Pharma tech CFO says finance is at the center of AI strategy
Good morning. As investment in AI accelerates, CEOs expect their CFOs to play central roles in leading the strategy.
Finance leaders should treat enterprise AI oversight as a “proof of concept”—carefully assessing potential impacts and investments, tracking outcomes, managing risks, and regularly evaluating whether to continue the initiatives, Marco Steecker, a senior director and analyst at Gartner, explained earlier this week at the firm’s annual CFO conference.
I brought up this topic during my conversation with Josh Schwartz, SVP and CFO of Medidata Solutions, a SaaS platform provider for clinical trials in the life sciences. Schwartz recently took over Medidata’s enterprise IT team. “We need to get to business intelligence, and a lot of that sits within the CFO office,” he said.
When Medidata launched about 25 years ago, its goal was to streamline the mountains of paperwork required for drug approval, Schwartz told me. Over time, the company began digitizing this process and then built out a platform as the operating system for running clinical trials. Medidata, acquired by Dassault Systèmes in 2019, has run over 35,000 trials, with nearly 75% of novel drugs marketed in the last five years using their platform, Schwartz said.
The New York-based company has shifted from simply digitizing workflows to generating actionable insights for patients and pharmaceutical clients. Medidata has embraced the idea of “AI everywhere” to shorten the clinical trial cycle, ultimately bringing drugs to market faster and lowering costs for clients, Schwartz said.
The company’s partnerships with data firms like Snowflake further enhance its ability to curate and analyze massive datasets, giving researchers insights that would be impossible to generate manually, he said. However, Schwartz pointed out that, along with AI, there’s still a human at the center of the process.
He became CFO of Medidata in 2022 but has been with the company for more than 15 years in leadership roles. Schwartz is focused on finding tactical-use cases internally for automation in finance and accounting for a group of 90 professionals who report to him. By using enterprise software company Workday’s platform (a CFO Daily sponsor), accounts payable automation now processes nearly 90% of invoices, up from zero just a few years ago, he said.
“With our extreme focus on cash flow, 98% of invoices are paid right on time versus 60–65% previously—ensuring we are maximizing our net terms for cash flow while maintaining our vendor relationships,” Schwartz said. Medidata has saved over $1.46 million annually in costs through the automation of finance and HR workflows, he said. Before using a unified system, the company lost time, efficiency, and value when moving through each application differently, he said.
As a CFO investing in technology to support growth, I asked Schwartz what he thinks are some of the challenges facing the clinical trials industry.
“I think there’s revenue pressure, cost pressure, and then there’s this worldwide change where velocity is becoming even more important,” he told me. “So there needs to be a way where you can differentiate.” For Medidata, that means a focus on digital therapeutics—patient-facing software applications that help treat, prevent, or manage a disease. To that end, Medidata has recently partnered with Click Therapeutics, he said.
To stay competitive during uncertain times, “You’ve got to think long term,” Schwartz said.
CFO Daily will return Tuesday after the Memorial Day holiday. Have a good weekend.
Sheryl Estrada
sheryl.estrada@fortune.com
This story was originally featured on Fortune.com