Life Sciences Executives View Revenue Management as Business-Critical, According to New State of Revenue Report from Model N
New Data Shows 96% Are Still Managing Revenue Tasks With Spreadsheets, and 71% of Executives Believe Their Industries Could Do a Better Job Optimizing Revenue Activities
Model N, Inc., the leader in cloud revenue management solutions, announced findings from its 2021 State of Revenue Report, which examines current issues around revenue execution and management. Model N polled 300 C-level life sciences and high tech executives in January-February 2021, and 98% say they face revenue management challenges. Some 93% of respondents report that revenue management is a business-critical issue, describing the global COVID-19 pandemic as the biggest factor impacting revenue management today.
Almost three-fourths (71%) of executives believe their industries could do a better job optimizing revenue activities. Competitive markets, digital disruption, new and ever-changing regulatory proposals – combined with ongoing pandemic-driven uncertainty – are key contributors to the current life sciences challenges. Some 68% of life sciences firms reported an increase in revenue management moments in 2020 – yet a surprising 96% rely on traditional spreadsheets for some revenue execution tasks.
According to Melonie Warfel, vice president and general manager of Life Sciences for Model N, the survey findings reflect both the acute need for revenue management and the industry’s readiness to embrace technology-enabled solutions. “Our customers are constantly balancing changes to existing regulations, preparing for new requirements, and simultaneously maintaining ambitious research and development efforts,” she said. “More companies are leveraging AI-powered platforms like Model N’s revenue cloud to ensure regulatory compliance and manage revenues, which helps to support innovation. Having the technology to respond quickly to unrelenting pricing pressure in a changing environment is absolutely essential.”
Responding to Revenue Execution Challenges
Against this backdrop of billions in potential lost revenue, the life sciences industry is increasingly prioritizing business-critical revenue management challenges, and many firms are seeking new solutions. More than 90% of executives say revenue management needs to modernize in the digital era, and almost all companies (96%) report adopting new business models, changing processes (98%), and seeking out innovative technologies for revenue management (99%).
The continued impact of COVID-19 was also noted in the areas of revenue and daily business operations. More than half (54%) of life sciences companies say that steps taken during the fast-track testing and production of COVID-19 vaccines will have a long-term impact on revenue management processes. In addition, according to those surveyed, telecommuting also poses issues, as some 61% said remote work made revenue management more difficult.
The Role of Technology
Today’s leaders are leveraging revenue management strategies and tools that integrate both an understanding of the industry and most current technologies, including AI and the cloud.
Some 92% of those surveyed agree that cloud solutions should come from a vendor with deep expertise in a sector’s unique business complexity and challenges, a notable majority consistent with larger industry trends around enterprise-wide digital transformation and digitization initiatives. According to Model N’s research:
- 99% of companies are looking for innovative revenue management technologies, especially those that incorporate AI and machine learning (ML), at 74%
- 91% agree that the ideal revenue management solution would be cloud-based
- More than half (54%) have already augmented their processes with the adoption of additional cloud software
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