Healthcare Industry "Lost in the Digitalization Jungle"

November 25, 2019

Companies in the healthcare sector have big ambitions when it comes to digitalization, but they often fail with implementation, according to a global Digital Health Trend Study by Simon-Kucher & Partners.    The study shows that digital transformation is progressing slowly, and firms are often unsure about the direction in which to move. Fifty-nine percent of pharma, medtech, and consumer healthcare companies still lack a fully defined digital strategy, the study states.   While most healthcare companies with dedicated digital teams are satisfied with their defined strategies, 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.    Digital products and services were cited as the main focus of investment by all participants. Companies in the life sciences industry expect profitable outcomes from their direct and indirect products, services and solutions. Survey participants predict that 32 percent of their revenues will be generated through digital solutions by 2030.    Pharma and biotech companies make almost 14 percent of their investments in digital research opportunities and studies; the consumer healthcare industry allocates about one fifth of its investment budget in digital marketing; and the medtech sector’s highest priority is digital products, investing 20 percent in this area.    In their efforts to implement digital strategies, most companies fail to successfully monetize their solutions. 76 percent have difficulties defining a suitable pricing and revenue model, while over 80 percent lack resources. Christian Schuler, Senior Partner at Simon-Kucher & Partners, commented: “Digital strategies only work when their offer design is customer-focused and has a clearly defined service promise supported by clinical evidence. With a well-functioning internal setup and a digital strategy that is integrated into the company’s existing portfolio, the chances of a successful market entry with long-lasting impact are particularly high.”   

Companies in the healthcare sector have big ambitions when it comes to digitalization, but they often fail with implementation, according to a global Digital Health Trend Study by Simon-Kucher & Partners.    The study shows that digital transformation is progressing slowly, and firms are often unsure about the direction in which to move. Fifty-nine percent of pharma, medtech, and consumer healthcare companies still lack a fully defined digital strategy, the study states.   While most healthcare companies with dedicated digital teams are satisfied with their defined strategies, 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.    Digital products and services were cited as the main focus of investment by all participants. Companies in the life sciences industry expect profitable outcomes from their direct and indirect products, services and solutions. Survey participants predict that 32 percent of their revenues will be generated through digital solutions by 2030.    Pharma and biotech companies make almost 14 percent of their investments in digital research opportunities and studies; the consumer healthcare industry allocates about one fifth of its investment budget in digital marketing; and the medtech sector’s highest priority is digital products, investing 20 percent in this area.    In their efforts to implement digital strategies, most companies fail to successfully monetize their solutions. 76 percent have difficulties defining a suitable pricing and revenue model, while over 80 percent lack resources. Christian Schuler, Senior Partner at Simon-Kucher & Partners, commented: “Digital strategies only work when their offer design is customer-focused and has a clearly defined service promise supported by clinical evidence. With a well-functioning internal setup and a digital strategy that is integrated into the company’s existing portfolio, the chances of a successful market entry with long-lasting impact are particularly high.”    The “Digital Health Trend Study” surveyed more than 120 managers from the pharma and medtech industries in August and September 2019. For more information, visit www.simon-kucher.com