R&D leaders, whether in a small- or medium-sized biotech, a large pharma, or an emerging startup, agree that tracking R&D spend by category is the first step in increasing the productivity of R&D. Unfortunately, most traditional methods of budget management are ill-suited for tracking R&D services (which comprise nearly half of life science R&D budgets).
Because they don’t support continuous analysis of changing research needs, provider dynamics or provider performance, most budget management and e-procurement platforms suffer from a broken link between strategy and execution.
As described recently in SpendMatters, “By using a tool that has contract data, spend data and supplier management data (natively or through integration), you could create a dashboard that would support the continuous analysis of trends, risk, demands or supply changes. The defined strategy should also guide you to the right type of sourcing event with the right category-specific features and configuration.”
Traditional platforms for tracking budgets
- Are built for materials purchasing and logistics budgets
- Support single-time decision-making based on immediate requirements
- Do not reflect dynamic changes in supplier relationships
- Lack sufficiently structured data for continuous analysis /decision-making
Fortunately, organizations have found a better way.
Real-time budget management on the Science Exchange platform
Science Exchange, a SaaS-enabled marketplace specifically designed to support the source-to-pay process for R&D services, enables organizations to manage budgets for R&D services using dashboards populated with dynamic reporting of structured data showing real-time spend. By using blanket purchase orders (BPOs) with specified spend limits to define team- and category-specific Budgets, many of Science Exchange’s biotech and pharma clients are able to enhance visibility and control of their R&D spend.
Benefits for R&D operations
Increased efficiency and compliance
Budgets on Science Exchange increase efficiency and compliance. By reducing churn on goods receipt and PO generation, less time is spent by research operations and finance teams on accrual, budgetary oversight, and invoice reconciliation. Budgets facilitate regulatory compliance — keeping a unified record of internal and external R&D costs is important for SEC and IRS compliance. Also, Budgets on Science Exchange enable additional approval flow capabilities for regulated services (animal-based research, human biospecimens, GXP, etc.)
Science Exchange enhances budget control and visibility of detailed budget data
Operations teams use Science Exchange’s business intelligence features to further enhance control of budgets and gain visibility, with real-time tracking of remaining balances and other associated data on their Science Exchange enterprise dashboards. Budgets on Science Exchange also ensure budgetary compliance, as researchers are only able to spend within specified limits. Operations teams can set up automated approval workflows based on a variety of factors, including project cost, provider, and service type.
Increased buying power
Budgets on Science Exchange maximize buying power of R&D organizations. They allow for groups to be collated into a single purchasing instrument, reaching higher spend thresholds and being able to leverage increased discounts.
Benefits for researchers
Time savings and faster project starts
When applying Budgets to projects ordered and managed on Science Exchange, individual researchers benefit from faster project starts. On average, 4 days pass between acceptance and receipt of a traditional purchase order. This step is eliminated when an order is applied to a Science Exchange Budget, so that a service provider can start a project immediately. Considering that dozens of orders can be covered with a single Budget, the aggregate time savings are significant, as illustrated by the use case below.
Discovery Budget for Representative Biotech Company
- 134 outsourced projects ordered in 1 year
- Projects cannot start without approved PO
- Traditional PO approval time: 4 days
- Cumulative time saved by setting up Budget on Science Exchange: 536 hours
Benefits for research leadership: Start projects faster, accurately track team spend
Skip spreadsheets and emails: track budget spend in real time
Traditional processes used by researchers to track budgets are time-consuming and cumbersome. Because budget spend is trackable on Science Exchange dashboards of individual researchers, it eliminates the need to pull reports from ERP systems or enter data into static, manual spreadsheets. Researchers can collaborate more easily, because spend and remaining budget are visible to all collaborators, stakeholders, and approvers. Because spend data are structured with R&D teams in mind, Budget approvals are easy and quick on Science Exchange.
About Science Exchange
Science Exchange is a SaaS-enabled marketplace for outsourced R&D, accelerating breakthrough discovery by providing scientists with immediate access to over 3,000 CROs, CMOs, and academic laboratories. Additionally, the Science Exchange enterprise program enables organizations to consolidate R&D outsourcing spend into a single strategic relationship, driving efficiency and cost savings.