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For pharmaceutical companies, a data warehouse can be just what the doctor ordered.

Healthcare Industry is using technology to reap greater profits.

For a pharmaceutical company that feels its promotional activities lack focus, that its sales efforts are diffused, or that it is out of touch with the mindset of its primary audience, a data warehouse can be the best medicine.

And, in fact, many pharmaceutical companies are using data warehouses to gain a competitive advantage. Why? Because there's a myriad of benefits for pharmaceutical companies that choose to build and use a data warehouse. Companies can evaluate the status of products and services, determine the effectiveness of promotions, develop profiles of customers and physicians, analyze sales strategies and compensation, and ultimately improve the bottom line. And it can be done very cost effectively.

So, just what is a data warehouse? Simply put, it's a database that stores, manages, and catalogues customer records, data, and information to provide users with timely and accurate information (or knowledge) for decision making. The data warehouse process dramatically improves corporate sales by optimizing activities to pursue the largest and most likely buyers.

A study of financial impact of data warehousing conducted by IDC, a leading research firm, found that the average ROI of data warehousing projects to be about 401 percent. Average payback for data warehouse applications was 2.3 years; average data warehouse cost was $2.2 million.

Data Warehouse and Pharmaceuticals

If data warehousing offers so many benefits, why hasn't it been more received by more companies in the pharmaceutical industry? Primarily because companies have been reticent to embrace technology not targeted towards manufacturing or product research. But many large companies in the industry are now facing a dry-up in the new product pipeline and they have to look at other ways to improve profitability. This cost-cutting climate of the healthcare industry--exacerbated by external market influences such as managed care and capitation--has forced pharmaceutical companies to examine all avenues that will help them become more competitive. Technology is one of these primary avenues.

But that's only the beginning. The market forces that have impacted the healthcare industry have also changed the way pharmaceutical companies market their products. The internal sales force has traditionally been charged with meeting with the physicians who prescribe their drugs. While this one-on-one interaction remains integral to the sales process, it is no longer enough. It's unclear that sales representatives are even talking to the right physician. And whether the physician will even prescribe a particular drug depends on the managed care plans with which he or she is affiliated. Therefore, it is critical for a company's sales and marketing staff to analyze and determine which physicians to target with what product.

Another problem is collecting the physician-level prescription data. Typically, the internal corporate data provides information only on the whole sales to distributors. This data will not provide information on prescriptions by physicians. As a result, pharmaceutical companies must rely on third-party data for this physician-level intelligence. The combining of internal and external data means that corporate analysts have to spend several days each month trying to understand what it all represents. By purchasing the information and storing it over a period of time, it's possible to get a snapshot of marketplace activity and trends. However, multiple sources of data lead to several versions of the truth. Moreover, company decision-makers must often wait days before reports can be produced by the IT department.

Pharmaceuticals Move to Technology

Clearly, there are advantages to using a data warehouse, but which departments would benefit the most?

One of the primary beneficiaries would be the marketing department, which is responsible for planning the company's advertising and promotional efforts. Their challenge: How to spend resources to get maximum "bang" from promotion and marketing activities. If the company is launching a new drug, marketing must determine how to optimally allocate the budget among several promotional activities. Who are the physicians they need to reach and how much should they spend per physician? What percentage of the budget should go into advertising? A data warehouse can help answer these questions.

A data warehouse can also help pharmaceutical companies to effectively market their products directly to consumers. Through the analysis of key market information, companies can determine their primary customers' buying preferences, as well as other crucial demographic and psychographic habits. Consequently, pharmaceutical firms can gain clearer insights into how they should spend their marketing dollars.

This technology can also help regional sales managers to manage their tactical activities, such as the allocation of human resources. Within a regional office, each manager might have 50 or more sales representatives, in order to budget resources and sales calls effectively, the people in the field must have direct access to a central repository of critical business information-the kind of access that a data warehouse offers.

Crunching Financials Through the Warehouse

The pharmaceutical company's finance department can also greatly benefit by using a data warehouse. Typically, when a company's marketing staff launches a new drug, finance must approve all budgetary expenses. Since marketing and finance work closely together, they need to be privy to the same information; a date warehouse can help ensure this happens. This enables finance to run several ROI scenarios and to determine break-even points.

Using the data warehouse requires minimal training. In fact, the actual decision maker can use the warehouse to perform the marketing/sales/finance analysis without having to receive input from the IT/ IS department.

What about the future? A data warehouse will offer pharmaceutical companies several compelling marketing opportunities including: early detection of competitor activities, rapid planning and deployment of promotional efforts, information sharing between functional departments, and creation of a library of required reports.

Will a data warehouse improve the quality of the drugs that pharmaceutical companies produce? No-that is not its purpose. However, a warehouse can help pharmaceutical companies convey the right message to the right target audience. More specifically, organizations can ensure that they get their products into the hands of the right physician and ultimately the right consumer. From that perspective, pharmaceutical companies can become much more customer-centric and improve profitability.

RELATED ARTICLE: Plan Ahead for a Healthy Warehouse

Building a new data warehouse? Beverly Chiarelli of Ardent Software's Data Warehouse business unit suggested several ways healthcare providers can build an open warehouse for the future.

1. Design your warehouses to meet the needs of your business or practice. Warehouse architecture based on a clear understanding of your organization's critical success factors will ultimately yield the information you need to thrive.

2. Outsource. There are a number of consulting companies well versed in data warehousing that you can hire on a contract basis. Once the warehouse is built, you can keep using design and management tools without keeping the consultants on board.

3. Invest in easy-to-use tools and components that your in-house IT team can manage once the consultants have packed up and left. In addition, easy-to-use tools with a shorter learning curve help new employees come up to speed in less time.

4. Investigate metadata. Metadata, or "the data about data," is crucial to an efficient warehouse. Among other things, metadata provides information on the origin and transformation history of warehouse data. You will want to explore the issues surrounding metadata when building your company's warehouse.

5. Implement tools that are flexible and scaleable when building or updating your warehouse. The right tools will allow you to extend your data management system to add new users and integrate data from additional sources with as little complication as possible. You will see the value of this when your institution acquires data resulting from a merger, partnership, or acquisition.

6. Design your data warehouse so business users have direct access to the information they need. The less involvement your IT department has in everyday queries, the better. You want to avoid turning your IT department into a helpdesk, they are too valuable a resource to be hunting for business data.

7. Invest in tools and components that support multiple platforms. This will allow you to deploy the same applications on Unix, NT and other platforms throughout your company.

8. Look at the number of people who will be using the warehouse and how that number could expand. Make sure your software will support different databases and different platforms, and take into consideration all of the possible add-ons to the system including management and security features to protect patient privacy.

9. Provide employees with the data mining and query tools they need to leverage organizational information in their decision-making processes.

10. Build on what you have. Expanding? No money to do so? Often you can build on top of existing systems, incorporating legacy storage systems and components in a new warehouse.

Beverly Chiarelli is Director of Product Marketing at Ardent Software, Inc. where she is responsible for communications strategy, marketing programs, and product launches. She holds bachelor degrees in Computer Science and Economics from Brandeis University and an M.B.A. from Babson College specializing in marketing and entrepreneurship.

Amit Desai is co-founder of Anubis, an industry pioneer in innovative data warehouse technology. Mr. Desai has consulted on several projects with pharmaceutical companies seeking technology expertise to gain a competitive advantage. He received his BS in Computer Science from the Massachusetts Institute of Technology.
COPYRIGHT 1999 Nelson Publishing
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1999 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Technology Information
Author:Desai, Amit
Publication:Health Management Technology
Date:Mar 1, 1999
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