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NOT ‘Business as Usual:’ What the BioPharma Channel Can Glean From High Tech

Posted By Cynthia B. Hanson, Monday, October 16, 2017
Updated: Sunday, October 15, 2017

Partnering isn’t “business as usual” anymore. “Even companies that think they have their practices down are all reinventing what they are doing now because they have to deal with … the increasing speed, scale, and scope of partnering that has become exponentially greater,” emphasized Jan Twombly, CSAP, The Rhythm of Business, Inc., during her session “The BioPharma Channel: Leveraging Practices from the High-Tech World to Drive Success.” Twombly was presenting at the 2017 ASAP BioPharma Conference, “Accelerating Life Science Collaborations: Better Partnering, Better Outcomes,” held Sept. 13-15 at the Royal Sonesta Boston, Cambridge, Mass.

“The high tech channel has learned that you are not going to be successful if your channel partners aren’t successful. … You need customized partners to provide local market access. High tech needs new partners because it needs vertical and technical specialization. Some companies do this better than others,” she added. For example, Cisco generates 85 percent of revenues by channel partners. That’s exceptional, considering that the industry average is 39 percent.

The channel is a route to market that is accessed either by communication avenues, a direct sale force, or co-commercializing a product with a partner. It’s about delivering on intended value in a resource-friendly way, she added.  Biopharma usually doesn’t consider the channel as key to growth. Yet market growth trends and future projections from BMI Research indicate that unmet patient needs and the significant growth potential of emerging markets provide significant reason for pursuing a channel strategy, Twombly said, while flashing past market size data and future size projections:

2010: $150 billion
2015: $245 billion
2020: $340 billion
2025: $490 billion

High-tech channel partners are not seeking more automation, Twombly observed.  What they are looking for is:

  • More engagement with field engineers and local sales personnel
  • Greater understanding of corporate priorities
  • Joint planning on strategic opportunities
  • Better understanding of their partners’ strategies and plans
  • More proactive communications, support, and relationship management

So what can the biopharma industry learn from high tech’s successes with channel partnering? Twombly asked.

  1. Take a portfolio approach: Place bets carefully, and manage it as a portfolio from low-touch to high-touch.
  2. Carefully manage the transitions, and ensure partner (and stakeholder) readiness.
  3. Maintain robust measurements, reporting, and action from a 360-degree perspective. We are becoming very data driven.
  4. Make it part of the fabric of the organization from end to end: Bake it in, don’t bolt it on. You need to have a strategy, and the partnering needs to be integrated into various functions of your company.

That’s critical to the entire process, she emphasized:  “Baking it in. … We like using a stakeholder management model. In many instances, you will not have dedicated people. You need to understand the economics; have good reporting and data collection that are able to be monitored; focus on closing the gap between current practice and what stakeholders need to profitably support the channel partners. That is how you will demonstrate value,” she advised.

“Governance is sometimes not in place,” she added. “You want simpler governance because of the nature of the relationships, but still need to have executive and operations levels to formal governance. Make sure you have the right participants engaged, set expectations, and have proper alignment and meetings. Make them good, formal meetings, but create an environment people will want to attend. The quarterly business reviews in high tech are typically all one way. If you really want to build that relationship so the partner can help you with market access and driving the business, you need to make it a two-way meeting.”

Consider conducting partner summits, she concluded. In the high tech world, they are a staple for building relationships by helping partners learn what’s new and where company strategies are headed. Summits provide an opportunity to have all your partners together to learn about common challenges.

ASAP Members can learn more about this provocative and well-attended ASAP BioPharma Conference session in the September 2017 issue of eSAM Plus.

Tags:  alignment  ASAP BioPharma Conference  BMI Research  channel partners  channels  governance  high tech  Jan Twombly  partners  portfolio approach  stakeholder  summits  The Rhythm of Business 

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