Biotech and life sciences companies operate on the cutting edge of science, but their finance teams often work with dated tools and processes. In addition, key stakeholders often include private equity partners, stockholders, grants, venture capital – and all of them need tailored financial information.
We partnered up with Gatepoint Research and surveyed 100 finance executives across the Biotech and Life Sciences sector to find out how their teams prioritise those needs, what obstacles they encounter, and how they use technology to elevate the role of finance in their business.
Most companies surveyed are pre-revenue therapeutics start-ups from less than 10 to 500 employees.
Half of the executives surveyed report a finance team smaller than 4 people. And while there is a natural correlation to company size, even companies between 250 and 500 employees report an average team size in the single digits.
Those small teams, however, are tasked with several initiatives. As we have previously written about, the role of the CFO is expanding, which is one of the reasons start-ups bring them on board sooner. In our survey, we ask finance leaders to identify their top initiatives:
Gaining operational efficiencies by simplifying and automating processes topped the list, nearly 60% of finance leaders reporting that their current processes are challenging.
Finance leaders recognise their importance in driving strategic decision-making for their businesses. For example, 49% of the executives surveyed said Building data analysis capabilities and skills is a significant initiative – their most prominent item on the list when it comes to extending capabilities of the finance function. Building capabilities also goes hand in hand with optimizing the finance operating model, which 46% of finance leaders reported as an important initiative.
But there are challenges with simplifying process and building better analytical capabilities. 47% of finance leaders report that it’s hard for them to integrate data from different systems. 45% say that manual processes slow their teams down, and 41% feel they don’t have the budget to change their finance technology.
As a result, teams spend their time aggregating and manipulating data in Excel instead of taking advantage of reporting automation to analyse data and inform strategic decisions for their business. That presents a time challenge to the teams and leaves them with stale data.
By the time their numbers are aggregated, finance is looking so far in the rear-view that it’s challenging to make forward-looking decisions. But, especially in Biotech, with companies operating predominantly on investor capital, access to real-time data can be a critical tool for making sound decisions.
On a positive note, about three-quarters of finance leaders say they have the relevant skills to drive innovation in their organization. Only 16% encounter reluctance to challenge the status quo amongst their C-level peers. Even fewer see a risk with migrating business-critical systems that can act as an enabler for finance transformation.
But what does finance transformation tangibly look like? We asked finance execs how their function can add the most value to its stakeholders.
A vast majority want to access and provide critical metrics in a dashboard format. 51% want to slice and dice their data in customizable, relational reports. 42% want access to real-time financial data. And not surprisingly, 45% of finance leaders are looking to automate cumbersome, manual tasks.
Finance leaders are looking to advanced analytics to help them add value in strategic areas of their business. Finance leaders see the most opportunity for advanced analytics in planning, risk management, and operational decision-making.
For planning, budgeting, and forecasting, 25% report extensive use of advanced analytics today, while 43% of finance leaders expect to make extensive use in the next few years.
Covid-19 has noticeably driven finance leaders’ expectations in risk management: while only 3% of them make extensive use of advanced analytics here, almost a quarter (22%) of them expect to do so in the future.
As CFOs and finance leaders lean into the evolution of their roles, they increasingly see advanced analytics as an enabler for operational decision-making. While 17% of them reported extensive use of advanced analytics in this area today, 40% expect to do so soon.
Overall, the small finance teams of Biotech companies often struggle to navigate different priorities, serving a plethora of stakeholders. The biggest obstacle to innovation is manual tasks and outdated processes.
Those same tasks are holding them back from changing their modus operandi. Add in the challenge of integrating their finance system with various other systems and limited budgets; driving change can be difficult.
Yet, it is the change in technology that enables more efficient processes, helping to elevate the value finance can add to their business. By using modern finance technology, finance teams can gain unprecedented real-time insights, and automated processes free up time to analyse data to help inform strategic decisions.
Our surveyed audience clearly recognises this shift: 95% of finance executives surveyed plan to re-evaluate their financial management system in the next 12 months.
The Akuna Solutions Team