The Impact Of Digital Transformation On The Life Sciences Industry

Judy Cubiss and Ginger Shimp

By 2025, we will be in a consumer-driven global life sciences market. Patients will have more access to their personal records. They will also be more accountable for their own health. Personalized treatments will be a normal function of medicine. The entire world of health will be connected through the Internet of Things.

Smart technology working through the cloud is currently disrupting the traditional patient value chain.

New business models will grow based on digital health services.

Around 75% of patients expect to use digital services for health in the future. These digital networks will be the main communications hub for personalized medical solutions. Updates to treatment plans will move through distribution networks centered on huge companies like Alphabet and Apple. Competitive life sciences companies will incorporate the new opportunities into their traditional structures for an expanded feature set.

Recently, Brian Fanzo and Daniel Newman, co-hosts of the popular S.M.A.C. Talk (social, mobile, analytics, cloud) Technology Podcast, caught up with Joe Miles, global vice president, Life Sciences Business Unit, SAP, on an episode of an extraordinary series entitled Digital Industries, which examines how digital transformation is affecting 16 different industries.

Listen to a short clip where Joe Miles highlights the impact of digitalization for life science companies:

SMAC podcast

Regulatory changes and the digital transformation of the medical industry

There continues to be a global regulatory explosion combined with a focus on cost containment, which, for an industry that is already one of the most regulated, means that life sciences companies must rely on innovation like never before. Successful life sciences companies will need to innovate—fast. And in a way that drives cost efficiencies and productivity. Why? As Miles puts it, “Markets cannot continue to pay for healthcare at the rates in which they have in the past.” Especially as global reimbursement is declining.

Companies must take a serious look at how they are approaching their business models and processes, even from a regulatory perspective. Miles says, “We’ve seen a big move to digitize, in a lot of areas, including on the sales and marketing side, the kind of non-traditionally heavily regulated areas.” Miles also shared that for direct material procurement, life sciences firms are looking at cloud solutions, historically an area that was a little … taboo.

on the medical device side companies are investigating how to reduce the cost of sale while staying within the boundaries of compliance and still providing a simple elegant experience

Connecting silos

Historically, life sciences companies have had to deal with the siloing of different departments. The challenge is creating a flow of information between these departments. Miles has seen marketing, R&D, customer service, and operations organizations starting to align themselves globally to leverage a common business model and process. Technology solutions, delivered in the cloud, can make this transition more attainable.

In the best situations, the relationship between patient and company is improving. Companies cannot advertise a generic wonder drug to a mass market and expect people to accept it. Patients expect personalized and holistic service.

Fortunately, the life sciences industry has access to the technology to gather data to make this happen. New sensors and smartphone apps connect patients and producers like never before. This capturing of data, coupled with the understanding of how an individual is using the drug, will hopefully lead will to a better outcome for patients. Miles reflects, “If you improve the outcome of your therapy, you’re ultimately going to improve the reimbursement level from the payers, which obviously is key a metric for growth in the organization.”

Privacy vs. accessibility

Medical companies face a constant balancing act between protecting patient privacy and accessing records for better service. HIPAA regulations continue to pose an obstacle for many of the smaller companies. On the one hand, patient data is now much more secure. “On the flip side, though, you’re seeing a significant growth of information,” remarks Miles, “specifically tapping the new market for genomic information.” Companies that gain permission to use this information from patients, even in aggregate, have a wealth of opportunity.

10 G of raw data created by a scan of a single organ

Take, for example, companies like 23andMe. Many participants are actually relinquishing their privacy rights for use in the aggregate. Note that they’re not allowing their individual information to get out there, but they are permitting their results to be studied in an effort to enhance the gestalt. The result?

“The 23andMe’s of the world will eventually become hubs of information,” enthuses Miles. “Ultimately the medical community, upon studying the data, will be able to make a determination that a common biomarker is a precursor to someone who, say, might be predisposed to diabetes or Rheumatoid arthritis or cardiovascular disease. Those with that trait then become really good candidates for developing a protocol in a new product or a drug to address that particular chronic disease.”  

Millennials drive transformation

There is a generational divide when it comes to digital transformation. Millennials are not only more likely to openly provide their medical information, but they are also better candidates to run forward-thinking technology in the industry. Hiring demographics are changing within the life sciences industry. As Miles states, “We’re seeing the app generation coming into the front end of the workforce.”

But although the industry can expect to see younger people at the helm, it doesn’t eliminate the bottleneck of regulatory framework, or the need to be highly qualified and well-versed in medical standards. And training and certification will always be a highly regulated process within the life sciences industry. Successful organizations will continue to have to employ strong disciplinary measures when hiring and training the next generation of employees.

The exciting technology of the future

Of the many new technologies that have entered the life sciences space, perhaps the two with the most focus are machine learning and the Internet of things. We see many scenarios in the traditional manufacturing area, but the application of these technologies is now moving into other areas. We’re also hearing a great deal about blockchain technology for scenarios around finance as well as track-and-trace for supply chain.

Finally, Miles points out that the role of application program interface (API) “is really changing the nature of software in its own right, and allowing us to really tap into the partner community—into those little niche players—that can bring some really unique capabilities very, very quickly, is very, very powerful.”

To listen to this episode of Digital Industries for the life sciences industry, co-produced by SAP and S.M.A.C. Talk Technology Podcast, click here.

Transforming into a truly digital business is much more than just implementing new technology to meet the demands of a digital age. It’s more than keeping up with the deluge of transformation happening all around us. Digital transformation is about understanding how to harness these changes and incorporate them into your business strategy. It’s about driving agility, connectivity, analytics, and collaboration to run a Live Business. A digital core empowers you with real-time visibility into all mission critical business processes inside your four walls, and in your interactions with customers, suppliers, workforce, Big Data and the Internet of Things.

For more on how SAP can help you drive your own digital transformation in the life sciences industry, visit us online.

More resources

Healthcare’s Digital Future, McKinsey & Company, July 2014.

In-Memory Databases: Applications in Healthcare, Hasso-Plattner-Institute, April 2015.


Judy Cubiss

About Judy Cubiss

Judy is director of content marketing for Finance at SAP. She has worked in the software industry for over 20 years in a variety of roles, including consulting, product management, solution management, and content marketing in both Europe and the United States.

About Ginger Shimp

With more than 20 years’ experience in marketing, Ginger Shimp has been with SAP since 2004. She has won numerous awards and honors at SAP, including being designated “Top Talent” for two consecutive years. Not only is she a Professional Certified Marketer with the American Marketing Association, but she's also earned her Connoisseur's Certificate in California Reds from the Chicago Wine School. She holds a bachelor's degree in journalism from the University of San Francisco, and an MBA in marketing and managerial economics from the Kellogg Graduate School of Management at Northwestern University. Personally, Ginger is the proud mother of a precocious son and happy wife of one of YouTube's 10 EDU Gurus, Ed Shimp.