Digital solutions from CSAM Health Group are frequently used to assist skilled healthcare professionals in the Nordic region. Managing billing for a large number of products to 500 customers across 14 of CSAM's subsidiaries can be challenging. Since many customers use more than one CSAM product, there are 700 customer agreements that need to be monitored and invoiced correctly and on time. Here's how CSAM addressed this challenge.
Svein-Harald Utgård, Business Manager
Svein-Harald Utgård plays a key role in this story. Back in 2019, he was the CEO of Arcid, a company that developed software crucial for data exchange, particularly in cancer treatment. When CSAM Health Group expressed interest in acquiring Arcid, it presented a significant opportunity for him and the company.
CSAM Health Group is the leading provider of specialized software for the healthcare sector in the Nordics and is now expanding globally. The company offers a family of specialized digital solutions for the healthcare sector, perfect for Arcid's further growth.
Critical missions imply that CSAM Health needs to closely follow important subcontractors. As a publicly traded company with multiple subsidiaries, billing over 500 customers is also a complex endeavor.
CSAM Health has a unique growth story and significance to customers and society. To ensure the entire group moves in the same direction, Svein-Harald is tasked with leading an important project. More on that below.
Developing software critical to healthcare and emergency services
CSAM Health Group is organized into seven different business areas, each creating software critical to clinical treatment or societal preparedness, vital for healthcare professionals to carry out their tasks.
This includes software for public preparedness, health data sharing and collaboration, medical imaging, maternal and child health, and medical research. These solutions are crucial at all stages of life, from conception, pregnancy, and birth to diagnosis, cancer treatments, and emergency ambulance procedures.
Challenges with a Complex Structure
Together, CSAM Health Group serves around 500 customers, mainly public and private healthcare organizations. Most are in the Nordics, but there are now customers in 27 countries. These customers are served by one or more of the 14 subsidiaries. 76% of the group's 2022 revenues of NOK 370 million come from Annual Recurring Revenue (ARR), mainly made up of the licenses customers pay to use the software.
Since going public in October 2020, the demands for revenue recognition quality in CSAM Health Group have significantly increased, along with growth expectations. Acquiring smaller niche providers is a key part of the growth strategy. This involves a large number of contracts with customers based on different practices in each company.
Many customers worldwide, numerous businesses billing customers, a greater number of products, ongoing acquisitions that need to be integrated, strict revenue recognition requirements for a publicly traded company…
A CFO would see significant challenges for the finance department in a company like CSAM Health Group, including:
- Revenues from many companies to be consolidated
- Tracking prices for an even greater number of products
- Over 700 customer contracts, often requested by auditors
- Complexity in billing customers due to different practices among units
- The need for exceptionally good control of some subcontractors, vital for critical healthcare deliveries
- Secure storage of important documentation, such as data processing agreements with numerous customers
In 2020, Svein-Harald, who now leads two of CSAM's seven business areas, was tasked with addressing these challenges as the Contract Services Manager. The challenges were substantial:
"Even though, on an international scale, we are just a medium-sized company, we have the complexity of a large company. This complexity is due to factors such as our geographical presence and product breadth. Most importantly, it's due to the significance our solutions have for healthcare, safety, and societal preparedness, both at a societal and individual level."
Revenue control is paramount
Marius Johansen, Legal Director
The top priority was gaining control of all income streams between the subsidiaries. It was clear that they needed a well-functioning contract archive for the entire group, which they didn't have previously. They had a place to store documents, but it didn't offer the functionality needed for contract management, according to Svein-Harald.
Legal Director Marius Johansen had signed an agreement with House of Control in 2019 to improve the legal aspects of the contracts. However, there was also a need for better financial control:
"As a publicly traded company, we are measured on customer contracts and recurring revenue. Control over income and the ability to increase it required a different and more sophisticated solution."
We asked Svein-Harald why they didn't start with suppliers and commitments on the cost side first. For him, the answer has to do with the complex corporate structure:
"As developers of software, we have a fairly uncomplicated and predictable cost side. However, what we can truly influence, both in the short and long term, is the revenue side. Are we billing what we should? Are we delivering more than agreed upon without charging for it? Have we missed price adjustments? When is the next time we can adjust prices, and what is the correct index? How can we manage to meet all deadlines? When we solve this, we can create significant financial effects."
Significant and measurable financial effects
With a smart contract management solution, Svein-Harald and his team have created significant effects for CSAM Health Group. This is due not only to the organizational effects the software enables:
"With Complete Control, my colleagues in the various business units get better oversight of their revenue streams. Previously, they could ask the finance department, but it was cumbersome and time-consuming. Now, they can much more easily monitor their customer contracts, including seeing how new modules may impact future revenue."
Taking up Complete Control has also yielded other positive effects:
"One thing is that we save time and therefore money during audits. A bigger effect, which is harder to quantify, is the effect of improved billing. With Complete Control, we have what we need to have a strong grip on all agreements down to the smallest detail. On an aggregated level, we can be sure that billing for a total of NOK 500 million per year is done correctly and in accordance with the contract," says Svein-Harald.
Helping fulfill the societal mission
Svein-Harald tells us that CSAM Health Group also uses Complete Control to have control over the company's most critical supplier agreements. In a company that contributes daily to the execution of crucial societal tasks, several subdeliveries are essential for the final product.
"With the alerts in Complete Control, our product managers receive invaluable help in checking compliance related to subdeliveries. Since our solutions and services are critical to society, they are strictly regulated and monitored by health authorities. Therefore, it is crucial that we always meet all requirements and that we can influence subcontractors to adapt to new requirements in good time."
Intuitive and easy to use
"How did you practically go about getting all the contracts in place so that it works well for you?"
"In the initial phase after taking up Complete Control, I was responsible for developing procedures and processes for how the entire CSAM Health should handle contracts. Now, it's the IT department that's responsible for the software itself, but I still get asked for advice."
He says that adopting Complete Control has been straightforward: