The Importance of Revenue Lifecycle Management for MedTech

As the new year begins, medical device leaders face evolving macro and sector-specific trends. These will amplify longstanding challenges and spawn new barriers to profitable growth.  

Forward-looking firms are revisiting their Revenue Lifecycle Management (RLM) approach to ensure they will operate on firm footing during 2024 and accelerate toward profitable growth.  

An Industry in Transition 

Medical device companies' margins are feeling pressure from a slowed economy, high-interest rates, constrained and unpredictable supply chains, and raw materials inflation.  

At the same time, their customers – payers and providers of medical services – are becoming increasingly cost-conscious. Traditional commercial constructs are scrutinized, and more buyers lean toward value-driven contracting approaches, such as price-per, value-based, or as-a-service models. 

Some medical device companies are expanding into omnichannel delivery, such as e-commerce, or exploring self-service options to optimize their cost-to-serve. Others are bundling capital items with software and services, transforming themselves into end-to-end solutions providers to secure more recurring revenue and better margins. 

Medical device companies also need to heed the rise of the "consumer patient." People no longer anticipate healthcare as a one-way, one-size-fits-all transaction; they want providers to develop and adopt more human-centric approaches, including personalized surgical techniques and follow-up care. Patients also expect healthcare to go where they go rather than receive episodic, contained healthcare experiences – a trend referred to as "care anywhere, everywhere." 

Then, there are ongoing advancements in digital healthcare and artificial intelligence. Innovations in this space fuel increased M&A activity and non-traditional deals and partnerships. Previously disparate medical sectors are coming together to develop and improve products and services across the entire care pathway.  

Against this backdrop, many medical device companies seek to reinvigorate their Revenue Lifecycle Management strategies.  

Correctly designed and deployed, intelligent RLM platforms unify and automate medical device companies' revenue-generating processes and connect data throughout the organization. This ultimately increases internal team speed, accuracy, and productivity, optimizes operational and financial performance, maximizes customer lifetime value, and positions organizations to outperform the market and their peers.  

What's Wrong with Traditional Revenue Lifecycle Management? 

The uncomfortable truth is that many medical device companies' current RLM systems leave much to be desired. Operational and data silos and legacy systems and operations obscure visibility and slow the speed of doing business, putting profitable revenue growth at risk. 

Let's take a moment to consider how sub-optimal and fragmented RLM operations introduce headaches at different levels within medical device organizations: 

Sales 

Lackluster RLM operations frustrate sales teams compiling quotes and contracts, particularly if they're applying clinical requirements to deliver highly customized solutions or need to set accurate price points for new devices. Implementing different pricing structures and accommodating variables such as equipment cost, maintenance, training, services, warranties, and discounts is time-consuming and complex.  

All this impacts deal velocity and wastes valuable time that is better spent on customers. 

Legal 

Without integrated RLM, legal teams responsible for negotiating and drafting contracts with GPOs, IDNs, hospitals, and insurance firms struggle to coordinate their efforts across multi-layered ecosystems and processes. A lack of functionality for quickly setting up new contract structures and leveraging them across different organizations and markets means they always have to start from scratch.  

Sub-standard compliance rigor and frequent errors and rework are other common pain points. 

Finance 

When a company's RLM systems are fragmented, finance teams find managing and fulfilling contracts difficult. Tracking and accurately calculating net revenue for deals with complex pricing structures is particularly challenging.  

Because data points are spread across legacy or siloed systems and spreadsheets or, worse still, "live in the heads" of multiple stakeholders, forecasting accurately and gaining consistent visibility of gross-to-net price performance is almost impossible. 

Customer Service 

Disconnected RLM systems hamper customer service leads' ability to renew and expand contracts and delay order processing time.  

In addition, legacy systems with basic functionality complicate managing contracts that involve recurring revenue, inflating the company's overall cost-to-serve. 

 As pressure rises on all sides of the business, the case for digital RLM transformation in the medical device industry becomes increasingly compelling. Consider these sobering statistics:  

Without a digitally transformed and integrated RLM system, medical device companies: 

• Spend less than 30% of their sales time on customer-facing activities 
• Lose 2–6% of their profits due to a lack of pricing control 
• Have a net promoter score of less than 15  

The New Face of Revenue Lifecycle Management 

Modern digital RLM solutions allow medical device companies to accelerate and simplify generating quotes and proposals for complex offerings. For example, it becomes quick and easy to prepare highly configured proposals for GPOs, IDNs, and hospitals covering a variety of devices, consumables, and services. Effective RLM simplifies generating quotes based on subscription or pay-per-use pricing or ones involving multi-site labs and multiple instruments and tests across several locations.  

The right RLM solution streamlines contract negotiation and execution through customized contract authoring and collaboration​, approval management, e-signatures, and obligations tracking and management.  

RLM automation gives finance teams what they need to manage and fulfill contracts, including complete visibility on gross-to-net profit. It also puts them back in full control of billing cycles, contract obligations monitoring, and more.   

Embedded renew and expand capabilities and automated cross/upsell suggestions eliminate much of the manual effort to build and sustain new and existing customer relationships. 

All stakeholders can access a single CRM platform for consolidated reporting and a 360-degree customer view. 

How Accenture and Conga are Reinventing RLM 

Accenture and Conga have joined forces to help medical device companies reinvent their revenue operations through effective Revenue Lifecycle Management. Combining Accenture's deep transformation experience with Conga's market-leading technology solutions, we deliver profitable growth while managing complexity at speed and scale. 

Medical device clients that have engaged with Accenture and Conga to manage their revenue across the full value chain have seen substantial positive results, including 3–5% higher deal margins, a 26% reduction in order processing times, a 23% increase in cross- and-upselling, 36% greater contract accuracy and compliance, and 60% more time spent on customer-facing activities, rather than administrative tasks. 

Our RLM solution leverages one unified data model that supports API integration with leading-up and downstream industry systems, such as IQVIA and Zilliant. It's also pre-integrated with Salesforce and AWS, and we have defined a clear roadmap for integration with other main cloud marketplaces, including Microsoft Azure, Google Cloud, and Alibaba Cloud, by 2024. 

Ready to recharge your Revenue Lifecycle Management engine? Contact us to learn how we can help you achieve profitable growth while managing complexity quickly and scale.