PharmExec Blog

A Crash Course in SaaS

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Our magazine is called Pharmaceutical Executive—indicating a focus on the c-suite. But we know many of our readers aren’t executives (yet), and may not have quite the same in-depth knowledge as their bosses. So, for those who hear the term “SaaS” bandied about in conversations and fake their way through discussions about it despite not quite understanding what, exactly, it is, we present: A Beginner’s Guide to SaaS. (Those who do know are hereby dismissed.)

Software-as-a-Service (SaaS) is sort of a misleading term, as it’s not software in a traditional sense. It uses a web-based system and off-site computers—run by another company and operating in a “cloud” that is basically the internet—to collect and sort data and turn it into actionable intelligence. In pharma’s case, this would be the basis for sales force automation (SFA). Sales reps input call notes and set up calls and look at their doctors’ latest prescribing habits through this program. Line and bar graphs, sorted lists with prescribing percentages and past performance not only give reps a leg up, but let their managers keep an eye on them.

The advantages of SaaS are pretty clear: Your company doesn’t have to maintain a huge server farm and large IT department, and the company providing the service is the one that worries about fixing bugs and automatically upgrading the software. Matt Wallach, EVP and general manager of SaaS provider Veeva Systems, says it’s the difference between owning a condo or townhouse, in which you pay fees associated with homeownership and have to mow your own lawn and salt your own sidewalk, and renting an apartment, wherein you’re not responsible for any of those things. Furthermore, customization is a breeze, as customers can suggest features of their own or turn others on and off, with very little turnaround time.

Ed Gemo, Pfizer’s senior director of global SFE/marketing solution center, said switching from the “Excel and paper” model to SaaS can reduce costs per rep $3,000 or more, and Wallach said companies can expect total initial savings of $100K, plus $20K each subsequent year.

And it’s not just a way to cut costs—sales effectiveness can see a big boost from something as simple as a better-prepped rep. As Gemo said: “We’ve always had this data, but we’ve never had a good way of using it until now. Instead of listening to a customer’s needs, we just kept repeating old messages. We just screamed louder.”

SaaS may seem like a “duh” concept, especially since other industries have been using it for 12 years or more. But the far stricter regulations placed on pharma’s sales forces, and the industry’s special breed of mistrust, made SaaS adoption supremely unattractive.

Then technology advanced enough to allow for rapid deployment of new features in response to regulation and policy changes, and pharma saw the risk decrease. At least 90 percent of companies’ customer relationship management teams are using SaaS now due to this marriage of tech and trust.

Still, the SaaS world has remained divided into segments: a company would use one provider for SFA, another for closed loop marketing, yet another for sample accountability and distribution, and so on. Veeva Systems announced this week it’s developed an application network—Veeva Web—integrating its original-flavor system with ones from Exploria, QPharma, and TerrAlign in an attempt to create the Holy Grail of life-sciences SaaS. “We’re looking to eliminate the cost of system integration,” Wallach said.

That pharma mistrust hasn’t completely abated, though, and many companies are waiting to see if this is, in fact the Holy Grail, or if it’ll be another case of dashed hopes.

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