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Why ERP for Contract Research Organization?

Contract research organizations (CROs) provide essential support to pharmaceutical, biotech, and medical device manufacturers across a range of projects. Solutions such as SAP ERP for life sciences can be valuable resources for both the CRO and their client, streamlining contractual research projects of a technical and confidential nature.


Today, we’ll outline how ERP systems work in biotechnology and why they are powerful transparency tools for CROs.

How Does ERP Enhance CRO Client Relationships?


CROs are often assessed against industry expertise, integrity, and corporate value. Still, transparency is an increasingly important factor for the research carried out, running costs, and other aspects of contract management. Pharmaceutical and biotech manufacturers require reliable timescales and finite budgets, given the extensive costs and periods involved in developing a new device, medication, or technique.


Incorporating an ERP solution enables a CRO to provide visibility at each stage so that their client is always up to speed with developments and milestones and receives a far better experience. One of the primary reasons why manufacturing enterprises need ERP systems is to provide organization-wide oversight of critical project paths, this leads to huge advancements in efficiency and accurate planning.

Why Does an ERP System Improve CRO Contract Value?


As we've touched on previously, an ERP software solution connects the CRO and project managers, so expectations and deliverables are entirely clear, relating to real-time project status and current timelines versus projections. If a pharmaceutical or biotechnology enterprise can trace how their research is progressing and receives status reports, they can factor this information into their plans and stay fully informed to avoid mismatches in resource allocation.


CROs operate on a unique business model, which depends on the complexity and volume of research and evidence required. Clients often pay contract costs in installments, depending on achieving pre-set milestones, although exact invoicing procedures may vary between projects.


Incorporating ERP enables CROs to bill upon completion or upon project stages delivered, which supports timely, accurate billing with the customer able to monitor progress so they can align their budgets with payable invoices. Continually updating the ERP ensures that finance teams have total visibility about timescales for approaching milestones and can ensure funds are available to avoid delays.

ERP Improvements in CRO Cost Traceability


Research projects incur a range of expenses, all of which are typically passed on to the client. While it may be possible to anticipate costs fairly accurately, an integrated ERP will keep the customer in the loop as the work proceeds and prevent potential miscommunications about unexpected charges.


ERP software is important not solely to the client organization but also to the CRO, which can leverage real-time reporting to improve internal efficiencies.


CRO management benefits in the same way as any other software user and can streamline resources and personnel, monitor timescales against schedules, and quickly identify where a change of plan is necessary. The more efficient and transparent the CRO, the greater the potential savings, and the more competitive service it can offer to each client, providing a reputational advantage along with higher overall profitability.

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