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Drug contractor transforms revenue forecasting with Changepoint software

Changepoint PSA improves revenue forecasting and time reporting, but can be complex and challenging for some users.

Patheon, a service provider to the global pharmaceutical industry, is deploying Changepoint professional services automation (PSA) software to significantly improve revenue forecasting.

Based in Durham, N.C., Patheon uses the on-premises PSA software to manage  its contract  development and commercial manufacturing services. It selected Changepoint software over two other final bidders, Planview and NetSuite.

Patheon uses the PSA software at nine locations in Canada, the U.S. and Europe and has plans to deploy it at other sites following its merger with DSM Pharmaceutical Products. Patheon has more than 8,000 employees.

Temoor Saeed, manager of global pharmaceutical development services (PDS) business processes for Patheon, said the software from Changepoint, based in Richmond Hill, Ontario, is "a very powerful tool," particularly as Patheon integrates new sites after acquisitions. Last year, for example, when Patheon purchased Banner Pharmacaps, now Banner Life Sciences, it deployed Changepoint in Banner's offices in the Netherlands and North Carolina.

 "It covers a wide range of capabilities and it certainly has helped us in our transformation journey," he said in an interview. "With Changepoint, forecasting of revenues and demand is much more precise and the effectiveness of forecasting is easier to determine." While Patheon had forecasting capabilities in Microsoft Project, the software that Changpoint replaced, it was not easy to get a global view, according to Saeed.

Changepoint also improved Patheon's ability to track the time spent by employees on a particular job and compare that time to initial bids for the job, he said.

Changepoint PSA is harmonizing processes such as tracking of deliverables, project issues and risk reporting, milestone management, billing, revenue forecasting, revenue recognition, time reporting and capacity planning, he said.

"All of these processes have been harmonized globally and are driven by data going in and coming out of Changepoint." It also integrates well with the company's SAP ERP.

However, the Changepoint PSA software presents some challenges, mainly user adoption, for which rates can vary, he said. So, to help improve adoption, Patheon established a comprehensive training program and a support structure, he said in a followup email.

Due to the importance of ensuring that the data in Changepoint is reliable, the initial training emphasizes data entry and compliance with guidelines for using the system.

Adoption of advanced features and reporting is higher at sites that embed Changepoint data and reports into business processes such as medium-range forecasting or calculating metrics for on-time delivery, according to Saeed. "Where there is a regular discussion around system data, then this reinforces data accuracy and user adoption," he wrote.

Getting a handle on project data

With Changepoint, Patheon is dealing with a lot more data than with Microsoft Project and that makes data organization more complex, yet more useful, according to Saeed.

 "Changepoint obviously was something new for us," he said. "The data is organized quite a bit differently from Microsoft Project."

Changepoint, for example, reports employees' time at the task level, instead of just on projects, requiring leaders to understand some new metrics on performance indicators in managing teams. At some European sites, however, adoption went well because users were already familiar with that detailed level of time recording, Saeed said.

Changepoint is more robust than Microsoft Project and provides more information, but it is also more complex to use, which was expected.

"It's quite layered. Sometimes, to get down to the data that the project managers need, it takes a few more clicks than what you might expect."

While necessary to prevent errors, validation rules also can slow use, he added. A mechanism inside Changepoint sometimes blocks a user from recording time on a task if a project manager is editing the language in the task at the time.

 In contrast, Microsoft Project limited use of files to one person at a time and was often unreliable, he said. The company also often struggled with corrupt files and errors on the Microsoft system.

If companies are considering Changepoint, he said it is important to design a top-notch training program, especially to support a large base of users across the globe.

Saeed leads a core team that runs Changepoint and trains "super users" in each function for each site. The super users then hold their own training sessions at their sites. The core team also holds forums to receive feedback from users and suggestions for improvements.

Overall, Changepoint is worthwhile for Patheon and helped solve key problems, especially global revenue forecasting, Saeed said.  The company also benefits from a major upgrade in time reporting on certain tasks such as developing analytical methods and manufacturing processes, routine testing and manufacturing a drug. Changepoint allows the company to compare the workload to forecasts and make decisions about how to manage employees and juggle plant capacities, he said.

The company uses the Changepoint data to determine how it performed on assigning workers to specific tasks, which allows sharing of best practices across sites to eliminate redundancies and become as efficient as possible.

"There is a variety of information we can gather, from time reporting down to the task level, which has been very, very valuable to us," Saeed said.

The data from Changepoint also helps improve profits.

"When it comes down to project profitability, because of the time recording piece, now we have the data that is telling us how we are doing," he said. "If we've gone over our budgeted hours, now what do we do? Do we go back to the client and do a change request for additional hours? Or do we try to take a look and see what is going on with what we estimated and make changes for future quotations? It gives us a lot more information to work with."

Next Steps

Learn more about project management

Read a case study about PSA on FinancialForce.com

Understand the benefits of financial modeling

Dig Deeper on Financial analytics and reporting

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