Life Sciences Summary: The 2022 Benchmark Report
11 Community-Powered KPIs for Best-in-Class Performance Across Procurement, Risk, Invoicing, Expenses, and Payments
The 2022 Life Sciences Business Spend Management (BSM) Benchmark Report has 11 powerful KPIs based on actual spend data from more than US$3 trillion in cumulative business spend.
Use these KPI's to identify key ways that you can optimize your spend practices and make smarter decisions.
Life sciences companies such as Abcellera Biologics, Bridge Bio, Evotec, Grupo Bios, Zymergen, and more use these KPIs to evaluate and improve:
- How efficient they manage transactions and processes
- How successfully they have digitized spend management activities
- How well they drive compliance and mitigate third-party risk
- The extent to which they optimize their spending to get the best rates and uncover the most savings opportunities
Thanks to Coupa, Karuna now has greater visibility into its business spend management and complete SOX compliance. Karuna's accounts payable workflows are now more streamlined and efficient, providing the organization with further transparency and centralized record keeping.
FAQ
What are some insights from the data collected to produce the Benchmark Report for Life Sciences organizations?
First, community members saved 6.3% on average. Traditional spend management approaches typically yield 2% to 3% in savings relative to overall spend. Top performers this year saved far more by applying BSM best practices.
Second, they were able to attain 15.4% diverse suppliers. As efforts around Environmental, Social, and Governance (ESG) grow, best-in-class companies currently have 15.4% of their total supplier base classified as diverse.
Third, it takes best performers in the Coupa community 6.5 business hours to approve expenses. With business travel and expenses (T&E) expected to rise, leading organizations took only 6.5 business hours to approve expense reports.
Another key metric is that community members identified more than $2 million for every billion dollars in spend as suspicious. Coupa's Community.ai intelligently analyzes business spend for potential fraud, user error, and process avoidance. The average buyer identified 0.2% of their overall spend in Coupa to be non-compliant.
Second, they were able to attain 15.4% diverse suppliers. As efforts around Environmental, Social, and Governance (ESG) grow, best-in-class companies currently have 15.4% of their total supplier base classified as diverse.
Third, it takes best performers in the Coupa community 6.5 business hours to approve expenses. With business travel and expenses (T&E) expected to rise, leading organizations took only 6.5 business hours to approve expense reports.
Another key metric is that community members identified more than $2 million for every billion dollars in spend as suspicious. Coupa's Community.ai intelligently analyzes business spend for potential fraud, user error, and process avoidance. The average buyer identified 0.2% of their overall spend in Coupa to be non-compliant.
What are the 11 KPI's that the Benchmark Report for Life Sciences provides?
Source-to-Contract:
1. Contract Management Cycle Time - the time between requesting a contract and the contract being signed
2. Structured Spend - the percentage of spend that goes through company-hosted and vendor-hosted catalogs (a.k.a. punch-outs)
3. On-Contract Spend - the percentage of spend put through pre-negotiated contracts to enable better prices and terms
Procurement:
4. Electronic PO Processing - the percentage of total purchase orders that are approved and received by suppliers electronically
5. Requisition-to-Order Cycle Time - the average time it takes to process purchase orders, from the initial requisition to the final, approved PO
and
Services Requisition-to-Order Cycle Time - the average time it takes to process POs related to services procurement, which often have more complex approval processes
Environmental, Social, and Governance (ESG):
6. Spend with Diverse Suppliers - how much of a company's total spend goes to suppliers classified as diverse across a range of categories established by governments around the world
Supplier and Third-Party Risk Management:
7. Supplier Information Management Cycle Time - the time it takes for suppliers to respond to digital requests to update their supplier information
Invoicing:
8. Electronic Invoice Processing - the percentage of invoices processed through electronic, highly automated means
9. First-Time Match Rate - the percentage of invoices that are two-way or three-way matched with POs and receiving documents without the need for exception handling
Expenses:
10. Expense Report Approval Cycle Time - the average time from when an expense report enters the system to the time that it's approved for payment
11. Expense Report Lines Within Policy - the percentage of lines that meet policy limits within expense reports
1. Contract Management Cycle Time - the time between requesting a contract and the contract being signed
2. Structured Spend - the percentage of spend that goes through company-hosted and vendor-hosted catalogs (a.k.a. punch-outs)
3. On-Contract Spend - the percentage of spend put through pre-negotiated contracts to enable better prices and terms
Procurement:
4. Electronic PO Processing - the percentage of total purchase orders that are approved and received by suppliers electronically
5. Requisition-to-Order Cycle Time - the average time it takes to process purchase orders, from the initial requisition to the final, approved PO
and
Services Requisition-to-Order Cycle Time - the average time it takes to process POs related to services procurement, which often have more complex approval processes
Environmental, Social, and Governance (ESG):
6. Spend with Diverse Suppliers - how much of a company's total spend goes to suppliers classified as diverse across a range of categories established by governments around the world
Supplier and Third-Party Risk Management:
7. Supplier Information Management Cycle Time - the time it takes for suppliers to respond to digital requests to update their supplier information
Invoicing:
8. Electronic Invoice Processing - the percentage of invoices processed through electronic, highly automated means
9. First-Time Match Rate - the percentage of invoices that are two-way or three-way matched with POs and receiving documents without the need for exception handling
Expenses:
10. Expense Report Approval Cycle Time - the average time from when an expense report enters the system to the time that it's approved for payment
11. Expense Report Lines Within Policy - the percentage of lines that meet policy limits within expense reports
Why is it important for life sciences organizations to focus on benchmarks in order to improve business processes?
The Life Sciences industry has shifted. The cost of capital has increased. For example, the government rebates, low interest rates, and high stock prices that Life Sciences companies were taking advantage of in 2021, are no longer an option. Access to capital is harder than ever and investors are demanding a return on previously invested funds.
Externally, inflation and escalating costs are forcing Life Sciences companies to re-evaluate and re-negotiate their spend. Finance and Procurement professionals have increased focus on implementing the fiscal controls to tighten spend.
The supply chain delays in 2021 have resulted in resulted in businesses struggling to balance inventory. This shift has resulted in an increased focus on collaboration between procurement, sourcing, supply chain planning, and business line managers.
Coupa helps life sciences companies maximize margins while mitigating supply chain risks by optimizing sourcing, planing, and purchasing to increase lab productivity and prioritize sustainable growth. Traditional Business Spend Management (BSM) benchmarks, which are based on self-reported survey information, provide a useful but incomplete picture.
This report is the industry’s only collection of benchmarks based entirely on hard data from real business spend transactions (a.k.a. community data). We gathered these data points through the power of Community.ai, an initiative that combines data-driven insights with human-to-human connections. By analyzing anonymized transactions from thousands of customers across the Coupa community, Community.ai is able to provide a deeper level of insight than with survey data alone.
Externally, inflation and escalating costs are forcing Life Sciences companies to re-evaluate and re-negotiate their spend. Finance and Procurement professionals have increased focus on implementing the fiscal controls to tighten spend.
The supply chain delays in 2021 have resulted in resulted in businesses struggling to balance inventory. This shift has resulted in an increased focus on collaboration between procurement, sourcing, supply chain planning, and business line managers.
Coupa helps life sciences companies maximize margins while mitigating supply chain risks by optimizing sourcing, planing, and purchasing to increase lab productivity and prioritize sustainable growth. Traditional Business Spend Management (BSM) benchmarks, which are based on self-reported survey information, provide a useful but incomplete picture.
This report is the industry’s only collection of benchmarks based entirely on hard data from real business spend transactions (a.k.a. community data). We gathered these data points through the power of Community.ai, an initiative that combines data-driven insights with human-to-human connections. By analyzing anonymized transactions from thousands of customers across the Coupa community, Community.ai is able to provide a deeper level of insight than with survey data alone.
