Why simulation-based financial forecasting is the prescription for what’s next

The journey would carry the pharma company’s forecasting model from legacy systems to a flexible digital platform, letting planners across the organization use centralized data to generate their own models. Using the most forward-looking management technologies – including cloud-based data collection and simulation models – this organization was ready to fully modernize its research, manufacturing and marketing forecasting functions.

Leaning into its established trust in Ernst & Young LLP (EY) practitioners, executive leaders across several business units selected an experienced EY team who brought a combination of extensive technology acumen and understanding of the pharmaceutical business. A multidisciplinary approach was needed to align the company’s core business functions so that its scientific innovation, manufacturing and marketing teams could have a foundational platform to meet emerging public health needs.

The result is an integrated transformation across the forecasting process, including the technology foundation, operating structure, and forecasting model development capabilities.

“Companies like this spend billions on the scientific research that yield lifesaving medical discoveries,” says Raj Sharma, EY Americas Consulting Vice Chair. “But those resources are diminished in value when new developments don’t match up with public health needs, manufacturing capacity and marketing campaigns across the product life cycle. This forecasting solution brought together EY teams’ functional and technical experience with the client’s in-house digital and data team to co-create a solution with the most current and emerging data technologies.”

Like many large organizations in the commercial life sciences industry, the pharma company relies on its financial forecasting processes to anticipate trends and deliver a strategic advantage.

Previously, though, forecasting data was heavily dependent on a combination of internal IT provisioning and varied external sources that weren’t keeping pace with shifts in the pharmaceutical market. Inconsistencies in data sourcing and organization, timing and execution of data pulls, and analysis methodologies created a perfect storm that continually blurred the horizon for executives making high-stakes budget and spending decisions.

EY teams leveraged internal knowledge resources across the health sciences sector, data science and market research to develop a customized solution that helped executives to make better informed decisions.

Sourcing top IT talent from EY Global Delivery Capabilities, the team developed an open-source financial forecasting platform to help create a solution that offers 1,000-plus forecasting models across more than 70 countries. The simulation-based forecasting tool unites the organization’s priority data with external statistics to provide the shared, detailed visibility stakeholders need for accurate financial planning and revenue forecasting.

The new, cloud-based platform consolidates the company’s forecasting assumptions and variables from multiple global markets, giving internal users the ability to look at the same unified source of information. The system also pulls in external statistics around health trends, such as what types of illnesses are predicted to increase in the next one to five years and which clinical trials might show the greatest potential.