When life sciences businesses engage with contract research organizations (CRO) to perform pre-clinical testing and other scientific work, millions of dollars can be committed to contracts. Typically, research performed under contract terms comprises multiple projects which are part of larger, longer-running programs. Setting up, operating, and tracking programs and the management of the business relationships with the CROs involved are business-critical, highly consequential activities.
Too many times, neither life sciences executives nor program and business managers have the right level of visibility. Given that CRO and program management are areas of the business on which auditors like to focus, limited transparency results in the high risk of unsatisfactory audits and penalties.
Common shortcomings in program management
Many life sciences companies experience typical program management challenges in one or several of these areas:
- Initial planning was flawed, because it did not consider all available, important information. As a result, program budgeting cannot provide an effective program framework. Overspending is likely and becomes more so through the duration of long-term programs or when the program and project portfolio expand.
- CRO billing is not aligned with the work performed or milestones achieved, but lags. Companies lack a reliable system or practice to forecast expected invoicing or tie it to a vendor’s performance. Not only is it difficult to verify whether billing is accurate, you also can’t easily determine what budget remains, nor handle accruals and prepaid balances in a timely and dependable manner.
- Approval mechanisms for high-ticket items like contract amounts or invoicing under CRO contracts may be inconsistent or poorly enforced. The right people don’t always get involved when they should, or approvals are delayed because the process is continuously being reinvented.
- Companies use multiple processes and systems to manage CRO programs, finance, and other business operations. Sometimes, they deploy a contract management system that is separate from financial, reporting, and other software. Or, they use spreadsheets to track programs and their performance. Lacking integrations and process inefficiencies make it much more likely that human error compromises finance management and program decisions, or contributes to underwhelming project and program performance.
These well known issues are often tolerated when a company’s focus is on achieving certain scientific or medical results, and business leaders may need to handle them as emergencies when they become too troubling. However, it takes relatively little effort and investment to forestall them in the first place.
Enhancing ERP for control and transparency
To help life sciences companies avoid and address these shortcomings, we have augmented the comprehensive business management functionality of cloud-based NetSuite ERP with comprehensive program, project, and contract management capabilities, so you can:
- Track your spending to forecasts based on contract terms and benefit from full visibility of the financial and operational aspect of CRO activities at a project and program level.
- See what a CRO vendor’s performance looks like, what the billing implications are, and automatically calculate accruals and remaining budgets with complete accuracy.
- Update your projected spending per month or per quarter based on a full view of your CRO engagements per project or, at a higher level, per program or per vendor. Both project and program managers and their colleagues on the finance team can make accurate assessments of CRO engagements and their financials.
- Avoid overspending and discrepancies, and you intervene promptly when vendor performance or business practices demand it.
Connected, optimized software environment incorporating industry-best practices
NetSuite provides a centralized repository for contracts, reports, and other important documents. Managing these in a separate tool can be cumbersome and error-prone. But if you do use a document or contract management or lab system that you want to retain, so your users can continue working within their accustomed software environment, we can integrate your preferred software tools with NetSuite.
In optimizing NetSuite for life sciences companies, we also connect financial and program management with stakeholder approvals, using best-practice workflows. If your contract management provides for various levels of required approvals, where managers, executives, the CEO, or even the board have to approve expenditures at certain dollar levels, we can configure the right approval workflows and show you how to adjust them to suit your service vendor engagements. For many life sciences clients, we also have added approval validations and sign-offs to further reduce any risk.
Shortening the distance to key goals
What is likely to change in your business following a fast NetSuite deployment enhanced for the life sciences business?
For one thing, you can take better control of your programs and vendors. You can project accurate financials without surprises, such as overspending. You can set up meaningful budgets and execute to them, and you can implement appropriate approvals for spending and major decisions. Audits can become less painful and more predictable. At an individual level, contributors at any level of the organization receive the information and functionality that allow them to act in the company’s best interests.
Those changes, in turn, can mean a strategic advantage in a highly competitive, rapidly evolving industry where you need to keep your eyes on your goals without being distracted by obstacles and problems that could easily have been addressed.
Visit our NetSuite for Life Sciences page to learn more and get in touch with the Sikich life sciences team.
