RESEARCH REPORT

In brief

In brief

  • Today’s healthcare C-suite is investing in the latest technology, but they aren’t necessarily unlocking its trapped value for their organizations.
  • We’ve decoded the strategic use of organization technology by studying both Leaders and Laggards.
  • Leaders as those who are building what we call Future Systems Vs Laggards who are investing in but not realizing the full value of innovation.
  • Find out how Future Systems can help you scale innovation and achieve full value.


Tech is everywhere, value isn’t.

The growing innovation achievement gap. Today’s healthcare C-suite is adopting technology that spawns new capabilities and applications. But many still struggle to scale innovation organization wide.

It’s creating what we call the innovation achievement gap—the difference between technology innovation investment and realized value.

Value is difficult to capture in part because the conventional IT “stack”—spanning software applications, hardware, telecommunications, facilities and data centers—wasn’t built for today’s world of analytics, sensors, mobile computing, artificial intelligence applications, the Internet of Things (IoT) and billions of devices. Nor was it designed to adapt to the world of tomorrow, whatever that might be.

But it’s not the case that digital native organizations are closing their value achievement gaps, while legacy organizations aren’t.

We’ve found that growth in every kind of organization depends on a systematic and sequential adoption strategy in line with Future Systems.

Work the systems

We conducted our largest organization systems survey to date and collected data on more than 8,300 companies and organizations across 20 countries and industries, studying both “Leaders,” who are building Future Systems, and “Laggards,” who are investing in—but not scaling—innovation. The survey included respondents from 356 healthcare organizations across the US, UK and Australia. We asked about:

  • Adoption of key technologies
  • Penetration of technologies adopted
  • Organizational culture

We scored the organizations on these dimensions, calling those in the top 10% Leaders and those in the bottom 25%, Laggards. By tracking performance indicators between 2015 and 2023 (projected), we can see a strong correlation between technology adoption and achieved, or expected, value.



The difference is staggering: Leaders grow revenue at nearly three times the rate of Laggards. And the lost potential is snowballing.

In 2018, Laggards had $0.5 billion foregone annual revenue. If they don’t change, they could miss out on as much as $2.8 billion of their annual revenue by 2023.

Leaders' expected growth is represented by the purple line and Laggards the blue line (self-reported). This illustrative model shows the opportunity cost of not evolving to Future Systems using a company with $1 billion in revenue in 2015.

This illustrative model shows that the difference between Leaders and Laggards’ revenue growth is projected to widen. Leaders' expected, self-reported growth is represented by the purple line and Laggards the blue line. Dollar values illustrate opportunity cost for a hypothetical organization with $1billion in revenue in 2015.

Capture the value

Healthcare Leaders have a deliberate stance toward technology adoption and a clear vision for what their organizations’ future systems should look like.

While some leaders are born, others are made: Everyone can emulate the mindset and methods of the top 10%

But it’s not just about collecting new tools; they prioritize and sequence implementations in optimal ways. They cultivate Future Systems, a state in which organizations adopt complex, interconnected living systems of technologies, applications and people. As a result, their systems allow for a seamless flow of product and service innovations from one process to another.

Laggards, on the other hand, have faith in a “fast follower” approach, implementing technologies as individual point solutions without a plan for cultivating systems. So, when a potentially game-changing innovation comes along, they fail to scale it.

Let’s take a closer look at why healthcare Leaders are building thriving Future Systems, which are boundaryless, adaptable and radically human:

Boundaryless

Boundaryless systems take advantage of blurring boundaries to create new spaces where ideas and partnerships can flourish.

Historically, the components of the IT-stack—database, applications and infrastructure—have been treated as independent entities. These days, divisions are fading.

Boundaryless organizations utilize the cloud, have a uniform approach to data, security and governance, and have established paths for exploring unconventional business/technology partnerships.

77%

of respondents say systems are breaking down the boundaries between data, infrastructure and applications, between humans and machines, and even between competing organizations.

Adaptable

Adaptable systems learn and improve by themselves, eliminating the friction that hinders growth and helps humans make better decisions, much faster. Powered by advances in data and intelligent technologies, those with adaptable systems aren’t fazed by change.

88%

More than 88% of Leaders agree that decoupling the entire IT stack is a key step toward adaptable systems, compared to less than 30% of Laggards who think so.

Key markers of adaptable organizations include organization-wide use of automation and AI, a continuous data supply chain in the cloud to power the AI in the organization, and a stable but modular, flexible, and constantly evolving architecture.

Radically human

Radically human systems talk, listen, see and understand just like we do, bringing elegant simplicity to every human-machine interaction.

85%

of Leaders are extremely effective at breaking down cultural barriers that hinder employees working with radically human systems compared to 49% of Laggards.

Thanks to technologies such as natural-language processing, computer vision, voice recognition and machine learning, radically human systems are becoming less artificial and more intelligent, making them easier to interact with and more efficient.

1. Adopt technologies that make the organization fast and flexible

Leaders are moving to decoupled data, infrastructure and applications that enable greater flexibility and a faster-moving IT culture.

While Leaders opt for flexible, uniform and scalable architectures capable of responding to market demands, like seamless customer payments, Laggards find it difficult to move away from rigid IT architectures which leaves them unable to maximize investments in innovation and vulnerable to system-wide outages.

88%

of Leaders adopt critical technologies such as microservice architectures, containers and Kubernetes that allow decoupling.

2. Get grounded in cloud computing

Cloud computing is essential to Future Systems because it enables organizations to successfully utilize other technologies, including AI and analytics. As such, Leaders treat the cloud as a catalyst for innovation.

91%

of Leaders have adopted sophisticated cloud services compared to 36% of Laggards, who tend to see the cloud as a cost-effective data-center.

3. Recognize data as being both an asset and a liability

Leaders ensure data quality, creating security measures that anticipate threats and building ethically responsible frameworks for managing data and AI. This establishes a virtuous cycle of data creation and consumption, because the quality is always improving.

91%

of Leaders ensure data quality and continue to enrich their data compared to 61% of Laggards.

Similarly, the AI handling the organization data must gain the trust and confidence of the people who use it to avoid the risk of adverse effects on business performance, brand reputation and regulatory compliance.

91%

of Leaders have a systematic way of managing AI in a responsible/ethical manner, compared to 51% of Laggards.

4. Manage technology investments well – across the organization

Leaders have clear visibility into organization-wide technology investments.

88%

of Leaders systematically track ROIs for investments in automation across the organization, compared to 45% of Laggards.

Leaders work toward process alignment by breaking down barriers between IT and other departments. They also establish innovation centers, creating pipelines for innovation transfer. For instance, they might consider how improvements in machine-learning-driven sales and customer relationship technology could be used to predict and pre-empt employee turnover.

5. Find creative ways to nurture talent

A workforce immersed in yesterday’s technologies is one of the biggest obstacles to creating the expansive, flexible, human-centric systems necessary for success.

77%

of Leaders are using AI and advanced analytics to personalize learning, predict skills needs and match workers’ skill requirements with appropriate training modules.

Leaders also make sure their talent is not afraid to experiment and present non-traditional ideas—important components of learning and growing.

Four barriers to innovating at scale

Across the world, organizations cite architecture flexibility as the biggest of four barriers to innovating at scale. Respondents were asked about their effectiveness in addressing each.

Technology adoption

Mastering new technology frontiers at speed and at scale.

Architecture flexibility

Building flexible, uniform and scalable architectures capable of responding to market demands.

Systems trust

Safeguarding trust in systems with constantly evolving approaches to security and data.

Organizational transaction costs

Reducing interaction impediments, both organizational and technological.

View All

To scale innovations repeatedly and grow twice as fast as others, organizations must evolve to Future Systems by cultivating the mindset and methods of the top 10%, right now. Those that wait will find it increasingly difficult to catch up, as new technologies proliferate while the pace of innovation accelerates.

Now is the time to make your move to the future

Healthcare Leaders already enjoy a considerable head start and will not be standing still. To scale innovations repeatedly and drive growth, organizations have to depart from adopting technologies as point-solutions and evolve to future systems.

About the research

We surveyed C-level executives from 8,356 companies and organizations (half IT, half non-IT) from 20 industries and 20 countries, including respondents from 356 healthcare organizations across the US, UK and Australia. Our dataset captures key growth and revenue indicators over an eight-year time period. About 80% of the organizations included have $1 billion or more in annual revenues.

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