Contract Lifecycle Management (CLM) in Life Sciences – A Strong Uptake

Contract Lifecycle Management (CLM) implementations are picking up, replacing legacy systems with cloud-based technologies. Besides the benefits of a CLM tool as shown in the diagram below, there are a number of practical steps to consider in an implementation to ensure that value is delivered.

Source: Model N & Apttus Customer Impact Study, June 2017

VALUE OF SI IN A LIFE SCIENCES CLM IMPLEMENTATION

Technically speaking, System integrator (SI), Technology partner, Integrator, or Technology consultants, are titles which add to the bill of any implementation. Activities that never come to mind when doing the initial research but look costly on paper. Let’s explore their value and why it goes beyond a CLM vendor evaluation.

PLANNING & INITIATION

During the initiation phase, a SI should lead the plan adaptation provided by the software vendor to meet the customer’s specifications. Besides the vendor’s technical requirements, there are additional aspects to incorporate in the plan.

Typically, we see master data readiness issues that need attention within a global CLM implementation. These can include products, list prices, customers and vendors, user roles and responsibilities. Most likely the countries within the scope will not have the entire framework of data at hand. Other external factors can influence the planning (e.g., MDR Regulation (EU) 2017/745 and (EU) 2017/746) and the increased focus on proactive compliance and risk management to keep up with revenue maximization and profit management. Updating the plan to account for these issues and assessments of a SI will help support a successful execution.

Additionally, new sales models are growing in popularity, especially performance- or outcome-based and new pricing strategies, to accommodate healthcare professionals focusing on costs and leading to price pressures. In fact, having the knowledge and experience of multiple project implementations and technologies enable these integration experts to see the similarities and redundancies in the activities to be executed to optimize the timeline.

Another value driver is identifying early risks within this phase. Typically, within a global CLM implementation, we’ve noticed that harmonizing the contract is likely to take longer than anticipated and would therefore put the schedule at risk. Similarly, over the last few years we have seen several life sciences solution providers having consolidated (Alliance is now part of Eversana, IMS Health & Quintiles merged to form IQVIA). With fewer parties to choose from, contract templates will have an increased value as companies need to buy more from a single vendor. As redlining to track changes becomes more important and as there should be more negotiation given the players are larger, it’s important to keep tighter control over non-standard contracts

REQUIREMENTS

During the requirements phase, the value of the SI is to support the translation of the business language into requirements which are implemented by the vendor, while in parallel, keeping them understandable to the business. In the case of templates, the consultants’ role is to provide the software vendors with what will be the technical conditions for clauses to apply based on the example provided from the business. There is also the need for flexibility, as highlighted in these two examples: to quickly create contracts from templates and clause library using standardized contract terms and conditions, and to further improve contract language and reduce the need for adjustments after activation.

The SI proposes alternatives to the potential “gaps” in the software solution, such as the approval requirements and audit needs, without overloading processes. Typically, none of the software vendors would have 100% of requirements covered. The SI provides business process workarounds which provide value to the customer by avoiding costly customizations and bridges the remaining 10-20%. Likewise, knowledge of the software provides an alternative perspective to the requirement. This results in streamlined contracting and accelerated processes to improve turn-around time, approvals and governance.

TESTING

While building software is the vendor’s focus, the testing phase is a priority for integrators, as unit testing is not enough. The first deployment may not be perfect, either.

That’s when the SI makes a real difference because the vendor’s and integrator’s testing is characterized by perspective, as well as scope. We’re implementing a business process, rather than just software. From start to finish it is process-driven. This allows for more thorough testing. Examples include approval validations as a way of reducing the number of days between submitting and activation in the system to improving turnaround times.

Next, identify what needs to be approved to avoid delivery disruptions or delays, and highlight contracts that will soon expire to engage customers early in the renewal process — all of which drives collaboration and transparency. There is no reason for the vendor to test the end-to-end process. Without a SI, the system would move to production with potential critical defects. Additionally, the SI speeds up prioritization and accelerates issue resolutions, by retesting for defects earlier.

DEPLOYMENT & LAUNCH

During user acceptance testing (UAT) and training, the value of SI stands out. With business testers in the room or on the line, it’s easier to speak about rebate lines than objects or records. Writing the UAT scripts requires an understanding of the business. In one CLM implementation, our UAT scripts became the standard operating procedure, as we detailed the various steps to create a contract and integrate prices into the Order Management/Enterprise Resource Planning. In addition, the test scripts were leveraged for user training materials, reference guides and short training videos, which are much more appealing from an end user perspective. Using different kinds of training materials is more appealing than using system testing scripts. The SI could build that for the client as some may not have the resources or technical knowledge to build the additional artifacts. And, it’s easier to go through a one-page document than it is to maneuver through an Excel spreadsheet.

ALL THIS TO BRIDGE THE GAP

In short, the SI is the link between business operations and IT functions during an implementation. Like a good rope, it can stretch a bit when needed to maintain all parts together and ensure a smoother implementation. SI leverages previous experiences to deliver quality and value, from start to finish and through the hyper-care period.

The SI always provides the right level of understanding. Stay tuned to learn more.

 

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