interview the members who will be involved in your projects and spend time with them. They need to understand your mission and vision. They need to feel that they are seen and valued. You also need to make sure they’re a cultural fit. Putting two teams together that follow different beats on a dance floor will lead to a challenging performance. Most importantly, if something isn’t working, everyone should be functioning as one team to figure out a solution and not fall into the trap of shifting blame.

Outsourcing is a tool that can empower organizations, especially when there’s uncertainty around the economic outlook. Creating a flow for how to select and establish a relationship with a vendor will not only support a single project but also help with a dynamic framework for outsourcing. Roles shouldn’t be outsourced simply to save money. This approach will ultimately backfire, especially in instances where in-house talent would be better suited for a position or task. Takes steps to enable seamless collaboration and value every team member, regardless of whether they’re on your payroll.

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