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Ashfield Answers

Strategic counsel for a global healthcare sector in an ever-present state of flux

The road to smart-sourcing

Julian Tompkins, Regional President, Ashfield Commercial & Medical Services, explains why the smartest approach is the integrated approach

The value of outsourcing to the global pharmaceutical industry is no longer up for debate. The past decade has seen pharma demonstrate an increased willingness to partner with trusted service companies, and widespread recognition on that outsourced partners can develop creative strategic solutions to help companies overcome their challenges. In the process, outsourcing has proven an effective method of minimising fixed costs whilst driving demonstrable improvements in brand performance and patient outcomes. It's been a long journey, slowed down by old perceptions and perhaps an understandable loyalty to traditional methodologies - but the contract sales organisation (CSO) market has come a long way since the rent-a-rep model of the 1990s.

The modern breed of CSO focuses not only on sales, but on the delivery of integrated services and solutions that support the entire commercial life cycle. The phases and elements of a long-term brand strategy are common - but, despite years of operating in independent silos, they rarely work best in isolation. From pre-launch clinical and scientific communications, key opinion leader (KOL) development and healthcare symposia, to educator programmes, market access activities and environmental market research, the value of shared intelligence and centralised management is incomparable. And with pharmaceutical communications crossing continents, countries and cultures, harnessing a multi-channel approach in an increasingly global marketplace requires expertise, regulatory understanding and infrastructure to deliver operational excellence. But with every activity across the product life cycle intrinsically linked, it's perhaps surprising to discover that the integrated approach to commercialisation has for so long been the exception rather than the rule. It's time to redefine the outsourcing paradigm.

The cross-functional approach is aligned with the evolving and multi-disciplinary healthcare environment. In a market bedevilled with complexities and challenges, it can enhance customer engagement across multiple channels and multiple markets - and drive real economies of scale. There can be no argument: outsourcing works - but integrated outsourcing provides even greater benefits in the value-based economy.

In fact, such is the industry's reliance on strategic partnerships that the term 'outsourcing' is itself being redefined. So-called 'smart-sourcing', where organisations design their resourcing models for maximum effectiveness using a combination of in-house and outsourced competencies, is gaining traction. This collaborative approach sets out to drive productivity and efficiency gains, leading to improved profitability.

Certainly, collaborating with a large, international partner can secure gains and cost-savings in equal measure. In a global market, the procurement costs of dealing with multiple suppliers in multiple countries is significant. Moreover, the associated cost of maintaining on-going relationships with high volumes of individual suppliers is not only prohibitive, but it lacks synergy and offers procurement no economies of scale. By working with just one trusted partner to provide an integrated programme of services, organisations can benefit from the consistency of a high-quality approach - and make it both scalable and cost-effective.

As pharmaceutical operations become increasingly globalised, the trend towards integrated outsourcing will only accelerate - and the prospect of international master service agreements will draw ever closer as procurement managers battle to drive down the cost of global activities. The most progressive companies will be those that choose to collaborate with trusted partners that can offer a size, scale and depth of service portfolio, that can help them develop ingenious solutions to challenges across the brand life cycle.

In a fast-paced environment where competitive advantage is the most precious commodity, the need to be proactive as new commercial models emerge is paramount. Outsourcing and collaboration represent two of the industry's best hopes for increased profi tability and sustainable growth. 'Smartsourcing' may yet prove to be the sector's next buzzword - but the smartest outsourcing will undoubtedly be integrated.

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Article by
Julian Tompkins

Regional President, Ashfield Commercial & Medical Services

7th March 2014

From: Research, Sales, Marketing

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