Suppose you are a lab manager dealing with purchasing or an AP manager dealing with delays in supplier payments. In that case, you need Biotech Procurement Software to automate the purchasing and invoice-matching.
Do you struggle with any of the following:
- Dealing with multiple websites to place vendor purchase orders.
- Tracking purchasing orders in spreadsheets and always behind in updating the spreadsheet with the latest vendor updates.
- Chasing scientists to confirm if they have received the product so that the invoice can be paid.
- Struggling to answer questions like: how much did we spend on research so far?
This article is for you if you answered yes to any of the questions above.
In this article, we will cover the core tenants of the Biotech Procurement process, the key challenges, and how to overcome these challenges with technology automation.
What Is Biotech Procurement Software?
Biotech Procurement Software is a procurement software that automates the Biotech Procurement process. It is designed to reduce the manual effort with purchasing, improve staff productivity and effectively track costs related to different stages of drug development.
Biotech Procurement Software aims to address the unique challenges and requirements of procurement within this industry. It typically offers features and functionalities that cater to the specific needs of biotech companies, which may differ from those of other industries due to regulatory compliance, quality control, and the nature of biotech products.
The procurement software addresses all aspects of the Biotechnology procurement process, including vendor selection, vendor onboarding, contracts, purchasing, invoice and accounts payable, and inventory management.
What Is Procurement In Biotech?
Procurement in Biotech is the strategic process of acquiring essential goods, services, and equipment for biotechnology enterprises’ research, development, and operational activities.
Key facets of procurement in the biotech domain encompass:
- Acquisition of Laboratory Resources: Biotech companies rely heavily on specialized laboratory supplies and equipment, encompassing reagents, chemicals, instruments, and machinery. The procurement process entails the selection of suppliers, contract negotiations, and effective supply chain management to ensure the timely availability of these critical resources.
- Sourcing Research Materials: Biotechnology research necessitates specific biological materials such as cell lines, antibodies, nucleic acids, and tissue samples. The procurement function oversees materials sourcing that aligns with stringent quality standards and ethical considerations.
- Management of Outsourced Services: Collaborative efforts with external entities, such as contract research organizations (CROs) and contract manufacturing organizations (CMOs), are commonplace in biotech. Procurement professionals are tasked with selecting suitable partners, negotiating service agreements, and overseeing these collaborations to ensure mutual success.
- Regulatory Compliance: Given the sensitive nature of the biotech industry, adherence to regulatory mandates is paramount. A procurement process is required to ensure that all materials and equipment meet relevant regulatory criteria regarding safety, quality, and ethical considerations.
- Cost Optimization: Biotech companies often operate within a competitive landscape, warranting prudent cost management strategies. Procurement is pivotal in optimizing expenditures while safeguarding the accessibility and quality of essential resources.
Key Features of Biotech Procurement Software
Let’s look at some common features you need in procurement software focussed on Biotecth. We have used ProcureDesk as an example, but this is a generic list of features that any good procurement software must support.
A purchase requisition is the first step in the procurement process. This step is often time-consuming for scientists for the following reasons:
- Purchasing includes purchasing from different websites.
- A huge list of items is available, so keeping track of what you purchase most often is challenging.
- After purchasing, you need to track the status of the purchase orders and follow up with vendors to ensure delivery. Many times, the orders are back-ordered.
The purchase requisition module makes ordering purchase lab supplies and research material easier by making it simple to connect to your favorite vendors.
Instead of going to different vendor’s websites to place the orders. You can access the vendor punchout’s within the procurement software, making purchasing easier.
Let’s say you want to purchase a scale from Fisher Scientific. All you have to do is go to your procurement software, click on the vendor name, and the system automatically routes you to a vendor’s website.
The vendor’s website is populated with your pricing. No need to remember messy usernames and passwords for different vendor accounts. It’s all managed seamlessly for you.
Here is an example of a punchout shopping cart:
Once you are done purchase, click on return the shopping cart to the purchasing system, and you are routed back to your procurement system.
Here is how it looks in the procurement system:
That’s all you need to do. Then submit a request for approval, and the system does the rest for you. Once the order request is approved, the system places the purchase order with the vendor and informs you once the vendor accepts the vendor.
It’s that simple; no need for you to visit different vendors’ websites.
The procurement software makes it easier to get approvals for your purchase. Instead of following up continuously with managers for approval, the system does the approval routing for you.
There is no need to remember your purchasing policy and when you need approvals from whom.
The approval workflow can be easily configured in the system so that the system can route the request for approvals based on your defined spending policy.
The managers can easily access their pending approval tasks through the procurement application on a mobile app.
There is no need to search the emails to find the appropriate document to approve.
Here is what an approval dashboard looks like:
Budgeting and Cost Management
One of the concerns for finance teams is that they want employees to go over their defined budget.
When you go over budget, it is not good from a cashflow perspective, but also, if you are middle of raising the next round, it could put you in a tough spot.
With a procurement system, you can ensure that your teams don’t go over the assigned budget.
Here is a step to step process to ensure that:
- Set up a budget and assign access to the appropriate departments so that you can control who can use that budget.
- Set up rules for budget management, specifically – what happens when a team goes over budget? Here are a couple of options to consider:
- Let the user proceed if the over-budget is within a certain threshold. Let’s say 5% of the budget.
- Block the purchase so that the user can’t move forward.
- Send the purchase request for additional approvals to the finance team so that they can decide if it makes sense to move forward with the purchase.
And that’s how simple budget management is. Once you have set up the budget, the budget controls are in place – you are all set, and the system ensures that the user doesn’t go over budget.
The approvers can see the budgets in real-time before approving the purchase. With a procurement system like ProcureDesk, you can approve with confidence.
Here is an example of an approver view of the budget.
Purchase Order Management
A purchase order module automates the manual process of sending and tracking purchase orders with vendors.
With purchase order management, you do not need to track purchases in a spreadsheet. The system provides you with a nice dashboard where you can track the status of your purchase orders.
The system automatically generates the purchase orders, and based on the supplier preferences, the PO is issued to the vendor.
Here is an example of a purchase order that is generated in the system:
The system can email the purchase order to the vendor or use EDI(Electronic Data Interchange) methods for sending the purchase orders.
Purchase Order Tracking
Once you issue the purchase order, tracking the purchase order could be a tedious task. Has the vendor shipped the product, has the product been received, and so on?
These are the questions that any buyer needs to know to plan their work effectively.
Procurement software makes it easier to track this information.
Here are a couple of ways a procurement system can help:
- Request vendors to acknowledge the purchase order so that you know if the vendor can meet the desired date.
- Keep track of the package in transit and send notifications when the product is received.
- Allow an easy way to create receipts to track what is received from the vendor and against which purchase order.
ProcureDesk makes it super easy to track purchase orders.
With an inbuilt order acknowledgment process, you can request that the vendors acknowledge the purchase order.
The system also has an inbuilt tracking process to help track the purchase orders in transit.
Once the product is delivered, you automatically receive an email notification from the system.
You can then easily create a receipt from your mobile device and confirm the quantity you just received.
That’s all you need for order tracking.
The purchase order process is great for increasing the efficiency of your lab team, but it could cause problems for your Accounts payable team.
Once the Accounts Payable (AP) team receives the invoice; they need to match it with the purchase order, confirm that it has been delivered, and then process the invoice for matching.
This might not be an issue if you only have a few invoices to process, but when processing hundreds of invoices, this could become a bottleneck for paying vendors on time.
That is why you need an automated invoice-matching process.
With an automated invoice matching process, the procurement system matches the invoices with the purchase order and receipt, also called the 3-way match process.
Here is what is matched in a 3-way matching process:
- The quantity invoiced vs. quantity received and ordered.
- The price is listed on the purchase order and invoice. This ensures you only pay what you agreed on in the purchase order.
Any exception to this process needs to be routed for approval, and appropriate teams must review the invoice before it can be processed.
Here is an example of a matching exception that you see in ProcureDesk.
Biotech and pharma companies have stringent requirements for vendor onboarding. If you are producing drugs, you must comply with Current Good Manufacturing Practice (CGMP) Regulations.
This could be tedious to manage the onboarding process and keep track of all the supporting documents from the vendors.
Procurement software can help manage vendors effectively and help track all the supporting documentation.
A well-defined vendor management process looks like this:
- The request for a new vendor can be made directly through the procurement system. The request is then routed for approval to the appropriate person.
- Once the request is approved, the vendor is created in the accounting system.
- All related documents can be stored in the procurement system along with the expiration dates. This allows you to request new documents when the old documents expire.
Here is an example of how a vendor profile looks in ProcureDesk:
You are not at your desk always, and it is cumbersome always to open a browser to perform an activity.
Let’s say you just received a package of lab supplies. Open the browser and create a receipt if you have a manual process or web-based application.
Now imagine instead of doing that, you can open the phone app, click a picture of the packaging slip, and you are done.
That is how easy receipting can be when you use a procurement system that has a mobile app.
Another issue is with purchase approvals. People need to find that email, open the purchase request, and approve. I do not know about you, but most busy executives get 100+ emails daily. Now you can imagine how painful it is to comb through all emails to find the approval email. No wonder email approvals take longer as compared to mobile approvals.
In contrast to that, an experience where you can easily see all approval requests in a single dashboard and approve all requests.
A mobile application makes the approval process faster, reducing approval cycle time. Here is an example of a mobile app:
You might have a contract with CRO(Contract Research Organization) or a vendor for delivering lab supplies; where do you store them?
Is it someone’s inbox or shared folder that half of your team can’t access?
Do you always struggle with finding the appropriate contract?
Are your contracts getting auto-renewed for services that you don’t need anymore?
If you are dealing with any of these issues, a contract management system can help solve this issue.
A contract management system helps with the following:
- Store all contracts in a single repository that your team can easily access.
- Automatically get alerts for contracts expiring so that you can take appropriate action.
- Track spending against contracts so you can easily see how you meet your contractual obligations.
Procurement software can help you organize your contracts and ensure that you meet your contractual obligations.
Here is an example of a contract in ProcureDesk:
Are you concerned about duplicate purchase orders?
Do you have excess stock of regular lab supplies?
Do you have items that are expiring and that you are unable to use?
If you answer yes to these questions, an inventory management tool can help solve these problems.
An inventory management system can track your inventory and usage information to maintain optimal inventory levels.
Here is an example of an inventory snapshot:
You can see the details of what you have on hand and the inventory across all locations. The system automatically updates the on-hand inventory when an item is received.
You can also transfer inventory across different locations.
When using the inventory, you can create a release to use the inventory or manually update the onhand inventory.
Reporting is a critical feature of Biotech procurement software. CSO (Chief Scientific Officer) often wants to understand the cost of different experiments you run.
If you don’t have a standard process for reporting on Spending, it becomes cumbersome to find these answers through past PO spend data.
With ProcureDesk, the centralized dashboard and reporting provide you with all the information you need to make informed decisions about future drug development and experiments.
A single dashboard answers the following questions:
- What are we purchasing?
- Who are the top suppliers?
- Who is making these purchases?
- How the cost is allocated to different departments.
- How are we doing on budget vs consumption?
Here is an example of a Spend dashboard providing this information.
Integration with the Accounting System
If your procurement software doesn’t integrate with your accounting system, it is difficult to recreate the data manually. Imagine entering an invoice in procurement software and entering the same information in your accounting. That increases work, not decrease!
ProcurDesk integrates with multiple accounting systems like QuickBooks Online and Desktop, Xero, Oracle NetSuite, Sage Intacct, Microsoft Business Dynamics, and many more.
With integration, you can expect the following:
- Master data is automatically imported into your procurement system. For example – a chart of accounts, suppliers, payment terms, classes, dimensions, etc.
- The purchase order and invoice data are automatically sent to the accounting system so that you don’t have to manually recreate the data in your accounting system.
While evaluating the integration, consider the effort required from your end to support that integration.
Benefits Of Implementing Biotech Procurement Software
Implementing a procurement system can result in many benefits, but here are the top 3 benefits you can expect from automating your procurement process:
Imagine a procurement process that seamlessly aligns with the fast-paced nature of biotech operations. Biotech Procurement Software does just that. Streamlining and automating various procurement tasks liberates valuable time and resources for your scientists and lab managers. The software optimizes workflows from requisition to approval and purchase order generation, enabling your staff to focus on strategic initiatives rather than getting bogged down in administrative tasks. With an intuitive user interface, tracking and managing procurement requests become more straightforward, fostering collaboration and minimizing delays.
Reduced Errors And Stockouts:
In the world of biotech, precision is paramount. Mistakes can be costly, both financially and in terms of research timelines. Biotech Procurement Software acts as a safety net against errors resulting from manual processes. Through automated order creation and approval workflows, the risk of data entry errors and miscommunications plummets. Furthermore, the software provides real-time visibility into inventory levels, ensuring you’re well-equipped to prevent stockouts and keep your operations running smoothly. By maintaining accurate stock data and optimizing replenishment, you can bid farewell to the headache of last-minute shortages disrupting critical projects.
Controllers and CFOs are perpetually seeking ways to optimize costs without compromising quality. Biotech Procurement Software stands as an ally in this endeavor. It facilitates better Spend visibility, enabling you to identify cost-saving opportunities, negotiate favorable terms with suppliers, and make informed decisions. Through data-driven insights, you can identify trends, analyze supplier performance, and strategically source materials at the best possible prices. This software also helps minimize maverick spending, enforce compliance with procurement policies, and ultimately leads to a healthier bottom line.
Implementing Biotech Procurement Software – Key challenges And considerations
Let’s delve into the key challenges you must consider for a successful implementation.
Gaining the support of controllers and CFOs in biotech companies is pivotal. While procurement software offers an array of benefits, it requires investment. Communicate the advantages with clarity – from cost savings to improved decision-making. Present a compelling case that aligns the software with the company’s long-term strategy. Show them the potential return on investment and how it aligns with financial goals. Their buy-in will be the driving force behind a successful implementation.
Ease of Use:
No matter how sophisticated the technology is, it can lead to frustration and hinder adoption if it isn’t user-friendly. Scientists need software that streamlines purchasing processes without adding complexity. Look for solutions that offer intuitive interfaces and customizable features. This way, your team can swiftly adapt to the software without extensive training. The key to a smooth transition is procurement software that simplifies rather than complicates.
Mobile App Support:
In today’s business landscape, being tied to a desk is a thing of the past. Your team is on the move, and so should your procurement software. Ensure the specialized software offers robust mobile app support for creating and approving purchase requests. This allows decision-makers to review and approve purchases on the go, maintaining the flow of operations even when they’re out of the office. Mobile accessibility empowers real-time decision-making, keeping the procurement process dynamic.
Punchout Catalog Support:
Biotech procurement often involves specialized equipment and materials. Compatibility with punchout catalogs is crucial as it streamlines purchasing these unique items. Your team needs a cloud-based software solution that seamlessly integrates with these catalogs, reducing the complexity of procurement and ensuring accurate ordering of specialized supplies. A comprehensive cloud-based procurement software should cater to this requirement.
Ongoing Support And Training:
Implementation isn’t a one-time event; it’s an ongoing process. After the initial setup, end users require continuous support and training to maximize the software’s potential. Choose a vendor that provides comprehensive training resources and responsive support. Address roadblocks promptly and ensure your team remains updated on new features and improvements. This consistent support fosters confidence in the software and drives its adoption.
In the dynamic landscape of biotech and life sciences filled with digital transformation, efficient procurement processes are vital. Biotech EProcurement Software offers a solution to the challenges faced by lab and AP managers. This software streamlines operations by addressing pain points like multi-site ordering, Contract Lifecycle Management, tracking in spreadsheets, and invoice processing.
Biotech Procurement Software empowers labs and AP managers to optimize purchasing processes, reduce errors, and achieve cost savings. It transforms procurement into a strategic driver of success, facilitating better decisions and efficient resource utilization.