Pharma's digital make-or-break point

July 12, 2023
Addressing the reasons why pharma is lagging behind in digital transformation adoption

Digital transformation is taking center stage on the agenda in every industry with research suggesting that global tech spending (including consumer, organizational, company, non-profit and government spending) will have increased from $8.5 trillion in 2022 to nearly $11.5 trillion by 2026.

The pharma industry, however, has typically been a laggard regarding the adoption of digital business.

In recent years, buying behaviors have evolved, and pharma companies must adapt to attract talent into the industry and acquire and keep patients. But falling behind on the digital adoption curve has meant many pharma companies lack the skills to undertake a digital transformation process.

Historically, major pharma companies were generally very successful financially. If they had a bottleneck or a problem they needed to overcome, they would bring in more people to meet that immediate need. However, it has now become pertinent for companies to step back and analyze how best to solve problems long term with a digital solution.

The pandemic had a substantial impact on pharma processes. With customer-facing practices restricted, many companies realized that had business processes been automated, it would have ensured productivity was maintained. The natural result of this experience should be to increase investment in internal processes and bring in the skill set needed to implement them.

But the true challenge lies with adoption — which is often the make-or-break point of a digital transformation project. There are several reasons why pharma is still behind in the digital adoption curve, and these must be addressed in order for the industry to keep up.

In-house skills gap hindering digital

Digital transformation is a complex process, and within most in-house teams, there will be a significant skills gap regarding successful implementation.  For many companies, acquiring the relevant skill set internally is not the most viable a solution. The skill requirements are changing so dynamically that employees need continual development. Those who had the most up-to-date skills just two years ago will find that their knowledge is now outdated, as are their skills.

Agility is critical when it comes to acquiring or utilizing a skill set for digital transformation projects, and often that skill set is more useful when outsourced to specialists with niche knowledge and understanding and, by definition, the most up-to-date skill set developed through a continual focus on digital transformation for a multitude of clients across all industries.

Another vital element in embracing digital business is not just the skills to implement it, but the mindset. It is a significant technical cultural change, and business leaders should not underestimate this. They must demonstrate their focus and investment in digital transformation, and this will filter through the business. Businesses that delegate the entire process to the IT team as a siloed project will almost certainly fail, leaving them lagging further behind in an industry that is finally waking up to the digital requirements of pharma and all its stakeholders.

Patients as end users

There has been a generational shift when it comes to the health. Historically, when patients or parents of patients were told of health conditions, diagnoses or prognoses, it was generally accepted to follow the doctor’s recommendation of steps concerning the treatment.

Nowadays, people are far more likely to take information under advisement and research the subject matter further themselves. Parents may seek out communities or charities dedicated to people with similar conditions to better understand the management of a condition or receive recommendations to take back to their medical professional.

Rather than a patient/doctor experience, it is shifting to a more customer/services relationship, with the onus on pharma companies to meet the needs and requests of end users rather than simply distributing a medication that was devised in a with limited interaction with those who would be the end users.

For example, rather than a patient being given a knee replacement and a doctor selecting the best fit from their range of equipment, a patient may ask for a bespoke, 3D printed knee replacement modelled on their existing physique to greater ensure a positive outcome. The power is increasingly sitting with the patient who may demand the same hyper-personalized care they feel they would receive in any other circumstance or industry.

Pharma needs to adapt to remain competitive and relevant. Companies that gather and analyse feedback and data from end users are far more likely to succeed in the coming years.

Culture is critical

This expectation from patients/end users indicates a societal shift that requires digital business transformation. The transformation process is not simply an IT project to fit the needs and budget of a company.

Similarly, with a significant skills gap and increasing demand for talent, internal employee experience is essential too. For example, twenty years ago employees used clocking-in machines to log their working hours. However, if a potential employee were told in 2023 that they would be using an analogue clocking-in device that was not networked to any back-office software to log their hours, that would ultimately dictate the salary they would receive each month, many would refuse and seek employment elsewhere.

With current cost pressures impacting businesses, efficiency is crucial and can help enterprises to remain competitive and succeed during these economically challenging times. If companies refuse to adapt, they will be pushed out by new, modern, more agile competitors. The message is clear: adapt or be left behind.

Importance of collaboration

When businesses experience increased cost pressures due to either macro or micro factors, they often consolidate workloads and put them onto fewer people. While this saves money in the short-term, in the long-term, this could result in employees having extensive experience in one area, and very little knowledge in other areas.

Digital business is niche and is not designed to be a cost-saving activity. It is a transformation activity to improve the organization and ultimately bring in more business. It is an investment for the long term, a by-product of which will most likely be cost savings.

To effectively implement a digital business transformation process, companies should partner with specialists with the skill set to come in and start immediately rather than needing to upskill ahead of undertaking the project. Picking the right partner for the right activity is critical. Consolidating IT work along with digital transformation under traditional vendors due to cost pressures and ultimately expecting delivery across all aspects of the business from one or two prominent vendors is counteractive.

Digital business planning

A change of mindset at the very top is critical to the success of digital transformation. While there may be many workers supporting this process, for it to be successful, it needs to be adopted and implemented from the very top echelons of the organization. Simply giving it to your head of IT and hoping for the best will almost certainly fail. You need the correct, specific skill set, and for pharma organizations, having the skill set in-house within the IT team is simply not viable or productive. The continual development of skills and research is mammoth and would stop them from being effective and useful in their current job.

It is also critical for pharma organizations to undertake detailed assessments from partners and end users ahead of and during a digital transformation project. Pharma companies need to fully understand where they are and how they are perceived within the market to adapt, rather than execute a transformation based only on their perception.

Another piece of advice to pharma business leaders is to deliver in a bite-sized approach rather than a big bang. This might sound odd and the opposite of general advice, as leaders might want to see the whole project planned out in advance, but it is not possible or productive to do that.

It is critical to implement in stages, then review, analyse, and move on to the next stage. Review each sprint and adapt rather than plan the whole race. If leaders demand a plan for the entire project, by the time it is halfway through, there may be better, more effective solutions on the market that should be encompassed. An agile mindset is crucial, as priorities and technology may change throughout the process.

A final consideration is this. If we look at other industries — banking, automotive, e-commerce and airlines, to name a few — and ask ourselves how these industries have changed and adapted over the past five or ten years, the answers are incredible. We’ve gone from purchasing a physical airline ticket from a travel agent to buying them on our phones and simply scanning a QR code to board a plane. We can do our shopping, be that for groceries, holidays or property, online from our phones. There are fewer branches of banks as we control our finances online.

The pharma industry needs to see how the landscape has changed over the past few years, draw inspiration from other industries and adapt to survive.

About the Author

Bipin Bhaskar | Client Partner, Altimetrik