4 Tips to Make Data-Driven Decisions in Biotech and Pharma
Nearly 75% of life sciences CFOs are asked to take on wider operational leadership roles. Here’s how FP&A teams can help CFOs make data-driven decisions.
Today’s CFOs are being pulled in all directions. And in the competitive biotech and pharmaceuticals sector, finance leaders are stretched especially thin.
According to a 2016 EY survey, life sciences organizations—including biotechnology, pharmaceutical and medical technology firms—are placing greater operational demands on their CFOs than companies in other sectors.
Nearly three quarters of life science CFOs said they are being asked to take on wider operational leadership roles, as compared with 64% of global respondents across sectors. To deliver on a more diverse set of priorities, 58% of life sciences CFOs said they need to build their understanding of digital, smart technologies and sophisticated data analytics.
But finance leaders can’t go it alone. They need support from their FP&A teams to focus on the future while still keeping a close eye on daily operations.
We showcased four ways you can give your CFO the intel he or she needs to make data-driven decisions—and get more done in a day.
Tip 1: Embrace Collaboration
Smart, strategic decision-making relies on accurate information about key business drivers, such as drug pricing, regulatory changes and emerging innovations in healthcare. And the best way to provide your CFO with up-to-date info is by collaborating closely with the teams who work with this data every day.
While building these relationships requires a personal touch, cloud-based data management tools can also help facilitate collaboration. Making it easier for internal partners to update information makes it more likely that the finance team will have access timely data when they need it. And standardizing how and when people provide information slashes the time it takes to chase data down.
In fact, according to our CFO Indicator Report Q2 2016, 32% of respondents said their FP&A teams could be more effective if they leveraged new financial systems and software technologies.
Tip 2: Frame the Big Picture
Don’t force your CFO to waste time combing through multiple spreadsheet tabs or massive metrics reports. Instead, offer a more consolidated view of key performance indicators (KPIs) while giving him or her the power to drill down into data as needed.
Data visualization tools can you give your CFO the dashboards and scorecards he or she needs to quickly understand business performance and identify new growth opportunities. And according to our report, 31% of CFOs said they’d like their FP&A teams to improve their data visualization skills. For instance, visualization tools can help you deliver easy-to-absorb insights around KPIs like R&D as a percentage of sales, regional sales variances, or the number of clinical trials currently in progress. These snapshots can clearly outline how specific drivers have performed over time—and how they are projected to perform in the future. If you’d like to learn more about Forecast Best Practices, check out our ebook here.
Tip 3: Offer Data On-Demand
A company’s financials are always changing. And while regular reports help CFOs keep current with performance, some decisions require targeted, up-to-the-minute analysis.
Collaborative data management tools can help execs pull the information they need at a moment’s notice. And driver-based data modeling software can help FP&A teams quickly prepare forecasts that highlight how immediate changes in the marketplace could impact future growth see demo.) If a drug doesn’t receive FDA approval or a competitor gets to market with a new medication first, the right technology lets FP&A teams to respond quickly—without pushing other important work off of their desks.
Tip 4: Invest in Technology
And tools that make the finance function more efficient give teams the bandwidth to spend more time looking into the future, Jim Kaitz, president and CEO of the Association for Finance Professionals, told CFO.
“Greater investment in technology liberates FP&A staff to do what they were hired to do, and what their organizations need them to do: conduct robust analysis and forecasting to better inform their company’s strategic decisions,” he said.
Want to know more about how to drive better decision making by focusing on metrics that matter?
Contact us to see what we can do for your life sciences and/or biotech company.
Written by Bob Hansen, Workday Staff
This blog was originally published on the Workday Blog.