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Home | Newsletter | UPDATE 3 | 2017 | Digital Foundation - Efficiently Developing Digital Business Models
October 21, 2017

Digital Foundation - Efficiently Developing Digital Business Models

Digital services with direct contact to patients are just a step on the way to truly value-adding digital business. The advantages of such services are undoubtedly enormous, but often their practical implementation remains unclear. How does innovation find its way into a company?

The lines between the digital and physical world are beginning to blur, paving the way for new business models. From an application offering patients information on their medications, to diagnoses using software featuring artificial intelligence, everything in today’s world is possible from a technical point of view. “Digital transformation” refers to the use of new technologies to create value for customers while tapping into new sources of revenue. A differentiation is made between three levels:

  • „Digital business models” refer to comprehensive digital business models. Frequently, they extend beyond industry boundaries and are often part of the highest level in the company; they are the responsibility of the CEO, CIO or CDO (Chief Digital Officer). An emphasis is placed on what is referred to as “digital ecosystems”; in the healthcare sector, the “digital health ecosystem” is a network of all stakeholder groups, from patients to researchers, insurance companies, authorities and representatives in the life sciences industry, to doctors and hospitals. Among other things, this type of platform (such as telehealth) helps researchers recruit study participants and offers patients personalized information and interactions for all issues related to their health, using various devices, on a 24/7 availability, location-independent basis.

 

  • “Digital customer engagement” promotes patient engagement on various channels, strengthening customer loyalty. These initiatives are frequently driven by sales and marketing, and are especially attractive on the OTC and generics markets. For example, a manufacturer of diabetes strips can beat the competition by offering an application with dietary advice for patients.

 

  • “Digital collaboration” aims to establish a computing environment that makes it possible to flexibly respond to innovation and support new ways of working. Often, it is a crucial internal requirement to enable digital business processes, such as a cloud-based R&D collaboration management platform.

 

„Quick” does not always mean “win”

When it comes to the customer interface, time is also a critical factor. It’s no surprise that the first digital products often appear as a result of the initiative of marketing and sales. Since standard IT services for life sciences is focused on supporting core processes and is trimmed for cost efficiency, stability and integration, it is generally unable to adequately support departments that interact with end customers. Frequently, specialized agencies are summoned to ensure quick successes in digital customer engagement. They deliver functional, innovative applications in just a few weeks, but often this is not enough, as compliance and support also have to be guaranteed.

 

Digital Foundation

 

Depending on its functionality, an application for a medication can even constitute a medical device and must be registered and approved as such; when it comes to projects initiated in haste that run outside of standard processes, such requirements are sometimes forgotten.

Digital Foundation

 

As a result, completed applications are discontinued or land in the market without validation or customer support. Depending on what information is managed using the product, it may lack patient data privacy requirements or violate an obligation to notify the authorities (for example, in the case of vigilance-relevant data).

What does a solution look like that supports digital innovation in companies while at the same time not compromising quality or sustainability?

 

Digital foundation for Innovation

The key criterion for successful digital transformation is a sound organizational and technological basis: a digital foundation that closes the gap between requirements for agility and stability.

ARCONDIS recommends three major steps to establish this foundation:

 

  1. A high level assessment (HLA) for each project to ensure that the planned scope is appropriate and that the appropriate departments in the company, such as IT or Quality, are involved. This is the only way to safeguard the investment and to ensure that the internal resources are streamlined. The HLA focuses on questions such as: Must the application be validated or approved as a medical device? Does it have to be connected to back-end systems? Who will ensure service management?

 

  1. At the same time, innovation requires clear governance to efficiently develop sustainable digital business models. In addition, this type of concept always focuses optimization of the alignment between the CIO and CDO. In rare cases, both roles are performed by one person, but frequently they are intentionally kept strictly separate. A governance model establishes the foundation for collaboration.

 

  1. The role of the internal IT must be clearly defined. It is not the objective to transform the IT operations into an ultra-innovative application developer. Nevertheless, those involved must be trained on new technologies and above all how to integrate them. Topics such as enterprise architecture, master data management, data integrity and interface management play a crucial role. After all, IT operations can provide support in many aspects: IT can provide interfaces to internal systems (ERP, CRM, MDM, etc.), offer a platform for applications and interfaces, or assist in selecting and quality control of an external partner (agencies, developers etc.).

 

Establishing fully-digital business models will take some time – after all, this is a “digital journey” with different levels: from the digitialization of internal processes, to establishing collaboration platforms to digital engagement models – and thereby, complete penetration in the form of integrated, digital business models. A solid digital foundation paves the way for digital transformation.

Christian Baumgartner

 

 

“If the path to administrative IT is paved with budget requests and forms, in practice it is simply ignored. But the right solution is not to bypass processes; rather, internal processes have to be readied for digital business.”

— Christian Baumgartner, Principal Consultant of ARCONDIS Group


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