Digitalization is a game-changer and is putting customer interaction on an entirely new footing, even for companies in the medical technology industry. Going forward, what will be the best mix of digital and analog communication channels? And what opportunities and potential can digitalization deliver in terms of integrating and leveraging important sales process steps more effectively and offering new products and services?
Dr. Oliver Scheel, partner at A.T. Kearney and leader of the Health practice in Central Europe
Dr. Arne Kreitz, principal at A.T. Kearney and member of the Health practice in Central Europe
“This much up-front: There needs to be a big change in the way the medical technology sector approaches sales. Digitalization is the major challenge, and we are currently witnessing a fundamental transition across the industry. Our digital environment is already changing at breakneck speed and the pace will doubtless continue to accelerate. It is hardly surprising that numerous disruptive technologies – including cloud-based solutions, sensors and big data – have now emerged. At the same time, customers increasingly expect more – and rightly so. And the competition, of course, never sleeps: Non-industry players like Amazon are pushing into the marketplace. So what does this mean for businesses in medical technology? Time to bury your head in the sand? Most definitely not: The potential and opportunities for the industry look far too promising.
But what does the industry itself think? The German Medical Technology Association (BVMed) and A.T. Kearney surveyed a range of medical technology businesses to find out how they were digitalizing their sales operations. Twenty-four companies took part in the study, including a number of global champions.
Scope for more digital customer interaction
In theory, new digital forms of customer contact pose significant challenges for medtech companies. In practice, though, there is plenty of scope for more. In terms of the web, web stores, digitally optimized marketing, and the optimization of digital customer journeys, all of the companies surveyed thought they were falling well short of current standards.
None of the companies is systematically optimizing its digital customer journeys (the route from initial product contact through to a purchase decision), even though this is becoming increasingly complex. The key, going forward, will be to use a combination of digital and face-to-face channels. Almost half of the companies did, at least, have firm plans to do so in the future.
Improvements in the internal management of customer contact information will also be required. Omnichannel management is not yet adequately established in these companies. In 77% of them, there is either no coordination between channels as yet, or very little.
Digital products and services
More encouraging is the fact that many of the companies are well set-up when it comes to digital transformation. Thirty-five percent of them already consider their processes for developing digital products to be “world-class.” So, it seems that the groundwork in many areas has been done: Digital reference points are in place, and development work is progressing at speed. One particularly encouraging business in terms of digital products and services is Aesculap. The medtech company has already taken numerous digital products to market, ranging from digital quality control, to sterile goods documentation, to sensors that track intracranial pressure and can be monitored digitally by clinicians. Looking ahead, digital service solutions, particularly for commonly occurring disorders like heart disease or diabetes, will be crucial.
Whether services and solutions like these ever actually become available on a mass scale will depend to a certain extent on efficient digital sales analysis. Many companies in the medical technology sector are intent on becoming better set-up for this. For instance, 65% of them want to deploy comprehensive data management systems. But it is also worth noting that data availability and utilization are still in their infancy, with 44% of the companies surveyed using little in the way of external data.
Five digitalization success factors for the medtech sector
How best should digitalization be approached? We have identified five key factors:
1) Top-down mandate: CEOs must make a clear commitment to digitalization and lead by good example.
2) Digital vision: There needs to be a guiding digital vision that can keep the digital transformation process on track.
3) One digital accelerator: One person within the organization, reporting directly to C-level management, should act as an anchor and accelerator.
4) Start-up atmosphere: Primarily, this means acknowledging that errors are part of the learning process, embracing ideas from all levels, encouraging agile working methods, and looking to hire talented young people.
5) Active change: The key is to see digitalization as an opportunity, not a threat. This includes fostering a positive atmosphere and engaging actively with the digital community.
It is high time that businesses began making these changes. And the best approach to digital transformation in medical technology, as ever, is to be bold!”