Biopharmaceutical Company Speeds Towards Commercialization with Netsuite
Biopharmaceutical Company Speeds Towards Commercialization with NetsuiteAs pharmaceutical and biotechnology companies push toward approval and commercialization of their pipeline, an essential consideration for finance teams is the time required to implement an ERP solution. As the organization and its vendor interactions grow, spreadsheets quickly become untenable ways to manage the complex financial tracking and reporting necessary to remain efficient and compliant. One biopharmaceutical company shared its experience working with BDO Digital to adopt NetSuite ERP and the factors driving decisions and timelines.
The Challenge Before NetSuiteWith headquarters in the U.S and an Australian subsidiary, the biopharmaceutical organization was heavily reliant on Excel spreadsheets to run its financial operations. Trial balances and financial statements for each organization were maintained in its financial system of record, the general ledger, which was also the source of accounting transactions and journal entries. Consolidations and eliminations were handled in Excel from downloaded statements. Budgeting and accruals were also conducted in Excel, with business partners and vendors’ providing input for calculating accruals. Outsourced manufacturing was also a consideration for the company, so billing and reporting required timely collection to support financial flow processes.
“As a newly public company with a growing clinical pipeline, we needed a more robust system that could scale with our business,” said one employee who realized that a software upgrade was in order. The company wanted a system to increase efficiencies while providing support for critical functions like accounts payable, contract management reporting, budgeting, forecasting and SOX compliance. With commercialization looming, supply chain and inventory management, revenue processes and transactions, and gross to net accounting would need to be incorporated into the system. Because of this, flexibility and scalability were crucial considerations. The biopharmaceutical firm’s SOX 404 compliance program provided additional business requirements. Its finance team works with an outside advisory firm to document critical controls, test them and report on the controls’ effectiveness. The ERP system selected would need to automate those controls for additional efficiency.
A Need For An ERPBDO Digital has focused on taking the agile and mature NetSuite technology and tailoring it to the pharmaceutical industry’s unique needs. Its team has guided dozens of pharmaceutical companies to discern the most advantageous moment for transitioning to a fit-for-purpose and scalable ERP solution.
Neal is frequently confronted with questions about timing when meeting with potential clients. “The first thing they say is ‘We’re probably too early for this,’” he states. “It’s generally never too early to ask the question ‘Is it too early for this?’ It’s very difficult to do both the implementation and commercialization.” In his experience, the below signs point to a need for an ERP.
- TRIAL PHASE AND QUANTITY
- COMPANY PROFILE
- TIME INVESTED
The SolutionThis biopharmaceutical company implemented NetSuite in a single phase. The evaluation took place among the core team and included finance and IT teams, with input from the management team and audit committee. Because the process overlapped with quarter-end activities, the team planned for six months to adopt the system. The company focused on including financials and budget functionality in the initial phase to help improve reporting, comparisons, forecasting consolidations, accounts payable and contract management. The initial stage included purchase order workflows and SOX compliance, automating delegation authority and the segregation of duties. With its NDA under priority review, the company plans to scale the system to include supply chain modules to manage inventory, revenue and gross to net accounting.
According to Neal, four to six months is a typical NetSuite implementation timeframe. A three-month implementation can be accomplished but is typically disruptive to the finance team’s other responsibilities. For organizations seeking to include supply chain and GMP functionality, clients should plan for six- to nine-month deliveries.
The biopharmaceutical client sees BDO Digital as a valued resource in the process: “BDO Digital understands the nuances of the pharmaceutical industry and our business model. They help design and tailor the system to address our current needs with an eye towards what the company will need in the future as we approach commercialization. That experience and guidance is invaluable in an ERP implementation.”