Lessons for successfully executing digital transformation in Healthcare

THE DIGITAL

ADVANTAGE

HOW DIGITAL LEADERS OUTPERFORM THEIR PEERS IN EVERY INDUSTRY

Transform to the power of digital

Introduction

2

Copyright © 2012 All rights reserved.

The Dutch Healthcare system is in its present design not sustainable

In it’s present form the Dutch Healthcare system will be:

� Unpayable (long-term conditions, growing demand and increasing possibilities)

� Unfeasible (growing number of elderly people and decreasing working population)

� Untenable (changing care demand and costumer attitude request a different way of care provision)

3

Is e-Health the solution and if so what are the preconditions

WHAT IS

DIGITAL MATURITY?

Copyright © 2012 MIT CDB and Capgemini Consulting

Digital maturity is a combination of two separate but related dimensions: Digital Intensity

and Transformation Management Intensity

Digital Intensity is investment in

technology-enabled initiatives to change how

the company operates – its customer

engagements, internal operations, and even

business models.

Location-based marketing

Digital Design

Connected Products

Mobile sales

Customer Service in Social Media

…

Digital Vision

Cross-silos coordination

New skillsCultural change

…

Transformation Management

Intensity consists in creating the leadership

capabilities necessary to drive digital

transformation in the organization.


The two dimensions spell out four different types of digital maturity

Transformation Management Intensity

Dig

ita

l In

ten

sity

BEGINNERS

• Beginners do very little with advanced digital capabilities,

although they may be mature with more traditional

applications such as ERP or electronic commerce. Although

companies may be Beginners by choice, more often than not

they are in this quadrant by accident.FASHIONISTAS

• Fashionista have implemented or experimented with many

sexy digital applications. Some of these initiatives may create

value, but many do not. While they may look good together,

they are not implemented with the vision of gaining synergies

among the items.CONSERVATIVES

• Conservatives favor prudence over innovation. They

understand the need for a strong unifying vision as well as for

governance and corporate culture to ensure investments are

managed well. However, they are typically skeptical of the

value of new digital trends, sometimes to their detriment.

DIGIRATI

• Digirati truly understand how to drive value with digital

transformation. They combine a transformative vision, careful

governance and engagement, with sufficient investment in

new opportunities.

DIGITAL MATURITY

MATTERS


We quantified the digital maturity of 391 companies and analyzed their financial

performance

* Of the 391 companies in our sample, 184 were publicly traded

We analyzed financial data

from all the publicly-traded

companies in our sample*

Digitally-mature companies

are achieving statistically

significantly better financial

performance**

** Industry adjusted FY2011 financial performance for 184 publicly traded firms, controlling for geography


Companies that are mature on the digital intensity dimension are

better at driving revenue through their existing assets

Digital Intensity and Revenue Generation

Basket of indicators:

• Revenue / Employee

• Fixed Assets Turnover (Revenues / Property, Plant & Equipment)

+6% +9%

-4% -10%


Companies that are mature in the transformation management

intensity are more profitable

Transformation Management Intensity and Profitability

Basket of indicators:

• EBIT Margin

• Net Profit Margin

-11% +26%

-24% +9%

DIGITAL MATURITY

MATTERS IN

EVERY INDUSTRY


Digital transformation is moving more rapidly in some industries than in others…

Banking

Consumer

Packaged Goods

Insurance

Manufacturing

Pharmaceuticals

Retail

High Technology

TelecommTravel and

hospitality

Utilities

Digital maturity, by industry, for our survey

Each dot represents the average maturity of industries forwhich we have 20 or more data points.

Beginners Conservatives

DigiratiFashionistas


…but every industry has firms that have already begun to gain the benefits of digital

transformation

Percentage of firms in each industry by quadrant.

“Digital Beginners in

any industry are

several years from

gaining the digital

maturity that their

Digirati competitors

already possess"

BUILDING

DIGITAL MATURITY:

THE DIGITAL DNA


Digital Leaders show common patterns: the Digital DNA

Focus

Investments on

where they

choose to Excel

Digitally

Combine Digital

Capabilities to

Exploit Synergies

Use Digital

Technologies to

Transform their

Business Models

Invest 100% in

transformation

management

Digital

Leaders

“Digirati status is more

than simply a

combination of sound

management and digital

capability. There is

something inherently

different about Digirati

DNA that separates

them from the rest"

CONDUCTING YOUR

OWN DIGITAL

TRANSFORMATION


Our two-year research program provides some useful pointers for successfully executing a

digital transformation.

Conducting your digital transformation requires taking action in four key areas:

framing, investing, engaging, and sustaining.

“CEOs and other

senior executives are

increasingly asking

practical questions

about what digital

transformation

means for their

businesses”

Frame

Frame the Digital Challenge

• Understand the impact

• Assess Digital Maturity

• Develop & Align around a

Vision

Focus

Focus Investments

• Invest in Digitally-Enabled

Initiatives

• Adapt your Business Model

Sustain

Sustain the Transformation

• Build Capabilities

• Measure & Monitor

Engage

Engage the Organization

• Signal and Mobilize

• Govern across silos

• Evolve Culture/ adapt Work

Practices


We discovered that many common perceptions about digital transformation were actually

myths, which can lead executives to make unfortunate and costly decisions.

Digital is primarily about the customer

experience

Digital primarily matters only to

technology or B2C companies

Let 1000 flowers bloom; bottom-up

activity is the right way to change

If we do enough digital initiatives, we will

get there

Digital transformation will happen despite

our IT

Digital transformation approach is

different for every industry and company

In our industry we can wait and see how

digital develops

Huge opportunities exist also in efficiency,

productivity & employee leverage

Opportunities exist in all industries with

no exceptions

Digital transformation must be led form

the top

The how of transformation is more

important for driving overall performance

Business/IT relationships are key, and in

many companies they must be improved

Digital Leaders exhibit a common DNA

There are digital leaders outperforming

their peers in every industry today

Myth Reality“Many common

perceptions about digital

transformation are

actually myths

Fortunately, our global

survey of nearly 400 large

firms, supplemented by

157 in-depth interviews

with senior executives in

more than 50 large

companies, provides fact-

based answers”

Copyright © 2012 All rights reserved.

Digital Transformation Global Healthcare Survey 2013

Why

Understanding how healthcare providers are gaining advantage from digital technology.

– How digital mature are healthcare providers globally; and

– How do they perform against their peers and other industries.

What

We will be conducting a global online survey in the Summer of 2013 (in English)

– 200 – 300 providers globally (e.g.hospitals, physician practices, mental healthcare, elderly care)

When

– End of June: potential participants

– Publish survey and reach out to providers July 1st

– Survey completion deadline September 15th

– Survey results and publication date December

19

Health & Medicine

Lessons for successfully executing digital transformation in Healthcare