It’s no secret in the industry that when it comes to Pharma Revenue Management, most companies are still operating in silos with disconnected business processes, lack of cross-functional communication, and an overall deficiency of knowledge by one group or all groups, of the core E2E process.
It’s no secret that operating in such a manner causes your organization to run its operations inefficiently, leak revenue, and potentially expose yourself to further financial risks; and quite frankly, turn a smooth month-end financial process, or forecasting season, into constant fire drill after fire drill.
Once you’re done chasing last month’s results, it’s the end of the next month already. Any thoughts of looking forward, being proactive, tracking the current month, etc. are out the window: “Maybe next quarter.” One more departmental performance metric you need to move out another quarter on your review form, while explaining to your superior, “We can’t get… The numbers aren’t… The system will not… Their team didn’t…”
What You Don’t Know, Will Hurt You…Eventually.
Being the one who must provide all the answers to the financial results, which are ultimately downstream effects of the processes, functions, systems, and teams upstream of you, can be very frustrating. Especially with a lack of understanding of what is up the stream; and those up the stream, having a lack of understanding of you. Most likely, something occurs within your organization every day within one function or another, that if the another related function (usually Finance) knew more about, a flag would be raised.
The Sales and Marketing team extends a Bill back pricing rebate to a customer based on a contract term, while all downstream processes are only forwarded the amendment with a price change. Accounts Receivable receives a large deduction on a customer invoice and simply posts the variance to a Customer Account with no detail, simply the date. A charge back analyst re-processes charge backs per a request of their customer, with a utilization or liability period of two years ago. IT runs into hundreds of line item validation errors in the invoicing process that, little to their knowing, causes missed accruals to occur.
No, of course you can’t have an all-knowing eye on every transaction that takes place across all functions in your GTN organization (leave this to the auditors, another group beyond your Finance team that will most likely be lifting up rocks to find…). But what you can do is make your organization more aware of cross-functional business processes; and you can start doing this by doing some Cross-Functional Business Process Mapping. Let’s take a look at the example of the A/R team being presented with a customer deduction on an invoice.
Creating the ‘Standard’ Business Process
I have found that a common downfall of the GTN cross-functional practice is that of treating all customer occurrences and/or changes as different events. Therefore, the business process associated to each event is varied. One customer contract is handled this way, while another is handled that way. This is usually because, “…that’s how we have always done it.” Or, “this amendment does not need to go through Finance, because it has no ‘effect’ on accruals.” In some cases, a simple misunderstanding of a certain customer channel or type of pricing causes system changes to go undone, accrual rates to be adjusted incorrectly, or not adjusted at all; all potentially causing resulting inaccuracies in related adjudications.
Once a business process mapping exercise is complete, I find the next best tool to implement is that of standard processes and forms. Ensuring that all functions utilize a standard process model will minimize the risk associated with a step being overlooked, a change not being communicated, etc. An added sign-off/approval step in the process ties responsibility and oversight to each transaction, making each process owner accountable. Team members are then more likely to take a careful look when their name is being assigned and their sign-off required.
Let’s take a look at a sample form for a Customer Disputed Deduction process.
A Communicative Organization is an Efficient One
So, you’ve put standard, documented business processes and forms in place across your Cross-Functional Organization; what now? Well, your teams need to learn to talk…to one another, that is. From a management standpoint, regularly scheduled meetings will need to occur to discuss open items, contracting pipeline (customer, product, contract pipeline: a hot topic for a later post), upcoming deadlines, and lessons learned from your newly implemented process improvements. I think you’ll find that, given a forum to discuss new findings, team members are more willing and even excited to present and discuss. You may even find the discussion turn to innovation and further process improvement ideas.
But with this newfound communication and integration of team players into processes or discussions they have yet to be exposed to, you will surely find confusion, lack of understanding expectations of self or team, etc. This is why it is very important to standardize or make tangible the expectations of each team and its members.
Make sure to make it very clear what is expected, whether it is a hard deliverable, certain feedback or insight, or analysis. Brainstorm how you can utilize forms, checklists, or templates to have each team member work off of. Therefore, their own activities to be completed are very clear and right in front of them. You will discover that once these newly integrated team members not only understand what is expected of them, but how they affect the bigger picture, they will be more apt to contribute to the overall success of the organization.
Taking such a deep dive into what drives your GTN organization is no easy or quick task, but I think you’ll find that both the short-term and long-term benefits are absolutely worth it. Therefore, heed the words of Benjamin Franklin, “Drive thy business or it will drive thee.” How much longer do you want your business to drive you? Are you ready to take back the reigns?