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Improving revenue: Finding the right talent (part 1)

Posted: 5 November 2013 | | No comments yet

Few markets have undergone the degree of change experienced by the life sciences sector in recent years. The end of the blockbuster drug era, the increasing cost of product development and a growing population putting greater strain on healthcare services around the world have combined at a time when economic constraints are putting fierce pressures on the public purse to do more with less…

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Few markets have undergone the degree of change experienced by the life sciences sector in recent years. The end of the blockbuster drug era, the increasing cost of product development and a growing population putting greater strain on healthcare services around the world have combined at a time when economic constraints are putting fierce pressures on the public purse to do more with less. For many providers, this has turned established pricing models on their head. It has moved rapidly from a dominant focus on volume generation to one in which the sales team must recognise and become directly involved in the protection of baseline profitability as much as top line revenues.

It may be that some of the skills and expertise required will have to come from sectors that are more advanced in the area of revenue performance improvement. Yet, experience to date confirms that, with the right leadership and enterprise-wide approach, in most cases there is likely to be a pool of talent within the existing business capable of adopting a more strategic approach to revenue management. Alex Rumble, Senior Director Europe, Model N, recently noted the apparent dearth of skills within supplier businesses as they look to take a more strategic view of improving margin performance. “In some ways, this comes as no surprise,” she added. It is true, for example, that the concept of end-to-end revenue lifecycle management has yet to achieve mainstream adoption in the life sciences sector and there are as yet relatively few practice specialists capable of driving fundamental change within the business.”

Yet, there is another key element driving this wind of change across the industry. “Differentiating one’s proposition now requires the business to consider price in the broader context of defining the distinctive value of their offering, which in turn demands a more in-depth understanding of the customer’s needs and challenges. The result of all this is that identifying the appropriate development and operational skills is only one element in putting in place an effective revenue management initiative. Creating a pricing management team without the appropriate infrastructure and business-wide support to underpin it is unlikely to succeed,” said Alex.

On the way: A snapshot of providers to today’s life sciences industry would show an increasing number of companies starting to undertake change initiatives in improving their approach to pricing. Yet, too many are doing this in a fragmented way, with no vision of what the end-to-end process of price, profit and revenue lifecycle management should look like. They have yet to recognise the importance of developing skills and talent in-house if the business is to move from a narrow siloed approach to a broader, enterprise-wide commercial view. Alex notes: “There are three key elements in effectively addressing key skills issues around ownership, leadership, management and people development. First, to make it happen, board-level project ownership is crucial. Second, in an essentially global pharmaceutical industry, it requires staff who can take a multinational, multi-departmental view of managing the complete revenue lifecycle, at both a strategic and operational level.

Finally, much is changing for life sciences firms in the area of pricing and margin control. Not only is revenue lifecycle management a relatively new concept, but aspects of the sales process itself such as tendering have also rapidly increased in importance. The result is that the new skills required to enable the enterprise to take full advantage of the opportunities they offer are in relatively short supply.

Read Part 2 >>

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