By: Tara Rockers, Business Development Manager of Life Sciences at Twelve Consulting Group
I recently had the opportunity to co-host a webinar with Pharosity and Anaplan, where we revealed how to design and build effective Gross to Net models in Anaplan based on our collective expertise. Our webinar focused on the key elements to consider when developing a GTN solution in Anaplan, as well as a discussion with Bayer on critical success factors to prioritize when embarking on a GTN forecasting initiative.
Key highlights from the GTN webinar included:
Overview of the Gross to Net Ecosystem and the impact beyond just GTN
Expert insights on what to expect throughout an Anaplan implementation project and how to best prepare for a streamlined project that delivers the intended value
Understanding the catalysts in your GTN Ecosystem that drive change
The Gross to Net (GTN) Ecosystem
The two core functions of the Gross to Net ecosystem typically include GTN Channel Forecasting (contract-level, bottom-up forecasting by market channel) and Accruals & Reserves (accruals & reserves reconciled and managed based on forecasts and actuals).
Additionally, there are business functions within the enterprise that are critical to enabling the two core functions or are critical customers of the following business functions:
WAC Price Management - common WAC price schedule
Demand Forecasting - demand & ex-factory forecast, sometimes to the segment level
Pre-Deal Assessment - analytics and modeling of deals for assessment & approval prior to contract execution
Post-Deal Performance - continuously monitor actual contract performance vs. pre-deal and forecast projections
While some may assume these functions would look similar across manufacturers, the truth is quite the opposite. Our observations across the industry indicate that all of these business functions can look distinctly different based on the product or product portfolios the customer intends to enable.
Another key observation that is important to understand is that all 6 functions are interconnected. For example with GTN Channel Forecasting, if we’re doing bottoms-up forecasting, we can provide better accrual rates for our GTN Accrual & Reserve Management.
The contract-level forecasts can be input and made available in our Pre-Deal Assessment realm. In this case, if we have renewals coming up, we’re not starting from scratch — there is an understanding of how the contract has been forecasted most recently and we can use this as a first step in Pre-Deal Assessment.
In another linkage example for Post-Deal Performance Monitoring, there is a need to compare actuals to the original Pre-Deal modeling. There may even be a desire to compare actuals against contract-level forecasting for each Gross to Net Channel Forecasting cycle. Having the GTN Channel Forecasting pumping into the Post-Deal as well Pre-Deal models is almost equally important.
One of the major benefits of a Connected Planning platform is that all of the business function linkages do not require their own unique interfaces or input templates. Instead, there are models within Anaplan pulling together data from different business functions based on distinct product attributes and business rules.
“This capability allows you to minimize the number of point-to-point interfaces or emailing of spreadsheets that are inefficient and archaic,” — Mike McCarthy, Partner at Pharosity.
Our experience with Anaplan deployments in the Life Sciences industry has shown several benefits, with time savings and efficiency among the most evident. In Anaplan, you can bring in data once and make it available to multiple models, eliminating the hunter-gatherer dilemma that many end-users encounter — saving time with data integration. Once the data is in Anaplan, models read from each other and/or a centralized data source.
Improved What-if Analysis
When business functions are integrated and accessed from one platform, users can experience immediate streamlining benefits.
“Emailing is no longer necessary and instead, those outputs from one business function serve as inputs to another. As a result, what-if analyses can be seen in a matter of minutes or hours versus days or weeks.” — Michael McCarthy, Pharosity
Forecasting and Accrual Accuracy
Following an Anaplan implementation, analysts performing the Gross to Net Channel Forecasting will immediately see improved data granularity and methodology, plus more accurate forecasting. Users can pick from a host of methodologies to find the best fit, which provides a better bottom-up channel forecast and input for accrual rates. As a result, analysts observe a decrease in absolute value of accrual true-ups per brand per channel per quarter — the more accurate the accruals, the smaller the true-ups get.
Critical Success Factors
During this webinar, we had the opportunity to discuss with Eckart Beuttenmueller, Director of GTN Optimization at Bayer Pharmaceuticals, where his team started, how he initially approached the business case, and how his team was able to deploy Anaplan at scale to help streamline Bayer’s GTN operations. We touched on several critical success factors, including:
1. A laser focus on data integration and availability early in the project
Modeling at an intricate level and doing detailed analysis requires very granular views of your data. It’s imperative to understand what your source systems are capable of providing in order to answer the questions being asked. One of the single most important pieces early on in the project was having a good understanding of the data quality and establishing who will own the central data management function.
2. Hands-on engagement of the client team throughout the model build
When implementing new technology, it can be challenging to manage the change and drive user adoption. To help mitigate this, Bayer planned for extensive user acceptance testing throughout the project and involved key users in this testing at each stage.
"It helps us catch things that are more difficult to visualize. It’s one thing to design the system and process, but when our clients get their hands on it and see exactly how different components of the modeling process interact with each other — it can illuminate processes that aren’t as efficient as they could be" — Brian Barbash, Partner at Pharosity
This involvement helps to refine and rethink processes and gets users familiar with the Anaplan technology, leading to increased user adoption and satisfaction once the system goes live.
3. Justifying the internal investment with a paid proof of concept
Making the business case internally to move from one system, especially a legacy EPM platform, to a system like Anaplan can be a difficult obstacle to overcome. In Bayer’s case, the Proof Of Concept (POC) went a long way to show Anaplan’s functionality and flexibility, which fit the needs of the business. It was important to take the time to understand the pain points of their existing system and show them how Anaplan can solve them. The real benefit, and what ultimately won people over in making the investment, was the additional capabilities, such as increased forecast accuracy and driving growth through better decision-making.
Watch the Webinar Replay
Interested in watching the full webinar replay? Want to see it in action with a pre-recorded demo? Both are available upon request — reach out to Tara Rockers, our Life Sciences Business Development Manager.