Magazine Article | February 11, 2015

3 Steps To Creating A Bar Code Labeling Niche

By The Business Solutions Network

An ISV gears up for another year of double-digit growth by developing a strong focus and expertise in FDA-regulated industries.

Pete Winkel Photography, Ltd.

A large percentage of you may not identify personally with the niche markets that ISV Innovatum sells to, which include food and life sciences. However, the ways Innovatum differentiates itself from much larger competitors can easily be applied to any other industry and especially any other highly regulated industry. It’s important to note, too, that not only is Innovatum realizing year-over-year doubledigit growth, it’s doing so without any VC funding, and it’s debt-free.

Before you can appreciate how Innovatum differentiates itself, it’s important to understand what it does. This ISV makes enterprise software systems for managing content that’s used to generate labels in FDA-regulated industries. Innovatum President and CEO Ardi Batmanghelidj shares an example of an orthopedic surgeon in an operating room performing a hip replacement. “The surgeon relies on the information contained on the label that’s on the box to determine which part to use,” he says. “That label is managed and printed by our software.”

Step 1: Become An Expert On Industry Regulations
Batmanghelidj says that some of the best business advice he’s ever received came from legendary Fidelity Investments Fund Manager Peter Lynch. “Years ago I remember him saying that opportunities are all around us, and they’re closer than most people realize. It’s a matter of being able to observe and monetize them.”

One of the biggest challenges Innovatum has observed among medical device manufacturers, pharmaceutical companies, and food manufacturers is compliance with FDA regulations. One example is 21 CFR (Code of Federal Regulations) Part 11. Per the requirement, companies need to prove to FDA auditors that their labeling systems include a comprehensive chain of custody audit, so that a hip manufacturer, for example, is able to add a new data element or icon on its label without compromising the accuracy of the other information. Achieving this compliance requires creating software and processes that provide change audit and electronic signatures for every important content change. The vendor of the software must also have detailed procedures that describe software code design, development, and modifications. Additionally, detailed software and hardware installation, upgrade, and maintenance processes have to be created.

“Part of the compliance process is to have a validated system. The validation mandate requires end users to thoroughly test their bar code labeling solutions,” says Batmanghelidj. This entails clicking every button, ensuring data updates correctly and predictably. The entire process can add months to an implementation. “We found a way to alleviate this burden by conducting in-house testing of our software and offering a validation packet with PDF evidence to our customers,” he says. “Additionally, we’ve been audited by multiple pharmaceutical and medical device manufacturing companies over the years, and that gives our customers greater confidence in our validation process. On average, a client can reduce its testing burden by 80 percent, which translates to tens of thousands of dollars in savings from reduced labor expenses and a faster time of deployment.”

Step 2: Anticipate Industry Changes, New Regulations
Batmanghelidj says that anticipating his customers’ business needs and adapting Innovatum’s products accordingly is another critical component of his company’s success. To do this, he says IT solutions providers have to be in the stream of the process. “It’s like surfing, and we’re trying to catch the next wave. You can’t do that if you’re not aware of the waves until after they’ve passed you by — you need to see them coming and prepare yourself to respond quickly,” he says.Subscribe to Business Solutions magazine

The ISV accomplishes this by being actively involved in its target industries and being part of the conversation. For Innovatum, this entails being actively involved in AIM (Automatic Identification Manufacturers Inc.) North America, the AIDC industry association. “Our involvement with AIM over the years has led to speaking opportunities and more recently to my becoming the chairman of the AIM North America Healthcare Committee,” says Batmanghelidj. Not only does this give Innovatum access to new prospects and potential business partners, but it gives it another key advantage. “The FDA and Congress come to AIM for advice before promulgating a new bill, and that gives us a head start on important changes our customers are going to face in the future,” says Batmanghelidj. In fact, it was through his affiliation with AIM that Batmanghelidj got an advanced notice of UDI (unique device identification) requirements. “The gist of this regulation is that every medical device sold in the United States must be identified by a unique ID number,” he says. “Additionally, that information must be present on every label printed beyond a certain date, and the data must be submitted to the FDA’s cloud database, which is called GUDID [Global Unique Device Identification Database].” By the time the new law was put into effect, Innovatum’s software was already UDIcompliant. “And after the U.S. starts enforcing the new labeling standard, China, Canada, and the European Union will follow suit with similar requirements, which we are once again aware of ahead of time and able to adapt our product accordingly.”

Step 3: Provide Highly Customized Customer Service
Ask any VAR, MSP (managed services provider), or ISV about their customer service and they’ll tell you theirs is the best, but Innovatum is able to back up its customer service claims with some specific stats, including the fact that every one of its customers has agreed to serve as a reference. “We offer support for our entire global client base from our support center in Atlanta,” says Batmanghelidj. “We include 24/7 support, and in the past, that’s necessitated pulling technicians out of vacation to address an urgent customer need. We’ve become an adjunct IT resource for many of our customers as a result of providing consistently high levels of customer service,” he says.

“Don’t implement anything without spending time with the day-to-day users of the solution to ensure it’s going to meet all their business needs.”

Ardi Batmanghelidj, President and CEO, Innovatum

One example of Innovatum’s commitment to customer service involved a customer that installed Innovatum’s software but wasn’t able to get it to work properly. The ISV sent its top technicians to troubleshoot the problem, and after h ours of testing and troubleshooting, they discovered the customer had configured its virtual machines incorrectly and installed the labeling software on the equivalent of a 1980s PC. “We helped the customer get to the root of the problem, and we didn’t nickel and dime them for their error,” he says. “At the end of this particular incident, the client announced how collaboratively we had worked with their team, and they gave us an outstanding testimonial on LinkedIn discussion boards as well as other social media outlets.”

Batmanghelidj admits that Innovatum has had some learning opportunities, which he illustrates with another example. “On one occasion I was attending a client training session just prior to going live with our software, and a print-label operator raised his hand and asked a basic question about two prerequisites that had to be met before a serial number could be added to a label,” he says. “Had the program been implemented before receiving this information, it would have been much more time-consuming to resolve, not to mention it could have led to frustrations for the customer and extra labor resources from them and us to troubleshoot the problem,” he says. “This was one of the greatest lessons learned over the years: Don’t implement anything without spending time with the day-to-day users of the solution to ensure it’s going to meet all their business needs.”

Prepare Now For The Next Wave In Bar Code Labeling
Although Innovatum is going to be spending much of its time in 2015 helping its clients comply with the latest FDA mandates through new implementations and updates, it’s already got its sights set on a new product launch planned for early 2016. With the expansion of globalization and the need for information in multiple languages, many companies are struggling with having to present more information than can fit on the real estate of a label. More and more data is being placed into multiple-page Instruction For Use (IFU) documents, which in reality are seldom used, contribute to waste of our natural resources, and drive up costs and overhead. Regulatory agencies throughout the world are recognizing this and are paving the way for delivery of electronic information via the Internet. Innovatum’s next product will be managing IFU documents and presenting them via a SaaS-based system on the Internet.