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The Scary Consequences ($600M Loss in Valuation) of Neglecting Digital Infrastructure

Can your digital foundation support the complexity of life science manufacturing requirements?

Digital transformation within the Life Sciences sector offers immense potential to drive growth and streamline operations. But if done wrong, the consequences can be devastating. One manufacturer learned this lesson the hard way. By choosing a standard software solution that didn’t meet their industry-specific needs, they faced a $635 million drop in stock valuation, an FDA 483 form letter, and class-action lawsuits. What went wrong, and how can your company avoid the same fate?

The Case Study: A Manufacturer's Mistake

One particular life sciences company was on the brink of commercial success with their aesthetic therapies. They were ready to scale and prepared for FDA approval but made a critical error in implementing Microsoft Dynamics 365 standard software, which wasn’t tailored for life sciences manufacturing. Without the right controls and digital readiness, they failed to meet FDA compliance requirements, leading to disastrous results.

What Went Wrong?

The company did not engage with the right experts or take the necessary steps to ensure their digital system could handle the unique challenges of life sciences manufacturing. They didn’t think through the specific design and control needs, leading to an FDA 483 form letter, which indicates serious compliance issues. This, in turn, led to a significant drop in stock value—$635 million in one day—and subsequent legal ramifications.

Key Takeaways for Digital Transformation Success

Here are the critical lessons your business can learn from this failure:
  • 1

    Tailor Your ERP to Your Industry

    Standard solutions may not meet the unique requirements of life sciences manufacturing. Choose a solution that addresses specific industry needs, like FDA compliance and batch tracking.

  • 2

    Engage the Right Experts Early

    Having the right digital transformation partners who understand your industry can help you avoid costly mistakes.

  • 3

    Prepare for Regulatory Compliance

    FDA compliance is crucial in life sciences. Ensure that your systems have the necessary controls and audit capabilities to meet these requirements.

  • 4

    Don’t Rush the Process

    Taking the time to properly plan and implement your digital infrastructure is critical to long-term success.

This manufacturer’s story is a stark reminder of the importance of getting digital transformation right. By taking the right steps—engaging with experts, choosing tailored solutions, and preparing for compliance—you can ensure your life sciences company thrives. Don’t let your business become the next cautionary tale. Partner with HSO to ensure your digital transformation is a success.

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