Clinical Research Focus: Out of Scope Performance Audit
On the 3rd Wednesday of each month I discuss topics most relevant to clinical research services and technology providers.
Auditing your out of scope process is one of those handful of initiatives that can drive both early and long-lasting ROI- this year (even this quarter)- if you start now and action it properly.
Specific to clinical research providers, the combination of long contract durations and high complexity and unpredictability of clinical trials means most contracts require multiple changes over their lifecycle. Managing scope change is a constant consideration on these contracts.
Most providers struggle with the entire process chain involved- identifying and pricing out the scope change, communicating it to the customer, reaching verbal agreement, converting that verbal agreement into a signed amendment, and even billing the resulting changes.
The ROI for this year is compelling, because capturing scope change this year that otherwise slips into the next (or never gets captures) provides a host of financial benefits, including:
Increased revenue that often drops into gross and net profit on a dollar for dollar basis
Increased bookings and backlog performance and forecasting
Improved resourcing transparency
Below are some best practices for conducting such an audit to maximize both types of ROI, in approximate chronological order:
Designate an executive sponsor with accountability and decision making authority.
Sample size should combine your largest revenue projects with a wide sampling of smaller projects.
Review documents (contracts, SOPs, forms, etc.) independently of any comments, excuses, or hearsay received while collecting those documents.
Action obvious project specific issues with large dollar impacts along the way (early ROI).
Meet with a wide range of staff across multiple roles involved in the process, making clear the goal is improvement, not blame.
Discuss recommendations with executive sponsor and top stakeholders, with a timeline and process for decision making and implementation of those decisions.
Ensure broad based rollout and training is provided as quickly as possible (you do not have to wait for updated SOPs to do this).
Track ROI monthly, report and celebrate your success and struggles at regular intervals.
The initiative itself should take no more than 45 days if you’re focused. Early ROI comes from actioning the missing scope change you will find on your largest projects. Long-lasting ROI comes from the process improvement itself.
Note- I do not include “interview your customers” or “talk to third party suppliers” in this audit process, because 1) most companies will find the most valuable improvement opportunities are within their own direct control, and 2) involving external parties will delay the process and provide convenient reasons to shift blame externally.