next generation commercial capabilities

Delivering Next-Generation Commercial Capabilities within the Pharmaceutical Industry

Contents01 Executive Summary

03 A PARADIGM SHIFT FOR THE PHARMACEUTICAL INDUSTRY

07 A VISION FOR NEXT-GENERATION COMMERCIAL CAPABILITIES

13 THE PATHWAY FOR COMMERCIAL TRANSFORMATION 14. 1. PLAN

19 2. BUILD

21 3. OPERATE

24 CONCLUSIONS

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Thought Leadership 2

Executive Summary Innovative, next-generation commercial capabilities are an indispensable asset for a pharmaceutical industry that must navigate the truly transformational changes taking place within global healthcare markets. This rapidly evolving environment within which medical innovators exist is driving the twin pressures of increasing commercial complexity and associated unsustainable costs. Today, forward-looking companies understand the need to efficiently interpret the tsunami-like flow of data moving through healthcare systems, in order to derive rapid insights and to take action from this information, which is fast becoming the new hallmark of success. The commercial engine at the heart of a pharmaceutical company must be able to collect, interpret, and further leverage this information to implement locally relevant customer solutions that maintain global consistency and deliver strategic advantage.

This senior executive briefing outlines a blueprint for how pharmaceutical companies can utilize a new collaborative model to effectively build next-generation internal commercial capabilities by leveraging the analytical, technological, and intellectual expertise of external partners, allied with a company’s internal assets. In doing so, pharmaceutical companies can recognize cost-efficiencies and, more importantly, innovate commercial processes to deliver additional growth as markets continue to evolve.

Delivering Next-Generation Commercial Capabilities within the Pharmaceutical Industry3

A Paradigm Shift for the Pharmaceutical IndustryThe pace at which global healthcare markets are evolving is accelerating. Aging populations, improved and earlier disease diagnosis combined with an increasing shift towards unhealthy lifestyles are driving spiraling costs for health systems in nearly every market. In addition, data and technology are making new insights possible to every stakeholder within healthcare, including the providers and payers. As a consequence, pressure is being exerted on the pharmaceutical industry to demonstrate greater value for the medicines it produces. The industry has arguably become a victim of its own success – the bar has become ever higher (and easier to measure) for novel treatments and competition is fierce.

In adapting to this new health economy, the pharmaceutical industry is facing challenges on two fronts, balancing this increasing market complexity and the associated need to innovate its commercial model against the necessity to manage unsustainable operational costs. While globalization provides an opportunity to scale solutions to recognize efficiencies, the expertise needed to deliver these can be cost prohibitive in the short-term.

The key factors underlining this are summarized in Figure 1 and are further described below.

Figure 1Drivers of commercial change for the pharmaceutical industry

HEALTHCARE DATA EXPLOSION

TECHNOLOGY REVOLUTION

GLOBALIZATION

REQUIREMENTS FOR INNOVATIVE COMMERCIALIZATION


HEALTHCARE DATA EXPLOSION

Driven by the other factors outlined below and the fundamental nature of the digital age in which we live, an explosion of new data sources is now available with which to make business decisions, driving additional complexity – and cost, if not harnessed in the right way. Exploiting this new wealth of information is hindered by the fact that, over the past 10 years, basic IT functions such as data integration and warehousing have been largely commoditized, created in a piecemeal fashion, and often outsourced, achieving cost-cutting goals but leaving the company deficient in these key capabilities. Adding to these challenges is the fact that many information sources, such as real-world data (RWD), are commercially available to all, making it entirely possible that payers, providers, and competitors can know more about a company’s products than the company itself. In effect, this has become a race for data, and the insight locked within it, between a pharmaceutical manufacturer, its competitors, and the healthcare providers it serves. In consequence, new approaches are needed that can derive business critical insight at a pace in line with data generation.

TECHNOLOGY REVOLUTION

The technology revolution, which underpins this healthcare data explosion, has also dramatically changed how such data is interpreted and presented to the pharmaceutical industry’s customers. Cloud-based applications, mobile solutions, and novel data-visualization platforms are driving new approaches to digital customer engagement, which align with the desire from healthcare providers to manage the multiple pressures on their time and make every interaction efficient. While multichannel marketing (MCM) may therefore offer the promise of better customer engagement, it requires the right segmentation and ongoing understanding of these customers to deliver practical results. Developing and implementing sales and marketing strategies that consistently demonstrate return-on-investment at the brand, portfolio, and corporate level can only be achieved through nimble, real-time analysis and execution platforms that combine internal information with customer feedback loops.

GLOBALIZATIONTechnology, and the connectivity it drives, has also been a driver of globalization across all sectors, including the pharmaceutical industry. While the specific healthcare system dynamics and priorities vary on a country-by-country basis, the ability for the pharmaceutical industry to apply some level of global efficiency is essential to manage the cost of commercial engagement. This requires systems and processes that facilitate global working through ensuring appropriate local scaling and skills alignment of the delivery workforce, access to the right talent from anywhere in the world, standardization of knowledge and common methodologies, and the ability to share best practice across countries and regions. Never before has the old mantra of ‘think global, act local’ been more relevant and, with the right commercial capabilities in place, pharmaceutical companies are now well positioned to deliver against this promise.


REQUIREMENTS FOR INNOVATIVE COMMERCIALIZATION

Finally, the pharmaceutical industry is in the midst of a fundamental shift in its commercial model, driven by some core changes in the healthcare landscape. Generic erosion in primary care markets and the need to demonstrate cost-effectiveness for new medicines are shifting the focus toward smaller, more defined patient populations and specialist medicines, where unmet need is greatest. The oncology market is highly representative of this shift, where genetic profiling of patients and development of companion diagnostics are becoming the hallmarks of success. The data market around such ‘precision medicine’ is booming, as new organizations like the personal diagnostics company 23andMe demonstrate; initially rebuffed by the FDA but now working cooperatively with the US regulator.

In addition, the decision-making process behind medicines usage in nearly all therapeutic areas is becoming more protracted, as systems seek to balance personalized approaches with restrained healthcare budgets. Individual physicians still make key therapeutic decisions but they do so within a context wherein payers (including patients, delivery networks, accountable care organizations [ACOs], health technology assessment [HTA] bodies, and regional / hospital formulary decision-makers) are exerting more influence. For the pharmaceutical industry, this dual challenge of smaller patient populations and more complex prescribing pathways, involving physicians and payers, necessitates innovative approaches to remain commercially viable.

NEW DRIVERS OF BUSINESS TRANSFORMATION

To date, the pharmaceutical industry’s response to this paradigm shift has been to outsource in-house commercial capability gaps piece by piece or scale those functions down that are seen as non-essential. However, this has fragmented these capabilities and created information silos across multiple platforms, providers, and partners. Addressing this problem and delivering further gains in commercial effectiveness can only be achieved by consolidating external partners around the following objectives, also illustrated in Figure 2:

LOWER OVERALL COSTS

INNOVATION TODRIVE NEW MODELSAND PROFITABILITY

PRESERVATION OF INTELLECTUAL PROPERTY

AND COMPETITIVE ADVANTAGE

FLEXIBLEOPERATIONS

FASTER ACCESS TO INSIGHTS AND THE

RIGHT ACTIONS

CRITICAL SUCCESSFACTORS UNDERPINNING

NEXT-GENERATION COMMERCIAL CAPABILITIES

Figure 2Core objectives for next-generation commercial capabilities


1. LOWER OVERALL COSTS

Reducing costs has been a priority for many pharmaceutical companies, implemented via a series of tools and levers such as consolidation, standardization, and automation. Procurement often drives cost containment through preferred provider agreements in tandem with broader capabilities development but, as mentioned above, careful scrutiny of value is necessary to ensure cost savings are not to the detriment of business growth.

2. FASTER ACCESS TO INSIGHTS AND THE RIGHT ACTIONS

Despite the explosion of healthcare information, derivation of robust insight from this ‘big data’ is not trivial. Companies must be focused on actually delivering better commercial outcomes from it and therefore be willing to invest in new data and analytical platforms to help them collect and derive actionable intelligence more efficiently.

3. PRESERVATION OF INTELLECTUAL PROPERTY AND COMPETITIVE ADVANTAGE

There is a recognized need to retain critical decision-making either in-house or within a few key long-term partners such that important decisions are not broadly outsourced and true capability is not lost. While pharmaceutical companies appreciate having a choice in providers, they are quickly gravitating to a few select partners, limiting risks around loss of intellectual property while also bringing unique assets and broad learnings from earlier client engagements, so that processes can be optimized over time. In addition, there is a balance that must be struck between blending expertise that partners can only gain from working with multiple clients and appropriate processes and systems that protect intellectual property.

4. FLEXIBLE OPERATIONS

The need to handle variable workloads without financial impact to the company is pronounced and a core value of any effective commercial model. The best solutions are scalable and easily accommodate volume impacts, such as new launches, loss of exclusivity, internal budget cycles, and other operational situations. Such events cannot always be forecast well in advance (e.g. competitor licensing and acquisition activity), so the need to adapt quickly is critical.

5. INNOVATION TO DRIVE NEW MODELS AND PROFITABILITY

Innovation and continuous improvement are key themes for forward-looking companies, as the pace of new information and technology is such that commercial functions must be able to adapt as quickly as the environment in which they operate. To maintain competitive advantage and ensure ongoing efficiency, innovation processes and policies will need to remain front and center.


A Vision For Next-Generation Commercial CapabilitiesAchieving success requires departing from practices of the past. New partnership models are being explored that are addressing deficiencies in historic approaches.

Companies at the cutting edge of next-generation commercial capabilities are now centralizing control of key aspects while also building durable capabilities that deliver a strategic advantage, working with the right external partners to align internal commercial and technology functions, plus enhance internal skills, to deliver the real results possible in an information-driven age. The result is more seamless working between the central team, its internal clients, and external partners to drive innovative best-in-class approaches, for which cost efficiencies are a consequence rather than the overwhelming focus.

To deliver against this vision, as illustrated in Figure 3, the right external partner must possess three core attributes:

• Healthcare data expertise: Access to, and the ability to understand and interpret, the different types of information available (not only core clinical data, commercial data, and RWD, but also information relating to technological interventions, new treatment pathways, and shifting government and payer policies), including knowledge of their limitations and how to integrate multiple sources together for the right business insight.

• Leading technology capabilities: Best-in-class predictive applications to enable proactive and rapid intervention through real-time derivation of insights from information, in addition to an understanding of how novel cloud-based platforms can be used to efficiently scale technology solutions across an organization.

• Global presence and skills: The right personnel to deliver deep knowledge of informatics, different therapeutic areas and healthcare markets, in addition to the ability to rapidly ramp up such teams on a global basis, as and when required.


Figure 3 Business-critical commercial operations trends in the pharmaceutical industry

FROM TO

INEFFICIENT AND DECENTRALIZED METHODS PLATFORMS AND DECISION-MAKING

GEOGRAPHICALSCOPE

CENTRALIZED GOVERNANCESTANDARDS AND PLATFORMS EXECUTED LOCALLY

HYPER FOCUS ON COST CUTTING

STRATEGICINTENT

DEVELOPING CAPABILITIES AS A STRATEGIC DIFFERENTIATOR WITH COST REDUCTIONS OVER TIME

DECENTRALIZED DECISIONS RESULTING IN SPAGHETTI ARCHITECTURE / STRANDED DATA

TECHNOLOGYANDINFORMATION

CENTRALIZED GLOBAL PLATFORMS FOR DATA COLLECTION, LEVERAGE AND INSIGHTS

SUPPORTING A WORLD OF REPRESENTATIVES IN A REACH AND FREQUENCY MODEL

COMMERCIALMETHODS

CENTRAL ENGINE DRIVING KEY STAKEHOLDERS INSIGHTS AND COMMERCIAL INNOVATION

DECENTRALIZED ‘VENDOR’ LED BY COMMERCIAL AND AFFILIATE STAKEHOLDER DECISIONS

PARTNERSTRATEGY

STRATEGIC GLOBAL PARTNERS WORKING TOGETHER ON NEXT-GENERATION CAPABILITIES

KEY TREND


BUILDING COMMERCIAL CENTERS OF EXCELLENCE

Aligning the core objectives for next-generation commercial capabilities with the essential attributes of the right external partner necessitates the development of Centers of Excellence (CoEs) within the commercial functions (Figure 4), which combine the information, technology, and human capital on both sides (internal and external partner) – developing internal capabilities and skills while maintaining ownership of essential intellectual property. The result is commonality across CoEs around analytical and technological process, while clustering the appropriate subject matter expertise into these defined virtual units.

Figure 4The building blocks of commercial Centers of Excellence

LEADING TECHNOLOGY CAPABILITIES

ESSENTIAL COMMERCIAL PARTNER ATTRIBUTES

CORE COMPONENTS FOR NEXT-GENERATION CAPABILITIES

HEALTHCARE DATA EXPERTISE

GLOBAL PRESENCEAND SKILLS

SUBJECT MATTER EXPERTISE

CENTERS OF EXCELLENCE (CoEs)

INTELLIGENT ANALYTICSPLATFORM TECHNOLOGY AND

APPLICATIONS

The result is commonality across CoEs around analytical and technological process, while clustering the appropriate subject matter expertise into these defined virtual units.


The specific focus for these CoEs will vary by company, but typically they are emerging in the following areas:

• Therapeutic areas, at the disease area level (oncology, diabetes, cardiovascular) or aggregated by approach (specialty, primary care, personalized medicine).

• Advanced analytics and business forecasting, at the brand, portfolio, and operational level.

• Market intelligence, establishing best practice for the integration of primary market research (PMR) with the ever-increasing volume of secondary data available through integrated desk research (i-DR).

• Customer engagement, covering areas including MCM, closed-loop marketing, and salesforce effectiveness.

• Performance management, defining standard reporting mechanisms and key performance indicators (KPIs) across brands, therapeutic areas and geographies, which also include internal metrics around customer engagement such as incentive compensation.

• Real-world evidence, encompassing pre- and post-launch value assessment, from early health economic evidence through to outcomes evaluation.

• Information management, working across the business to project requirements, design, and deliver strategies to ensure the technological architecture is futureproof.


• Electronic medical records: Comprehensive point-of-care records of how patients are treated reveal a detailed clinical picture contributing to an overall understanding of a patient’s treatment pathway and general state of health.

• Clinical technology: A proliferation of mobile devices such as, for example, monitors, ventilators, pumps, and glucometers provide rich sources of clinical data that can enable early detection, prevention, and interventions to improve patient care and outcomes.

• Track-and-trace systems: If the FDA succeeds in mandating that pharmaceutical companies install systems to know where their products are located in real time, important logistical data becomes available every time a package ‘hits a node’ on the distribution system.

• Social media: Wide-ranging public conversations about diseases and how they are treated provide rich insights into how patients and prescribers perceive healthcare and treatments.

• Real-world evidence: Privately funded and government-sponsored longitudinal studies are producing a wealth of information on treatment practices, patient persistence and compliance and, critically, patient outcomes.

The commercial advantages to be gained by keeping abreast with the sheer volume, velocity, and variety of healthcare data cannot be overstated and underline the critical importance of the intelligent analytics platform as the foundation of good commercial practice. Here, partner expertise across the myriad of data sources, understanding their limitations, and ability to integrate them is vital.

INTELLIGENT ANALYTICS PLATFORM

The intelligent analytics platform sits at the heart of the CoE, allowing collation of information and initial distillation of insights from multiple sources including, but not limited to:


TECHNOLOGY AND APPLICATIONS

Building on the intelligent analytics platform, pharmaceutical companies can then unlock commercial insight through smart use of technology and applications. Predictive ability, accuracy and speed are key attributes here. The long-term trend is to move away from retrospective analytics, which provide a picture of what happened in the recent past, towards projecting future scenarios. In reality, this is more achievable in some areas than others, e.g. MCM, but immediate wins are available across every aspect of a pharmaceutical business in more accurate and timely analytics. To achieve this ideal, companies must combine their own internal primary and secondary insights with the informational, technological, and analytical skills of the external partner.

While cloud-based technology can enable global access, the functionality of such applications must deliver value at the local level. Specifically, that means a constant focus on integrating and standardizing healthcare datasets and making robust tools available to analysts within the affiliates so their operating systems and brand teams can better understand the behavior of key customers and the influence they have on markets. Examples of two common areas where technology and applications – combining intelligent analytics with the right tools to extract insights and take action – can deliver benefit are in the use of customer-relationship management (CRM) systems and MCM. Both are essential components of good customer engagement, but need to integrate internal and external datasets in a way that enables a 360-degree view of the customer and drives more effective engagement – essentially, combining traditional ‘push’ sales and marketing with a more informed ‘pull’ approach based on individual customer needs.

SUBJECT MATTER EXPERTISE

New operating conditions bring requirements for new areas of expertise. This is particularly true in healthcare where expertise spanning therapeutic areas, individual markets, business functions, and technology is now critical to delivering the right commercial answers to questions such as ‘how can my product be delivering better value?’. But this requirement comes at a time when many commercial functions are downsizing, potentially exposing gaps in expertise, which can be bridged by an external partner with the right breadth of subject matter expertise.

Such partners can also help retrain incumbent staff to create, among other things, strategies for sourcing data, using the cloud for collating and storing information, identifying the right applications to extract meaningful insight from information, and building pillars of excellence in analytics that can adapt as complexity mounts. A long-term vision is important because, while everyone agrees such next-generation commercial capabilities are still in development, very few would question their importance in delivering success for the business. The right partner will seek to enhance its client’s knowledge, not replace it, and in doing so will help accelerate the process towards achieving this vision.

In summary, such CoEs drive real change in the way pharmaceutical companies operate, inspiring new ways of engaging customers, driving more intelligent business enablement globally and enhancing internal expertise, all while protecting intellectual property and driving cost-efficiencies. These CoEs also deliver both short- and long-term benefit, through immediate commercial efficiencies, which combine internal and external expertise, while laying down the foundations for innovative next-generation commercial capabilities.


Armed with an appreciation of the building blocks for success in developing next-generation commercial capabilities, along with a clear view of the current and ideal future situation for the industry, a pathway can be defined to guide progress towards this ideal endpoint, aligned to the three key stages of plan, build, and operate Figure 5.

The Pathway for Commercial Transformation

Figure 5Plan, build and operate to achieve next-generation commercial capabilities

IDENTIFY CRITICAL SUCCESS FACTORS

APPLY LEVERS AND TOOLS

DEFINE THE INTERNAL ECONOMY

UNDERSTAND THE PROCESSES IN PLAY

REDEFINE INFORMATIONMANAGEMENT PROCESSES

AGREE A CLEAR LONG-TERM ROADMAP

DEVELOP THE OPERATING MODEL

DEVELOP A GLOBAL DELIVERY STRATEGY

PLAN FOR CHANGE

IMPLEMENT TRANSITION

EXECUTE GOVERNANCE MODEL

ADOPT OPERATING MODEL

PLANNING INNOVATIVE CAPABILITIES

1. PLANBUILDING SOLUTIONS FLEXIBLE DELIVERY

CAPABILITIES

2. BUILD 3. OPERATE


1. PLANPlanning and agreeing on a core strategy is the first stage, which includes several smaller steps, outlined below.

IDENTIFY CRITICAL SUCCESS FACTORSThe natural instinct behind any change is to seek cost-efficiencies, but with this comes the very real risk of limiting the ability to analyze, anticipate, and act on new customer opportunities. The initial step in planning must therefore be to understand key drivers of change which, within the current information-driven environment, could include aspects such as agility, responsiveness, speed, and accuracy.

In this context, the first phase of transformation is about finding a new point of equilibrium that reflects the balance required for addressing customer, organizational, and operational factors. The practical implication of all this is that the deployment of new technologies, tools, and resourcing arrangements must be considered in the context of a well-designed customer strategy, not as solutions in themselves. To achieve this, the mindset within commercial operations must also adapt; a process that is initiated by identifying new critical success factors, rather than relying on old ones. Such factors might include the deployment of new tools and technology, enhancing a capability that is maintained internally, outsourcing a non-strategic process, or bringing a new managed service into the organization, which need to be aligned around new KPIs such as lower costs, faster time to insights, new customer acquisition, greater flexibility, and so forth.


APPLY LEVERS AND TOOLS

Achieving the identified critical success will depend on applying levers (e.g. standardization, centralization, and outsourcing) and tools (e.g. people, processes, technology and information) in the right way. The second step in planning should account for how these levers and tools can be best utilized throughout the change, underpinned by the recognition that the old fragmented models of the past must embrace greater centralization and shared synergies to drive the best-in-class capabilities now required, as illustrated in Figure 6.

Figure 6Levers and tools being deployed to transform commercial capabilities

IMS HEALTH ASSETS

LEVERS

TOOLS

• Fragmented business capabilities

• Not considering RWE and other novel sources

• Decentralized, unknown, outsourced, and vendor transactions

• Organically developed environment held together with incremental additions

• No single view of truth

• Lots of information and data

• Significant time delay to business insight

• Technology• Processes• People

• Standardization• Centralization• Innovation• Outsourcing

CURRENT STATE FUTURE STATE

• Consolidated capabilities

• Ready access to RWE, social, and other novel sources

• Delivery centers, co-ownership, co-investment & broader partnership, global deals

• Single view of truth

• Consolidated enrichment and linkage platform

• Insights organized for retrieval

• Advanced analytics well used

• Innovation in early stages

• Insights embedded into commercial operations

• On time, on demand services


DEFINE THE INTERNAL ECONOMYThe type of internal economy (the way a company functions internally) supported by management will impact the overall success of the commercial transformation. Interestingly, it is rarely the choice of economy that is critical as much as the degree of governance, communication, and alignment that is implemented across the business. Nevertheless, it is worth highlighting the four broad types of economies that exist, characterized as follows:

• Closed economy: A strong edict from management, supported by the affiliates, directing all applicable work to a shared service group. Outside help is commissioned only when there is a backlog or to fill a clear capability gap.

• Open economy: A free market system that allows business leaders to contract internally or externally as required.

• Hybrid economy: A mix of the open and closed economy models that can take multiple formats. Some processes may be considered strategic and therefore directed to either an internal resource or a single partner of choice to ensure quality and consistency. Others may flow through a single company to ensure certain volumes, and therefore, discounts, are achieved.

• Investment economy: The formation of a joint venture or other co-funded efforts to start or expand capability building.

UNDERSTAND THE PROCESSES IN PLAYAs companies strive to enhance their core commercial capabilities, conversations with top tier and mid-sized life science companies to discern where their efforts are focused reveal the processes in play that must be understood ahead of transformation. The results show attention is most commonly addressed on capabilities in the following areas:

• Operations, usually around a technical system underpinning a core industry process, such as incentive compensation administration, marketing systems and sales operations.

• Analytics, usually related to commercial processes such as segmentation and targeting, promotional response modeling and performance management and reporting.

• Strategy, relating to ongoing assessment of strategic direction, driven by environmental or acquisition opportunities.

• Research, usually on situation assessments, share analyses, patient journeys and stakeholder profiles.

• Technical, as related to the support and maintenance of systems such as the Help Desk, tiered support services, the administration of core commercial systems and information management.

• Medical, to support medical-related needs such as manuscript development, literature reviews, abstracts and poster development.


REDEFINE INFORMATION MANAGEMENT PROCESSES

The need for alignment between business and technology strategies within change management has never been so acute. A number of models are available for consideration including Software as a Service (SaaS), Data as a Service (DaaS), and, more recently, Business Process Outsourcing (BPO) that enable a company to use a partner’s data, hardware, processes, people, as well as softer capabilities such as expertise and connections. Whatever platform strategy is deployed, however, companies must first lay down a tailored information management strategy that aligns their business goals with the technology required to attain them over three core phases, as illustrated in Figure 7.

Figure 7Alignment of business and technology strategies

BUSINESS VALUE

DELIVERY

INFORMATION

ORGANIZATION

DIAGNOSTIC

• Identify business opportunities that exist for current and future decision-making.

• Understand and develop hypotheses on how these can be better supported through key areas (e.g. organization, technology, governance) and associated maturity levels required.

DEVELOP ROADMAP

• Develop an actionable structure/plan for delivering the capabilities that will meet business objectives and drive impactful decisions.

• Define key associated initiatives and projects, along with respective resource and timing required to deliver the strategy.

INFORMATION MANAGEMENT STRATEGY APPROACH

ECONOMICS

STRATEGY AND TARGET PRIORITIES

• Define and prioritize the capabilities required to deliver the information needed and understand to what extent these can be shared.

• Develop the target state enabling areas (e.g. organization, governance process and solution architecture).

• Quantify associated costs and benefits.

PHASE 1 PHASE 3PHASE 2


AGREE A CLEAR LONG-TERM PLAN ROADMAPThe creation of a comprehensive cross-functional plan with clear milestones for attaining new or enhanced capabilities is essential for securing organizational alignment. Ideally, it should:

• Identify all new and enhanced capabilities required for transformation across relevant functions both within the commercial organization as well as in clinical / technical and corporate or shared-service disciplines.

• Show the priority and timing of building each capability in a sequential plan that is globally aligned to the business drivers of affiliates and regions.

• Specify key milestones in the building of these capabilities so the organization can clearly assess progress, capability maturation and the timing of investment.

• Include a best-practice communications plan to share progress, report early wins and maintain focus on the real benefits of the transformation effort.

• Be built to enable selected quick wins that are tied to specific business issues that drive transformation.

The devil, as is usually the case, resides in the detail, which is why attention to these five dimensions is so critical:

• Business value: Creating strategic advantage in information management might involve looking at decision-making cycles, information-centric capabilities, and market trend impacts such as patient-centricity and the changing reimbursement landscape.

• Delivery: Turning data into actionable information and insight, including architecture plans and a host of rationalization solutions such as lifecycle management tools and processes, cloud technology, mobile device management, security requirements, among others.

• Information: Identifying the capabilities needed to support commercial analytics and decision-making might incur further analysis in topics such as data quality, business intelligence and predictive analytics, reporting, integration, collaborative opportunities, lifecycle management, among others.

• Organization: Sample topics for consideration include roles and responsibilities, governance, data stewardship, cross-functional interactions and external support.

• Economics: Sample topics in this space include incremental investment, prioritization, dependencies, timings, metric selection, among others.


2. BUILDOnce the strategy has been defined, the organization can be built to deliver against this strategy, as outlined in the steps below. This encompasses both the internal operating model and the delivery strategy, both combining internal skills with external partner support.

PLAN THE OPERATING MODELIn developing and building the operating model the following processes should be considered:

• Executive sponsorship, steerage and governance programs: Formal steering teams, supported by a senior executive, as well as steering agendas and clear governance criteria are critical to ensure the effort moves in the right direction.

• Funding and chargeback: Detailed mechanisms to fund the central effort, either by the affiliates or the corporate business, must be put in place.

• Ongoing performance management and service levels: Constant monitoring of KPIs is important to ensure the solution is on the right track and to highlight where modifications are needed.

• Talent management: New talent requirements will include subject matter expertise as well as skilled bespoke workers. In most cases, this will involve transitioning local resources and the acquisition of offshore resources in low-cost hubs either directly or with partners.

• Customer satisfaction: Creating necessary synergies in usage across methods and geographies will require a constant focus on value creation and the communication of to all stakeholders.

DEVELOP A GLOBAL DELIVERY STRATEGYGlobal delivery is the ability to manage resourcing to ensure access to a large pool of relevant experts round the world at a competitive cost. Companies must therefore have in place:

• Outsourcing competencies: Understanding of the end-to-end outsourcing process, tools and techniques to utilize them effectively.

• Strategic alignment: Ability to create a strategy and alignment around that strategy.

• Sourcing capabilities: Ability to source help and determine the optimum provider.

• Process expertise: Understanding of the process metrics and drivers involved.

• Governance style: Ability to manage and work with a service vendor.

• Relationship management skills: Ability to sustain good relations with a service vendor.


PLAN FOR CHANGECreating an effective roadmap for change must have clear milestones. Typically, these are charted over both short and long timelines, are approved across the functional leadership team and funded appropriately. An example that is pertinent to many pharmaceutical companies might be to bolster the critical capability of ‘driving new insights from disconnected data assets’. Figure 8 shows five milestones associated with this goal, each with a measurement approach that can lead companies smoothly along the path to excellence.

Figure 8Milestones towards excellence in driving insights with disconnected data assets

1

2

3

4

5

EXCELLENCE

TYPES OF DATA INTEGRATED/ANALYZED

PARTNERS ENGAGED

COMPLETED SESSIONS

ACTUAL INITIATIVES

LEADERSHIP TEAM REVIEW

When teams integrate and analyze data to identify patient journey interventions and partnerships in the globalexternal therapy ecosystem relating to improving or disrupting diagnosis rates, treatments and outcomes.

When teams invite and engage innovative third parties to share their unique contributions to the ecosystems and regularly exchange ideas.

When teams conduct ideation sessions to identify ecosystem partnerships that could advance patient carein the disease area and prioritize which ones should be investigated ( e.g. consumer technologies).

When teams conduct due diligence of partnerships to decide which type of initiatives and / or partnerships should be carried forward to their strategic brand and functional plans.

When teams exchange their external ecosystems work to identify cross-brand opportunities.

When teams explore and interpret their respective external therapy ecosystems for strategic partnership and health initiatives that have potential to improve diagnosis rates, therapy adherence, or other aspects of care which lead to improved patient outcomes.

APPROACHMILESTONES DELIVERABLES


TRANSITIONEven with the aforementioned planning in place, managing the transition to the new operational vision is a particularly sensitive stage of the transformation pathway. To manage it effectively the transition model must have four key aspects at its core:

• The transition team: A dedicated transition team must be put in place composed of multi-tiered personnel all partners working with key individuals from within the pharmaceutical company’s commercial and technology teams, who can devote the time required to effectively manage the process end-to-end.

• Consistent communication: Regular communication, not only between the external partners and internal personnel involved in the transition but also with additional key internal stakeholders who are impacted, is essential, involving both regular (daily and weekly) catch ups and more comprehensive monthly / quarterly service review meetings.

• Shared planning: The planning process around transition must be co-owned between external partner and internal stakeholders, to best facilitate assessment of areas for improvement and identify areas where additional skills support is needed.

• Program management: Centralized program management ensures that there is coordination across the multiple streams of the transition, monitors quality and timing standards and keeps joint executive boards apprised of the current transition status and risks.

3. OPERATEWith the strategy and organization in place, delivering the change is a process that necessitates a carefully coordinated transition phase, followed by clear governance and operating models, as explained below.


These aspects then preside over the multiple dimensions (technology, process, program, geographical, deployment options and business continuity) that must be included within transition and follow the rigorous process outlined below:

1. Transition readiness: The collaborative transition team conducts a detailed study to understand existing systems, reports and processes, with all documentation (SOPs, process maps, report specifications etc.) being shared openly, which allows training enablers to be put in place and the process of on-boarding for the external partner to commence.

2. Knowledge transfer: New processes are established, dry-run testing conducted, and appropriate training conducted, followed by testing to ensure knowledge transfer has been successfully conducted.

3. Secondary support: Primary production is conducted by the current teams and any existing service providers, while being shadowed by the new capability, which allows for further testing and process improvements / recommendations.

4. Primary support: At this stage of the process, the model now flips with the new capability taking on the role for primary production, shadowed by the current teams and any existing service providers, as a final phase before handover.

5. Steady state: The new capabilities and processes can now be fully implemented, post any changes from testing, with any partner and internal teams working collaboratively in a steady state mode.

While the above process represents an overarching template that can be applied across the business, in reality it should be applied individually to each CoE, as the inherent processes, stakeholders and skills requirements will vary across them.

GOVERNANCE MODELThe governance model includes the following five processes, aligned to the evaluation measures outlined in Figure 9.

• Assessment: Monthly meetings in the first year, thereafter every quarter, with the strategic, management and operational boards to review ongoing progress.

• Innovation: Ensuring incentives are provided for innovation within the process through a gate-based process involving a dedicated steering team delivering quarterly and ad-hoc inno-vation events / meetings.

• Capacity management: Implementation of a dynamic staffing model, driven by a dedicated re-source management office and weekly management meetings / reporting to key stakeholders aligned around the CoEs.

• Quality (service level agreement [SLA]) management: Measurement of SLAs across the CoEs and individual offerings, including quarterly key stakeholder reviews.

• Constant improvement: Implementation of Kaizen methodology across all key processes, including after-action reviews (AARs) to deliver process improvement.


OPERATING MODEL

EVENT MANAGEMENT

INCIDENT MANAGEMENT

PROBLEM MANAGEMENT

CHANGE / REQUEST MANAGEMENT

FINANCIAL MANAGEMENT

• Meeting and attendance

• Time to follow up or closure of business issues

• Number of submitted business cases

• Business case movement through gate processes

• Impact of implemented innovation (revenues or expense)

• Level of utilization annually and seasonality of deliverables

• Level of resource leverage across CoEs

• Headcount levels and management + time to fill open heads

• KPIs _ service level agreements across services and geographies

• Standard ITIL 3 service measurements

• Clients satisfaction results

• Number of Kaizen and AAR processes completed

• Input from governance

• programs reviews

GOVERNANCE

MEASURE / KPI PROCESS MEASURE / KPI

• Number of events detected and resolved pro-actively

• On time delivery / quality

• Number of Incidents (by category, priority impact and urgency)

• Average/mean time to issue resolution

• Number of problems identified and work around / fixes implemented

• Reduction in number of incidents over time

• Number of major changes / requests

• Time for change review, approval and implementation

• Change acceptance rate

• Budget versus expenditure

ASSESSMENT

INNOVATION

CAPACITY MANAGEMENT

QUALITY (SLA) MANAGEMENT

CONSTANT IMPROVEMENT

PROCESS

Figure 9Success measures / KPIs relating to each process within the governance and operating models for next-generation commercial capabilities

OPERATING MODELIn coordination with the governance model, the operating model takes the overarching processes outlined above to a more granular level, structured around the following management processes and aligned to the KPIs outlined in Figure 9.

• Event management: Processes for monitoring and identifying events, such as scheduled deliverables, data load, network and application availability etc.

• Incident management: Processes for logging, prioritizing and resolving incidents in order to restore normal infrastructure / analytical service in the most time-efficient manner.

• Problem management: Processes for proactively identifying the underlying cause of incidents, as outlined above – effectively heading off problems before they occur.

• Change / request management: Processes for efficiently handling all changes / innovation requests.

• Financial management: Processes for optimizing the costs associated with infrastructure and analytical services delivery.


ConclusionsLarge-scale transformation programs are incredibly demanding, especially when the focus is as central to the pharmaceutical business as commercial capabilities. They require a thorough understanding of the need for change, its impact and the expected benefits. Such transformation is made harder still because the changes to which pharmaceutical companies are responding are prompted by fundamentally new conditions in the operating environment, which mean there are no clear benchmarks from which to measure performance gains.

But the need for commercial transformation is clear – to maintain growth pharmaceutical companies must be able to efficiently derive insights from information, across every aspect of the business, or risk being left behind by competitors and the very healthcare systems in which they operate. Furthermore, they must understand their evolving role in a healthcare ecosystem that is fast-evolving far beyond traditional pharmacological interventions, embracing technology to deliver new solutions. Delivering the next-generation commercial capabilities this demands requires partnership with the right external providers, but in a manner that is distinct from previous outsourcing models. Instead, cost-efficiencies must go hand-in-hand with innovation to develop unique CoEs, which integrate central teams, internal clients, and external partners to harness each stakeholder’s capabilities to maximum benefit, while specifically driving internal skills development and maintaining intellectual property.

This senior executive briefing has outlined the key success factors in driving this change, described the building blocks of this next-generation commercial structure, and outlined a pathway to attaining it. Most critical to all of this is the need to ensure external partners can add real value, through combining:

• Extensive understanding of global healthcare data sources, covering both ‘traditional’ medicine and novel interventions, and how to integrate them.

• Best-in-class technological capabilities for rapid analysis

• Deep healthcare expertise across therapeutic areas, markets and functions, which is available on-demand globally

Ultimately, the rewards will go to those management teams that can clearly map out the major eventualities, inspire unity and cohesion among the workforce, and think not in terms of what has gone before but on finding innovative pathways by working with the right external partners who share a similar passion and vision.

Where information was once the currency of success, actionable intelligence is now the key advantage. For next-generation commercial capabilities in the pharmaceutical industry, reducing costs remains important, but reducing the time taken to derive accurate insight, in every aspect of the business, has become vital.


About the Authors

Andrew Gunn is an Enterprise Solutions executive in Technology and Applications at IMS Health and is based out of the US. Andrew has over 18+ years of experience in developing solutions that address a range of issues affecting the Life Sciences and Health Care industries. Andrew has a strong understanding of business processes and experience within commercial areas of pharmaceutical sales, marketing, and managed markets; with specialization in developing managed services, information management, customer relationship management and business intelligence solutions.

Andrew Gunn

Vishal Khanna heads the commercial outsourcing services business globally for IMS. Vishal has extensive experience in developing and managing brand performance and has over 2 decades of experience in large-scale services delivery & transitioning work to offshore centers. Vishal has been in the services business for over 22+ years. He has worked in a range of industry segments allowing him to bring the best of all worlds to his clients. Vishal has an MBA from TIAS business school, Tilburg, Netherlands, and a Bachelors Degree in Computer Science from the University of Pune, India. He is a Certified Outsourcing Professional (COP) from the International Association of Outsourcing professionals (www.iaop.org) and a certified COP for Governance and business development.

Vishal Khanna


Gary Minarich, VP and Global Center of Excellence Lead in Analytics for IMS Health, has been advising Life Sciences companies for almost 20 years, providing advice to clients in their go to market strategy encompassing new product launch strategy, sales force planning and optimization, ROI analyses, new and inline product forecasting, multi-channel marketing optimization, and more. Earlier at IMS, Gary was responsible for the global rollout of the Nexxus Marketing software as a service (SaaS) solution, a turn-key solution that allows companies to integrate and optimize their personal and non-personal promotional efforts. Earlier in his career, Gary worked at NASA, the US Space Agency, in the Research and Technology group. Gary holds an MBA from Indiana University, a BS in Astrophysics from Michigan State University and has also conducted doctoral studies in Astrophysics at Arizona State University.

Gary Minarich

Chris Nickum is responsible for the company’s commercialization of Global Services and solutions.

Since joining IMS Health in 2001, Chris has served in key leadership roles in which he developed commercial strategies for clients, sized and designed sales and marketing organizations, devised new commercial capabilities, and implemented measurement and management strategies. Most recently, he has focused on developing and deploying an alternative strategic framework for industry commercial models, identifying $15 billion in commercial effectiveness and efficiency improvement opportunities.

Prior to IMS Health, Chris held senior management roles at McKesson, NDC Health and PCS Health. While at these companies, his responsibilities included leading efforts to develop and commercialize innovative data warehousing and management assets, and driving the initial use of anonymized patient-level data.

With more than two decades of industry experience, Chris’s perspectives on pharmaceutical commercial opportunities and transformation have been published in numerous periodicals worldwide, and he is a frequent presenter at industry events, academic conferences and university forums.

Chris Nickum

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