A practitioner's approach to Spend and Process management
Understanding requirements, user expectations, profiling end users and day-to-day dynamics for a healthcare client is as close to being a certified physician having in-depth knowledge about his patients as well as the treatment. A service provider requires a similar understanding of both the client and the processes involved. Along with these requirements, there are also certain nuances within the typical scope of a service provider.
- Prevalence of local suppliers: 40% of the local geographies and regions have a significant number of local supply bases as a result of a decentralized set up. This brings a dire need for language expertise, market and local supplier knowledge to monitor spend and efficiency of the services.
- Disparate processes and systems: Extensive M&A ventures in this sector have lead to inorganic growth and thus the incongruous process and systems. This inconsistency becomes one of the key challenges of implementing any organization wide program. It is thus very critical to account for the extent of inconsistency and its impact of regions, BUs, processes and systems.
- Segments within the Geos: Driven by inorganic growth, Operating companies continue to work in silos. Segmented set of suppliers, stakeholders and teams are all symptoms of this phenomenon which is clearly seen across various geographies. The dissection of spend and suppliers is detrimental to the volume - and consolidation leverage that would not only bring additional benefit but would also be very cost effective and operationally efficient.
- Supplier limelight: There is a constant need to explore new sources for innovation, savings and risk mitigation. Healthcare companies rely on validated suppliers, including BPM and strategic partners as these entities are expanding into emerging markets. In order to tune into the latest trends, predictions and emerging models, a reliable supplier is required.
- Managing the third wheel: VMI (Vendor Managed Inventory) and similar set ups are prevalent in healthcare companies that involve managing third party relationship on behalf of the client. This is an endeavor to strike a delicate balance with respect to compliance, cost, efficiency, and stakeholder experience.
- Power of Knowledge: Management of categories like R&D, API and other industry-specific categories require deep domain knowledge along with extensive category experience within the concerned geographies. The strategies, execution, supply models, etc. are very different from indirect category management which is the usual BPM forte.
- The marketing buck: As the saying goes - 'healthcare companies are actually marketing companies' would not be an exaggeration given the expense apportioned to the marketing category. Marketing as a category is considered one of the most complex categories for the non-standardized scope, dynamic requirements, and closer stakeholder management required.
The end users who avail the service provided to a healthcare client are different to those clients in manufacturing retail or media. Procurement services provided to scientists, researchers and clinical administrators, require a committed understanding of the sector along with domain competence which makes all the difference in the world of BPM services.