Market Research Vendor Management Excellence Report Summary


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Market Research is one of the functions in pharma that uses vendors extensively because of the many strategic questions – from positioning to branding – that Market Research groups are expected to provide insights on. This study examines vendor management strategies and, in particular, evaluates the use of exclusive vendor partnerships. In addition to providing key vendor benchmarks around outsourcing levels and number of vendors used, the study presents the benefits, problems and management approaches for exclusive vendor partnerships. There are also sections that present perspectives from companies not using exclusive vendor partnerships and insights from executive interviews.

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Market Research Vendor Management Excellence Report Summary

  1. 1. Best Practices, LLCREPORT SUMMARYMarket Research Vendor ManagementExcellence: Evaluating the Use ofExclusive Vendor Partnerships
  2. 2. Table of ContentsTable of ContentsPROJECT BACKGROUND Project Overview Benchmark Class Profile Key FindingsSTUDY FINDINGS Vendor Partnership Benchmarks Outsourcing Levels Number of Vendors Used Common Contracting Models Exclusive Vendor Partnerships Usage Patterns & Mapping Levels Contracted Study types Contracted Future UseContinued
  3. 3. Table of Contents, 2Table of Contents, 2 Evaluating Exclusive Vendor Partnerships Goals & Benefits Drawbacks ROI & Measurement Managing Exclusive Vendor Partnerships Resources & Account Management Collaboration with Marketing Teams Penalty & Incentive Systems Training Employee Engagement Perspectives from Companies Not Contracting Exclusive Vendors Appendix: Insights from Executive Interviews About Best Practices, LLC
  4. 4. BEST PRACTICES,®LLC4Copyright © Best Practices®, LLCKey Topic Areas Probed:Study Objective & Research MethodologyResearch Objectives:• To uncover current field data on a series of keyvendor management benchmarks, includingoutsourcing levels, number of vendors used,and critical factors driving various vendorcontracting models• To gather innovative approaches and executiveinsights into the evolving role of the bio-pharmamarket research function from both a tacticaland strategic perspective• To adapt lessons that will enable marketresearch leaders to plan and implementstrategies for controlling costs, avoidingcommon mistakes, and improving quality onprimary market research through vendormanagement excellenceThis benchmarking research, conductedthrough a field survey instrument and aseries of interviews with selectedparticipants, delivers performance metrics,insights, and lessons learned on:•Vendor management models for primarymarket research•Vendor contracting strategies•Streamlining the market research function•Maintaining high levels of research quality•The benefits and drawbacks of exclusivevendor partnerships in the currenteconomic and industry landscapeThis benchmarking research study examines vendor management strategies to help bio-pharma market research groups provide support and value that aligns with broaderorganizational goals and commercial objectives. In particular, this research explorestrends and efficiencies in the use of exclusive vendor partnerships.
  5. 5. BEST PRACTICES,®LLCParticipating Companies:Research participants included 37 market research executives and managers from 26leading pharmaceutical, biotech and medical device companies. All study participantscontributed data through a field survey. Representatives from ten benchmark organizationsprovided additional insights through deep-dive interviews.Universe of Learning: Companies Participating in Study
  6. 6. BEST PRACTICES,®LLCResearch Participant Job Titles Include:6Copyright © Best Practices®, LLCMost Participants Serve at Director Level or AboveResearch data and insights were contributed by a seasoned class of respondents, fromvice presidents to managers. The vast majority of respondents serve at the director levelor higher.• Vice President, Oncology• Executive Director, Market Research• Executive Director, Business Analysis• Senior Director, Market Research (4)• Director, Market Research (11)• Director, Marketing Research• Director, Market Analytics• Director, Business Analysis• Director, Business Intelligence• Director, Managed Markets• Director, Marketing• Director, Sourcing & Supply Management• Director, Commercial Effectiveness• Associate Director, Market Research &Analysis• Deputy Director, Market Intelligence• Senior Manager, Market Research• Manager, Market Insights• Manager, Market Research (6)• Manager, Marketing Science
  7. 7. BEST PRACTICES,®LLC7Copyright © Best Practices®, LLC• Account management frequently occurs at the market research Director level:Exclusive Vendors are most often managed at the account level by a market research director,while a market research manager most often serves as a primary point of contact. EVs also tendto work remotely and only rarely ever interact directly with marketing or brand teams.• Companies not using Exclusive Vendors express several different reservations:Respondents cited a wide variety of rationale for not using an EV for market research, including:• The need to maintain competitive bidding on projects, particularly ones with large spends• The belief that EV contracts undermine vendor innovation• The view that no one vendor excels across multiple types of studies• The need for flexibility and the ability to change suppliers as needed• The difficulty in implementing an EV partnership modelThe following key findings and insights emerged from this study.SAMPLE: Key Findings and Insights
  8. 8. BEST PRACTICES,®LLC8Copyright © Best Practices®, LLCVendors Most Often Hired on a “Project-by-Project” Basis(n=23)Q. What percentage of your primary market research projects are governed by the followingvendor contracting models?Most benchmark organizations adhere primarily to one of two main vendor contractingmodels, wherein they hire external vendors either: 1) on a project-by-project basis or 2)from a list of preferred vendors. For the benchmark class on the whole, ExclusiveVendors conduct only a small percentage of a company’s market research.3%42%55%“Project-by-Project”Contracting Model “Preferred Vendor”Contracting Model“Exclusive Vendor”Contracting Model
  9. 9. BEST PRACTICES,®LLC9Copyright © Best Practices®, LLCDrawbacks Include Lack of Innovation, Resource EfficienciesQ. Which of the following problems, if any, did your company experience as a result ofmoving to an Exclusive Vendor for market research? (Check all that apply)(n=6)Lack of vendor innovationLack of resource/FTE efficienciesInability of vendor to deal withdifferent aspects of the businessMinimal/No cost savingsImplementation/OperationaldifficultiesVendor complacencyInability of vendor to adequatelysupport internal clients50%50%33%17%0%17%17%Despite gains in cost efficiency, the Exclusive Vendor contracting model does not appearto be a panacea for all market research challenges. Half of respondents deemed “lack ofinnovation” and “lack of FTE efficiencies” to be among the difficulties resulting fromusing an Exclusive Vendor.Voices from the Field:“Weve vetted them [EVs]. Through historical experience we knowthe people, we know the quality of the work. We know they are notridiculously expensive and even if they are we hope that we arecontracting to get slightly better pricing from them. And so the restof the [EV] process is just quality control.You know the level of experience and amongst the brand teams orwhoever is the end user…they know too or at least have heard of thevendor repeatedly and that gives a level of confidence…But we focuson impact, rather than a hard ROI measure. The question we ask is:‘Is the market research work moving the needle?’ Is it actionableand insightful or will it just sit on the shelf.’”-Director, Insights & Innovation
  10. 10. BEST PRACTICES,®LLC10Copyright © Best Practices®, LLCTraining Approaches are Geared toward the PragmaticQ. What types of training does your company employ when onboarding an ExclusiveVendor? (Check all the approaches your company uses)(n=6)Overall Company Orientation:On-site company orientation: 33%Virtual company orientation:(phone-based, technology-based,downloads) 67%Training Areas:Company and business profile: 0%Internal Market Research processorientation: 50%Therapeutic area: 33%Brand strategy: 33%Required proficiency with internalprocesses based on company-vendor relationship: (e.g., PurchaseOrder generation) 83%Compliance (e.g., adverseevents) 33%Since Exclusive Vendors are frequently contracted to perform what some participants called“lower level” market research activities, it is not surprising that their training tends to be morepragmatic than strategic in nature. As a result, vendors are often trained remotely, with moreemphasis on proficiency with internal processes (83%) than on areas like brand strategy ortherapeutic area knowledge (33%).Voices from the Field:“When youve got a vendor coming on board therere certain protocols to know, from purchase orders to contracting to the invoicingprocess. So all that kind of training for the vendor is handled by a supplier management group to a certain extent. We supplement that byreinforcing and helping communicate. And then therere very specific protocols in terms of how we need to conduct research with formaltraining and refresher courses for the vendors.”-Manager, Market Research
  11. 11. BEST PRACTICES,®LLC11Copyright © Best Practices®, LLCRespondents Predict Sustained, Expanded Use of EVsQ. How do you anticipate your company’s use of Exclusive Vendors for market researchchanging in the next 12 - 36 months? (Choose one)(n=6)Expanded use of EVs for primary market research: 33%Same use as now: 50%Decreased use of EVs in favor of preferred vendor use: 17%Decreased use of EVs in favor of project-by-project vendor use: 0%Most respondents anticipate a similar or even greater degree of Exclusive Vendor use in the nextfew years. Half of participants predict the same level of use in the next 12 – 36 months, while 33%foresee expanded usage in the future, where the pressure to reduce costs (in this case viaconsolidated contracting) figures to remain a chief concern for pharma market research groups.
  12. 12. BEST PRACTICES,®LLC12Copyright © Best Practices®, LLCBest Practices, LLC6350 Quadrangle Drive, Suite 200Chapel Hill, NC Best Practices, LLCBest Practices, LLC is a research and consulting firm that conducts work based on thesimple yet profound principle that organizations can chart a course to superior economicperformance by studying the best business practices, operating tactics, and winningstrategies of world-class companies.Link for Report: Evaluate the Use of Exclusive Vendor Partnerships