Sales force outsourcing should be strategic
should move from a short-term to a long-term way of thinking, says
a new report.
In the last ten years sales force outsourcing to contract sales organisations (CSOs) has caught on as a tactical way for pharma firms to meet their short-term needs, normally in the form of a simple contractual relationship between the company and the provider, said the report by market analysts Datamonitor.
Because sales representative roles are similar throughout the industry, outsourcing this function is relatively easy and brings benefits such as efficiency gains, expertise, speed, flexibility and avoiding capital outlay, while still allowing firms to retain in-house control over their proprietary functions such as physician targeting and marketing.
However, while this tactical approach has a value in allowing companies who are nervous about losing control through outsourcing to test the waters before committing to third parties, Datamonitor believes that companies can achieve added value by using sales force outsourcing strategically instead.
As confidence in outsourcing grows, this is something that many pharma companies are already beginning to do.
"To achieve this, pharmaceutical companies need a fundamental shift in thinking to a longer-term and strategic view, and integrate the use of sales force outsourcing into their overall strategy," said the report, titled "The future of outsourcing."
"If this can be achieved successfully, pharmaceutical companies can optimise the benefits that outsourcing can offer, from additional cost-savings to enhanced expertise."
To successfully use sales force outsourcing strategically, companies should especially look to allocate in-house sales force resources on those areas where their strengths lie and draw on the resource and expertise of external service providers to address those areas that are weak.
"This can result in a more efficient use of resources - by targeting which sales force functions are retained in-house and which are outsourced, a company can optimise the performance of its activities and thus optimise revenue and profits," said the report.
However, the report warns that it is crucial for pharma firms to effectively manage any outsourcing relationship with a CSO once it is in place, monitoring the CSO's performance, making sure the arrangement is meeting expectations and keeping communication channels open and resolving any conflicts as they arise.
"Although outsourcing involves handing over a function to a third party, a pharmaceutical company should not completely relinquish control over the outsourced function."
