Finding the Best Fit: Three Characteristics of an Effective Analytics Outsourcing Partner

The way in which customers seek information and make purchasing decisions rapidly is changing in today’s medtech environment. In fact, the very definition of a “customer” has evolved beyond the healthcare provider to include key stakeholders at large group practices, independent hospitals and integrated delivery networks (IDNs). Sales and marketing organizations, in turn, are racing to meet the disparate needs of both clinical and non-clinical influencers by adjusting their sales models and providing data-backed insights for rapid decision-making.

Many medical device companies have neither the bandwidth to manage the multiplying streams of available data today nor the expertise to generate insights based on ever-evolving customer purchasing trends and behaviors. Others stand to risk wasting time and money on building new analytic capabilities in-house, only to realize it is outdated by the time it’s ready.

Outsourcing sales and marketing operations and analytics to another partner enables a company to manage these functions more efficiently and effectively. In addition to tackling some necessary but routine analytical tasks, the right vendor can help a company better predict product sales trends and understand customer behavior and purchasing styles. For example: Are independent hospitals paying less? Are large IDNs negotiating lower prices?

Companies in the highly competitive and regulated medical device industry, however, generally are skeptical about trusting third-party organizations with their data and analytics. Of the U.S.-based medical products, devices and service companies that participated in a recent study by Evanston, Ill.-based global consulting firm ZS, 16 percent outsource business intelligence, 12 percent of those surveyed outsource big data analytics (such as click-stream data and social media), 8 percent outsource marketing analytics (e.g., closed-loop marketing and campaign return-on-investment analytics), and 4 percent outsource sales analytics.      
                                                                                                                               
Still, we expect companies to benefit from outsourcing many critical aspects of their commercial operations in years to come. Large IDNs are more powerful and data-driven than ever before. Government pressures and reimbursement challenges change how medtech firms need to operate. Decreased product differentiation, greater competition in the field and changing buyer behaviors all are factors that further compound the pressure on companies to do more with less. Strategic outsourcing can play a critical role in alleviating some of these pain points and turn others into a strategic advantage.

The question for many firms today is not if they will outsource key elements of their operations, but about how best to accomplish their outsourcing goals with a partner of choice. While lowering costs often is one of the drivers for entering into an outsourcing engagement, the company may not be best served by the lowest-cost vendor.

Instead, here are three key characteristics to consider when choosing an operations and analytics outsourcing partner:

1. Find Expertise That Aligns with Needs
Medical device and diagnostics companies grapple with various changes, from rapid advancements in technology to robust merger-and-acquisition activity. A partner who demonstrates an astute understanding of industry trends and technology advances can help the company stay ahead of these changes. This, in turn, allows the company to keep its focus on its core competencies that provide a competitive advantage. 

An experienced partner who fully understands what a company needs also can ask the right questions and explore large amounts of data in a way that generates a hypothesis and actionable insight—making the medical device company become leaner and more efficient. A partner also will start with a universe of commercial questions and can help the company increase the value of the analytical capability.

2. Seek Out Various Services That Develop Solutions
A partner’s ability to address a company’s key business issues and deliver actionable insights is directly correlated to a well-rounded resume with a variety of tools and skill sets. This should include a wide range of relevant services, products and consulting as well as an established library of analytic assets, solutions and expertise to pull, integrate and analyze data from various providers quickly and efficiently.

All too often, a company partners with a firm with only one of these credentials (e.g., a pure data provider or a pure technology vendor). In some instances, investing in the long-term with such a partner may be more costly than valuable for the provider.
One example to consider is a medical device company locked in a contract with a data provider that had promised a set of solutions designed to solve specific corporate challenges. The company gradually and painfully came to realize the vendor could not deliver on the promise it made.

In this situation, the outsourcing partner implemented a tool that, though easy to use, was not configured to track advanced analytics (particularly metrics and key performance indicators) and did not provide “ready to consume” reports with actionable insights that the client needed and preferred. Furthermore, the vendor had difficulty integrating other data sources into the tool, which limited the way in which the company could use its data analytics to make decisions.

Finally, the tool’s implementation and use among different stakeholders at the organization led to the same data providing multiple versions of the truth—and decision-makers could never agree on which version was correct. 

A vendor with a broad portfolio of services and capabilities can orient the appropriate analytics and tap into multiple tools and technologies to build customized solutions that both address problem areas and answer important business questions. The vendor also should be able to deliver insights and reports in a digestible format readily adopted by key stakeholders.

3. Look for Modernized Business Processes that Drive Results
Another critical element is a partner’s capabilities and resourcefulness in building an outsourced team with the right people—those who have appropriate experience in the issue area or industry and the necessary training to deploy capabilities that deliver meaningful results.

A good outsourcing partner can coordinate across different locations and business units as well as anticipate and adapt to changes in project scope or scale—all while under the pressures of budget, deadlines and performance expectations. A vendor who lacks the appropriate business processes to alleviate a company’s pain points, however, can quickly become part of the problem rather than the solution.

Take the example of one medical products company whose analytic needs changed throughout the year, with a tendency to peak in the second and third quarters. While their commercial operations partner was equipped to ramp up or down based on client needs, it failed to put in place appropriate business processes (both people and tools) to anticipate peak periods and help alleviate internal discord among the many divisions at the company. Delayed response times and communications challenges during these critical periods resulted in costly delays, rework and sub-par internal customer satisfaction ratings.

In the example above, the partner firm failed to anticipate and initiate processes to get ahead of key challenges. It also failed to match its team’s skills and resources with the business needs of the medtech firm.
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Not all business questions are the same, and the analytical rigor, data sources and methodologies partners use to answer said questions shouldn’t be the same either. A vendor with well-defined business processes—such as data quality management, a diverse set of analytic skills, ability to visualize large volumes of data and technology solutions that enable mobility—and the right balance of onshore and offshore support can overcome challenges related to the company’s changing needs by maintaining open lines of communication with their sales and marketing teams. It also can ensure the proper support model is in place by successfully matching up employees with the right analytic expertise by project.

Conducting due diligence across a range of parameters can help a medtech company find the right outsourcing partner who can help them meet challenges head on, stay agile and take advantage of the newest trends and technology. A quality commercial operations and analytics partner also will play a part outside of the role of outsourcing and influence a company’s business strategy in a thoughtful and positive way. 

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Raj Jayashankar is a principal in the medical products and services practice at global sales and marketing consulting firm ZS and leader of the firm’s analytics- and technology-based offerings. Jayashankar has a deep and varied experience developing and building commercial capabilities for life-sciences companies. He has led global transformational projects in the areas of commercial operations, business model optimization and organizational change for both fast-growing and mature life-sciences companies. These projects have tended to include significant and innovative use of analytics and technology.

Amol Joshi is a manager based in the Philadelphia, Pa., office of ZS. He has worked with a variety of pharmaceutical and medical device clients, focusing on sales and marketing operations and analytics outsourcing. Prior to joining ZS,  Joshi worked for a global management consulting technology services and outsourcing company.