Sometimes, the solution that businesses need is hiding in plain sight. And sometimes, organizations hesitate or delay implementing that solution out of fear of risk or change—or because it seems easier to stick with the status quo.
But in cases like these, avoiding change can wind up costing businesses dramatically more in terms of lost opportunities, hidden costs, and decreased productivity. Whereas making a wise and targeted investment can pay off with unexpected dividends.
Here’s a simple analogy: Replacing an aging air conditioner can seem expensive, and sometimes homeowners feel like they can’t afford it. But once they replace their money-wasting, power-draining existing unit with a much more efficient one, they often discover that it saves them more energy costs than they wound up spending to purchase it. And by the end of the summer, they’ve come out ahead.
Contract administration in healthcare manufacturing is a prime example.
Losses can result when rebates and chargebacks aren’t tracked and analyzed accurately. When multiplied across catalogs of items, it isn’t hard to see how these losses – caused by discrepancies across channel partner systems – can quickly amount to hundreds of thousands of dollars for companies that aren’t paying attention.
Here are the most common reasons businesses don’t take more aggressive action to get contract administration challenges under control:
Most of these hesitations are rooted in what might be described as a “culture of complacency” — a default resistance to change that leads to settling for workable approaches when, in reality, they hamper efficiency and productivity while papering over financial losses.
The difficulty of quantifying these costs is part of what can inhibit organizations from acting.
Sometimes, these costs are invisible because the team members creating time-consuming workarounds in Excel are doing their best to rise to the occasion. But in reality, they’re losing valuable time and not able to make the best use of their talents and skills, which could be repurposed toward achieving new and more important goals.
These are common pain points, and many organizations struggle with them. The key to moving from a complacency mindset to an opportunity mindset often involves realizing that you’re not alone, and it’s not a problem that’s specific to your organization. This means that an experienced partner like ProfitOptics, with a track record of solving these challenges for other healthcare organizations, can help you navigate the right path.
There are immense payoffs that come from breaking free from complacency:
A significant psychological hurdle for many manufacturers in making a change is the fact that there’s an upfront expense involved in moving toward better contract admin systems, even though they’re more efficient and productive.
As an example, one large office supply company we worked with was surprised at the monthly expense of migrating to a new system. Upon deeper examination, it became clear that their current system was costing them hundreds of thousands of dollars each month due to inefficiencies and errors. Once that was understood, the idea of making the investment was much more appealing.
When your team members are freed from inefficient systems, it amounts to a virtual boost in your labor force without adding new hires. It’s almost like adding bonus employees to your team for free.
Imagine how much more they can do in a day, and what they can achieve when they can set their sights on stretch goals and blue-sky projects —and what kind of impact that can have on your bottom line.
When contract administration is automated, that translates into increased ROI in important ways. You reduce human error and contract disputes, which translates into not only efficiency gains and less resistance, but improved relationships with channel partners and customers.
Automation also provides your organization with better, more complete, and more up-to-the-minute data, which in turn enables more intelligent decision-making to improve profitability.
4. Collaborative dynamics pay off.
Although healthcare is a business, at its heart it depends on the shared goal of helping and healing patients. That common objective incentivizes healthcare organizations to collaborate, cooperate, and negotiate win-win solutions that benefit all participants.
If you’d like to know more about how ProfitOptics can help you boost ROI though more efficient contract administration, contact our team.
