How much does drug discovery software cost?
How number of users affect drug discovery software costs The number of people who need access to the platform is…
Buying software for your company can be a challenge. Every organisation does things differently, and there is often no handbook to follow.
For some, getting drug discovery software budget approval means simply knocking on the door of the CEO. For others, it means liaising with Legal, Finance, IT and Procurement teams, all armed to the teeth with red pens and Tipp-Ex. It can be a daunting prospect, particularly if this is your first time.
Fortunately, there are some high-level steps you can follow which apply to almost every organisation. As a CFO, I am far more likely to approve a proposal which has met these criteria (even if it wasn’t in our budget for the year).
We’ll run through each of these steps below so that, by the time we’re done, you’ll be ready to get that software from your dreams onto your desktop.
Step 1 – Building a budget ‘business case’
The most important step in the whole process. Get this right and, even if you bungle everything else, there is still a decent chance you can make this happen. If you get this wrong however, no matter how well you understand the financials or the IT angle, you won’t be getting an approval.
Building a business case means answering this simple question: how will your company benefit from purchasing this software, and why is that benefit worth the cost?
Let’s dive into the first part – how will your company benefit? There are many ways that new software could add value. It could save time by automating a process, or improve results by analysing data in a novel way. It is vital that you understand the problem that your software will solve.
Where you can, calculate a dollar value of this benefit, which will typically be an increase in sales or a reduction in cost (music to the ears of any Finance department). For example, a new marketing tool could add 10 customers a month to your agency business, generating $100k of new sales. Or, you could be adding metabolism prediction software, which can deliver savings of $10m+ for your Biotech company by avoiding expensive preclinical trial failures.
The software company you are buying from should be able to help with this. Look on their website for case studies, or speak to one of the sales team about your specific business requirements. Don’t be afraid to use this resource! When you buy from Optibrium, one of our dedicated sales team will work with you to build your business case from the ground up.
The second part of the question can’t be forgotten, even if you’ve nailed your answer to the first – why is that benefit worth the cost? If that new marketing tool adds $100,000 of new business but the software itself costs $80,000, then it is not worth the risk. There will be better ways for the company to spend its money. The benefits have to make sense in the context of the expected cost.
Step 2 – Understand the purchase process at your company
The easiest or the hardest step, depending on your organisation! Speak to your manager or someone who has been around for a while and knows the process. There are some key questions to answer:
- Who can approve spending decisions for my department? (usually a department head/director)
- How much cost they can approve? What happens if we need to go above that threshold?
- Do I need to raise a purchase order?
- Who can sign a contract on behalf of the company? (There will usually be a short agreement to sign when buying software – you need to find out who is authorised to review and sign it)
Step 3 – Understand the financials
You don’t need to know all the ins and outs of the finances involved, but it is helpful to understand a few basics before making your drug discovery software budget request, such as:
- How much will it cost? (yes, this is quite important)
- Is it paid monthly or annually?
- Is it paid with a credit card or via bank transfer?
- How long is the contract?
Having all of these to hand up front will mean you get a quicker decision from Finance or the budget holder. You can hear more about drug discovery software costs from our CCO, James.
Step 4 – What are the software alternatives?
One of the first questions I would ask when reviewing a proposal – is there a cheaper/better alternative? Any approver will want to know that you’ve done your homework here and considered all the options.
No matter how good the software seems, it is good practice to look at least a couple of alternatives. You want get the best deal but also the right functionality. Sometimes this will be straightforward because there’s only one solution out there for your need. At other times you’ll need to balance the pros and cons of different software and assess how well they fit with your workflows.
Don’t be afraid to show your working here. It will demonstrate that you have thought carefully about the proposal and that the path you have chosen is the best one for the company.
Step 5 – Don’t forget the IT department
The silent watchers. The protectors. The ones who keep our world turning. Don’t forget to speak to your IT department before making any software purchases. They will need to check it is safe, secure, and that it works in your company’s environment.
Before reaching out, it is best to have the answers to a few key questions:
- Is the software desktop or cloud-based?
- What other systems/software will it integrate with?
- What company and/or personal data will be shared/stored on this software?
This is a great time to reach out to your sales representative from the software company (if there is one). They will have answers to all the typical questions coming from IT.
Step 6 – Write it up
Condense everything into a clear and concise summary and you are onto a winner. Your Finance team will thank you, and it will give confidence to any decision maker that their approval is in safe hands. Some companies will have a template to follow when making a purchase request. In the absence of guidelines, you should aim to get this onto a single page, or a couple of slides, depending on your weapon of choice.
If you do all of the above and the value added by the software is clear, you will have a great chance of getting drug discovery software budget approval. Who could possibly say no?
About the author
Ally Henderson
Chief Financial Officer
Ally leads Optibrium’s Finance and Operations teams, shaping the group’s financial strategy in collaboration with key stakeholders. Previously, he headed finance at SciBite, supporting its sale to a FTSE 100 company, and managed audit clients at Deloitte, where he trained as an accountant in the Entrepreneurial Business department.
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