Success Factors for Global Alignment and Targeting Platform. Pranav Lele

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1 Success Factors for Global Alignment and Targeting Platform Pranav Lele

2 Success Factors for Global Alignment and Targeting Platform Pranav Lele Increasing complexity and the globalization of pharma business models will force organizations to adopt a new unified approach for multi-country sales planning. Sales operations organizations within pharma must prepare to standardize across countries or risk losing business agility and face higher costs to support heavily localized business processes and nonstrategic technologies. This paper will explore the best practices and superior capabilities that can help reduce costs globally, even in the most cost-sensitive markets.

3 The harmonization imperative Local market dynamics and varying regulatory compliance standards have led to decentralized evolution of pharmaceutical companies. Teams selling similar products are structured and managed in different ways across countries, though they may have similar target customer segments. This has also led to an obvious impact on the related commercial operations processes (alignment management, targeting, refinement, incentives computation and payouts, etc.), most of which are managed by local entities with local budgets, many manually or on spreadsheets and some through disparate locally administered IT systems. For example, in markets like Europe and Latin America, different local affiliates have chosen disparate systems (often highly customized) to cater to their specific needs and budgetary constraints, leading to a wide technology portfolio, which central IT groups need to support. However, with pipeline pressures, and the goal to reduce spending to support salesplanning processes, the drive to adopt scalable and more cost-effective solutions has increased to the point where many companies have started to centralize and harmonize technology and operational best practices across markets. As enterprise-level technology evolves, most organizations are faced with some critical questions: + How to reduce the total cost of ownership of disparate systems in use for sales-planning processes across countries? + How to enable smaller markets to adopt common processes, systems and best practices that require upfront investments of a scale that is not available due to local budgetary constraints? + What is the best approach to manage large technologies deployed across multiple countries, without losing the agility to handle niche or specialized parts of the business or respond to varying business needs? For example, when preparing for a new product launch with a new sales team with minimum lead time. With changing market dynamics, companies will face increasing cost pressures 1 and the need for more global customer management (especially key customers or accounts, KOLs, etc.) due to increasingly mobile patients and customers. Thus, organizations will need to deploy harmonized practices and processes across countries to manage such customers in a standardized way. In addition, capabilities like CRM and multichannel marketing will continue to remain expensive solutions if deployed in locally, thus resulting in a trend to adopt harmonized processes and centralized systems for all sales-planning processes across countries. Rapidly evolving new technology has made it possible to create and deploy such a central platform to multiple countries. 1 Sinking profits and accelerated consolidation: Big pharma facing upheavals, EY release, May 2014; Progressions 2014, EY Global Pharmaceutical report. 3

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5 This type of solution helps all markets leverage a common set of processes and best practices, and also deliver savings on total ownership costs through centralized implementations and ongoing operations in a shared or managed services model. Technology also offers a higher level of automation through faster data processing, data quality checks, direct system integration and elsewhere, leading to a reduced turnaround time for activities that previously have required manual intervention across all countries. This has a direct impact on improving agility, as processes are now better equipped to respond to changing business strategies. Unlocking the value of single platform commercial operations Harmonizing the decentralized sales planning processes across countries may represent a significant challenge because such initiatives often lead to changes to business rules, operating processes and technology ecosystems, which result in a disruptive change to many headquarter and field users. As new processes are designed, there is a risk of delayed deployments and heavy process localization in the absence of a system that offers the best practices. Fortunately, rapid evolution of enterprise-wide technologies like cloud-based CRM or ERP systems, HR process automation tools, and sales planning and forecasting suites has offered an avenue to counter these issues and achieve faster deployment by leveraging best practices around salesplanning processes and technology. Ongoing advancements in infrastructure and cloud hosting have also reduced upfront capital expenses, thus making such technologies more affordable in a pay-per-user model. With evolving support across mobile devices, sales teams are now equipped with access to key planning data while performing regular field activities like visiting doctors. These trends mean that organizations are now positioned to derive increasing benefits from the adoption of such standardized technologies, thus reducing the break-even period on the initial investments on the best-in-class applications. For example, one ZS client has seen a 50% reduction in the planning time, with improved user experience and a solution that can scale up to manage multichannel environments in future. In this case, the impact was optimized through the following guiding principles: + Centrally driven implementation: Build a core solution to incorporate the global best practices, followed by cluster-based deployments to individual countries. + Single source of truth: Remove redundant data duplication and adopt unified source of truth systems for alignment management and call planning. In other words, only one system for one domain, globally. + Automation and system integration: Adopt business-rule-based data processing as large enterprise systems interface with each other. Automate the data exchange across systems, thus reducing the manual effort to handle and manage data. 5

6 In the following section of this white paper, we have provided an insight into the factors responsible for delivering success, based on ZS experience across multiple global harmonization engagements. Key considerations for success Engagements for adopting enterprise-wide technology for standardizing sales planning processes are large transformation projects that involve business and technology risks. This section looks at some of the top factors that help to mitigate these risks and to drive a successful implementation. + Choosing the right implementation model Significant cost benefits can be achieved by choosing the correct implementation model for sales planning standardization. The choice of the model is closely related to the desired state of business processes, in addition to the desired state of downstream sales activity support technologies like CRM. The following diagram illustrates the ZS perspective on the implementation models: Common Central Tool Desired State 2: Central CRM + Customized commercial operations planning platform Desired State 1: Central CRM + Single strategic commercial operations planning platform CRM system adoption Locally Driven Implementation Centrally Driven Implementation Market Specific Technology Current state of most organizations Not a recommended strategic direction Localized Full Harmonized Target level of process standardization 6

7 There are two key models to drive success: Centrally Driven Implementation: Offers a cluster-based multi-country go-live across waves, with maximum leverage of a core central solution and some minimal localization to accommodate specific local needs. This solution leads to a higher degree of process harmonization, with a very efficient and cost-effective central solution. However, this model offers a lower level of localization, and as a result faces the risk of slower adoption by local stakeholders as very specific local needs may be required to be addressed locally. However, this is usually offset by the benefits from the large library of solution capabilities that would not have been available to smaller countries based on individual implementations and their local budgets. Our experience at delivering such solutions suggests that this approach can be seamlessly aligned to a broader program, such as a global CRM rollout. Locally Driven Implementation: Offers a market / country specific opt-in for the solution, with specific local entities (i.e. countries) choosing to enroll for the solution. This approach delivers a higher degree of localization (than the Centrally Driven Implementation), with customized individual deployments for countries. The key benefit offered by the solution is the ability to meet localized needs (with higher degree of customization), leading to an easier local market buy-in, thus resulting in reduced business disruption. However, as compared to the Centrally Driven Implementation, this approach presents the following challenges: + Higher program costs and timeline for the implementation due to separate local implementations leading to reduced efficiencies for deployment + Increased cost of ongoing operations and a higher turnaround time for ongoing operations processes. + Potential challenges for having local entities opt-in to the implementation program and common ongoing operations support processes. 7

8 Typically, organizations choose a model based on some of the factors highlighted below. Centrally Driven Implementation + Similar set of products and sales teams across markets + Similar target market segments across countries + Availability of program-level funding for all countries + Adoption of a central CRM system across countries + Vision to drive ongoing operations support through a central managed services or shared services model + Large library of global capabilities outweighs loss of some specific local ones Locally Driven Implementation + Large divergence in products and sales teams across countries + Varying target market segments across countries + Availability of local budgets for sales planning, leading to decentralized technology adoption through individual program enrollment + Varying CRM platforms across markets, with high degree of local customization In many cases, companies adopt a blend of the two strategies, where the smaller and less complex markets get an out-of-the-box centralized solution, while bigger and more complex markets, such as EU big five, add their own budgets to allow some customization and localization over the out-of-the-box solution. Such customizations are usually taken up in subsequent phases of the program, i.e. after the deployment of the out-of-the-box solution is completed to all countries. + Optimizing the investment The common conundrum faced while proposing business cases for standardizing pharma sales-planning processes is the key business metric to focus on for building the case. Companies are usually juggling some important questions: How should we build a new platform that offers better functionality without investing a huge upfront amount on implementation? What is the best way to minimize the operating costs of large complex platforms that are implemented across countries? What will help us reduce the total cost of ownership of the new platform? 8

9 The business case for such large programs is based around the equation provided below: Return on Investment (ROI) = [Cost Savings + Cost Avoidance + Sales Uplift - Program Cost] Program Cost This equation focuses on four key factors: Cost savings: Reduction in expenditure incurred to support the current business as a result of the new platform. This will include all the saved costs on legacy technology infrastructure, support teams and the associated vendor costs. Cost avoidance: This is the value of the additional time / bandwidth available with the current business and operations support teams as a result of an automated process offered by the new system. This spare capacity can be deployed for other programs within the organization. Sales uplift: This is the cumulative value of the business gains accrued due to the availability of new system features and harmonized processes across countries. This will include the direct impact on sales, and the efficiencies derived due to harmonized operations. Program cost: This is the implementation, ongoing operations support and software license costs for the program, i.e., the investment needed to build, deploy and maintain a multi-country platform to serve all business requirements. Most large multi-country programs are designed to break even within a threeto-five-year horizon, which is typically the timeline for paradigm shifts in technology and operating processes. A faster break-even and a higher ROI can be achieved using some techniques highlighted below: Combine basic program and introduction of new functionality: Organizations may prefer a basic program that offers a standardized platform to replicate the current system and functionality. In such scenarios, new functionality is added and integrated later, after the initial platform stabilization exercise is completed. This will result in a higher implementation cost for new functionality, as a thorough impact analysis on the implemented system and business processes needs to be conducted post go-live. Hence, a best practice is to combine the rollout of the basic program and introduce the new functionality along with this program to avoid recurring system modifications, and to leverage the knowledge of the implementation team through the program implementation timeline. 9

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11 Prioritize the new functionalities: A large program offers an opportunity to rationalize processes and also offers a wide variety of new features on the standard platform. Since these features have associated costs, these need to be prioritized using some guiding principles that are established during the commencement of the program. A few such principles are provided below: + High priority for features causing the biggest business impact, such as those required by a larger number of countries or with the potential to impact the biggest volume of sales + High priority to be assigned to features that require a lower ongoing operations effort through process automation + Low priority to be assigned to features that lead to a fundamental change to the platform created as a part of the basic program + Leveraging economies of scale and scope Large multi-country sales operations programs offer massive economies of scale as more global affiliates enroll for adopting standard technology and processes for managing areas like alignments, call planning and incentives. This is due to the ability to rapidly deploy a centrally developed platform across multiple countries while leveraging the technical and process expertise built during the initial phases of the program. Thus, a critical factor for success is to enroll the maximum possible number of countries into the program during the setup and program commencement. This helps to configure a central harmonized platform and to minimize the incremental deployment costs to newer markets. For example, in one large program, ZS was able to successfully roll out the ZS Javelin TM alignment management and targeting platform to 35 countries in three waves of deployment, with as many as 17 countries in a single wave. This wave of 17 countries added approximately 30% to the program implementation cost. The average implementation cost for all countries ranged from 1/10 th to 1/3 rd of the standalone implementation cost. Beyond scale, large programs also offer the opportunity to centrally manage ongoing operations (potentially with lower-cost labor in countries such as India), reuse the skill base across countries and set up shared services models with external vendors. While planning multi-country transformation programs, this serves as an important long-term success driver because these models also contribute to significant economies of scope. Best practices on technology and process management are centrally built and harnessed across markets, while the local teams can focus on better planning and executing the selling programs. 11

12 + Proactively managing change Process and technology standardization has a direct impact on the way commercial operations processes are driven across multiple markets, and hence an impact on a huge volume of sales. Thus, onboarding any new standardized process requires an extensive focus on change management to ensure that the impacted stakeholders (like sales reps, district managers, country leads, etc.) can move seamlessly to the new technology, with minimum disruption to their day-to-day work. Based on prior experience, ZS recommends that the following six focus areas need consideration for the change initiative: Focus Area Set the guiding principles. Establish the goals and program vision Governance Drivers for Success + + Identify and prioritize the goals and metrics that define success, and ways to manage them. + + Ensure strong buy-in from the program sponsors and stakeholder leadership groups. + + Create a strong internal program brand name to build emotional connections and to reinforce the principles. + + Set a joint program vision for impacted stakeholders to help improve adoption in later phases. This can be done using the following model: Drivers: State and quantify the business opportunity that will be captured (or the business challenge that will be mastered) through the initiative. Deltas: Identify the gap between where the organization is and where it wants to be. Decisions: List the decisions that the organization needs to take. These will roll into the deliverables for the program. + + Establish the layers of the governance model: program steering committee, deployment team leadership and individual delivery teams. Define mutually exclusive roles and responsibilities for these groups. + + Define processes for tighter program governance through regular updates, status meetings, milestone tracking, effort and schedule variance analysis, etc. 12

13 Focus Area Analyze the stakeholders. Engage with communication. Script the critical moves. Drivers for Success + + Distribute the stakeholders into distinct groups based on their roles, background and level of influence. For each group, create a map of the gains or losses that will be accrued due to the program, along with a strategy to enhance the gains and to mitigate the losses. + + Identify the change leaders: Identify the champions who would be the first adopters, and then evangelize the new process and technology. ZS experience suggests that market leads or country leads are the typical leaders who offer program feedback and help to cascade the changes to field sales force teams. + + Clearly highlight the relevant benefits to each impacted group. + + Offer regular program updates to all stakeholders and seek continuous feedback. In one ZS program, each program milestone was communicated to all change leaders and program champions throughout the organization. This helped to depict the progress that the program had made due to the participation of relevant teams. For example, a successful rollout in the U.K. was communicated to Latin America to build a strong positive image about the program. + + Utilize critical project phases (like UAT) to engage, educate and develop change leaders so that they can better evangelize the platform and the process + + Shrink the change: Adoption levels are significantly improved if the program is set up in a way that new technology offers the exact same results as existing systems. For example, as part of a program, ZS focused on replicating the business data currently available to the field by reverse-engineering the first version of the business rules, to reduce confusion that additional information may cause. Any new requirement to business rules was then assigned as an operations activity. + + Pull the rug: Adjust the environment to make the old way harder to sustain. For example, ZS rapidly decommissioned the old alignment management systems as soon as the new technology went live. Also, all new data and process requests with the old system were put on hold until the deployment of the new platform was completed. 13

14 Making the move One thing is for certain, increasing complexity and globalization of pharma business models will force organizations to adopt harmonized processes and technologies. While some companies have been at the forefront of investing in such platforms for sales planning, many more will soon follow. Sales operations organizations within pharma need to set themselves up for standardization across countries or risk losing business agility and facing exponentially increased spending to support heavily localized business processes and nonstrategic technologies. Fortunately, rapidly evolving technology platforms, combined with process expertise and implementation methodologies, are now available to achieve the desired level of standardization. Thorough planning of changes to minimize disruption, combined with strong program governance, results in faster global process harmonization along with a reduction in the total cost of support and operations. Though the global business landscape is pressuring pharma companies to standardize, the systems, processes and approaches for making these transitions successful are available, and will help to offer a smoother transition. About the Author Pranav Lele is a Manager with ZS Associates in Pune, India. He leads the sales planning solutions delivery group that focuses on sales planning process transformation using the ZS JavelinTM suite of software solutions. He has worked primarily for large and mid-tier clients in the pharmaceutical industry across a wide range of sales planning areas including alignments, targeting and call planning. Prior to joining ZS, Pranav worked as enterprise architecture and IT strategy consultant for clients in the banking, logistics and pharmaceutical industries. He holds a B.S. in engineering from the College of Engineering, Pune (India), and an MBA from the SP Jain Institute of Management, Mumbai (India). 14

15 About ZS ZS is the world s largest firm focused exclusively on improving business performance through sales and marketing solutions, from customer insights and strategy to analytics, operations and technology. More than 3,000 ZS professionals in 21 offices worldwide draw on deep industry and domain expertise to deliver impact where it matters for clients across multiple industries. To learn more, visit or follow us on Twitter (@ZSAssociates) and LinkedIn.

16 For more information, please contact: ZS Associates zsassociates.com ZS Associates 07-15