How digital solutions are rewriting the commercial playbook in MedTech
Opportunities and challenges emerging from the digital solutions business
Digital solutions are shaking up traditional business models in the MedTech industry - companies are moving beyond devices to deliver smarter, connected care. Now is a pivotal moment for decisive action: Will you stick with traditional device sales or embrace digital solutions as a new core business? Do you possess the capabilities and talent to win in this era of exponential change? Is your organization and enabling IT set up and ready to successfully commercialize digital solutions? Our new “Future of Business Interaction” report provides valuable insights and answers to pivotal questions, empowering MedTech companies to successfully commercialize digital solutions.
MedTech companies are strategically investing in a software-driven future
In recent years, established MedTech companies have heavily invested in cultivating new digital capabilities across research & development and commercial functions to establish a foothold in the growing market for advanced digital solutions, i.e. software-enabled products and services, powered by cutting-edge technologies such as AI. This move beyond the traditional device business enables MedTech companies to amplify their impact along the full continuum of the patient journey from prevention, detection, diagnosis, and treatment to care management. It involves empowering patients to proactively manage their health as well as supporting health care providers to improve clinical outcomes as well as increasing operational efficiency.
While today’s digital solutions market remains experimental, now is the time for MedTech companies to strategically position themselves for future success. Some companies maintain focus on traditional hardware sales; however, others strive to become innovation leaders embracing digital solutions as a new core business. Most companies place themselves anywhere between these two extremes, carefully evaluating if the digital solution trend will be as disruptive as it has been in other industries.
Early movers are placed to gain (at least) partial control of hospital networks, secure market niches for sustained growth, and generate recurring revenue streams (independent of traditional hardware sales), thereby maximizing customer lifetime value. Conversely, companies that postpone investments risk missing out on innovation, falling behind competitors, and potentially being excluded from the market.
External and internal challenges of the digital solution business
The commercialization of digital solution offers presents a promising opportunity, but also a complex undertaking. It is critical for MedTech companies to acknowledge and proactively address prevalent external barriers in the adoption of digital solutions such as technical debt, lack of data standardization, budget constraints as well as security and compliance concerns of health care providers. Internally, MedTech organizations must carefully navigate the transition from hardware to solution focused operations along the digital value chain. This involves commercial capabilities, organizational setup and supporting IT infrastructure to capture market share and profitably scale the business. The more ambitious the digital solution strategy, the greater the extent and depth of change required.
Six imperatives to successfully commercialize digital solutions in MedTech
Our report finds that a profitable software business ultimately depends on the company's ability to master key success factors across three areas:
Customer
- Deep understanding of customer needs: Facilitating adoption through co-creation, involving key accounts and opinion leaders in digital solution design
- Shift from CapEx to OpEx: Supporting hospitals in shifting from capital to operational expenditures with flexible budgeting and pricing models
Regulatory
- Reimbursement & funding: Advocating for and navigating reimbursement frameworks to secure funding for digital health solutions
- Cyber security & data privacy: Establishing clear, joint standards for consistent interpretation of cyber security and data privacy requirements
Company
- Strategic ambition & software-specific capabilities: Choosing positioning between hardware-focus and digital solution innovation leader, and closing respective capability gaps
- Organizational anchoring & enabling IT infrastructure: Evolving org setup with the perspective to globally scale solutions, and ensuring IT flexibly adapts to new GTM models
Download our report to learn more about the keys to successful software commercialization and navigate the exciting opportunities and challenges brought by digital solutions in the MedTech industry.
Archive: Explore our previous publications
Our previous “Future of Business Interaction in MedTech” publications focus on improving and enhancing business interactions between MedTech companies and hospitals along the quote-to-cash process and the corresponding transformation from a linear, siloed customer engagement model to an integrated, recurring sales and interaction cycle.
