Mastering finance in healthcare: A conversation with Raman Chawla, CFO of Medikabazaar

In a dynamic and highly regulated healthcare industry, financial excellence is paramount for success. Raman Chawla, the Chief Financial Officer (CFO) of Medikabazaar, focuses on the intricate interplay of finance, technology, and compliance.

With three decades of experience, he outlines how this cutting-edge healthcare solutions provider relies on innovative technologies to optimise financial performance, streamline operations, and maintain compliance in an exclusive interview.

Edited excerpts from the interview:

YourStory: Tell us about your role as CFO in MedikaBazaar. How has the journey been so far?

Raman Chawla: At MedikaBazaar, the model focuses on the end consumer, hospitals and other medical institutions. All our solutions are targeted towards that. We serve close to 100,000 hospitals and deliver through very superior supply chain technologies.

I personally look into enhancing the financial efficiencies of the organisation. Aspects like how do we receive the orders? How efficient are we really delivering our solutions? What is the cost of every customer? All information helps us develop new categories and build the business.

YS: In the healthcare industry, cost control and financial efficiency are paramount. How has technology played a role in optimising Medikabazaar's financial performance and reporting?

RC: So, we operate in the distribution part of the value chain. Typically in any distribution business, tracking becomes a key in cost optimisation, it could impact your ability to invest in future lines of business.

That is where technology comes into play. Important data points like packaging costs, spends, cost per customer serving come through leveraging cutting-edge technology. We are currently growing at a very fast speed. You cannot manage this scale without a very robust tech platform for tracking.

YS: Could you discuss the specific challenges the healthcare sector faces and how innovative technologies have helped Medikabazaar overcome them?

RC: The sector faces multiple challenges from a hospital’s perspective. We, at MedikaBazaar, deliver end-end medical procurement solutions. Although we do this at scale, there is a whole market to be explored. The reason is that this space is fragmented to reach a meaningful market. There is a long way to go which is also a kind of opportunity for us.

With numerous distributors, inventory management is also a challenge. Serving customers from Tier II and III cities, hospital’s ability to negotiate better, and helping them sustain their business are a few challenging areas.

YS:Data analytics and AI are transforming decision-making processes. How does Medikabazaar leverage data-driven insights to make informed financial decisions?

RC: Apart from our products, we also have an in-house robust order management system. The system tracks two key processes for us: when you receive the order from the customer and the procurement side.

We have also developed an AI/ML base tool that helps us with demand planning. We have installed this with a lot of hospitals. It helps us track consumption patterns, predicts future demand etc.

Some of these tools have helped us over the years and we continue to make improvements to make sure all is in line with as we scale up to the next levels and add more categories.

YS: In a highly regulated industry like healthcare, compliance is crucial. How does Medikabazaar ensure technology solutions comply with industry standards ?

RC: Compliance is there because we are dealing with medical products. There are a lot of products like pharmaceuticals or even surgical equipment where you need a drug licence. The customers that you supply to also need a drug licence. We make sure doctors and hospitals we onboard have necessary permissions.

A dedicated compliance function team takes care of all of this. Currently, we are managing through Excel sheets but we want to invest in technology to help us with all compliance functions.

YS: What is the readiness for a company like yours to go for an IPO?

RC: We still think we have 3 years to go before we are fully prepared. We don’t want to go too early and dilute too much. From revenue sizing to profitability and margin expansion, there are the few things we want to get right before we go public.

YS: What will be your advice to CFOs in the healthtech sector?

RC: Follow the business fundamentals right. Focus on quality and setting extremely strong corporate governance in place. Also, if you as a business are not taking full advantage of technology when it comes to managing financial operations, you might be missing the trick.