bioclinica fls roi ebook 2016
TRANSCRIPT
A Bioclinica eBook | 2016
Overcoming
ROI INITIATIVE: A TECHNOLOGY SOLUTION for INVESTIGATOR PAYMENTS
2| ROI Initiative: A Technology Solution for Investigator Payments
Managing investigator payments faces specific,
well-known challenges. Current systems are
fragmented and manual, and in most cases are
not transactional or financial-based. The result of
continuing with current processes is the inability
to manage the complexity of the contract and
budget terms that are negotiated and paid
throughout the course of a clinical trial. Current
document management systems (e.g., CTMS
and other homegrown systems) are based on
non-financial system information that doesn’t
manage or account for the accuracy of payments
made. Additionally, routine data monitoring
activity does not always include time or cost
for re-monitoring efforts related to past payment
activity (e.g., monitors do not evaluate past
payments that would be impacted by changed
data). This effort would require an additional
burden to operational personnel to perform this
type of activity, resulting in higher costs for the
clients. Not to mention that the monitoring and
re-monitoring efforts would delay the timeliness
of completing the site monitoring process. This
further illustrates that payment automation is a
critical piece in the overall drug development
space, as it impacts all areas of the clinical trial
execution process.
ObjectivesThe process of completing a ROI evaluation for any initiative requires that all parties consider the end goal of the initiative to determine if a company should make an investment, which investment option to make and the expected fi nan-cial or strategic outcomes. It is important that stakeholders consider the scope and objectives of the initiative so the approach is clearly outlined to reach the intended outcomes.
The outcomes can be validated against the established set of initiative criteria, which may include the following:
• The options analyzed are compatible with corporate and functional strategic plans and goals
• The model itself is technically sound
• Investment costs are accurate
• Expected functional benefi ts are attainable
Measuring the expected outcomes can be complex, as they include fi nancial, non-fi nancial, operational and technical factors. Additionally, linkages to the external value can potentially be signifi cant and worth evaluating if they impact the following:
• Lost opportunities due to poor processes or perceived issue(s) of ineffi ciency, inaccuracy or both.
• Shift of resources from non-traceable and non-billable activity to another revenue-generating activity.
• Shift of time from non-traceable and non-billable work to other mission critical work.
• Shift in billable re-work that dilutes productivity and profi tability.
• Shift in allocation/workload based on the removal of non-billable activity to allow better/process improvement in other areas: better monitoring, faster site onboarding, etc.
Many companies are plagued with the challenge of trying to analyze and determine their return on investment in a complex and dynamic environment where both tangible and intangible factors need to be considered. Robust models exist for measuring the tangible benefi ts in dollars and cents; however, measurements can be diffi cult and even challenging to identify and predict. This is largely due to quantifying signifi cant business impacts such as cost avoidance, opportunity cost, potential revenue and added service revenue, which may all be important to an organization. Additionally, it is hard to put a price on intangible factors such as client or site satisfaction, loyalty and enrollment acceleration and performance on trials. These are all leading indicators of a high-quality trial with access to timely and accurate data to make real-time development or trial-related decisions.
While there are measures that can be directly related to cost reduction or cost avoidance, other strategic yet nebulous business advantages such as “competitive advantage” or “improved quality” may meet strategic goals and objectives. Diffi cult criteria such as competitive advantage may be quantifi ed in terms of measures such as the increase in sales rates directly related to improved service offerings, greater market share and/or improved client experience and perception.
Finding the BenefitsFinding the benefi ts involves consideration from the key business owners/stakeholders. It is important that the evaluation includes the quantifi able, subtle cost factors or benefi ts as well as the intangible benefi ts. The organization’s internal drivers should be considered and may include but are not limited to:
• Political risk factors
• Organizational risk factors
• Business process risk factors
• Technology risks factors
• Issues of time, scale and resource factors
• Importance of business process analysis
Data Monitoring
Paymentprocess
Contractmanagement
Time of operational personnel
Financialdata entry
Financials
ROI
Monitoring efforts
Budgeting& forecasting
Contract
3| ROI Initiative: A Technology Solution for Investigator Payments
Because a lot of time is spent on ROI analysis (resource cost and time) the investment should be pointed in the direction in which a company is headed to avoid unnecessary expenses. The company strategies, goals and objectives should be considered in the process to ensure the time spent on the analysis results in a decision that can be quickly and effi ciently implemented while ensuring organizational results are met.
Business Process and Stakeholder AnalysisPart of the ROI evaluation process should include a review of business objectives for each of the relevant stakeholders. For example, an operations department head may be concerned with a bloated headcount, but a technology department may focus on integrating technology solutions that provide effi ciency and cost savings in business processes.
Analyzing the current business process is an important exercise that will highlight the needs, challenges and risk factors for each respective business owner or stakeholder as well as outline their roles in the initiative. In the case of investigator payments, each stakeholder should evaluate their needs in relation to the following:
Activities and pain points in the business process(es).
All possible solutions that may alleviate manual steps and pain points for evaluation to ensure robust comparison of options.
Possible risks in changing the business processes.
The fi nancial measures for each business owner. This may include hidden or harder-to-fi nd costs imbedded in other units or not tracked against the work activities.
Areas in which stakeholders can achieve cost avoidance (e.g., not adding headcount to scale).
Where opportunity costs, including additional revenue opportunities, may exist.
Future planning for system integration and interoperability to meet corporate business goals.
Each functional business owner should evaluate the strategic, operational goals and benefi t with thoughtful considerations and value in the following ways:
Business Owner Site Setup (Contracts/Payments/Activations)
Stated Issue/Ineffi cienciesIndividual and manual spreadsheets used/human interpretation of payment terms and setup parameters.
Desired Improvement Consistency and standardization of payment tool (removal of individual Excel tracking sheets).
Business Signifi cance Manual maintenance of Excel sheets. Transcribing data/information into multiple systems.
Action Items Identifi ed
Evaluate the human interventions/touchpoints and risks around selecting or interpreting how setup processes can be inconsistent or where errors may be introduced at the manual touchpoints.
Estimated ImpactElimination of time spent on re-work and managing multiple data entry points (e.g., Excel tracking, CTMS, monitor visit report, EDC, etc.).
Business Owner Project Management
Stated Issue/Ineffi cienciesRoutine site phone calls regarding payments and/or payment-related details. PM time lost on chasing down information within the organization.
Desired Improvement Minimizing site phone calls related to payment information.
Business Signifi canceLess PM overburn on project management unit. More focused time on site performance and enrollment metrics for the client.
Action Items Identifi edEvaluate current average of site-related communications that are related to payments and the volume of calls after solution implementation.
Estimated Impact Improved margin on project management administration activities.
4| ROI Initiative: A Technology Solution for Investigator Payments
Business Owner Clinical Operations
Stated Issue/Ineffi cienciesOperations staff are on the front line of site relationship management. Poor or ineffi cient payments can put a strain on site relationships.
Desired Improvement Operations staff are able to focus on monitoring and fostering site loyalty.
Business Signifi cance Loyal sites can be the edge needed for business to enroll challenging trials.
Action Items Identifi edComplete site survey specifi cally on payment-relat-ed feedback and their effects on site relationships and choices sites make when participating in trials.
Estimated Impact Improved overall site satisfaction and loyalty.
Business Owner Financial Operations
Stated Issue/Ineffi cienciesVolume of payment-status-related inquiries from sites for non-billable personnel across the cumulative clinical trials.
Desired Improvement SG&A time to research payment items and provide status update as needed.
Business Signifi cance Revenue/margin leakage decrease over time and stopping point.
Action Items Identifi edEvaluate time to research each payment question X total number of calls per month and by total number of trials.
Estimated Impact Time focused on project fi nancials/margin oversight and change order management.
Business OwnerAP/AR (Accounts Payable/Accounts Receivable)
Stated Issue/Ineffi ciencies Volume of trial-site-related follow-up on payments manually entered into AP system for processing.
Desired Improvement Import or effi ciency to the AP process.
Business Signifi cance More time to focus on AR and DSO metrics.
Action Items Identifi edIdentify what parameters would be necessary for an automated AP import to process payments on daily basis.
Estimated Impact Focus and improvement on AR and DSO.
Tangible Benefits and MeasuresEach of the key stakeholders should identify their goals and objectives
for the functional business area for which they are responsible. Once
goals and objectives are outlined, the benefi ts and measures can be
applied. The goals and objectives may include but are not limited to the
following:
Cutting costs by reduced headcount or minimizing
a department
Avoiding new hires and training expenses as payment volume
increases
Creating more revenue from the existing business process
Working within the same process
Fixing the current process with people, technology or both
Business owners should identify and document their benefi ts and
measure with the internal department and corporate goals in mind. The
consolidated list of benefi ts and measures can be mapped back to the
internal short- and long-term objectives to illustrate value.
Tangible Benefi t and Measure Table
Benefi t MeasureDepartment
ObjectiveCorporate Objective
Improved revenue/margin Revenue leakage/margin reduction
Headcount Static headcount with increasing volume
Productivity Increased ability to focus time on billable activity
Repeat business
Client survey results on reasons for selection of preferred provider, VOC, etc.
Estimated Impact
Focus and improvement on AR and DSO.
5| ROI Initiative: A Technology Solution for Investigator Payments
Intangible Benefits and MeasuresThe intangible benefi ts are harder to quantify. They are value
propositions that can have a fi nancial impact, but it is often hard to
measure fi nancial value against competitive advantage. Often the
intangibles address market pain points and ways to give the business an
edge. The intangible considerations should drive the means in which to
measure intangible success(es).
Intangible Benefi t and Measure Table
Benefi t MeasureDepartment
ObjectiveCorporate Objective
Increased site satisfaction related to payments Site survey evaluation
Improvement in site loyalty Site performance
Improvement in data entry quality/site performance
Timely data entry/data query rate
Improved payment accuracy and quality Data-driven payments
Client confi dence; full service award Repeat business
Competitive advantage New business
Evaluating the Cost-Savings SolutionsThere are several solutions that span the range of adding people to
incorporating technology. Each view or lens should be applied to the
evaluation based on the business owners and should build upon the
benefi ts, risks, cost factors and challenges deemed most critical to the
organization’s success. The value the solution brings to the organization
should be easily mapped back to the corporate strategies.
A quantitative improvement in total cost savings or increased revenue
may be a part of the overall benefi t picture; however, identifi ed
qualitative improvements can have a signifi cant impact on business
differentiation and strategic goals.
Cost AnalysisCost analysis is based on tangible and intangible benefi ts. Below is a
framework for quantifying benefi ts for both:
Cost Analysis: Solution
Expected Improvement
/ Benefi t Risk(s) Cost
Driver(s)
Oppor-tunity Cost
Avoid-ance Cost
Est. Time to Return
Corporate Objective
Functional Objective: Site Startup
Functional Objective: Project Management
Functional Objective: Clinical Operations
Functional Objective: Financial Operations
Functional Objective: AP/AR
Functional Objective: Technology/Innovation
Measuring Outcomes and ObjectivesIt is important that the solution selected for implementation and the
evaluation and measurement of the outcomes are distributed to all key
stakeholders along with updates. The feedback loop mechanism can
be the ROI document, which can be a living evaluation document that
captures key inputs throughout the process. These measures can be
utilized by other groups to ensure ongoing process improvement along
the way or to leverage them for other initiatives.
6| ROI Initiative: A Technology Solution for Investigator Payments
SummaryThe dynamic nature of clinical trials has resulted in groundbreaking
innovations over recent decades. In looking at the innovation land-
scape, EDC, IVR, ePRO, CTMS, etc. all share a common thread: system-
based solutions using automation to increase effi ciency, productivity
and scalability. Payment management is no exception. The amount of
development dollars spent each year on investigator payments should
be accurate, timely and transparent to ensure the development dollars
spent are correct. Automating this process will remove the inaccuracies
that have signifi cant impact across the entire development cycle.
7| ROI Initiative: A Technology Solution for Investigator Payments