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A new study reveals that healthcare’s digital transformation is not advanced when it comes to defining and executing a digital strategy.
Digital transformation is progressing slowly, and firms are often unsure which direction to move in, according to a new study.
The aim of the study, Digital Health Trend Study, published by global strategy and marketing consultancy Simon-Kucher & Partners, was to understand the current development state of digital strategies and to find out if companies only talk about it, or have already implemented it.
For the study more than 120 managers from the pharma and medtech industries were surveyed worldwide in August and September 2019.
The study found that 59% of pharma, medtech, and consumer healthcare companies still lack a fully defined digital strategy, according to the study. Healthcare companies define their strategies using different models. In 56% of cases, a dedicated digital team defines the strategy, while in another 42%, a new or existing commercial team takes on this role.
Traditionally, digital health strategies are initiated by companies’ headquarters; only in rare cases do individual countries or business units act independently. Almost 90% of those surveyed say their company’s headquarters defines the strategy for all business units, and 66% report that the headquarters takes over planning for all geographic levels. However, the case that a strategy is applied at both geographical and organizational levels, only occurs to 14% of respondents who already have a defined strategy. Over half of the companies in this category see themselves as digital front runners in the industry.
The survey found that most healthcare companies with dedicated digital teams are satisfied with their defined strategies. However, they often fail to implement and apply them effectively due to a lack of resources and insufficient staffing capacity. In contrast, when integrated commercial teams take care of the issue, only five percent of the companies surveyed said they were dissatisfied.
“A solid digital strategy for commercializing digital health solutions is ideally harmonized across all geographic and organizational levels,” says Jan Bordon, digital health expert and senior director with Simon-Kucher & Partners. “Defining the digital business objectives is crucial to ensure fit with the current business model and portfolio.”
Investing in digital products and services that enhance the existing portfolio is expected to significantly drive mid- and long-term (direct and indirect) revenue, according to the study.
In addition, to exploit the full potential, life sciences companies need to build internal digital capabilities and commercial/market access knowledge by dedicating resources and ensuring staff/C-suite support in the digital strategy (e.g., communicate vision, set key performance indicators)
The study also found that more than 30% of future sales (in five to 10 years) are expected to come directly and/or indirectly from digital solutions. “Digital solutions will be the norm rather than the exception, companies have to be prepared and should not hesitate to put sufficient resources and investment behind that topic,” Bordon says.
According to the study, key success factors for commercializing digital health solutions include:
“The industry is not as advanced as one could think when it comes to defining and executing their digital strategy,” Bordon says. “If you hear all the noise around that topic one can think that we are completely digitalized, but that is by far not the case. Commercialization of digital solutions is the key challenge from a capability perspective but also external environment perspective. Having a defined commercial assessment framework will help companies in the future to better steer their investments.”