By Joan Van Loon, Healthcare & Life Sciences Leader, IBM Belux
New entrants targeting the bottom of a market and then relentlessly moving up market, eventually ousting established providers, is what we today call ‘disruptive innovation’. Once it was a relatively rare phenomenon, now it has become a regular occurrence. In our recent C-suite study, “Redefining Boundaries”, we interviewed more than 5,000 C-suite leaders worldwide and looked at how businesses are responding to these new forces. In particular, the 178 healthcare respondents (providers & payers) gave some remarkable insights.
A few years ago, CxOs could see the competition coming. The biggest risk was the advent of a new rival with a better or cheaper product or service. Today, the competition is often invisible until it’s too late.
Also in the healthcare sector, ‘industry convergence’ is here and real, and it’s transforming much of the way the healthcare industry operates today. Healthcare is becoming more ‘consumer’-driven and these ‘consumers’ (patient, caregiver, customer) find their influences in other industries. Mobile devices, self-diagnosis, self-service and access to data, move them away from the classical medical care approach and into a personalized, on demand, real-time experience. Healthcare organizations should embrace this challenge to be successful.
‘Consumer’ interaction is moving increasingly online. While technology is seen as a main game-changer and CxOs agree on its importance, they are more uncertain about its impact. They anticipate changing the way their organizations engage with ‘consumers’, especially by creating more digital, individualized experiences. To drive this innovation, they are looking for increased external collaboration. However, it is clear that healthcare organizations are not frontrunners in taking on disruptors. That's why digital invasion is considered a key threat for the healthcare industry.
As digital health grows, healthcare CxOs expect a strong impact from cloud, mobile and the Internet of Things. Cognitive technologies lie next on the horizon, helping them with new levels of personalization and gaining insight from exploding volumes of data. While they do see the technological evolutions, most CxOs still largely depend on conventional techniques (brainstorming, predictive analytics) to identify new trends, hardly using simulation, prescriptive analytics, crowdsourcing or cognitive computing. In the healthcare industry, we see a positive trend towards the latter.
The same conventional approach is seen looking at the external sources they use to identify the next wave. Most CxOs still turn to thought leaders, market research and analysts for help. Looking at adjacent industries, drawing insight from ‘consumers’ or looking at social media is hardly used, although these sources can cast a completely different light on things.
Finally, there is also an element of speed that is crucial in coping with disruption. Being agile, experimenting extensively and using the ecosystem to develop a new product, service or business model does not have great impact if you don’t finish first. Healthcare CxOs believe technology will force them to re-assess most parts of their business; however, they do not recognize the speed with which these changes take place.
The healthcare industry is building an ecosystem with the patient and consumer at its core, but might not be making enough headway to develop these superior business models, nor feel the need to constantly re-evaluate and revise them and, when the time is right, be prepared to hit the market hard and fast.
Visit www.ibm.com/csuitestudy for the full version of the Healthcare Industry Point of View and other C-suite study reports.