Compliance, cost reduction, and innovation are your CEO’s top concerns. This research examines how technology, process re-engineering, and advanced organizational structures such as shared services, and outsourcing can tackle these challenges by making commercial operations and processes more intelligent.

1. Advanced Operating Models
Research Insights
LIFE SCIENCES COMMERCIAL OPERATIONS
v1.0 (July 2014)

2. Contents
Survey demographics 3
Executive summary 4
Key challenges 6,7
Functions’ impact on challenges 9,10
Functions’ maturity levels 12
Preparedness level to achieve process maturity
Overall ability to transform 18
Impact of operating model initiatives 20,21
Conclusion
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
14,15,16
22
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 2

3. METHODOLOGY
Sample of over 900 senior executives across industries, over
80 from commercial operations of large life sciences companies
Regions Size* Functions
10%
25%
65%
16%
84%
5001-10000
16%
64% of life sciences
commercial operations
respondents are from North
America
84%
10000+
94% of life sciences
commercial operations
respondents are from
larger companies (size
> 10000 employees)
*Company size defined by number of employees
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm. The respondents were selected
on the basis of their ability to make or materially influence operating model decisions, and likely range from senior executives to top
management.
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
Procurement
13%
Finance 17%
Risk 15%
Marketing
15%
40%
Operations
19% of operations
executives are from life
sciences commercial
operations
n=912
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 3

4. EXECUTIVE SUMMARY ► LIFE SCIENCES COMMERCIAL OPERATIONS
Transforming life sciences operating models: what are the imperatives
and means for large players headquartered in developed markets?
Management agenda
• Compliance, growth and
scalability most important
challenges for life
sciences organizations
today according to
commercial operations
executives
• Least pressing are
capital asset intensity,
risk management and
agility
Advanced operations can address imperatives
• Commercial strategy, access and reimbursement
(contact center, pricing and analytics) operations
seen as having impact on strategic challenges
• Compliance and advertising/promotion
management most mature and most prepared to
evolve, multi-channel marketing least mature
• Advanced organizational structures (shared
services and BPO) seen as useful by many
executives, but radically improved use of
technology and business process reengineering
have slightly more impact where applicable
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 4

5. INSIGHTS NARRATIVE ► LIFE SCIENCES COMMERCIAL
What are the most pressing
company challenges?
How can functions and related
operations address them?
Which functions are most
Are those functions mature?
Are those functions ready to
Can new operating models of
those functions help them
transform? Which ones?
What can the impact of that
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
effective at it?
transform further?
transformation be?
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 5

6. CHALLENGES ► LIFE SCIENCES
Compliance most important challenge across functions; growth and
scalability critical according to commercial operations executives
% of respondents from
various functions rating
challenge as among the
'Top 3'
Overall
Research and
development
Commercial
operations
Procurement
Ensure compliance
to regulations
Increase customer
satisfaction
Reduce capital and
asset intensity
Increase growth and
scalability
Enable company’s
innovation
Enable agility and
adaptability
0 10 20 30 40 50 60 70 80
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
Manage
risk
Reduce
costs
n=233 life sciences executives
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 6

7. LIFE SCIENCES COMMERCIAL OPERATIONS ► CHALLENGES
Regulatory compliance seen as the biggest challenge for life
sciences companies
Importance of the challenge (% of respondents from life sciences companies stating that the
challenge is among the ‘Top 3‘ for their company )
0 10 20 30 40 50 60 70 80
Ensure compliance to regulations
Increase customer satisfaction
Manage risk
Increase growth and scalability
Reduce costs
Enable company’s innovation
Enable agility and adaptability
Reduce capital and asset intensity
n=69 life sciences commercial operations executives
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
DIRECTIONAL
Cost,
innovation and
growth also
seen as the
most important
challenges
after
regulatory
compliance
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 7

8. LIFE SCIENCES COMMERCIAL OPERATIONS ► FUNCTION IMPACT
What are the most pressing
company challenges?
How can functions and related
operations address them?
Which functions are most
Are those functions mature?
Are those functions ready to
Can new operating models of
those functions help them
transform? Which ones?
What can the impact of that
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
effective at it?
transform further?
transformation be?
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 8

9. LIFE SCIENCES COMMERCIAL OPERATIONS ► FUNCTION IMPACT
Commercial operations portfolio components have diverse
impact on strategic challenges
Ensure
compliance
to regulations
Reduce
costs
DIRECTIONAL
Increase
customer
satisfaction
Increase growth
and scalability
Enable company
innovation
72 46 44 43 36
Magnitude of
challenge1
Commercial strategy
CRM and sales support
Compliance
Advertising and promotions management
Contract management/managed care
24 27 56 84 61
26 36 37 61 78
91 9 26 11 9
24 39 37 68 48
30 55 19 58 48
Multi-channel marketing 82
Access and reimbursement
(contact center, pricing and analytics)
7 33 44 57
24 39 37 66 52
n=69 life sciences commercial operations executives
% of respondents stating function
can have material impact on
addressing challenge
1 % of respondents from life sciences across all functions (n=233)
stating it is one of the top 3 challenges in their company
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 9

10. LIFE SCIENCES COMMERCIAL OPERATIONS ► FUNCTION IMPACT
Commercial strategy seen as important in solving many
pressing challenges; compliance’s impact narrower
Function Impact Index* combining stated importance of challenges and stated ability of a
function to address them
푛 푥푖푗푦푗, where 푥푖푗 is the %
Commercial strategy
Access and reimbursements
CRM and sales support
Contract management/managed care
Advertising and promotions management
Multi-channel marketing
Compliance
* Impact of a function on company’s challenges is defined as 푓 푥푖 = 푗
of respondents who believe that improvement in the function 푥푖 will have a material impact on
the challenge 푦푗; 푦푗 is the % of respondents citing the challenge as among the 'Top 3'
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
95
116
114
112
110
108
127
n=69 life sciences commercial
operations executives
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 10

11. INSIGHTS NARRATIVE ► LIFE SCIENCES COMMERCIAL OPERATIONS ► MATURITY
What are the most pressing
company challenges?
How can functions and related
operations address them?
Which functions are most
Are those functions mature?
Are those functions ready to
Can new operating models of
those functions help them
transform? Which ones?
What can the impact of that
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
effective at it?
transform further?
transformation be?
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 11

12. LIFE SCIENCES COMMERCIAL OPERATIONS ► MATURITY
Compliance, promotion management considered mature by
most; multi-channel marketing, CRM and sales support less so
% respondents stating the maturity of the functions in their organizations
DIRECTIONAL
Very mature Mature Somewhat mature/Immature
52 30 18
Advertising and promotions management 31 44 25
42
Compliance
Commercial strategy
30
Access and reimbursements 23 35 42
Contract management/managed Care 21 36 43
CRM and sales support 15 30 55
Multi-channel marketing
12 24 64
n=69 life sciences commercial operations executives
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
28
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 12

13. INSIGHTS NARRATIVE ► LIFE SCIENCES COMMERCIAL OPERATIONS ► PREPAREDNESS
What are the most pressing
company challenges?
How can functions and related
operations address them?
Which functions are most
Are those functions mature?
Are those functions ready to
Can new operating models of
those functions help them
transform? Which ones?
What can the impact of that
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
effective at it?
transform further?
transformation be?
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 13

14. LIFE SCIENCES COMMERCIAL OPERATIONS ► PREPAREDNESS
Compliance and commercial strategy most prepared mature
further; CRM, sales support and multi-channel marketing lag
% respondents stating the preparedness of their organization to mature a function
DIRECTIONAL
Fully prepared Prepared Somewhat prepared/ Not Prepared
Compliance 51 32 16
Commercial strategy 25 43 32
Advertising and promotions management 22 43 35
Access and reimbursements 20 39 41
12 41 47
Contract management/managed Care
Multi-channel marketing 16 29 55
CRM and sales support 9 33 58
n=69 life sciences commercial operations executives
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved.
14

15. LIFE SCIENCES COMMERCIAL OPERATIONS ► OVERALL ABILITY TO IMPACT
Many important functions not fully mature nor ready to develop
further
Ensure
compliance
to regulations
72
Magnitude of
challenge1
Commercial strategy
CRM and sales support
24
26
Compliance 91
24
Advertising and
promotions management
30 Contract management
/Managed care
Multi-channel marketing 7
Access and reimbursements 24
Enable company
innovation
19
Very mature or mature
Somewhat mature or Immature
% of respondents stating function
can have material impact on
addressing challenge
1 % of respondents from life sciences across all functions (n=233)
stating it is one of the top 3 challenges in their company
n=69 life sciences commercial operations executives
Reduce
costs
46
27
36
9
39
55
33
39
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
Increase customer
satisfaction
36
Increase growth
and scalability
43
84
61
11
68
58
82
66
44
56
37
26
37
44
37
61
78
9
48
48
57
52
DIRECTIONAL
% of respondents
assessing maturity
and preparedness
Maturity of
process
Prepared
to mature
Fully prepared or Prepared
Somewhat prepared or Not prepared
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 15

16. LIFE SCIENCES COMMERCIAL OPERATIONS ► OVERALL ABILITY TO IMPACT
Important functions seen as neither mature nor ready to evolve;
compliance at the other end of the spectrum
100
90
80
70
60
50
40
30
Size of the bubble proportional to impact
of function on many strategic challenges
Commercial strategy
Access and reimbursements
DIRECTIONAL
Advertising and promotions management
Contract management/managed care
CRM and sales support
Compliance
Multi-channel marketing
30 40 50 60 70 80 90 100
PREPAREDNESS
% of companies stated as very prepared or
prepared to mature in specified functions
% of companies stated as very mature or mature in the specified functions
n=69 life sciences commercial operations executives
MATURITY
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 16

17. INSIGHTS NARRATIVE ►LIFE SCIENCES COMMERCIAL OPERATIONS ► OPERATING MODELS
What are the most pressing
company challenges?
How can functions and related
operations address them?
Which functions are most
Are those functions mature?
Are those functions ready to
Can new operating models of
those functions help them
transform? Which ones?
What can the impact of that
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
effective at it?
transform further?
transformation be?
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 17

18. LIFE SCIENCES COMMERCIAL OPERATIONS ► OPERATING MODEL INITIATIVES
Many believe advanced organizational structures (SSC / BPO)
have impact across many functions
% of respondents stating the initiative can
have a material impact on the function
Business
process
re-engineering
Radically
improved
use of
technology
5
3
Commercial strategy 25 26
33 64 116
CRM and sales support 49 32 32 57
114
41 62 112
14 65 110
5
3
Access and reimbursements 17
5
3
53
Contract management/managed care 16
5
3
30
Advertising and promotions
management
53
48 58
Multi-channel marketing 23 108
Compliance 13 38 46
95
5
3
* Function Impact Index combining stated importance of challenges and
stated ability of a function to address them
1 BPO – Business Process Outsourcing, SSC – Shared Services
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
Impact
Index*
BPO or SSC
or hybrid1
45 127
DIRECTIONAL
n=69 life sciences commercial operations executives
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved.
18

19. INSIGHTS NARRATIVE ► LIFE SCIENCES COMMERCIAL OPERATIONS ►OPERATING MODEL IMPACT
What are the most pressing
company challenges?
How can functions and related
operations address them?
Which functions are most
Are those functions mature?
Are those functions ready to
Can new operating models of
those functions help them
transform? Which ones?
What can the impact of that
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
effective at it?
transform further?
transformation be?
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 19

20. LIFE SCIENCES COMMERCIAL OPERATIONS ► OPERATING MODEL INITIATIVES ► PROGRESS
Most operating model initiatives already in progress for
most of the functions
% of respondents; Width of the column indicates the % of respondents who believe that the
organizational structure initiative will have a material impact on the function.
CRM and sales support
Currently in Progress
Planned in next 12 months
Planned after 12 months
Not Considered
Commercial strategy
Advertising and
promotions
management
91
9
SSC, BPO
or hybrid
Contract
management/
managed care
83
11
6
BPR
71
6
24
Tech
70
15
10 5
BPR
56
16
22
6
Tech
NA*
67
19
4
11
61
17
9
13
Tech BPR
SSC, BPO
or hybrid
71
18
5
5
SSC, BPO
or hybrid
NA*
BPR
6
6
78
11
Tech
3
66
19
12
Tech
n=69 life sciences commercial operations executives
*Some data not reported due to small sample size
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
67
7
14
13
SSC, BPO
or hybrid
Multi-channel
marketing
65
18
12
6
73
13
14
BPR SSC, BPO
or hybrid
DIRECTIONAL
Compliance
NA* 96
94
4
6
Tech BPRE
SSC, BPO
or hybrid
NA*
Access and
reimbursements
10
65
20
5
SSC, BPO
or hybrid
Tech
68
18
14
BPR
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 20

21. LIFE SCIENCES COMMERCIAL OPERATIONS ► OPERATING MODEL IMPACT
Technology and BPR considered to have slightly higher when
applicable
Average $ impact, bar width proportional to percent of respondents stating that the initiative
will have a material impact
OPERATIONS – LIFE SCIENCES
COMMERCIAL
$209m
BPR SSC, BPO, Hybrid
$225m
Tech
OPERATIONS - ALL
INDUSTRIES#
$109m
$186m
SSC, BPO, Hybrid1
BPR
$ 242m
Tech
DIRECTIONAL
# n=365 executives responsible for industry specific operations from retail
and commercial banking, insurance, healthcare payer and life sciences
Average
$ impact
Annual $ impact is the impact of operating model initiatives in US$ per
annum including reduction of cost, capital required, improvement of
cash and revenue growth
1 BPO – Business Process Outsourcing, SSC – Shared Services,
BPR – Business Process Reengineering, Tech - radically improved use of technology
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
Advanced
organizational
structures
(shared
services and
BPO) seen
more often as
having impact
yet the
monetary
impact
expected is less
compared to
other initiatives
$165m
n=69 life sciences commercial operations executives
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 21

22. LIFE SCIENCES COMMERCIAL OPERATIONS
In conclusion
Senior life sciences R&D executives are challenged to
adapt to a rapidly changing business environment in an
economy that remains unpredictable. They say that
intense regulatory scrutiny, increasing cost pressures, and
the need for innovation are the most important business
concerns.
This research examined how those challenges can be
tackled by three levers of operating model
transformation: technology, process re-engineering, and
advanced organizational structures. The related
transformation of operations is an untapped strategic lever
for the COO as well as the CEO.
However, it is sometimes seen as a formidable
undertaking. Few understand the “IT + analytics +
process operations” nexus sufficiently. Technological
excesses of the past (such as ERP or data warehouses)
are well documented. Some technologies are unproven,
some uses of analytics are unclear, and older technologies
are rigid and expensive to evolve. Finally, it is frequently a
struggle to scale deep analytics throughout the enterprise.
Our experience of advanced operating models,
accumulated over 15 years, clearly indicates that there are
agile and practical ways to transform.
The key is to design, transform, and run the processes that
power advanced operating models so that they closely
align with measurable business goals, thereby avoiding
saddling the company with unnecessary and often
unmanageable complexity.
This approach focuses more rigorously on the sources
of impact and deliberately disregards any practice that does
not yield material outcomes. It also takes a more objective
and holistic look at technology, analytics and organizational
practices. It leverages now-mature “system of
engagement” technologies that complement “system of
record” technologies. It treats analytics (the arc of data-to-insight-
embed insight at scale into the fabric of other enterprise
processes; it does not take the typical approach of viewing
analytics as a task and a set of technologies. Finally, it
harnesses the process and organizational levers
available from established disciplines, such as
reengineering, shared services, outsourcing, and global
delivery.
We think that there is a smarter way to transform operating
models and address the most complex strategic challenges.
This is a way for COOs to make their enterprises more
intelligent and generate material impact.
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
to-action) as a process and determines how to
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 22

23. About Genpact
Genpact Research Institute
The Genpact Research Institute is a
specialized think tank harnessing the
collective intelligence of Genpact – as
the leading business process service
provider worldwide - its ecosystem of
clients and partners, and thousands of
process operations experts. Its
mission is to advance the “art of the
possible” in our clients’ journey of
business transformation and adoption
of advanced operating models.
www.genpact.com/research-institute
Genpact (NYSE: G) stands for “generating business impact.” We design, transform, and run business operations including those that are complex and
industry-specific. We believe that our approach, crystallized in our Smart Enterprise Processes (SEPSM) proprietary framework, is more focused, unbiased
and agile than that of our competitors. Our solutions integrate technology, data and processes into advanced and adaptable operating models that foster
growth and facilitate better management of cost and regulations in uncertain times. The result is intelligent operations of a range of functions such as
finance, supply chain, origination and client servicing, compliance, and risk. We have hundreds of long-term clients including more than one-fourth of the
Fortune Global 500. We have rapidly grown to over 66,000 people in 25 countries with key management and corporate offices in New York City. Our global
critical mass doesn’t dilute our flexible and collaborative approach, and our management team drives client partnerships personally. We attribute much of
our success to our unique history – behind our passion for process and operational excellence is the Lean and Six Sigma heritage of a former General
Electric division that has served GE businesses for more than 16 years.
For more information, visit www.genpact.com.
Follow Genpact on Twitter, Facebook, LinkedIn, and YouTube.
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
© 2014 Copyright Genpact. All Rights Reserved.
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 23

24. Thank you
Gianni Giacomelli
CMO, SVP Product Innovation
Source: Survey of 912 senior executives commissioned by Genpact to an independent research firm
PROCESS • ANALYTICS • TECHNOLOGY © 2014 Copyright Genpact. All Rights Reserved. 24