No one has ever accused the medical device industry of running ahead of the pack when it comes to implementing business transformation or adopting new approaches to business best practices. Given the level of regulation the industry faces and the levels of capital investment required, it’s no great surprise that “deliberate” and “careful” have trumped “bold” and “innovative” in medical device companies’ DNA.
But today the revolutionary changes that are rippling through all healthcare sectors are pushing change for the medical device business as well. Two big drivers – the consumerization of healthcare, and the increased focus on cost – are combining to create a groundswell of investment in the service functions of the medtech industry.
|By James S. Varelis, Principal, PwC Health Industries|
In the emerging consumer-centric health economy, medical device companies should view customer service as service with a patient in mind, not just a business-to-business function. That necessarily means rethinking service strategies and adopting service practices pioneered in other industries. As medical device companies face unprecedented cost pressures across the board, many are viewing this as the right time to consider the service side of the business to help drive revenues and profits.
As previously mentioned, other industries have trod this path before us. The technology industry notably ventured through the services evolution and transformation as a response to increased commoditization, increasing price pressures, volatile customer churn, elevated customer expectations and macroeconomic stress - all factors that certainly sound familiar to medical device executives.
Tech companies focused on service as a differentiator and service strategy, as a new way to protect profits and drive customer satisfaction and loyalty, with the result that in 2013 information technology services worldwide spend was forecast at $922 billion and on pace to reach $3.8 trillion in 2014.
Here in 2014 the medical device industry is on the cusp of a similar transformation. Customer service in the medical device industry has transformed considerably in the past few years - we are no longer in the transaction-only services realm in medical device services. And for the most nimble players, services has become a strategic lever for companies to differentiate themselves in the very competitive medical device space.
As someone who has spent nearly 30 years working and consulting to the medical device industry, I have never before seen the level of service-related focus and investment that companies are making today. Increasingly, companies in this space are recognizing the value of providing new products and services focused on the patient as a key differentiator for success and growth.
The time is ripe for increasing the medical device commitment to service – and I see five key areas where customer-centered medical device organizations are driving competitive advantage:
Business model transformations are not easy, but is a necessary endeavor given the complex mix of expanding and evolving customer needs, a changing definition of what customers define as 'value', and the highly regulated medical device environment.
--- By James S. Varelis, Principal, PwC Health Industries, Pharmaceutical & Life Sciences sector
[Photo Credit - iStockPhoto.com user AnthiaCumming]