“Miron, when you say ‘digital’, what do you mean?”
This is probably the most common question I get asked by pharma execs looking for a way to define and wrap their heads around this rapidly-evolving space.
On last check, there were approximately 120,000 pharma employees with ‘digital’ in their title, so it’s a natural question.
Given the broad spectrum of how digital is used today across the pharma value chain - from discovery to emerging patient-facing tech like digital therapeutics – below is a simple framework we often use to help our clients organize their thinking so they could make more informed ‘where to play’ and investment decisions.
If you’ve been following my posts, you’ll know that I’m a big proponent of ensuring a clear line-of-sight from digital initiatives to business impact (anything else is a ‘nice to have’).
The most sustainable digital projects are either immediately (or eventually) margin enhancing – they solve a critical business problem and either generate net-new revenue (including protecting current or future market share) or work to optimize and reduce costs.
Similarly, digital can either enhance existing processes already found as part of a pharma company’s operations (e.g, clinical trials, manufacturing, commercial) or require new processes, infrastructure and business models to be built which do not exist today (e.g., launching a digital therapeutic or creating a new digital biomarker).
The below 2x2 puts these dimensions together.
One caveat to note is that given how nascent some of the tech is, it’s sometimes difficult to identify in what quadrant something sits – but at least the framework can drive some good discussion and has been known to force executives to articulate a clearer and defendable value story behind their digital initiatives.
For example, digital biomarkers in clinical trials might shorten a trial’s duration and reduce costs.
At the same time, they can be used to learn more about a particular disease, which could eventually lead to better precision and safety (precursors to defending/growing revenue).
So the framework has some wiggle room but generally focuses on the defendable near- and mid-term impacts of digital and can ignite the ‘why are we doing this?’ conversation.
One thing to note is that a natural request from senior executives once they see a company’s initiatives mapped on this framework is to quantify the potential financial impact of the initiatives (it helps with prioritization), so be forewarned...
Have you seen any other frameworks that have better helped link digital with business impact?