Financial planning and analysis (FP&A) in the Life Sciences is exciting and fast-paced. Within a high growth organization, whether pharma, biotech or medical devices, it can be a particularly thrilling environment to broaden our finance skills. However, unless you have the proper systems and processes in place that scale with an upward business trajectory, you will quickly get bogged down in reactive mode, responding to requests and putting out fires.
As FP&A professionals, we know all too well the routine of coming to the office early to get work done before colleagues arrive and emails come flooding in. While one of our primary tasks is to put together budgets and forecasts, we also devote a large portion of time as a partner to the business. We provide projections, analyses and support to diverse areas of the organization including Commercial Operations, Manufacturing, and Reimbursement. We also assemble reporting packages that provide guidance to the C-Suite. Without automation and efficient processes, it’s difficult to be able to allocate our time to the value-added tasks that align budgeting and planning with strategy.
As someone who has been an Adaptive Insights power user and now implements the system for clients, I understand firsthand how liberating the move from spreadsheets can be. I spent an inordinate amount of time performing manual updates to worksheets, validating the numbers and creating reports. In other words, I was in “spreadsheet hell”.
In this first of a two-part blog post, I’d like to describe a couple of the time-draining challenges that spreadsheets pose in Life Sciences FP&A and how Adaptive Insights addresses them.
The Dreaded Cut and Copy - In the Life Sciences, we often need to budget new projects, cost centers and products. This would entail copying and then tailoring the new spreadsheet(s), an activity which could easily take a full day of effort depending on the complexity of the new initiative. As luck would have it, this is often a last minute request just when a forecast is about to start. In addition, as one would find in a growing environment, department VPs will want to split up their cost centers, requiring significant consultation with FP&A to determine which employees would be part of those new groups and ensuring salary and benefits calculations pull through appropriately into the new cost center spreadsheet. The duration of this process can be lengthy as VPs are busy with other priorities (as they should be!). With Adaptive Insights, it’s as simple as adding a new dimension or new level which requires only 10 minutes to an hour rather than a whole day with Excel. Then the VP or cost center manager can go into Adaptive as her or his time permits and move employees as they see fit. Adaptive is intuitive and allows tasks to be easily distributed, which also empowers those individuals who have responsibility over their cost centers, projects and products.
Moving from Tactical to Strategic FP&A - Prepping spreadsheets for rolling forecasts and annual budgets consumes a great deal of time, especially with a growing mix of products, projects, and cost centers, not to mention the complicated nature of cost of goods sold (COGs). When budgeting and forecasting season arrives, essentially the next several weeks or even months are dedicated to preparing these deliverables. As most people using spreadsheets know, it really eliminates the opportunity to focus on strategic activities. Adding actuals into spreadsheets, so that cost center managers have historical information upon which to base their expenses, can take a week or so. Figuring in new hires/terminations, new fringe benefit assumptions, and cleansing data requires even more time. The list goes on. Then you have to figure in the lead time necessary to begin planning for the forecast and produce a calendar for the C-Suite. With Adaptive Insights, there is minimal prepping. Simply create a new version then add new levels, projects, and hires as necessary and you’re off to the races! The time savings free up FP&A professionals to work more closely with internal customers to address key business questions, to align budget with strategy, and to perform more thorough analyses. The time previously spent creating spreadsheets can now be allocated to face-to-face conversations with cost center managers in helping them to understand the impact of their expenses and investments based on historical data. Adaptive Insights helps to eliminate and automate rote activities so that FP&A moves from tactical to strategic.
These are just two examples of how Adaptive Insights helps address the challenges of spreadsheet reliance in the Life Sciences. Stay tuned for the second post where I will examine other areas where Adaptive can help transform FP&A for pharma, biotech and medical device companies.
If you enjoyed this post, please subscribe to our blog and follow us on LinkedIn. Also, if you are considering moving away from spreadsheets and would like to see Adaptive Insights in action, please request a demo.