While studying analytics adoption across industries, the pharmaceutical industry caught my attention. The pharmaceutical industry is in a bind. According to IMS Health, the top 17 companies need to cut USD 36 billion in selling, general and administrative costs by 2017 to maintain an operating margin similar to 2012. Various factors such as expiring patents, tighter regulations and the steady decline in access to physicians have contributed to this situation.
To offset the impending losses from their shrinking profit margins among others, companies are looking at reining in sales and marketing expenses. However, instead of sacrificing potential headline growth by cutting down investments in sales and marketing, pharma companies can leverage analytics to improve the effectiveness of their existing sales force and improve the marketing return on investment.
Analytical models directly link brand plans to sales force decisions for greater alignment between strategy and execution. It also helps balance sales force workloads, equalizes earning opportunities and ensures that the most profitable customers are covered.
Using analytics, companies can design effective sales processes and channel strategies based on customers’ needs, buying processes and potential. Analytics can also help in market analysis and generate insights on market sizing, therapy area evaluation, competitive landscape and product demand. The advantages listed here only scratch the surface of the possibilities that analytical solutions offer. While some companies leverage analytics to varying degrees, many don’t.
The road ahead is lined with opportunities and hurdles for the pharma industry. However, by infusing analytics within the organization, pharma companies can exploit the opportunities and clear the hurdles easily. This also leaves open the question, ‘How can pharma companies use analytics effectively to drive commercial excellence?