Connect with AccuNet’s CEO, Michael Milligan, and check out his additional articles here.
Accounting is not only where the money is, it is where the information is. The challenge for CRO’s today is to combine classic financial information with study management information so all players–management, operations, and accounting–can use this information to run studies more profitably, give better customer service and win more studies.
In today’s hyper-competitive business environment you have to be the model of efficiency. New CROs are cropping up everywhere with state of the art accounting systems. They are not bound by “the way we have always done it”. The competition has offices in the U.S. and low-cost people and participants in countries like India, China, and the former Soviet states. Sponsors are demanding better reporting, lower costs and better terms. Your business has to be more efficient so you can win deals or the competition will.
In this article, I outline four key business processes for CRO’s, SMO’s, and CTL’s that the C-level executive has to attack in order to bring efficiency and actionable information to the people that serve and interact with the sponsor, participant, site, investigator and your internal employees.
These four key business process that your CRO must address immediately include:
1) Project/Study detail in the GL. Improve your financial visibility by adding another level of detail to your studies by using a study ID or Project ID to track costs, time, labor, commitments and inventory. The study ID will roll up into an account/sub-account combination for reporting in the financials. Too much of the story is lost if you are entering GL transactions at the summary level. This one key improvement opens up a wide array of the valuable data analysis. Now I can start to track costs like:
- How much non-billable and sales expenses went into winning this study?
- Which study is more labor-intensive, which studies are burning cash?
- Which are more profitable than others?
- What is my aged AR by study not just by the sponsor?
- What are my cash flow and revenue forecast for the study?
- What are my commitments to the study?
Now you have another dimension of analysis that can reveal some business epiphanies that could change the way you do business. Using this additional data you can apply basic project costing and project management principles to the wild west of study management.
2) Integrate Study Management and EDC systems with financial systems. When we first visit a research organization the three worlds of accounting, Study Management, and EDC systems seldom intersect. Completed IRB’s tracked by the EDC system do not talk to the Study Management system and approved pass-through expenses in the Study Management system do not talk to the accounting system. Three silos of disconnected information with lots of spreadsheets, manual folders, and sneaker networks tying them together.
The most efficient system is an integrated system, and, on closer examination, a relatively small amount of information needs to flow between these systems to add huge efficiency gains. One small example is using the approval request that a study management system typically provides, passing it to a financial system for payment and then passing back check number, amount and date paid. This information empowers study managers with information to answer questions from the PI, CRA, and patients about their expenses and stipends.
3) Disseminating the data. Once steps one and two are completed the next step is to push “scorecard” actionable information out to the sites, study managers, PI’s, and clinical researchers. This gold mine of information is pushed to the stakeholders over the web in flash reports, dashboards or in Excel that allows them to “self-serve” their own questions and provide better service to their customers. The benefit in the time saved from calling accounting for information and in using this information to impact the quality of service and profitability of a study.
- If a study manager is presented with information that shows them that one more completed visit will trigger a billing milestone, don’t you think most study managers will push to get it done?
- If they can tell a doctor that their stipend was paid on this date with this check number for this amount, would that make their “customers” happier?
- If everyone goes to this one source of information, or as I like to call it, “one source of the truth,” it greatly reduces the dozens of separate spreadsheets that each person keeps to track their own tasks.
4) CRM for contacts, pipeline and easy quote to project setup. A CRO is only as good as its backlog. Planning, forecasting, and resource scheduling depend on a reliable forecast. A unified CRM system, binding financial and project systems, yields a huge benefit. The ability to work a project, estimate, quote and convert to a live project in the same system is key. Planners and stakeholders need current capacity and planned projects for the next 18 months to staff, manage cash flow and forecast.
To use a sports analogy, everyone is reading from the same playbook.
The efficient clinical accounting system has strong project management, sales management and quoting, self-serve information to all stakeholders, and has document management and workflow. If your business satisfies these four standards you will be winning more studies, running more efficient studies, have happier employees, process more transactions with fewer people and have better cash flow than most research organizations.
If you would like to design the ultimate competitive ERP system or rework your existing systems, let’s talk. email@example.com