Hussain Mooraj, AMR Research

	 Enabling technologies for sales and marketing in biopharma won’t keep pace with impending business process changes. However, there’s a growing awareness that this relationship must be extended to embrace the multiple levels and types of interactions as well as to capture the multiple data streams driving customer-facing decisions in this industry. Here are my thoughts on the evolution of the sales and marketing models:

* Sales, general, and administrative (SG&A) expenditures are between 30% to 35% of revenue in life sciences. This is unsustainable, especially when compared to companies on the AMR Research Supply Chain Top 25, which spend approximately 17% of revenue on SG&A. This will only catalyze the rate of change to the commercial model.

	* The patient has started to play a pivotal role in influencing therapies. In our conversations with physicians, more patients are approaching them with potential therapies already in mind, with websites like UpToDate and WebMD as primary source of information. This requires incorporation of patient-back, outside-in processes enabled by knowledge management at the patient/provider level.

	* Commercial organizations have also suffered from a lack of analytical capabilities, with too heavy a reliance on the standard data sources like third-party longitudinal data and ex-factory data, which essentially perpetuated a limited view. They should incorporate an expanded data set, including demographic information, epidemiological data, contract and rebate information, KOL insight, and speaker bureau information. GSK’s data warehouse based on Teradata technology is an example of a step in the right direction. This of course, has to be closely coupled with an organizational change to be able to use the data more effectively.

	* Even though there’s a realization within most life sciences companies that the commercial model needs to change, I question whether the model is truly adapting at all, let alone rapidly enough to meet near-term demands. Most of the current efforts are centered on cost curtailment rather than changing the processes that would transform the commercial organization.

	Enabling technologies in sales and marketing

	There’s tacit acknowledgement that a direct relationship with the physician or healthcare provider organization is vital and won’t go away. However, the sales rep of the future would need to have a 360-degree view of activity that’s product centric, not just customer centric (the physician or major account).

	This would mean the heavily-siloed commercial functions—marketing, forecasting, trade management, sales ops, and contract management, to name a few&mdash;would need not only to share information, but be in lock step with their strategies. Today, customer relationship management (CRM) technologies are nowhere near enabling this level of interaction and data capture. As one senior business executive at a large, top 10 life sciences company put it, “The paradigm is changing faster than CRM companies and other associated technologies can keep up with.”

	The next evolution of customer-facing technologies will focus on the development and integration of multiple levels of customer interaction technologies. One key to success will be the integration of downstream data analysis into customer-facing applications. Customer management technologies and downstream data must also be tightly integrated into the extended supply chain processes of the life sciences enterprise to capture the strategic value and associated ROI.

	Cross-functional collaboration is essential

	In a recent AMR Research study, we asked life sciences companies to identify their most important sales and marketing capabilities. 53% of respondents pointed to developing internal collaboration processes that align manufacturing, supply chain, sales and marketing, and regulatory functions as key. At the same time, though, respondents rated their performances in this area as very poor.

	As companies venture to strengthen their collaborative practices, the most significant challenge is the lack of an advanced analytics function armed with accurate and timely data to provide information for better decision making. Leading companies focus on information architectures and analytical tools to create visibility across the value chain and enable effective, cross-functional decision making.

	That said, I see many life sciences organizations actually cutting back their focus on analytics and thereby retarding their capabilities. On senior business executive in a large life sciences company stated with concern, “Sales ops is where a lot of our analytics resides ... In the future, we see it diminishing and moving into IT. I don’t agree with it, but this is what is happening.” 

Hussain Mooraj (hmooraj@amrresearch.com) brings more than a decade of experience in pharmaceutical and biotech consulting, strategic consulting, and marketing to his role as Vice President, Healthcare and Life Sciences, at AMR Research (125 Summer St., Boston, MA 02110; amrresearch.com). Hussain’s current research focuses on the pharmaceutical and life sciences industries. He has degrees in textile management, information systems and supply chain management. 

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