Download a practical guide for MedTech companies to navigate digital transformation, outperform the competition, and increase patient value.
The MedTech industry has experienced impressive growth over the last decade. The vast majority of Medtech companies are valued globally, as their products meet the highest individual patient demands in terms of innovativeness, functionality, quality, and reliability. And the MedTech industry has also been able to strengthen its market position despite globalisation trends in general. Even forecasts find that the value of the worldwide MedTech market will reach $520 billion by 2022 (CAGR of 5.1%).
This success is not set in stone for all companies of the MedTech sector. Omar Ishrak, CEO of Medtronic, sees healthcare at a crossroads. We share his opinion, perceiving strongly disruptive forces driven by the market, technology, and regulation. Siemens Healthineers are confident that digitalisation in healthcare holds great promise, and many of today’s healthcare challenges can be overcome.
Now is the time for a major transformation to shape the future of the MedTech sector. We see MedTech companies currently affected and challenged by three concurrent technology-driven shifts.
The new foundation of digital technologies – posing questions regarding value creation, product and service innovation, and required capabilities—from delivering spare parts to leveraging 3-D printing, from human experts to self-learning systems.
Shift to value-based healthcare – posing questions regarding pricing models, customer and patient relationships – from supplier to ecosystem partner, from hardware to software and data-driven digital services.
The increasing pace of digitalisation – posing questions regarding ecosystem positioning, digital excellence, and data monetisation—from machine automation to connectivity and analytics, from single machines to entire value networks.
These shifts carry the risk of weakening the solid position of incumbent MedTech players. In an increasingly software-driven environment, MedTech companies cannot rely on their hardware strengths alone, not even with advanced embedded software. The upcoming cyber-physical world (Internet of Things) requires competency in both fields –the Internet and Things. MedTech companies can also turn these shifts into new opportunities for further growth, greater efficiency, and increased patient value. This publication serves as a guide to successively seize the opportunities arising from the aforementioned market shifts.
While the need for increased digital transformation efforts to secure competitive advantages has arrived at MedTech’s top management level, the exploitation of correlated gains lags behind expectations. The reasons may be diverse and company-specific but, in most cases, are based on six fundamental shortcomings that leading MedTech companies need to overcome:
- Efficiency-focused, short-term digital initiatives vs leveraging digitalisation to innovate products/services and build integrated solutions for patients;
- Reliance on strong hardware knowledge (with embedded software) vs developing and integrating new hybrid and purely digital capabilities into existing operations;
- Position as a single industry player with best-in-class solutions vs new (digital) ecosystem player collaborating, cooperating, and co-innovating with partners and peers;
- The reliable, value-focused developer of complete products vs.joint prototyping with customers, patients and/or partners on new digital innovations to overcome challenges of size and scale;
- Legacy organisational structures for digital initiatives vs new digital operating models that empower teams, foster collaboration, and create a test-and-learn culture;
- Narrow innovation focused on improving/enhancing existing solutions (10 per cent thinking) vs focusing on patient’s unmet medical needs to radically rethink existing solutions (10 times thinking).