Model N, the leading provider of revenue optimization and compliance solutions, has released the results of its 5th annual State of Revenue Report. The report provides insights to help executives in life sciences and high-tech industries plan and implement strategies for boosting revenue and market share. All executives agreed that innovation is essential for business growth and ranked technology and digital transformation as the top priority for enhancing innovation in 2023. Executives also cited market challenges such as supply chain disruption (43%) and inflation (84%) that affect revenue optimization, compliance, and innovation.
The report, which was commissioned by Model N and conducted by Dimensional Research, is based on the results of a survey of over 300 C-Suite executives responsible for revenue management at significant pharmaceutical, medical technology, high-tech manufacturing, and semiconductor companies. To track trends, some questions were repeated from previous surveys conducted in 2020, 2021, and 2022.
"Our findings show that innovation continues to be critical to business success and while market conditions have an impact on that, technology, digitization, and the use of revenue optimization and compliance solutions present the biggest opportunities for continuous innovation," said Rehmann Rayani, Model N Chief Strategy, and Marketing Officer. "As organizations continue to navigate the current economic climate, the quality and efficiencies generated through technology investments are more important than ever."
The role of technology in optimizing revenue and ensuring compliance is increasingly crucial. For two consecutive years, supply chain disruption has been named the top factor affecting these strategies. 70% of executives acknowledge that poor revenue management practices, such as inaccurate pricing and quoting, resulting in billions of dollars of losses for their industry. To address this, executives are fully committed to implementing data-driven technology and utilizing commercial data solutions to enhance revenue management.
While general economic challenges persist, certain challenges specific to each industry have arisen. For the pharmaceutical sector, compliance issues like price transparency reporting and the 2022 Inflation Reduction Act are prevalent, with 97% of executives anticipating further regulatory changes.
On the other hand, high-tech and semiconductor industries face challenges in the supply chain and logistics realm, with 41% of respondents citing customer demand as a major concern. However, the passing of the 2022 CHIPS and Science Act has brought optimism to 98% of those surveyed. Additionally, 40% of executives predict the industry's challenges will be alleviated this year.
"Executives recognize that their current revenue management strategies are insufficient in addressing issues such as supply chain disruption, inflation, manufacturing capacity, and staffing shortages," said Suresh Kannan, Chief Product Officer at Model N. "This report highlights the need for comprehensive revenue management solutions that provide real-time information and improve operational efficiency."
In today’s ever-changing business environment, companies must stay ahead of the competition and remain agile in order to succeed. Executives are increasingly recognizing technology and digital transformation as the most effective way to foster innovation, boost productivity, and remain competitive. By embracing technology, companies are able to drive efficiency, reduce costs, and create value for customers.
Digital transformation also allows companies to stay ahead of the competition, by leveraging technology to increase efficiency, speed up innovation, and create new customer experiences. The first step to implementing a digital transformation is to identify areas of improvement. Companies need to understand their current process, identify areas of inefficiency, and identify technology solutions that can help to streamline and automate processes then must then develop a strategy to integrate the technology solutions into their existing systems and processes. This can include developing new applications, modifying existing designs, or building new infrastructure. Once the technology and digital transformation are complete, companies can focus on innovation.
Companies can utilize data to better understand customer needs and behaviors, and develop new products and services to meet customer needs while leveraging technology to develop new business models, reduce costs, and create competitive advantages. Finally, companies can take advantage of the data generated by their digital transformation to create new insights, develop smarter algorithms, and create predictive models to better serve customers and stay ahead of the competition.
