Relationships are important in any business but there’s one relationship that can make or mar the commercial success of a pharma company in India: the one that exists between its foot soldiers the medical reps (MRs), and the various doctors and consultants who write out the prescriptions. Whose formulations will the doctor prefer to scribble from among the many available in the market?is a question that all drug makers want answered in their favor.
That is why, in a typical pharma set-up, the daily or weekly report filed by an MR is accorded so much weight.
Traditionally, the Indian pharma industry has adopted the pen and paper approach to this report-filing process. There has been a consistent to and fro of files and many a courier companies has flourished owing to the pharmaceutical sector. However, as operations grew complex and competition evolved, pharma companies began looking towards technology to manage this communication efficiently.
It was a decade ago that reporting software made its first entry into the pharmaceutical segment. Since then, it has seen many evolutions. With mobility coming into the equation and bandwidth issues being resolved (at least in large cities), even small pharmaceutical firms are contemplating a software for sales force automation (SFA).
Having said that, we are still far off from an industry-wide SFA goal, especially when it comes to adopting the best tools available in the market. The sector is still at a stage where basic software, either in-house or third party, forms the backbone of online reporting. Consolidation with other applications and higher-level analytical abilities through more sophisticated tools remain out of reach for most firms.
SFA: The roots
Sales force automation came into existence when pharmaceutical firms recognized the need to maintain and share a database of doctors across their areas of operation. As a result, the very first avatar of SFA resembled a database. Adding sharing and collaboration capabilities to this database was the next phase. The reporting capabilities came into the picture at a much later stage.
It was in the year 2004-05, recalls Rajput, that some companies with large India operations, started using reporting software, most of which was built in-house, since not many vendors were present in the space. It was only a few years later that third-party software caught up in the pharma industry.
The reporting feature, which was mostly put as an enhancement to the database-like tool, is what is catching the attention of IT heads and vendors alike. It is mostly owing to the fact that in a pharmaceutical firm, a lot depends on real-time reports and updates.
Atul Tuli, Sales Director, CRM On Demand (Applications), Oracle India adds that though pharma is investing in other aspects of business as well, sales force remains a key IT magnet. “Over the last few decades, various market influencers are forcing pharmaceutical companies to deploy IT solutions to automate and smoothly manage various functional areas, including R&D, clinical development, and supply chain to stay competitive. As sales forms the backbone of any pharma business, solutions which help in automating sales channels, optimize marketing spends and manage different products for different markets are witnessing high investments by various pharma companies in India.”
The primary source of a large chunk of data in a pharma firm is the MR daily report, which in the absence of any CRM or SFA, came in the form of paper or electronic files that need extensive consolidation. This often proved time consuming. As a result, pharmaceutical companies began scouting for a solution that involved information sharing in real time.
Evolution of cyber cafes in the smallest of towns and villages, followed by data cards, has played a phenomenal role in transitioning SFA from a plain-vanilla MR reporting routine into the modern SFA process that includes knowledge-sharing and collaboration.
Trends in SFA
When Meyer Organics decided to automate its sales force in a phase-wise manner about a year back, the company’s primary objective was to fast-track approvals and communication between MRs and area heads.
After the system went live, all MRs as well as managers and area heads can access the system directly for their reports and other tasks. After we implemented this software, every MR has been given a log-in ID and password and they fill their reports online. The report automatically gets forwarded to the area managers and approvals take place on the system. We now have more than 1400 MRs online,reveals Chinchkar.
Online reporting has become one of the key features of any sales force automation tool available in the market today. Says Rajput, “Things have been moving swiftly on the online front of late. As of now, we have a database of 15,000 people logging in daily to submit reports over our software.Though the advent of cyber cafes has a lot to do with the surge in online solutions, mobility and BYOD also have a contributory role to play.”
According to Srinivasan of Sage, pharma companies have been strategizing the automation of their workforce by implementing cost-effective mobile devices and technologies such as a basic mobile phones and SMS for quite some time now.
However, the signs of taking mobility to the next level are just emerging in the pharmaceutical sector. Though tablets are far from pervasive, some pharma organizations are doling out 3G tablets to managers and area coordinators. Others are looking to enhance the functionality of mobile-based reporting. Wockhardt, for instance, is using mobile technology at various levels, not only for SFA, but also in other processes.
The buzz about mobile reporting was first generated about five years back but it never took off. Now with the prices of smartphones falling and their uptake, along with tablets, growing rapidly, things seem to have reached an inflection point from where mobile SFA can indeed take an upward climb.
Another trend in SFA is the appetite of the pharma sector for Software-as-a-Service (SaaS). Says Rajput,” SaaS-based solutions, which involve no capex for companies, are catching up fast. Licensed software hasn’t found many takers in pharma.”
As a result, cloud-based applications, CRM in particular, are becoming popular in the vertical. The numbers paint a similar story. According to Gartner, SaaS delivery of CRM applications represented 34% of worldwide CRM application spending in 2011. Also, more than 50% of all SFA spending is on the SaaS platform. Separate figures for the Indian market are not available, but given the relatively lower penetration of SFA and CRM tools here, the SaaS adoption proportion in India could go even higher in the next few years.
Rajput gives an approximate idea of the investment that a pharma firm needs to make for an online SFA solution. For a sales force of about 100 people, an online software can cost anywhere from Rs200-500 per user, per month,he says. However, he’s quick to add that the cost of solutions can vary widely from vendor to vendor.
Need for niche
When it comes to SFA solutions for pharma, there is a near absence of big vendors. So the vendor options available to CIOs range from niche players catering only to pharma, to vendors providing general SFA software across verticals.
The most prominent reason for application giants staying away from pharma, according to Rajput, is the customization needs of the vertical. “Big players aren’t present in the pharma sector because the way this industry works, it is difficult to apply a general CRM software to it. That is primarily because the pharma industry doesn’t directly approach the customers. There is a doctor involved in the go-to-market chain.”
The other big reason behind this scattered vendor landscape is the level of services involved. Pharma MRs often need instant, over-the-phone assistance, usually in their own local language. With mega vendors, registering a complaint or getting a minor assistance often becomes a complicated, time-consuming process. Sales service becomes a concern for customers because big players work with reference numbers for complaints,corroborates Rajput. Most pharma enterprises therefore look for vendors who not only deliver the product customized to their processes but who can also ensure localized and quick services.
The absence of vendors created a crater in pharma, and many niche players, which develop software only for the life-sciences vertical, have mushroomed to bridge this gap. Interestingly, the scenario in India is a contrast when compared to other countries, where the pharma sector is mostly utilizing apps from mega vendors. Take the case of Aurobindo Pharma, which chose Oracle’s CRM for its sales force needs in Australia. There, according to CIO Mahesh Kumar Pinnamaneni, the company faced no major challenges. “We provisioned the solution mostly on iPads and because there are no connectivity hassles [in Australia], the deployment went smoothly,”he says.
Pinnamaneni observes that, in India, a sales force software riding on mobility hasn’t been able to take off, primarily due to connectivity bottlenecks and service viability. We are now looking at some offline application that can be installed on a basic smartphone,he reveals.
Bottlenecks
Chinchkar of Meyer Organics echoes a ground reality when he says, acceptance and training have been our biggest challenges. MRs resign quickly, so area managers need to conduct trainings repeatedly.
Other CIOs agree that the high attrition rate amongst MRs and extensive training needs often add up to unforeseen costs. Pinnamaneni is of the view that since SFA is very critical when you are doing domestic formulations and very important for a large sales force, system glitches and downtime can prove to be a tedious challenge.
He also puts into perspective the connectivity issues that continue to plague India. “We hardly face any infrastructural challenges in tier one and two cities now. But, in remote areas, connectivity is a big challenge.”
Apart from infrastructural impediments, the industry is also struggling with consolidation. Since most of IT purchases in pharma have happened in a random manner, IT heads are grappling to provide a single interface for all their communication needs. “Right now we have a different software for MR reporting. We would like to consolidate it with ERP and other systems,”says Chinchkar.
Poor usability standards of the implemented technology, resulting in lack of usage, is also something that both the vendors and users are dealing with. Many IT heads are driving corporate culture to enhance usage within the organization. Parab of Wockhardt believes that proper vendor selection, especially in a niche technology such as SFA, can save companies from some of these challenges.
Return on investment (RoI) has also become a debatable aspect of SFA. Srinivasan feels that additional costs, which many enterprises don’t take into account, can often lead to miscalculations on the RoI front.”There are several hidden costs like the cost of devices, cost of software (purchased as a license or cloud subscription), and integration and training costst that companies don’t initially account for. These parameters can change the TCO & ROI for pharma companies automating their sales force.”
Organizations are also facing some dilemmas with respect to taking their reporting to mobile and other devices. Lack of several available data points within the mobile interface is leading to breakages in the organizations’ processes,says Srinivasan.
Sales force 2.0
Experts envision a new era to dawn in Indian SFA once the air clears around BYOD applications for sales force. Elaborates Srinivasan, BYOD is a boon for the efforts of the pharma companies to aggregate information from a corporate perspective, but it is a bane when it comes to data security, as information can be extracted out and shared with competitors during an MR’s exit process from the organization.”
The reason for this, he says, is the fact that SFA applications were designed from a device perspective and in most cases, not designed keeping in mind many real-time scenarios. Therefore, more often than not, the technology does not support seamless wipe-out of data.
However, as the technology players work their way through these challenges, SFA tools of the future are likely to be more BYOD-centric, and will lay greater emphasis on data security. They are also expected to become device-agnostic and easy to install even on basic handhelds. Adoption of SFA tools will also get accelerated after the remaining connectivity issues are resolved.