Spend Analytics

Five Spend Analysis Benefits Pharmaceutical Executives Should Know About

October 19, 2021
6 min read
Akshay Upadhye
As per a report from McKinsey “Predictive analytics and data visualisation offer pharma business leaders the opportunity to transform commercial-spend optimisation and lift returns by 10 to 25 percent.”

Spend analysis, is often overlooked in pharma, but when accurately performed, it is integral to understand the organisation and can lead to surprising, yet meaningful insights. Such insights can be a catalyst to informed change, delivering organisation-wide efficiencies and cost savings. Using a spend analysis solution such as Spendkey, allows pharmaceuticals to bring together their often-fragmented raw data and uncover the hidden potential lying within. This can result in sustained, bottom-line impact and enhanced risk management strategies.

Pharmaceutical Executives sponsoring such projects will be able to harness the following benefits:

Normalising the data

Spendkey knows how fragmented and disparate pharmaceutical spend data can be. As the first, fully automated solution Spendkey can normalise multiple sources of raw data into meaningful insights quickly and accurately, with potential to make significant impact to the organisation’s bottom-line. Traditionally this process of “data normalisation” – i.e. the extraction, cleansing, classifying and standardising of the data - has been manual. As a result it has been time-consuming, inconsistent and full of errors. With Spendkey it’s automated, and with Mundi Pharma hundreds of thousands of transactions were processed, normalised and turned into significant insights within two weeks. From this Mundi Pharma was able to calculate and claim substantial rebates in the first fifteen minutes of getting access to the dashboard.

If you too want to normalise your data - contact us at info@spendkey.co.uk or alex@spendkey.co.uk

Payment savings

Spendkey recognises that Pharmaceutical Executives are under immense pressure to both reduce material costs and increase profits. Spendkey can provide insights into both spending patterns and supplier profiles. As part of the spend analysis report, Spendkey can provide the insights to be able to implement control over the pharmaceutical’s operational activities. Spendkey has helped pharmaceuticals avoid late payments and the associated penalty fees, plus has been able to identify and evade duplicate payments. Moreover, Spendkey can improve working-capital benefit by identifying where payments terms can be extended.

If you too want to normalise your data - contact us at info@spendkey.co.uk or alex@spendkey.co.uk

Experienced resources

Pharma purchasing teams may be focused on their daily tasks such as buying the ingredients and materials required by the organisation. Spend analysis is a strategic sourcing process to drive leverage across the entire organisation. Spendkey is experienced in supporting pharmaceuticals in driving most value from their data sets and delivering real benefits in supply chain efficiency. For example, Spendkey’s analysis report provided real-time insights into a pharma’s procurement activities and expenditures. This identified multiple suppliers being paid for the same materials across the divisions and sub-divisions of the organisaton.  Subsequently Spendkey was able to reduce the pharma’s costs through consolidation of suppliers and negotiation of significant price reductions. As a direct result the pharma’s profitability increased by over 10%.

If you too want to normalise your data - contact us at info@spendkey.co.uk or alex@spendkey.co.uk

Risk management

With Spendkey, pharmaceuticals can observe dependency on key suppliers by determining the level of dealings with them. The in-depth spend analysis which Spendkey provides helps pharmaceuticals to advance their risk management strategies. It is possible to distinguish core suppliers and identify where there may be over-reliance. Consequently, alternative sources can be secured to reduce dependency on certain providers. Effective risk mitigation in pharma can not only be converted into direct savings fast but can also make the supply chain more resilient and able to sustain change.

If risk management is a constant concern, we can help - contact us at info@spendkey.co.uk or alex@spendkey.co.uk

Organisation growth

The data obtained through Spendkey and the spend analysis outputs, enable Executives to secure the benefits of a reliable supply chain which in turn gives them the capacity to scale up, or consider M&A opportunities, or enter profitable ventures.

To know more about how spend analysis can benefit your organisation - contact us at info@spendkey.co.uk or alex@spendkey.co.uk

To summarise

Given the complex global, regulated and demanding environment that pharmaceutical companies operate, optimising your commercial spend is not easy; it takes investment in new processes, capabilities, and, in some cases, technology. It also requires a new organisation culture about making business decisions based on data. The change, however, is worth it: companies that have fully embraced the new, integrated approach to commercial-spend optimisation have seen improvements in returns of 10 to 25 percent during the first year of implementation. With further tuning, these can rise even higher.

Akshay Upadhye
Akshay solves the biggest challenges faced by organizations as they digitally transform and establish a reputation for delivery. His contribution enables the business to realize a sustainable market competitive advantage, measured tangibly onto the business bottom line. His reputation is underpinned by a cumulative experience exceeding 22 years where he has been engaged by both small niche businesses to private equity-owned entities and world recognised brands.

More news

Spend Analytics

How to write a business case for transformative spend analytics

There is no need to continue estimating and guessing – Spendkey can tell you how your organisation is spending 100% of its expenditure and provide actionable insights to help you make informed decisions.

Read Article

AI & ML in Procurement

AI in procurement has increased the speed at which data can be collected, analysed and utiliszed to create meaningful insights and make informed decisions

Read Article
Spend Analytics

Use of spend analytics to drive your organisations transformation

Before we go into the core topic of this article, it is important to ensure that we all have the same understanding of the meaning of spend analytics.

Read Article

Subscribe to Spendkey

Get industry insights that you won't delete, straight in your inbox.
We use contact information you provide to us to contact you about our relevant content, products, and services. You may unsubscribe from these communications at any time. For information, check out our Privacy Policy.