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Why Technology & Life Sciences Companies Should Automate Their Internal Systems for Financial Planning and Revenue Growth

Apr 25, 2024


In an increasingly competitive and fast-faced environment, technology and life sciences companies, if they haven’t already done so, should consider automating their internal systems for financial planning and analysis and more accurate data, and ultimately be better positioned for future growth.

I sat down with Marc Moskowitz, a partner in our Chicago office who is focused on CFO advisory, enterprise planning and business analytics to discuss why technology and life sciences companies should automate internal systems to position themselves for future success. He addressed the key components all companies should focus on, along with the key differences between revenue forecasting for the technology and life sciences industries and finally, the use cases for outsourcing the automation function to a third party.

Process, Data and People

The key components that all technology and life sciences companies should consider when automating their internal systems, regardless of whether they are at the pre-revenue or revenue stage, revolve around process, data, and people, all of which will prepare them for future growth.

“As technology and life sciences companies grow and scale, automation will foster more data accuracy and ultimately empower executives to make decisions faster,” Moskowitz said. 

Regarding process, if they are outgrowing a small business accounting system such as QuickBooks, they should consider evaluating a process-centric, best-in-class cloud accounting solution such as Sage Intacct. For data, when it relates to budgeting, planning and forecasting, if they are still using Microsoft Excel spreadsheets and are inundated with data that may be prone to error or lack of collaboration, then they should migrate to a more systematic technology stack such as Workday Adaptive Planning. And finally, they have to determine whether they have the right people internally in place to collect and analyze the data that’s automated.

“One of the most important capabilities is everybody making decisions and moving to the same beat,” Marc said. “When finance teams are siloed or there are disconnected reporting systems, they will have different results on how they are collecting data. Having automated systems so that everyone in the organization uses and references the same data can impact decisions that drive revenue.”

Revenue Planning Differences Between Technology and Life Sciences Companies

Revenue planning is the key differentiator between technology and life sciences companies. For example, in the technology industry, SaaS companies have a different way of forecasting their revenue compared to companies selling medical devices.  

A software and technology organization may plan future revenue growth based upon:

  • Subscription waterfalls, forecasting new and renewal annual contract value/annual recurring revenue (ACV/ARR), retention and churn by segment.
  • Net ARR, upgrades, downgrades and churn.
  • Sales representative productivity, planned sales representative capacity, quota coverage and territories.
  • Cohort modeling – model subscriber cohorts, retention, lead conversion and contract ramping.
  • Professional services – planned books, backlog hours, billing rates and utilization by role.
  • ASC 606 revenue and commission amortization – model complex revenue and commission amortization based upon contract duration.

Life sciences companies may plan future revenue growth based on the following:  

  • Pre-Revenue clinical trials planning: planning detailed trial-level spending to provide visibility into expense over the life of a trial; planning clinical trial milestones and expenses to manage cash.
  • Gross-to-Net Revenue Modeling – planning product life cycles, retail pipeline, rebates, accrual and chargebacks.

Marc also specified that in the therapeutics space, automating revenue planning and headcount planning have become even more crucial as many companies have reduced headcount, prompting companies do more without adding people to their finance team.  Technology and life science organizations must have the ability to create unlimited scenario planning to establish best case, base case and worst case, allowing them to be agile to pivot as micro- and macro-economic conditions change.

“Having those best practices around revenue planning is key; setting these companies up to be able to plan for the future when they scale,” he said.  “In addition, organizations should be leveraging AI algorithms to make predictions, forecast trends and identify anomalies.”

The various sets of data that technology and life sciences companies automate are other key differentiators. The solutions should be able to collect, plan, and report data across a variety of dimensions including geography, products, projects, customers and channels.  The organization should be able to seamlessly integrate this data from their ERP, CRM, and data lakes and warehouses.

Use Cases for Technology and Life Sciences Companies to Outsource Their Automation Function

If technology and life sciences companies don’t have a dedicated finance team to spearhead automating their internal systems to anticipate future growth, then they should consider partnering with a third-party firm who can assist with this function.

“By outsourcing the work to an advisory firm who has industry expertise in working with this space to transform their finance function, allowing them to report faster, analyze better and stay abreast of trends and changes -- all that will impact their bottom line,” Marc said.


To remain competitive and prepared for future growth, technology and life sciences companies should consider automating their internal systems for their revenue planning -- and if they don’t have dedicated personnel to spearhead this effort, then they should consider partnering with a third party to assist them with this process.

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Elana Margulies-Snyderman

Elana Margulies-Snyderman is an investment industry reporter and writer who develops articles, opinion pieces and original research designed to help illuminate the most challenging issues confronting fund managers and executives.

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