Accenture analysis revealed that digitization will be fueling almost one-third of the growth and an estimated 40 percent of the profitability in the pharmaceutical market by 2020. For those that partially digitize, their business models can drive improved profitability by as much as 27 percent. But, the true prize will go to those who become “digital all-rounders” and build new business models that address new markets.
Digitize partially—to buy some time
Many companies, if not most, are already doing this. They are digitizing key parts of their value chains—and the customer experience in particular. But with so many mainstream players implementing similar initiatives, the advantages partial digitization delivers will soon be commoditized. Partial digitization can and should be used as a learning curve—but remaining relevant for the longer term will require additional, more radical measures.
To win—combine partial digitization with building new business models
Our analysis shows that only digital all-rounders can hope to become proactive digital leaders. They achieve this by combining partial digitization with building new business models that address new markets.
To become a digital all-rounder, companies need to:
Provide clear guidance from the top.
Digital is here to stay. It needs the same top management attention as any other strategic initiative. Installing a chief digital officer is not sufficient. Every executive needs to make digital a priority and act as an obstacle solver.
Address the market as a whole.
Seek to create value for the entire health ecosystem—from prevention and care in core markets, to offerings for others. Consider, for example, how Merck’s spin-off Vree Health helps healthcare organizations meet patient engagement, accountable-care and care coordination goals.
Look for market growth.
If you target the right markets, profitability will be your reward. But think disruptively. Make a completely new attempt to drive success, even if you don’t yet have the performance metrics to prove its worth.
Learn, share and partner to create new business opportunities.
With the right partner you will develop a wider value orientation. Pfizer, for example, has hooked up with the startup, Akili Interactive Labs, in a clinical trial to evaluate whether or not a video game can be used to predict Alzheimer’s disease.
Foster a digital culture and mind-set and build required skills.
Sales experience, not digital experience, currently sets the agenda for most pharmaceutical players. That needs to change. So find ways of making life sciences attractive to talent with proven digital skills—the kind of talent behind Google, Twitter, Facebook and Netflix.