How to be on the winning side to digitalization in healthcare by Mckinsey

Sastry Chilukuri and Steve Van Kuiken outline four core principles to digital change that create better patient outcomes, generate more value for stakeholders, hold down costs, and improve efficiency.

The current digital era has changed the way the world operates and how industries interact with it, and healthcare companies have been no exception. The digitalization of products and processes has raised an unprecedented business context in which companies must adopt an innovative attitude and initiate a change in their mentality if they want to stay in business.

The new era of digitization invites companies to change their perception and stop considering digital technologies as utilities and begin to embrace them as strategic assets. In the article, Chilukuri and Van Kiuken explain how, in terms of digitalization, most pharmaceutical and medical-technology companies are still one step behind in comparison with other sectors such as travel, retail or telecommunications. Nonetheless, some healthcare companies are starting to bridge the gap between tradition and innovation and have undertaken new initiatives such as the use of analytics for data mining, cloud platforms to reduce storage and processing costs, robotics, big data, automation programs, 3D printing, sensor-enabled devices and wearables, etc.

There is no doubt that the competitive environment that healthcare companies across the world face nowadays has nothing to do with what existed a decade or more ago. Technology progresses and evolves by leaps and bounds, and so do all the activities that surround it: development processes, delivery systems, back-office operations, supplier interactions, consumer behavior… As the article explains “never before have so many technologies with the potential to affect the healthcare industry matured so quickly en masse “.

On top of this, companies must remain competitive in an industry that is in constant change and where the ambitious race towards innovation has only just begun. Healthcare companies must meet and exceed the demands, needs and desires of a consumer who is increasingly informed and engaged in healthcare decisions. As a result, companies are recognizing the importance of customer experience, creating more interactive technology, shifting towards evidence-based medicine, using big data to customize care programs to specific patients and treatments, and basically adopting an all-encompassing change program towards a new digital business concept.

Consequently, some changes need to be made in order to effectively become part of the new technological wave, maintain high levels of efficiency against competitors, and meet consumer needs. Throughout the article, Chilukuri and Van Kiuken suggest four core principles for change that “can help companies join the ranks of the winners. They can tackle their transformation programs successfully, creating better patient outcomes and more value for all stakeholders”.

The first core principle for success is to identify and prioritize the critical sources of value. This process consists on recognizing the products and services that are relevant to the company’s performance, represent a competitive differentiation, provide significant value to consumers and stakeholders, and thereon, consider ways in which digitalization could favor them. This principle enables companies to effectively adjust their investment in digital technologies and it also helps management focus on the crucial priorities throughout the complex transformation process.

The second core principle that Chilukuri and Van Kiuken outline is service delivery capabilities. According to them, “once priorities for digital transformation have been set, healthcare companies will need to focus on the means by which they will offer targeted digital products and services to consumers and stakeholders. This core principle suggests that companies should implement new approaches to product development and distribution, redesign their work flow and processes, and rearrange the organizational structure to be more agile, virtualized, product-oriented, and interactive.

Once the company has identified its main priorities and rearranged its delivery structure, it is time to consider if the activities required for digitalization are feasible. Then, the third core principle comes into play: IT infrastructure. Here, modernization is crucial. Companies should try to build flexibility into their IT structures, engage with new technologies, and create secure and efficient systems that manage data holistically to make information accessible quickly and easily. Chilukuri and Van Kiuken explain that a common mistake companies make when trying to become digital is to avoid change and simply include new applications and gateways into their existing system.

Lastly, the fourth suggested principle focuses on core management competencies. According to the article, these are all the enablers that allow companies to pursue a successful digital agenda. The first core area to focus on is talent and partnerships by ensuring that the company counts with valuable internal assets as well as relevant digital talent from outside the organization. Moreover, financial processes are also worth considering since healthcare companies must invest in their priorities, revise and update their investments, and control that enough budget is available. Finally, in order to maintain a proactive attitude willing to embrace changes, culture is critical.

To conclude, McKinsey’s article could be defined as a knowledgeable guide to digital evolution. Based on their experience, Chilukuri and Van Kiuken make something as intricate and complex as digitalization seem straightforward though four main core principles. They provide advice and examples for each point and describe its importance in the transformation process. Hence, this article is more than four keys to change, for those able to see beyond, this article could be the key to success in healthcare… and that is precisely what Monteloeder is doing. We are pleased to discover that our past efforts are aligned with MacKinsey’s suggestions, and that our future values, objectives and strategies will lead our company towards what Chilukuri and Van Kiuken consider as “winners in digital health”.

http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/four-keys-to-successful-digital-transformations-in-healthcare

CLAUDIA CARDONA

 

Related articles:

https://www.monteloeder.com/blog/2018/11/the-review-of-monteloeder-digitalization-through-smart-healthcare-conference-in-south-korea/

https://www.monteloeder.com/blog/2018/10/mhealth-are-we-ready-for-it/

https://www.monteloeder.com/blog/2018/10/the-mconsumer-the-new-user-category-among-the-sport-nutrition-market/