One industry that is rapidly growing around the world is the Lifesciences industry. From small start-ups to Fortune 100 companies, these organizations make up the Lifesciences sector. The industry comprises companies from the pharmaceutical, biotechnology, and medical device fields. The focus of these organizations is primarily on the R&D of products and services that improve the quality of life for peopl worldwide. With the latest advancements in technology and the benefits of artificial intelligence, there is a boost given, allowing for increased business opportunities.
With the rise in population and prolonged life expectancy, companies in this field are facing new challenges. To stay ahead of the competition, these organizations must remain innovative and stay productive. In addition, these types of companies require accurate project management capabilities, inventory tracking, cost management, and, lastly, transparent cost management.
In this first blog of our three-part series, we will be looking into the various development phases that a Lifesciences company typically faces when developing a new drug or new medical devices. This article focuses on developing new drugs and how medical research organizations can utilize NetSuite to solve their drug development challenges.
Financing Drug Development – Grant Management
The government or humanitarian organizations often fund discovery research for new medicinal drugs. However, late-stage development is primarily funded by pharmaceutical organizations and enterprise capitalists.
When it comes to drug development, grants are very common as that is where a lot of research is funded, whether it be grants from the government, private donors, etc. Each grant, however, comes with its own rules and restriction on spending policy. To satisfy patrons, organizations must keep track of their budgets to avoid defunding and keep trust for renewals in the future. Here are five significant challenges that medical research organizations face when it comes to grant management:
1. Operational Bottlenecks:
Most Lifesciences companies usually manage grants manually or with a semi-automated solution that is ‘quick fixed’ into doing the bare minimum. This means that they are often relying on disparate spreadsheets and copy-pasting data from multiple systems. Employees are wasting time tracking information and data provided by the stakeholders instead of focusing on the organization’s mission. Additionally, since most companies are working on more than one drug; or have more than one funding source, they manage several grant initiatives. Having a lot of money to develop a drug may sound like a good thing, but if your grant management approach is ineffective, it can grind operations and bring productivity to a halt. Moreover, if an organization cannot manage grants and is labelled inefficient, they are far less likely to receive funding or be awarded grants in the future.
2. Increased Probability of Errors:
Manual and semi-automated procedures for grant management increase the probability of costly errors for a medical research company. Such companies are usually answerable to a lot of stakeholders. They have lives at stake and are on a timeline. The cost of missing financial records or misplaced funds is very high. These types of errors can cost such companies their licenses. Such errors also result in time and resource wastage. Employees must invest valuable hours in re-work to manage these compliance blunders.
3. Compliance Challenges:
Lifesciences companies working on drug development and research are often dealing with multiple grants and funding agencies. The grants can be coming in from foundations, donors, or the government. Managing numerous grants means that these organizations need to comply with multiple rules and restrictions. Companies that have manual or semi-automated processes find it harder to comply with mandates and requirements. Additionally, if they do not have a proper tracking system for grants, they risk defunding, fines, penalties, and non-renewal.
4. Communication Gaps:
Communication is critical for any collaborative project. Managing grants involves multiple stakeholders spread out across different locations and departments. Collaborating on grants is a challenge when people are spread out and need to access necessary information manually. Companies relying on manual approaches do not have a cloud-based solution that can act as “a single source of truth” for their stakeholders.
5. Poor Reporting Capabilities:
When an organization is working with grants, it is naturally under scrutiny from the funding agencies regarding grant terms and conditions. Outdated approaches for grant management cannot provide adequate visibility to the respective funding agencies in terms of expenses and revenues. This means that funding agencies are often in the dark about how their money is being used. Medical research firms can find it burdensome to manage data on multiple and simultaneous grants resulting in inefficient and inaccurate reporting. Without proper visibility, funding agencies are unlikely to invest further in developing the drug in question.
If left unattended, such issues are likely to increase costs, waste time and resources, increase compliance challenges, jeopardize grant renewals, and negatively impact the organization’s eligibility for receiving grants.
You have probably heard it a dozen times before but let us tell you one more time, NetSuite is the #1 cloud-based ERP software system that you can find on the market. There has been a rapid increase in the use of NetSuite by Lifesciences companies to support their operational and financial management difficulties. These companies have adopted NetSuite to gain benefits such as accurate reporting and provide their research and science departments with the active support they require.
NetSuite caters to grant accounting needs by elevating efficiency and visibility for the stakeholders throughout the grant lifecycle. It provides its users with a centralized, connected system that allows them to track terms and conditions, track multiple grants in parallel, automate their time and cost records for invoicing. NetSuite’s grant management is designed to maintain all relevant milestones in the grant lifecycle to ensure that all the necessary information is displayed in a single source of truth and on a unified platform.
Benefits of using NetSuite for grant management:
- Easily link back to grant histories and automate time and cost management for invoiceable and non-invoiceable transactions throughout the grant lifecycle.
- Correlate multiple grants to multiple projects and funds.
- Increase visibility with KPIs (Key Performance Indicators) that provide complete drill-down capabilities.
- Access grant-related transactions such as purchase orders, expense reports, journal entries, and vendor bills through a single platform.
- Track progress of internal projects with a complete view of expenses, resources, and scheduled tasks.
- Manage source data of grantors from revenue transactions and receivables in one system and simplify accounts receivable aging, metrics, reconciliation, and financial reporting.
- Easily set up a general ledger / financial segment combination to automate data entry transactions against your grant to isolate and label regulated revenue transactions.
- Read our blog on financial segmentation in NetSuite: https://www.alphabold.com/managing-your-financial-segments-in-netsuite/
- Complete visibility of revenue to date and invoicing requirements by funder and grant/award requirements.
- Set up automated billing schedules within NetSuite that can send alerts to the accounting staff on scheduled dates.
Managing grants is a burdensome process for most medical research companies due to their reliance on manual and semi-automated methods. Medical research organizations need a more straightforward and automated approach to manage the entire lifecycle of their grants. With NetSuite, this is possible as these companies can use different features such as segments, customer records, and project records to keep track of the funds. Increasingly medical research companies operating in the Lifesciences sphere are turning to NetSuite due to the auditing functions that allow for easy traceability. Whether it is a grant application or a grant closure, NetSuite supports its patrons.
AlphaBOLD has partnered with multiple companies operating in the Lifesciences sphere and thus has experience helping medical research companies implement NetSuite to achieve transparency and success. Our highly trained NetSuite experts can help you solve your operational and financial management difficulties and provide solutions that can help you scale. Contact us now!