CRM in med devices cos: Challenges & change mgmt

Over the last several years, I have had close connections with Indian medical devices and pharma industries. While pharma industry has a choice of Customer Relationship Management (CRM) software solutions, Indian medical devices industry seems to have struggled to find the right software solutions. There is also an assumption, among many CRM vendors that what is good for pharma is good for medical devices companies also. That is simply not true. In this article, the intention is to cover the unique needs of the devices industry, some of the challenges, and also change management.

First, let us understand the categories within medical devices industry. We can broadly classify the industry into four segments.

Industry segmentation:
The industry is estimated to be about US$ 5 billion with almost 800 odd companies. Roughly half this value i.e. about US$ 2.5 billion comes from equipment and instruments. Segments in the industry are:

• Consumables and disposables: All the consumable products that hospitals use, from cotton to surgical sutures.
• Patient aids: For example, pace makers
• Implants: Cardio vascular, contact lenses, orthopedic implants and others.
• Equipment: X-Ray, MRI and all the others

When it comes to software needs, the first three categories have similar needs, and what equipment sellers need is different from these.

CRM needs for devices companies-how different from plain vanilla pharma CRM features?

The difference in CRM needs for devices comes from four basic variants:

• Pharma is largely prescription driven, devices are not.

This means that while medical representatives in devices industry do call on doctors, it is to engage them and make them adopt their devices in hospitals, not for prescriptions. Patients rarely buy devices; it is the hospital or the doctor who buys devices for use. Therefore the focus is on hospitals, not just doctors. There is a lead to conversion process that is longer than in pharma. But once there is a conversion to the company’s brand, partially or fully by the doctor/hospital, it is more ‘permanent’ than in pharma. Medical representatives in devices industry often take orders from hospitals that are passed on to stockiest for fulfilment. These basic differences mean that a CRM solution designed for the pharma industry can- not be used for the devices industry.

What should a CRM solution meant for devices industry have?
The way it looks like, unless devices companies use a CRM solution that recognizes the differences and look for a solution that addresses the differences, they will not be doing justice to their sales and marketing needs.

Any CRM solution would need to assist the entire operational cycle that sales force goes through. The support modules can all be the same or at least similar to pharma CRM solutions.

We have tried to plot the software modules that are common, those that are almost the same, and those that are unique to medical devices. The reader should appreciate that these are high level features and most commonly needed ones only.

Features common to both pharma and medical devices in software module development are that the master data management where small variants will be useful. The other components are travel and expenses, leave management for the field and E-Learning

Now the features which are the same for pharma and medical devices are E-Detailing, coaching and continuing medical education. Those aspects specific to medical device are sales funnel management, lead management, product pricing, account target planning, special activities tracking and order taking. If the differences are not recognized and if the solution does not address the third set of features in the above, it will be a sub-optimal way of IT automation.

Challenges in adoption of a CRM by the sales force
Sales representatives in medical devices companies tend to have better educational qualifications than their pharma counterparts. And yet, adoption of CRM, in Indian devices companies is often far more difficult than in pharma. It is really difficult to zero in on the exact reason for this. There could be two main reasons:

First is the industry has rarely given their sales executives the right application. Either they are pharma solutions “thrust” on them or very complex Sales Force Dot Com (SFDC) based solutions that are intense and difficult to use.

Second is the CRM solutions focuses a lot on the sales process and the “effort” side of things, whereas, in devices the focus is more on the “results” (order taking) than the process and means.

Currently, the field force is focused on quick results in getting orders, and not so much on the process of improving customer engagement as a whole. And so, companies have to invest time and effort in managing the change that is needed.

Commercial excellence managers have their role cut out. They would need to do three major things, if the devices industry has to adopt the right technology and applications, and use that to good effect.

To begin with it would be to redefine the customer engagement process, laying as much emphasis on “effort quality” as on ‘orders’. This will help companies in the long term. This would be followed by the adoption of the right technology and CRM software. Besides manage the mind set change needed. If these three things are addressed, we will see the devices industry come on par, when it comes to technology adoption. This is bound to happen very soon.