URL: http://devicelink.com/mx/archive/04/11/kerr.html


   <h>INFORMATION TECHNOLOGIES
   <h>IT in the Hands of Field Sales Reps

   <p>A sales force equipped with mobile tools for interconnection to
   corporate resources can preserve a manufacturer's competitive
   advantage.

   <p>David Kerr

   <p>The increasing complexity of today's healthcare equipment procurement
   environment has presented some new challenges for medical device
   manufacturing companies and their sales representatives. To gain a
   competitive edge in influencing product selection may require
   struggle. The emergence of intricate purchasing plans, contract-buying
   trends, and shifting pricing options constitute one set of challenges.
   Another relates to the growing complexity of medical technology
   itself, particularly its incorporation of information technology (IT)
   capabilities.

   <p>Medical device manufacturers and their field reps are discovering
   several healthcare industry procurement hurdles that need to be
   overcome. Group purchasing organizations (GPOs), contractual buying
   arrangements, on-line ordering, and face-to-face selling are each
   scenarios that present a distinct challenge for pricing and
   relationship building. A tool that can be of value in each of these
   situations is mobile sales force automation (SFA) technology.

   <p>Face-to-face selling is made easier by the development of personal
   relationships with physicians and surgeons in situations where they
   play an important role in purchasing. When doctors demand considerable
   technical data, product training, and manufacturer support, those
   sales reps armed with real-time data and interactive presentation
   tools will be the ones most likely to close a sale.

   <p>In an effort to foster better relationships with, and
   provide more value to, physicians--and to the healthcare industry
   generally--some medtech companies are investing in integrated sales,
   marketing, and supply-chain management systems that are known as
   customer relationship management (CRM) systems. Mobile SFA is a
   primary tool driving this initiative to meet, on demand and in the
   field, ever-growing customer needs (see sidebar).

   <p>According to a recent report by market analysts Frost & Sullivan (San
   Antonio, TX), CRM license revenue from mobile SFA applications, for
   both wired and wireless devices, is expected to grow from a predicted
   $169 million in 2004 to $293 million by 2008. The fastest-growing
   segment, wireless SFA, is projected to grow from $20 million to $115
   million over that period.^1

   <p>This article examines ways that mobile SFA can make medtech companies'
   field-based sales forces more effective in a procurement environment
   trending toward consolidated purchasing and automatic ordering while
   also serving the interests of institutional purchasers.

   <h>Sales Approaches by Product Category

   <p>Three major categories of medical devices--disposable goods,
   high-margin devices, and capital goods--call for different sales
   approaches. Handheld sales technology plays a different role in each.

   <p>In the hospital environment, purchasing departments and GPOs tend to
   control vendor selection, product pricing, and the awarding of
   contracts. This holds true especially with commodity-based products
   such as disposables (surgical gloves, swabs, and so on) where price is
   the primary differentiator and organizations are reordering more often
   than making first-time purchases. Rather than buying directly from a
   sales rep, these purchasing groups use electronic purchasing
   technology such as electronic data interchange (EDI) to maximize
   ordering efficiency and optimize savings.

   <p>Since the decisionmaking process and the sales cycle for disposable
   products are both very short, new purchasing and inventory
   replenishment tend to be conducted on-line. Here, manufacturers need
   to distinguish their products from competitors' while offering the
   lowest price and an efficient ordering process. Despite stringent
   pricing constraints prevalent in this category, sales reps with
   real-time mobile access to pricing models, product specifications,
   inventory information, and delivery schedules during the sales call
   gain advantage for their employers in terms of better CRM
   functionality, more-efficient document management, and electronic
   order submission and tracking. Mobile technology gives reps the
   ability to capture, store, and view account history during the sales
   call, and to present new products immediately at launch.

   <p>At the other end of the medical device spectrum are capital
   goods--heavy, expensive, highly sophisticated medical equipment. In
   this complex segment, product lines are narrow, sales cycles are very
   long, and purchasing decisions are made by committee.


   <p>Reps typically do not stock such inventory in the field, nor can they
   demonstrate equipment for each prospect. What is imperative for them
   is keeping a variety of technical specifications and a detailed
   account history on hand. They can, of course, benefit from mobile SFA
   functions that aid in selling, such as interactive presentations,
   video product demonstrations, side-by-side product comparisons, and
   display of technical documentation and complex pricing configurations.
   But the handheld technology enables them also to review and update the
   account history, check the field service and equipment maintenance
   history, and manage customer contact information relating to every
   member of the committee.

   <h>Selling Complex, High-Margin Devices

   <p>In between commodity disposables and capital goods falls the realm of
   high-margin implantable and diagnostic medical devices. These
   electromedical products have become increasingly sophisticated as they
   have incorporated miniaturized electronics and then embedded
   microprocessors. New IT-based devices in this category now contribute
   heavily to the ability of physicians to make reliable therapeutic
   decisions by means of the vital data they gather and record.

   <p>Owing to the complexity of these products, the surgeon or physician
   who uses them typically makes or strongly influences the purchasing
   decision. New product sales (rather than repeat sales) are common in
   this category because physicians focus on meeting the requirements of
   individual patients. GPOs are more price driven, but physicians
   purchasing highly complex devices base their decisions on specific
   patient needs, insurance reimbursements, product performance, and
   manufacturer support.

   <p>In this situation, a close, trusting relationship between sales rep
   and physician is critical. Physicians need to be confident of the
   rep's recommendations, the product's reliability, and the
   manufacturer's training support. Mobile SFA tools in the hands of
   sales reps enable device manufacturers to satisfy these buying
   criteria. They can help physicians make an educated decision by
   providing:
     <l>* Details of product features, specifications, and benefits.
     <l>* Critical data regarding product reliability and accuracy, such as
       clinical trial results.
     <l>* Side-by-side comparisons of competitive products.
     <l>* Interactive presentations and video surgical demonstrations.
     <l>* Downloadable educational material from the manufacturer.
     <l>* Reimbursement guidelines.

   <p>The mobile technology provides efficiency benefits for the wider
   institutional healthcare system as well (see sidebar).

   <p>Mobile SFA technology facilitates relationship building by providing
   sales reps with all the information and resources they need at the
   point of purchase, which might be the physician's office, operating
   room, or surgeon's lounge. Physicians are often challenged to sift
   through and process a great deal of technical and clinical information
   in order to make qualified decisions. Real-time access to corporate
   systems via mobile technology enables the sales rep to anticipate and
   respond quickly to technical questions about product performance and
   customization options, as well as refute competitive claims, track
   inventory, and fulfill orders on the spot. Well-prepared,
   well-educated reps armed with a complete set of easily accessible
   resources during the sales call are likely to be considered more
   credible by physicians and surgeons than those who are not.

   <p>In addition, SFA technology gives sales reps the tools for introducing
   new products to customers sooner than traditional methods would allow.
   They can make a professional and information-rich presentation to
   educate physicians about each new device immediately upon rollout.

   <h>Collateral Benefits

   <p>Mobile technology empowers sales reps and makes them more efficient
   (see sidebar). But by implementing handheld SFA solutions the medical
   device manufacturing companies that employ them gain in other ways.
   These benefits include CRM economy, easy field deployment, greater
   sales force productivity, and enhanced supply-chain visibility.

   <p>Alternative to Traditional CRM. Integrated CRM systems are no longer
   restricted by high cost to enterprises with large sales teams.
   Advances in system security and data integrity protocols allow
   companies of all sizes to outsource the SFA function of their CRM
   system with confidence. Also, the evolution of the application service
   provider (ASP) model--a hosted, pay-as-you-go arrangement--makes
   customized sales solutions affordable for smaller organizations.
   Depending on the functionality and support level required, the cost
   per user of hosted SFA services is comparable to that of telephone
   service.

   <p>Ease of Deployment. Smaller medical device companies with fewer than
   50 sales reps can field-deploy such new technologies as mobile SFA
   quite rapidly. For reasons of economy, they tend to favor
   subscription-based services, which can be implemented immediately and
   independently of legacy systems. And because the IT resources they
   employ are generally not very extensive, requirements for
   customization and integration into back-office systems are very
   manageable.

   <p>Larger organizations--those with, say, 500 reps or more--may require
   more time to deploy SFA technology effectively because of the need to
   take into account highly complex legacy systems when implementing
   integrated field solutions. Also, decisionmaking is naturally a slower
   process, and large internal IT departments have to take time to learn
   the new technologies before they are prepared to support the mobile
   sales force. An SFA pilot program involving the rollout of one
   business unit at a time is one way for a larger enterprise to
   accelerate deployment.

   <p>Sales Staff Productivity. Such administrative tasks as handling order
   paperwork and entering call notes for management review can occupy a
   substantial portion of a sales rep's workday. Medtech organizations
   seeking ways to minimize these burdens so reps can focus on
   revenue-generating activities such as prospecting, physician visits,
   and relationship building may find mobile SFA technology helpful in
   this regard. A secondary benefit is a clearer window into sales
   activities.

   <p>Supply Chain Visibility. Most supply chain technology is focused on
   the movement and storage of assets in the back office. By contrast,
   mobile SFA illuminates every facet of the dynamic supply chain: in the
   warehouse, on order, and in the field. This approach to supply-chain
   tracking--which makes trunk inventory, consignment inventory, expired
   products, and rep-to-rep inventory transfers completely
   visible--enables medtech organizations to be more responsive to
   customers' needs and to be more accountable for their own assets in
   this era of Sarbanes-Oxley. With their sales reps using handheld
   tracking technology to report on the movement of their personal
   inventory in the field, corporations can maintain accurate
   supply-chain data in real time.

   <h>Conclusion

   <p>Mobile SFA technology promotes streamlined management of the technical
   and administrative aspects of medical technology sales and provides an
   attractive vehicle for delivering presentations. Medical device sales
   reps can use the technology to personalize and automate the sales
   process for enhanced effectiveness in a progressively competitive
   market. No matter how complex the environment, the reps have the
   flexibility to close the sale.

   <p>Relationship- and education-driven sales and those for which
   profitability depends on efficient, automated ordering are the two
   poles of modern healthcare equipment procurement. In each scenario,
   SFA technology arms field reps with detailed, real-time data to
   satisfy the buyer and organizational tools to function effectively
   throughout the entire sales process and deliver the competitive edge
   their employers seek.
 
   <p>David Kerr is vice president of Everypath Inc. (Santa Clara, CA), a
   provider of Web-based handheld applications designed specifically for
   the medical device and pharmaceutical field sales environment.