Model N, Inc. (NYSE: MODN), the leader in revenue optimization and
compliance, published its sixth annual State of Revenue Report,
revealing life sciences and high-tech executives’ top business
priorities and challenges. The company’s 2024 report named process
efficiency and cost-saving measures as priorities for executives,
with greater emphasis placed on advanced analytics and artificial
intelligence (AI) to achieve these priorities. For a second year in
a row, supply chain disruption emerged as one of the top obstacles
to innovation across all industries.
Other innovation hurdles include changing and unpredictable
customer demand, fluctuating materials availability, constant
regulatory changes, and staffing challenges. In terms of process
efficiencies, three-quarters of executives say their current
approach to revenue optimization needs improvement, and survey
responses showed plans to bolster revenue operations by
incorporating advanced analytics (68%), AI (59%), and robotic
process automation (46%).
“AI and analytics are ushering in a new era of revenue
optimization and compliance across the life sciences and high-tech
industries,” said Rehmann Rayani, Model N Chief Strategy and
Marketing Officer. “Outdated, manual, and/or patchwork sales and
revenue processes can undermine profitability for even the most
innovative companies, and new technologies will unlock data-driven
insights that manufacturers need to maximize revenue and remain
compliant.”
Sixty percent of executives do not consider their organizations
very data-driven today, yet nearly every executive surveyed uses
external data resources from a variety of sources to inform
business decisions. To augment these data sources, 94% of
executives are open to anonymously contributing data to create
industry benchmarks that can help inform revenue strategy.
Life Sciences Executives Identify Compliance and
Communications ChallengesBeyond persistent macroeconomic
headwinds, 2024 survey results highlighted several
industry-specific challenges. Among pharmaceutical manufacturers,
most executives are worried about the influence of regulations on
future revenue. Half of the leaders surveyed are bracing for a
significant revenue impact from price negotiations with Medicare
under the Inflation Reduction Act, more than double the results
from the 2023 survey.
In addition, 94% of pharmaceutical executives reported
challenges with formulary validation – the process by which
manufacturers verify that payers are meeting contractual agreements
with respect to formulary placement. Manual audits (49%) and
limited access to formulary data (48%) were cited as top challenges
to assuring compliance.
From revenue loss to government penalties, the consequences of
poor customer and membership data are many. Yet, only half of
executives characterize their membership management process as
highly effective.
For medical technology executives, communication between field
sales and operations teams is a top concern, with just 38%
reporting excellent communication. Improvements in this area can
immediately streamline deal execution and boost profitability. The
medtech industry continues to adjust to new financing and
subscription models for capital equipment and software, evolving
from one-time to recurring revenue. Nearly 60% of executives
reported difficulties with managing such models.
Channel Data Remains an Untapped Opportunity for High-Tech
ManufacturersWhile channel sales data can give manufacturers
valuable insights into changing market conditions, only 27% of
companies consistently use this data to inform pricing decisions.
Greater insight into channel data helps execute more strategic
sales pivots faster in response to changing market conditions. In
addition, channel data helps manufacturers guard against gray
market sales. These unauthorized sales put manufacturers at risk
with regulators and law enforcement agencies, and most executives
surveyed reported concerns ranging from brand reputation damage to
financial and legal liability.
“Life sciences and high-tech manufacturers rely on complex,
multi-stage revenue processes. Failing to consistently monitor,
analyze, and optimize these processes is a recipe for increased
risk,” said Suresh Kannan, Model N Chief Product Officer. “This
year’s State of Revenue Report underscores how existing business
practices must evolve and harness the power of data and advanced
analytics to overcome industry challenges, optimize revenue, and
meet critical business needs.”
For more industry-specific statistics and commentary about
revenue optimization in life sciences and high tech, download the
full 2024 State of Revenue Report.
More About the 2024 State of Revenue ReportThis report,
commissioned by Model N with research conducted by Dimensional
Research, is based on the results of a survey of more than 300
C-suite executives directly responsible for revenue management at
large pharmaceutical, medical technology, high-tech manufacturing,
or semiconductor companies. Certain questions were repeated from
similar studies in 2020-2023 to enable trend analysis.
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About Model NModel N is the leader in revenue
optimization and compliance for pharmaceutical, medtech, and
high-tech innovators. Our intelligent platform powers your digital
transformation with integrated technology, data, analytics, and
expert services that deliver deep insight and control.
Our integrated cloud solution is proven to automate pricing,
incentive, and contract decisions to scale business profitably and
grow revenue. Model N is trusted across more than 120 countries by
the world’s leading pharmaceutical, medical technology,
semiconductor, and high-tech companies, including Johnson &
Johnson, AstraZeneca, Stryker, Seagate Technology, Broadcom, and
Microchip Technology. For more information, visit
www.modeln.com.
About Dimensional ResearchDimensional Research provides
practical market research for technology companies. We partner with
our clients to deliver actionable information that reduces risks,
increases customer satisfaction, and grows the business. Our
researchers are experts in the applications, devices, and
infrastructure used by modern businesses and their customers.
- Model N State of Revenue Report 2024
Public Relations
BLASTmedia
modeln@blastmedia.com
Investor Relations
Market Street Partners
investorrelations@modeln.com
Model N (NYSE:MODN)
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