John Mandy participated in thousands of audits during his 26-year tenure as a Quality Leader at Pfizer. Early on, Pfizer had thousands of GMP suppliers and CMOs located all over the world. In any given year, Mandy’s audit teams were executing over a thousand internal and external audits and assessments. But even he was surprised when he was helping a site prepare for a significant re-inspection and had a local QA lead proudly show him a validation qualification for a new paper shredder. That was just one of many times that he observed teams not taking a risk-based approach to systems validation.
I often speak to quality leaders and other executives who boast that their paper-based quality management system is “perfectly sufficient” to meet the needs of their business. I just nod and smile because I anticipate that I will be hearing from them (in a panicked state) in the very near future when they realize the limitations of a manual QMS.
Janet Woodcock made headlines (again) by discussing the possibility of a quality rating system to aid transparency in her recent blog. But the devil is in the details when it comes to ratings for a site’s quality maturity.
I am frequently in meetings with quality leaders and regulatory experts where I find myself wishing I could share some part of the conversation or findings with a broader audience. Something about the current state of affairs, best practice or just a really eloquent description of a pain point and how they are managing.
Today's savvy quality leaders know that securing executive support and buy-in are key factors in successfully selecting and implementing an enterprise quality management system. Convincing skeptical C-suite colleagues of the strategic implications and costs of the current state can be challenging, especially in documenting both hard costs and intangible benefits/risks. It is necessary to speak in terms that they understand and appreciate, starting with Return on Investment (ROI).
The true cost of paper-based quality management systems is quite varied when you consider that using paper creates a vast ripple effect on companies. It extends all the way from how papers get filed to how a manager communicates with employees. What's problematic is some of these costs are possibly invisible until you fully understand the duties of your document manager.
That's why it's important to always analyze your company and processes if you've used paper documents for years. You may discover certain procedures your managers and other employees use out of habit cost you more money and time than you realized.
Finding what the true cost is of a paper-based quality management system can lead you to some surprising findings if you've stuck with this process for years. You may still think using paper is easier since it's so convenient to write something down in a hurry. Employees may think the same thing, or maybe not. They may just go along with your management concept because they're so used to it.
What is the Cost of Poor Quality? Analyzing What Needs Improving to Save You Money
Figuring the cost is of poor quality in your company is neither an easy or enjoyable task, yet it's necessary to factor into the cost of overall quality to manage compliance. The only way to get a complete
picture regarding the cost of quality is by calculating the sum of both good quality and poor quality for a bigger picture of where your problem areas exist. It's nearly impossible to assemble this on your own without using an electronic quality management system (eQMS) to help you get organized.
With Quality Management Software (QMS), you can identify all quality costs in order to identify vulnerabilities. Because of the complexities involved in what could be costing your company money, you need tech that helps you piece everything together to find answers of why poor quality exists.
In many cases, you could be losing money without knowing it in various areas you haven't yet audited. With that in mind, let's take a look at the cost of poor quality and why maintaining a higher percentage of good quality is a smart goal to set for the coming year to save you money.
Busy CFOs intent on a bottom-line focus may be forgiven for not immediately seeing the financial benefits of a technology investment that will upgrade quality control and compliance while reducing associated costs.
Let’s make it easier for CFOs to say “yes” to pivoting to an eQMS system by looking at how to translate the eQMS language to finance.
Essentially the translation involves first, identifying the unnecessary costs of the enterprise’s current quality and compliance processes and second, demonstrating how to eliminate those costs by implementing a cloud-based eQMS system.
Identifying current process loopholes
To start the discussion, let us acknowledge that everyone connected with your enterprise works hard to manage quality and ensure compliance. The question for the CFO, then, is: are the processes in use sufficient to optimize cost savings?
Indications that there may be costly loopholes in your enterprise’s current system include:
- reliance on paper reports and files;
- silos of electronic files on various computers in different departments;
- signs of duplicative efforts, especially with respect to risk management and/or audits;
- corporate governance systems that are not aligned with quality, risk management, and financial systems; or
- quality, risk management, and financial systems that are not linked.
How should you approach CFOs about costs associated with these loopholes? Why not have the finance team attach a dollar figure to each adverse event in the most recent fiscal year which can be traced to one of the loopholes listed above?
- Time and data lost to the reliance on paper reports and files.
- Time and data lost to searching for electronic files, comparing data on siloed files, eliminating duplication on siloed files, and ensuring complete information is available once the right files are identified.
- The costs associated with personnel changes and finding or updating paper files as well as siloed electronic files.
- Time lost to deduping files.
- Adverse events unrecorded, partially recorded, recorded in duplicate, or recorded late.
- Audit reports that are: lost, incomplete, or duplicated.
- Unaligned strategies between corporate and mid-management levels leading to overlooked compliance tasks, duplicated tasks, partially completed tasks.
- Unexpected costs associated with too many adverse events, inefficient use of staff time, new compliance needs, or new risks.
Once quantified, these loophole-related costs are guaranteed to attract the attention of CFOs who then will be attentive to suggested solutions.
The next step is to offer a plan to eliminate those costs: an eQMS system.
Closing loopholes to reduce costs
Every executive—from CFOs to CEOs—is driven to optimize value. They look for ways to maximize savings and boost returns on investments they have decided will make sense for the enterprise.
- Reducing costs associated with quality control and risk management means closing current loopholes in the system by pivoting to an investment in an eQMS program.
Paper files, spreadsheets, and older quality control processes may have been adequate in an era when regulations and risks were much more predictable, but times have changed—and the systems on which an enterprise relies to manage quality and risk need to be up to meeting today’s new challenges.
Operating within a regulatory environment in which changes are the norm and a risk environment that turns life sciences enterprises towards continuous mine-evading tactics, CFOs are most likely to welcome an investment in an effective eQMS system that does three things:
- enhances compliance,
- reduces risk, and
- comes as close as possible to eliminating adverse events.
An efficient eQMS system offers linked, transparent, aligned, unduplicated, and complete documentation and reporting for audits, risk management, adverse incidents, and compliance with minimum staff effort and maximum ROI.
The good news for CFOs
More cost-related advantages to an effective and efficient eQMS system include:
- Adaptability to any size enterprise. CFOs need not fear paying for a system twice as big as they need.
- No extra charges for access to the system by an unlimited number of staff. Say good-bye to seat licenses.
- The right system coupled with strong tech support translates into little to no downtime, even for new users.
ZenQMS appreciates the concerns CFOs have and stands ready to assist by demonstrating the value of eQMS for your team. Let us know how we can help.
Woeful stories from real people that validate why we started ZenQMS
We had a tremendous time at the #RAPS conference last week (thanks to all attendees for actually making a trade show fun!). But someone visited our booth with a story that just brought it all home for me.