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Study: Healthcare Lags Other Industries in Digital Transformation, Customer Engagement Tech

March 30, 2018
by Heather Landi
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A recent study examining the digital maturity of six industries found that the healthcare industry ranked third in terms of overall digital maturity, as healthcare firms typically lag about a decade behind other industries in adopting business technologies that would help with customer engagement.

The study authors contend that healthcare’s intense regulatory requirements have led to a significant focus on security of customer data, often at the expense of innovation and experimentation.

Virtusa Corporation, a global provider of digital engineering and IT outsourcing services, examined the digital maturity of firms worldwide in its recent studyThe Digital Transformation Race Has Begun. The September 2017 study, commissioned by Virtusa and conducted by Forrester Consulting, evaluates the state of digital transformation across six key industries—retail, banking, healthcare, insurance, telco, and media.

That study found that, currently, 85 percent of businesses surveyed said they would increase the budget their company allocates for digital transformation next year, with 37 percent indicating the increase would be by 10 percent or more.

The study was generated with input from more than 600 digital transformation decision makers in North America and Western Europe, including 101 healthcare organizations, to explore the state of digital maturity across six key industries. Respondents included C-level executives, vice presidents, and directors at companies with revenues ranging from $250 million to more than $1 billion. The healthcare respondents included healthcare payers, providers, pharma and device manufacturers.

The study deployed a digital transformation maturity index, examining firms’ innovation readiness and competency across these key industries in three areas: customer experience, operational excellence, and business innovation. In all three areas, firms fared slightly better in customer experience compared to operational excellence and business innovation. The study also identified five levels of digital transformation maturity firms can reach – Curious, Exploring, Deploying, Thriving, and Mastering – to best synthesize the data from the maturity index. On average, firms currently fall into the lower-to-middle range of the Deploying category (26.06 out of 45), according to the study.

The study notes that in the age of the customer, empowered, demanding customers can exercise more choice than ever before in deciding which companies will earn their business, and which will fall by the wayside. “To keep up, firms must invent or reinvent their businesses with technology at the core, or watch customers defect as their markets are disrupted.” And, the study also stated, “To move forward on digital transformation, firms must evaluate their current capabilities, then plot a path forward accordingly. Furthermore, firms must move soon to keep up with the fast pace of digital change … In the age of the customer, firms must adapt or be swept aside.”

The study found that retail outperforms other industries across all three categories, setting the standard for creating innovative, digitally-driven customer experiences.

According to the study authors, healthcare firms typically lag about a decade behind other industries in adopting business technologies that would help with customer engagement. This lag is largely driven by unique regulatory requirements placed on healthcare firms as it applies to patient data.

In terms of overall digital maturity, healthcare ranked third among the six verticals (retail, banking, healthcare, insurance, telco, and media).

What’s more, healthcare ranked second in data optimization but struggled in self-service, digital marketing, and their preparedness for disruptive business models, where they came in last, according to the study. Healthcare firms also came in fourth for customer experience and in business innovation.

The healthcare industry’s conservative and hyperregulated market prioritizes security over patient engagement, according to the research. However, “health firms have made gains---in order to survive—in managing the security of data; many of their technological investments have been focused more on business process and record-keeping at the expense of investments that tie directly into finding new forms of customer (patient) engagement and innovation,” the study states.

“The Forrester Study confirms that while most companies are preparing to make digital transformation a priority, they have a long way to go before achieving any kind of mastery over the multiple disciplines required to effectively innovate,” Frank Palermo, global head of digital solutions, Virtusa, said in a prepared statement. “Firms that are obsessed with their customer’s experience can achieve significant operational efficiencies and put innovation at the heart of their respective cultures and are the ones that will see the greatest benefits from digital transformation.”

He continued, “In today’s business climate, with industries being disrupted at every turn, companies must be able to quickly change their products and processes to pivot to take advantage of new market opportunities. As the study finds, improving digital maturity will be key to meeting the changing needs of customers in an evolving marketplace.”


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