3 ways to overcome barriers to business agility in the Pharmaceutical Industry
Author Mark Bodger ACMA, ICit
In today’s changing world and complicated regulatory environment, the UK Pharmaceutical and Bioscience industry must be prepared to respond and adapt quickly to tackling various challenges. From raising capital, addressing pricing pressures to prioritising R & D efforts and managing third-party risks, the landscape of Pharma finance is changing.
During 2021 and beyond, life science leaders will need to strengthen their organisations’ financial health to cope with the repercussions of the current pandemic and better position their organisations financially to grow and thrive in a post-pandemic environment.
So how can CFO’s / Finance Leaders feel confident in their plans when change is the only constant?
The key to thriving is business agility and in the age of COVID-19 this has taken the form of assessing your status quo, reforecasting, and implementing flexible budgets. Agility is no longer a nice-to-have, it’s the cornerstone of modern business success. But achieving a responsive, dynamic organisation is easier said than done.
Barriers to agility are often so entrenched that overcoming them can seem incredibly challenging, especially when compounded by static, manual planning. Relying on racked-and-stacked table reports is insufficient. Robust modelling software, enhanced with visualisation features, is needed. Ultimately, business agility is about having the right tools to efficiently manage and measure change quickly, accurately, and comprehensively. And most of that comes down to how you plan. What is needed can be referred to as “active planning.”
Here are the three primary barriers to business agility:
Barrier #1: Manual processes and ad hoc reporting
Most finance teams use Excel to create reports, track financial projections and budgets, and synthesise numbers across departments. Excel is an effective tool for building custom formulas, scenarios, and look-ups. As a stand-alone budget and reporting tool, however, it has some significant drawbacks, including the slow, cumbersome processes Excel perpetuates.
Relying on Excel to reconcile budget numbers and bring business unit projections into alignment with corporate forecasts is a herculean task—rife with errors, broken formulas, and missed deadlines. By the time finance gets the numbers to match, they’re usually out-of-date. Then there are time-consuming ad hoc requests used to fill a gap in a company’s reporting process—a gap that can be filled with automated planning and reporting.
Excel doesn’t need to be replaced, and used in conjunction with a cloud planning solution, it becomes one piece of a continuous, comprehensive, and collaborative planning process.
Barrier #2: Lack of alignment and collaboration
World-class companies know that organisational alignment on KPIs is a predictor of business success. Tracking performance against goals, ideally with targets set for the KPIs, and then flagging under- or over-performing business units monopolises finance team resources. Finance is so busy with low-value but time-consuming tasks like balancing spreadsheets, fixing broken formulas, and nudging managers to submit budget requests, that they’re usually too swamped to steer overall financial strategy, let alone help facilitate and build collaboration.
Manual tasks hold finance hostage to mundane (albeit critical) processes, keeping data siloed and business decision-makers in the dark. Lining up behind KPIs is extremely difficult under these circumstances. These pockets of disconnected information keep decision-makers from effectively planning for what’s next. It’s not surprising that a majority of CFOs report lack of time as the biggest barrier to collaboration. Continuous firefighting and pursuing short term priorities get in the way. When business processes become more efficient, however, collaboration is achievable, productivity increases. Without alignment with KPIs, the disconnects between sales and operations, or production and management, or marketing and sales, make true agility impossible.
Barrier #3: Disjointed planning
By their very nature, resource allocation decisions need to reflect current circumstances—not the supply and demand challenges from last year and not financial reports that are three months old. Whether or not to hire more people, alter supplier relationships, invest in skills training, or accelerate capital investment plans largely depend on whether an organisation plans effectively and agilely. And to plan effectively requires far more than a series of budget meetings and annual reports. It gets worse when different departments have their own set of numbers, revealing the need for a single version of the truth.
Disjointed and static planning flows from ad hoc information, missing data, and siloed decision-making. Active planning, on the other hand, helps organisations predict and respond quickly to potential gaps in performance and course-correct swiftly and agilely to changing market conditions. But to do that requires a comprehensive and collaborative approach to planning that incorporates the latest information in near real time. In short, it requires active planning.
The sought-after capabilities of agility—to see change coming, rapidly adapt to it, and turn uncertainty into business opportunities—can only be achieved by changing fundamental processes. Automating reporting so that it flows from multiple coordinated systems (ERP, CRM, HCM, etc.), generating reports in real time, and giving managers access to self-service reporting are all critical to an active planning process.
Equally critical is to avoid digitally cementing existing processes that need to be redesigned. While static planning produces monolithic plans that aren’t a true reflection of the business environment, active planning is different. It’s about listening to what your data is telling you about your goals, resources, suppliers, customers, competitors, and the wider market. Where static planning is top-down, siloed, slow, and limited, active planning is collaborative, continuous, and comprehensive. In other words, active planning allows you to plan and forecast at the speed of modern business. By deploying a modern planning solution that enables active planning, your company can streamline FP&A processes, gain insights more quickly, and make better decisions faster. And be able to respond to change as it happens.
Don’t get stuck in the back office reconciling numbers and fixing broken links. Become a strategic partner by giving decision-makers access to the information they need with easy-to-use self-service reports, up-to-date data, and strategic insights.
Barriers to agility? With active planning, they’re easy to overcome
Achieving business agility in the age of urgency
How we can help you succeed
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