Digital transformation in Healthcare and Life Sciences: Are you a leader or laggard?
Simon Ulrich
Managing Director APAC | A.I. in Life Science Expert | (ex-)Founder, Startup Advisor & Investor
74% of executives and high-level managers consider digital transformation their IT initiative priority [1]. Companies have been investing 7.89 trillion U.S. dollars in digital transformation globally since 2017 [2]. Despite massive spending, only 21% of companies considered themselves digitally transformed [3].
Especially the Healthcare and Life Sciences industries have a very large need to catch up in terms of digital maturity [4]. This article explores what strategies global forerunners of the Healthcare and Life Sciences industries successfully apply and how you can take advantage of them.
The Challenge of Transforming in Life Science & Healthcare
Healthcare and Life Science organizations operate in a highly regulated and risk-averse environment. On top of that they face the classical challenges of lack of IT staff or transformational expertise, dependencies on legacy systems and technology, lack of senior management buy-in, lack of time and money etc. [5]
Unfortunately, numbers do a decent job to stoke fears too: “66% to 84% of digital transformation projects fail, […] which is a sizable proportion considering the costs, both monetary and otherwise, of putting these projects in place” [6]. As a result, our industry has invested only 14% of what the Manufacturing Industry en large invested into digital transformation in the second half of 2021 [7]. Healthcare and Life Sciences companies truly risk being late in the game.
How do Leaders and Global Forerunners differentiate?
Global forerunners have understood though that the Healthcare and Life Science industries are fundamentally data-driven businesses. Consequently, they have developed and executed strategic roadmaps as well as lighthouse projects to transform their businesses and operations to digital allowing them to “harness past and present operational data, providing access to decades of […] ‘experience’ buried across multiple sources” [8].
To successfully navigate their journey, digital forerunners typically use a crawl-walk-run approach: In the beginning, they modernize their IT architecture and utilize flexible platforms as well as ecosystems of tools [9]. By doing so, they typically achieve cost reductions, improved digital capabilities of employees and increased employee satisfaction [9], [10].
Subsequently, they focus on building and sustaining a competitive edge with regards to operations. They streamline and digitize processes and functions that already exist e.g., by rethinking customer service touchpoints, digitally redesigning operational core processes and fostering platforms for enhanced interaction with their employees [11]. Naturally, they prepare their organization well for the implementation since transformation to digital comes along with cross-functional and complex company-wide change efforts. Once they have paved the way for an enterprise-wide transformation process, they execute at highest standards.
Ultimately, equipped with new digital capabilities forerunners are well prepared for “insights-driven decision making at scale, unlocking productivity, and providing transparency across the […] organization and beyond” [8] which help them to explore and experiment with various sources of value and growth. They efficiently create unprecedented products, services, and ecosystems and capture the value with innovative business models that increase “the size of the existing pie or [create] new revenue lines” [11].
Arcondis’ uppermost goal is to make healthcare better and we achieve this by making you succeed. We are confident that with our 22 years of experience in life sciences, compliance, digital transformation, organizational change management and business model development we can turn your company into a digital champion. If you want to join the forerunners or expand your lead connect and reach out!
References
[1] Statista, "Priorities for IT technology initiatives in companies worldwide," 2022.
[2] Statista, "Spending on digital transformation technologies and services worldwide," 2022.
[3] B. Morgan, "100 Stats On Digital Transformation And Customer Experience," Forbes, 2019.
[4] Statista, "Global companies' level of digital maturity as of 2018, by vertical," 2023.
[5] Statista, "Hurdles preventing organizations worldwide from progressing with digital transformation initiatives," 2022.
[6] A. Correani et al., "Implementing a Digital Strategy: Learning from the Experience of Three Digital Transformation Projects," SAGE Journal / Haas School of Business University of California Berkeley, 2020.
[7] Statista, "Total investment in idustrial digital transformation worldwide," 2023.
[8] L. Finelli and V. Narasimhan, "Leading a Digital Transformation in the Pharmaceutical Industry: Reimagining the Way We Work in Global Drug Development," Clinical Pharmacology & Therapeutics, vol. 108, 2020.
[9] N. Furr et al., "The 4 Pillars of Successful Digital Transformations," Harvard Business Review, 2022.
[10] Z. Tekic and D. Koroteev, "From disruptively digital to proudly analog: A holistic typology of digital transformation strategies," Business Horizons, 2019.
[11] D. Bonnet, "Digital Transformation - 3 Stages of a Successful Digital Transformation," Harvard Business Review, 2022.