Kal Patel

As digital technologies transform industries, Chief Information Officers (CIOs) are under pressure to stay ahead of existing and emerging competitors. Digital health offers tremendous potential to enhance healthcare delivery and make medicines more personalized. This past decade, the rise of the digital economy has changed the role of the CIO. Change, however, is slow to come to healthcare as the industry lags most industries in bringing about digital transformation.

BCG’s Digital Maturity is Paying Off¹ study surveyed more than 1,900 companies in Europe and the U.S. to estimate their digital maturity based on 37 dimensions. Of all the industries analyzed in this survey, healthcare had the largest share of laggards (43%). In healthcare, there is wide disparity with medtech companies showing the fewest laggards (10%), while 70% of biopharma companies have not embraced digital transformation.

Understanding how CIOs can overcome the challenges of building a digital health Internet of Things (IoT) infrastructure is essential for harnessing digital transformation in a cost-effective and scalable manner.

How the CIO role is changing

Some CIOs still spend most of their time on legacy IT issues, leaving limited bandwidth for digital strategies. As the speed of business accelerates, CIOs are being asked to do more, faster. CIOs at top performing companies are less focused on IT outcomes and costs, and more focused on business outcomes, revenues, and platforms.

Moving from cost-controlling to revenue-building is the biggest change for CIOs, allowing them to help drive product strategy. A BCG survey² observed that companies transforming the CIO role increased market share by 7% while laggards saw their market share drop 11% from 2012 to 2017. CIOs are also working closer with CEOs, offering authority to lead initiatives that transform business.

As CIOs take the digital reins at their organizations, they must build the proper, scalable foundation to cost-effectively enable their digital health products. This requires CIOs to know when to build vs. buy supporting frameworks and how to best leverage internal resources to differentiate their digital products from the competition.

Top IT challenges in building a digital health platform

Healthcare’s transition from proprietary solutions to interoperable systems adds challenges with getting partners to support integration with siloed platforms. The next-generation biopharma and medtech CIO will help organizations move from siloed platforms and one-off integrations to leveraging scalable platforms that integrate with a variety of systems.

Companies that build their own custom digital health platforms in regulated industries frequently underestimate the ongoing costs, time, and maintenance these systems carry, including:

1. Growing security and privacy concerns: Developing digital products increases risks posed by security and privacy breaches. CIOs experienced in protecting IT infrastructures and data from external threats are now also responsible for large sets of patients’ medical information.

2. Managing the complex regulatory burden: The U.S. FDA and similar regulatory agencies globally regulate biopharma digital health platforms and certain medical device software differently. In the U.S., for example, the FDA has refined its position on regulating medical software at least eight times over the past two years.

3. Turning massive amounts of data into insights: Digital health platforms will exponentially increase the amount of data generated. The faster a CIO can draw insights from their platform’s data sets, the quicker they will transition from a cost center to a revenue enabler.

4. Scalability across regions, brands and health IT systems: When aggregating data from tens of millions of users in real-time, and across multiple therapies and systems, scalability is a significant concern.

5. Cost of building and maintaining a digital health IoT platform: The total investment required to build a custom regulated digital health IoT platform, as opposed to using a pre-built platform, can hit $50 million, and the annual maintenance fees can range from $10 to $20 million per single brand or product. Further, it can take around two years to build a new platform, delaying products and first-to-market advantage.

Tips for CIOs looking to take on digital health

Executives who get digital transformation right will be disciplined, agile, and pragmatic in their approach. These business leaders will act quickly to bring in early wins, while also carefully developing an innovation roadmap to build out the technical capabilities, resources, and external partners needed to support digital efforts long-term.

Three recommendations have emerged for CIOs leading digital health innovation at their companies:

1. Engage the CEO: Many IT departments lack the agility and specialized expertise to meet evolving needs, leading business units to hire chief digital officers (CDOs) to head their digital efforts.

The most effective CDOs will be temporary leaders who complete their digital projects in three to five years before transitioning their responsibilities internally. At companies where the CIO leads digital initiatives, they should report directly to the CEO or be on the CEO’s executive Leadership Team. As an executive team member, the CIO can ensure leadership fully leverages IT’s expertise in digital technology and architecting platforms for success.

2. Partner to build the digital health IoT platform: Digitization has enabled “stack architecture,” which significantly reduces integration costs. Non-differentiating technologies like infrastructure, platform, and standard software packages are now readily available from external partners. Managed services offer reduced costs and improved security, stability, and uptime.

CIOs should focus internal resources on the highly specific and differentiating product and service technologies at the top of the “stack architecture” that will give their company a competitive edge, such as a Software as a Medical device dosing algorithm to enhance an existing therapy, and partner with digital health software experts for all else.

3. Quick wins fuel growth: Digital products will unlock new insights and revenue streams that are hard to predict from the outset. These initial projects should be focused on discreet, rapid digitization efforts that can deliver quick wins in one key area, such as accelerating clinical trials or improving patient engagement. Rather than taking years, these initial projects demonstrate their initial value within weeks or months and could potentially help pay for longer term digital transformation initiatives.

Recognizing the evolving role of the CIO will help businesses harness digital health. Empowering CIOs enables them to successfully navigate healthcare companies through this transition.

References

1. https://www.bcg.com/en-us/publications/2018/digital-maturity-is-paying-off.aspx

2. http://image-src.bcg.com/Images/BCG-Where-Do-Large-Swedish-Corporations-Stand-on-Digital_tcm58-187778.pdf

Kal Patel, MD, CEO and Co-founder, BrightInsight