Life Sciences and High-Tech Executives Turn to Advanced Analytics and AI for Revenue Optimization, Model N Report Reveals

Model N, Inc. (NYSE: MODN), a leader in revenue optimization and compliance, has released its sixth annual State of Revenue Report, highlighting the key priorities and challenges faced by executives in the life sciences and high-tech industries. The 2024 report underscores the increasing focus on advanced analytics and artificial intelligence (AI) for revenue optimization, with process efficiency and cost-saving measures topping the list of priorities.

The report indicates that supply chain disruption remains a significant obstacle to innovation, echoing concerns across various industries. Executives cited changing customer demand, fluctuating materials availability, regulatory changes, and staffing challenges as additional hurdles to innovation.

According to the survey, 75% of executives believe their current revenue optimization approach needs improvement. Plans to enhance revenue operations include the incorporation of advanced analytics (68%), AI (59%), and robotic process automation (46%).

Rehmann Rayani, Model N Chief Strategy and Marketing Officer, commented, "AI and analytics are ushering in a new era of revenue optimization and compliance across the life sciences and high-tech industries. New technologies will unlock data-driven insights that manufacturers need to maximize revenue and remain compliant."

The report highlights that 60% of executives do not consider their organizations very data-driven at present. Despite this, nearly all surveyed executives use external data resources to inform business decisions. To further enhance data sources, 94% of executives are open to contributing anonymous data to create industry benchmarks.

Industry-specific challenges were identified, with pharmaceutical executives expressing concerns about the impact of regulations on future revenue. The Inflation Reduction Act's price negotiations with Medicare are anticipated to have a significant revenue impact, according to half of the surveyed pharmaceutical leaders.

Pharmaceutical executives also reported challenges related to formulary validation, with manual audits (49%) and limited access to formulary data (48%) identified as top compliance concerns.

In the medical technology sector, communication between field sales and operations teams emerged as a top concern, with only 38% reporting excellent communication. The industry is adapting to new financing and subscription models, with almost 60% of executives facing difficulties in managing such models.

For high-tech manufacturers, channel sales data remains an untapped opportunity, as only 27% consistently use this data to inform pricing decisions. Greater insight into channel data is seen as crucial for strategic sales pivots and guarding against unauthorized sales in the gray market.

Suresh Kannan, Model N Chief Product Officer, emphasized the need for businesses to evolve their practices and leverage data and advanced analytics to overcome industry challenges and optimize revenue.

For more detailed industry-specific statistics and insights, the full 2024 State of Revenue Report can be downloaded from Model N's website.