Biotech firms must navigate a product life cycle that leads from R&D to clinical trials, manufacturing, and distribution. It’s a complex labyrinth of supply chains, regulatory requirements, and tracking and documentation.
A cloud-based enterprise resource planning (ERP) system is an ideal investment that seamlessly helps keep up with ever-changing variables and business processes while providing insights to identify and evaluate long-term growth possibilities.
Greater agility, faster decision-making, better internal and external collaboration, and total regulatory compliance are all facilitated by ERP. While the biotech industry has historically lagged in embracing digital transformation, the COVID-19 pandemic has especially highlighted the importance of having an intelligent digital core.
A dynamic industry like biotech demands an equally dynamic solution. Here are seven of the biggest advantages ERP offers to the biotech industry.
1. Faster Financial Statement Close
Without an ERP platform, your accounting department is likely wasting hours manually entering data into different systems and furiously working to make sense of it all at the close of a financial cycle. ERP systems instantly capture all aspects of a company’s operation, providing a complete picture of financial performance effortlessly without the need for crosschecking and rekeying data.
You can get reports that suit your needs, whether you want a bird’s-eye view or a dive into more detailed operational data on specific areas of the business.
2. Real-Time Management of Spend
The business cycle of a biotech firm can change rapidly, so you need a full picture of where you are today as well as numbers that show where your business is heading in order to predict costs. Real-time data gives you the ability to make adjustments as needed, limit risk, and spot new opportunities as they arise.
An ERP platform monitors things like vendor pricing, the cost of materials, and other spending variables. A good system will also flag any cost exceptions and model alternative sourcing possibilities.
3. Streamlined Financial Consolidation
It can be tough to audit financial statements coming from multiple places, particularly when the information in each report doesn’t easily match up. ERP simplifies consolidation by accessing all the reports and using them to create and audit consolidated financial statements without any need for file conversions.
Ultimately, you get complete financial visibility across your entire organization to both facilitate predictable spending and manage costs around regulatory uncertainty.
4. Robust Internal Controls and SOX Compliance
The Sarbanes-Oxley Act of 2002 (SOX) was designed to protect the public from fraud and erroneous accounting practices by increasing transparency in financial reporting and requiring formalized systems for internal controls. ERP solutions are designed to meet SOX requirements through robust analytics and reporting capabilities.
The system can automate your entire SOX program, allowing users to easily generate reports and revenue projections that factor in market conditions and actual costs. With ERP, you can centralize documents, create templates, track SOX progress in real-time and automate the SOX processes.
5. Support for Growth
Another advantage prepackaged ERP systems offer is the ability to make process modifications quickly and easily. There’s a huge difference operationally between laboratory exploration and manufacturing processes. With a scalable ERP platform, you can start small and basic but handle more complex scenarios as the business grows, so you don’t have to worry about replacing the system in mid-stream.
Scalability is especially useful for contract manufacturers, as they must be able to adjust to specific terms and process requirements for each client’s unique needs. The right ERP platform provides the flexibility and reconfigurability to enable seamless integration with most other software systems.
6. Integration With Contract Manufacturers and Third-Party Logistics
Going to market can be exhilarating but is stressful nonetheless. An ERP system can help you avoid a chaotic rollout, streamlining the commercialization process by suggesting best practices as the product launch ramps up.
ERP can simplify your integration with the systems used by your contract manufacturers or third-party logistics providers. Real-time views of vendors, inventory, and logistics also provide insights into supply and demand issues to allow for proactive resolution. An agile production and distribution process ensures you can deliver products consistently.
7. Support for FDA Validation
Companies in many industries choose to validate their business systems to ensure they are operating properly, but they aren’t necessarily required to do so. In contrast, the FDA and other governing bodies around the world require strict documentation and evidence that a biotech firm’s systems are installed and set up properly. Furthermore, ERP testing cannot be conducted only internally; the platform also must undergo validation by a third-party auditor.
This type of audit doesn’t come cheap, as the provider must conduct a battery of tests on a newly installed ERP system. Are the formulas entered into the system for drugs accurate? Is the drug manufactured in the approved fashion? Are materials sourced from approved vendors? Will any manufacturing issues that may arise be caught? These are the kinds of questions auditors need to be answered.
Prepackaged ERP solutions can help cut costs within the validation process; many of them come preconfigured with FDA requirements, saving time and money. In addition, third-party auditors are already well versed in these prepackaged solutions, which further reduces the time and expense associated with validation.
ERP: A Perfect Fit for Biotech
ERP solutions are well known for increasing both productivity and collaboration by eliminating many administrative tasks. In the dynamic world of biotechnology, however, ERP goes beyond merely simplifying operations: it takes on the enormous extra challenges of maintaining stringent financial and product life cycle records and simplifying the validation process.
Learn why Navigator Business Solutions is ideally suited to help biotechnology firms run better business operations with complete suite-in-a-box, future-proof SAP solutions.