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New study shows optimal commercial operations and analytics increasingly important for medical technology companies

– Key account management, access to mobile insights and outsourcing are keys in today's complex IDN selling environment, according to study

EVANSTON, Ill. – April 15, 2014 – As medical technology purchasing decisions shift from individuals or hospital departments to ever-larger Integrated Delivery Networks (IDNs), key account management in today’s medical technology companies is a top priority – and commercial operations departments will be instrumental to their success.

According to a recent study by global consulting firm ZS Associates, to compete in this new paradigm, commercial operations must quickly analyze information and provide faster and more streamlined insights. 

“Large IDNs are more powerful than ever before,” said Associate Principal Tobi Laczkowski. “For medtech companies to succeed, they must identify and monitor information related to network-wide purchasing behaviors, decision makers and affiliated brick-and-mortar locations of these networks.”

Conducted every two years, the Commercial Operations Benchmark Study helps medtech companies benchmark themselves relative to their peers, identify areas for improvement and prioritize future operations investments. The survey measured 25 U.S.-based medical products, devices and service companies and studied customer relationship management, business intelligence, information management, pricing and contract management.

The study found a large gap between the operations department’s current ability to track account management goals (36 percent say they can) – and what it plans to do in two years (92 percent say they will).

“The medtech industry must effectively treat each IDN as one account.  IDN customers don’t want a different sales representative associated with each hospital or product line,” said ZS Principal Raj Jayashankar, who serves as the technology lead within ZS's medtech practice.  “They want one point of contact – and want this individual to know everything about the account.”

According to the survey, 40 percent of medtech companies list “IDN strategy” as a top customer relationship management (CRM) priority in the next two years. While only about half of respondents (56 percent) can track IDN membership now, nearly all (88 percent) anticipate this ability in two years.

“Developing a corporate-level IDN strategy is one of the highest priority initiatives for these companies,” said Jayashankar. “The increasing sophistication of technology to analyze customers and track account management goals will allow commercial operations to be a critical driver of success.”

Use of Mobile Technology More Than Doubles Over Two Years

To deliver customer-related information to the sales force faster, more medtech companies have embraced tablets such as iPads for account- and region-specific activities that require immediate access to customer information.  The survey showed that over the past two years, the use of mobile technology by the medtech industry more than doubled – to 75 percent from 35 percent – and is expected to reach essentially 100 percent in the next two years.

ZS has also found the use of mobile tablets by the sales force has shifted from “glorified brochures” to crucial tools for business intelligence and CRM to serve the IDNs’ multi-layered needs.

“The iPad is an excellent ‘crib sheet’ for salespeople — a tool that turns complex customer purchasing and behavior information into up-to-the-minute insights into a customer’s needs and opportunities,” said Laczkowski. “With the swipe of a finger, reps may now quickly and easily review their own performance as well as the customer’s interaction history.”

Medtech companies turn to outsourcing

As medtech companies become more efficient, they increasingly outsource their technology and analytics – as part of commercial operations – and increase their use of computing in the “cloud.”

Nearly half of medtech companies already outsource at least one commercial operations function – and more than 25 percent outsource at least two such functions, the survey showed.

“For a higher caliber of output and quality, medtech companies now outsource processes such as territory alignment management, business intelligence, reporting, and big data analytics,” said Laczkowski. “This allows internal commercial operations practices to become more efficient and more strategic.”

The benchmarking study also revealed significant variation in the size of commercial operations teams, relative to the size of the business they support. For example, companies with 200-300 salespeople – a common size in U.S. medtech companies — will manage with as few as four commercial operations full-time equivalent employees or as many as 30 or more.

“This study highlighted some fascinating areas for potential improvement,” said Laczkowski. “Each medtech company should take a comprehensive view of its current systems, processes and people – and learn how these compare to its peers.”

“Companies should then utilize this new knowledge to improve their capabilities, and implement best practices to remain competitive in this dynamic market.”

To view an executive summary of the study, please visit the following link: http://bit.ly/1gjD340.  

About ZS Associates

ZS Associates is a global leader in sales and marketing consulting, outsourcing, technology and software. For more than 30 years, ZS has helped companies across a range of industries get the most out of their sales and marketing organizations. From 21 offices around the world, ZS experts use analytics and deep expertise to help companies make smart decisions quickly and cost effectively. ZS comprises multiple affiliated legal entities.

Greg Austin
Director, Marketing & Communication, ZS

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Sikich Marketing & Public Relations