“Are you keeping your house clean?” Auditing your Global Pricing and Contracting Systems
How often do you clean your house?
There is an old saying that when a house is organized and clean, even our thoughts are scented – why wouldn’t we all want that?
Technology does not differ too much from our houses – in our daily activities, it becomes our home. And in an age of constant change, nothing is more imperative than doing a house check or cleansing, every once and a while, to understand where we are and what we can enhance.
Within Life sciences, the business and compliance drivers accelerate the momentum and the need for change. Furthermore, in this complex and highly regulated environment, digital transformation seeks to keep up with rapidly evolving technologies and end-user expectations, making it even more demanding to do this house cleansing. Affected by so many countries-specific variables, a periodic system audit of Global Pricing and Contracting systems is a necessary procedure in this industry. For this analysis, we will focus on Global Pricing and Contracting Systems, excluding the U.S. markets as its driven by specific requirements as it relates to Government Pricing Statutory reporting and Federal and State Medicaid programs.
Let us start by keeping it simple and showing you some similarities between a clean and organized house vs. system:
A technology system audit evaluates the adherence to industry standards, best practices and identifies risks and weaknesses. As a result, it enables the ability to perform updates and enhancements to the solution which can improve operational efficiency, align to compliance obligations, reduce costs, and provide a competitive advantage for the company in the market.
The audit process involves a review of a company’s system that supports global pricing and contracting-related business, considering also organizational procedures and associated documentation. To start, three important pillars should be correctly aligned, for correct operability and business performance:
Which are the most common challenges within the 3 pillars?
1. People & Organization
People & Organization is the most important pillar. Without users, systems and data are irrelevant and the user experience must be valued. However, the complexity and regulatory aspects of the business, make the maintenance difficult and cumbersome.
- Organizational workflows are often misaligned with industry practices and business processes are not always the most simple and direct, resulting in wrong configurations that can lead to a challenging user experience. Sometimes RACI matrices are not well defined or don’t even exist, which can delay pricing decisions resulting in lost revenue opportunities or a company’s reputation damage if the information is wrongly shared, requiring correction.
- Documentation maintenance, such as global policies and SOPs are time-consuming and difficult to keep updated. Technical documentation is not often done properly, and hence, it is important to ensure it is well-documented and correctly delivered by the implementation team.
Understating stakeholders’ perspectives by conducting interviews/surveys on a frequent basis help to recognize the system’s weaknesses and business needs.
System architecture is complex as data is frequently coming from multiple sources with various in- and outbound interfaces.
- Data inaccuracies can lead to pricing errors or contract-related errors, resulting in financial penalties and a huge impact on day-to-day operations such as invoicing issues, compliance, and financial reconciliations.
- Integration with a data warehouse is still not standard, leading to misaligned data.
- Markets may have country specific attributes, and many have pricing, revenue, and country-specific regulatoryimplications.
- The lack of standardized processes and experienced resources makes it difficult to achieve accurate data cleansing.
It is essential to perform data checks and data visibility evaluations on pricing and contracting systems to support business excellenceand avoid security breaches.
Technology acts as a critical supporting factor to improve business outcomes and streamline business processes in this global pricing and contracting landscape, which may face some challenges.
- Ideally, the system should be following the defined global business processes and ways of working. However, sometimes, during implementation, we find system limitations, and workarounds are needed until we get the new patch update or the new system upgrade, which can result in temporary challenges and a lack of operability.
- Technical difficulties and system downtime can lead to delays in day-to-day operations with the risk of negative financial implications.
- Systems need to integrate with various other technology systems. Any issues with system integration can cause data inconsistencies, leading to errors.
- In general, systems are managed in packages and to enhance the system, a release may be needed. If the release content is missed, the latest enhancements may end up not being visible to clients and thus, risk to achieve to the full potential and security of their implemented system.
Overcoming the above-mentioned challenges requires ongoing maintenance and the correct expertise and understanding of the technology and business processes. Unfortunately, regular maintenance and system audits become deprioritized until a specific event results in necessary action. However, organizations, should avoid this final-call situation and take a proactive approach:
How should a system audit be conducted to gain stakeholder engagement and end-user satisfaction?
System Review/Audit Cycle
What are the benefits of conducting a System Audit?
A proactive approach to conducting a System Audit in a Global Pricing/Contracting Management System every year is shown as a cost-effective solution in the long run. It examines the current stage of your system, supporting time efficiency and cost reductions, and still gives you quick wins on correct system operability for business sustainability and excellence achievement.
If you would like to have your house always clean, reach out to the Marbls team to learn more about our approach to Global System Audits and where we can help you!