“The writing’s on the wall, folks are getting ready for an upcoming profit margin squeeze and these days, my Finance colleague is my best friend”
Such an apt description from a digital health exec that gets the value of linking digital initiatives with business impact - especially when margins are under pressure.
Together, we ran a quick business diagnostic to uncover her organization’s top unmet needs to ensure that her initiatives are focused on the most urgent problems.
Here are a few illustrative slides (with 'dummy data') that show some of the analytical steps we used:
P2: Building the case is a six-step process (this post only focuses on the first step) - the first three steps identify critical business challenges and quantify the impact of solving them. The last three steps articulate how to solve these challenges and with what solutions (unfortunately many execs start on Step 4 with the tech)...
P3: Future financial goals - PharmaX wants to grow from $10B to $17B with most of the growth coming from new products and the existing portfolio, probably requiring investing in trials, commercial excellence and adherence
P4: Key business challenges - PharmaX’s supply chain is being disrupted, their trials are delayed, adherence to flagship products is dropping and they're faced with increasing pricing pressures
P5: Revenue and cost performance - PharmaX’s manufacturing and admin costs are declining relative to revenue growth but preclinical and clinical development costs are increasing faster than revenue growth and make up 45% of the overall costs
P6: A look across PharmaX’s TAs shows that the derm and CV portfolios make up 75% of total revenues but are amongst the slowest-growing TAs
P7: Puts all the brands/drugs of PharmaX’s portfolio side by side, showing which are growing versus declining. There’s a clear issue with Drug 1 (in CV)
P8: IP and loss-of-exclusivity review - here we see that PharmaX’s CV and derm portfolio are at higher risk
P9: Summarizing ongoing and upcoming trials by TAs – should help start forming some hypotheses on which trials might require assistance
P10: Takes a step back and lists the most critical business challenges coming out of the analysis – lots of hypotheses can be formed just by looking at this list and it can lead to a good discussion with the affected internal stakeholders (which might be losing sleep...)
While this short 10-slider covers ~20% of the analytics we typically run (and can be used beyond digital), I find that these steps often uncover 80% of the critical business challenges.
Like I mentioned in a previous post, getting close to these data should help executives better prioritize and make the case for their initiatives (and their job).
And notice how tech is one of the last steps in the process?
Strategy first. Tech Second.
Hope this is relevant and do drop me a line if you’d like a walkthrough of the complete ‘playbook’.