Commercial Operations in Life Sciences

A paradigm shift in Commercial Operations

In the past few years, new models of customer engagement and operations have been established in parallel to traditional methods of execution. Enabled by nimble commercial operating models, new digital strategies are being developed for improving customer insights through digital engagement, increasing operational efficiencies through new digital end-to-end processes, and delivering better marketing through actionable, data-driven insights.

This digital boost has been further accelerated by the COVID-19 pandemic, highlighting a significant shift in how Life Sciences organisations engage with their customers (health care professionals and patients), with implications on the corresponding go-to-market model and the set of capabilities required to enable this shift.

It is then critical to evaluate the setup and efficiency of the Commercial Operations of the future. In achieving greater efficiency, customer centricity and service innovation (constituting what we term as Commercial Excellence) across the end-to-end commercial operations, Life Sciences companies are able to successfully achieve their growth ambitions and create value for both their customer and their organisation.

While exploring new ways to achieve Commercial Excellence across the value chain, we have created a framework that encompasses the core four steps of the end-to-end Commercial Operations process and relative activities. For each area (Marketing, Selling, Order Management, Fulfilling) there are a series of approaches that can optimise the Commercial Operations process and address related challenges:

Intervening at each of these four steps of the Commercial Operations process can unlock a range of substantial benefits across the value chain in terms of both revenue uplift and cost reduction, as well as overall customer experience:

Achieving superior commercial benefits through Commercial Operations optimisation

Optimising the Commercial Operations process requires a dedicated and systematic approach to unlock its full value.

We believe that enabling commercial excellence through the implementation of even just some of the levers identified along the Commercial Operations process can unlock significant value:

• Sales and marketing efficiency and effectiveness measures can reduce operating cost by up to 30%, with average benefits amounting to 3-8% EBIT margin improvement
• Achieving customer centricity (e.g. through better patient engagement and services, enablement of commercial analytics, or ecosystem partnerships) increases brand advocacy, leads to higher customer spend, longer tenure and reduces cost-to-serve by up to 35 per cent while increasing revenue growth by 5-15% points on average
• An innovative service model allows the transformation of businesses in orchestrating a dynamic ecosystem of offers, with successful companies seeing their valuation move into a higher P/E bracket, typically 2-3x the value of pure product manufacturers