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New KPMG research finds that tech investments made by life sciences companies are exceeding innovation expectations. This article explores the research and compares life sciences technology functions and their decision-making with other industries. It also examines how life sciences organizations are using data analytics, anything-as-a-service (XaaS), virtual and augmented reality (VR/AR), low-code/no-code platforms, robotics and automation to fast-track innovation, and to safeguard data and complex partner and vendor ecosystems.
Increasing cyber threats to sensitive health information are making life sciences organizations cautious about how they leverage digital transformation. Yet, in light of this and other pressures, new research from KPMG shows that the sector is finding ways to innovate.
The KPMG Global Tech Report 2023 is based on a survey of 2,100 executives from 16 countries and nine industries. For 67 percent of the life sciences executives surveyed their technology investments have outperformed expectations in driving innovation in recent years. This is 18 percentage points higher than the average across all industries surveyed in terms of respondents seeing tech investments exceed innovation expectations.
Life sciences executives are also more likely than those in any other industry to say that the following technologies have boosted innovation: data analytics, XaaS, VR/AR and low-code/no-code platforms.
Technology is supporting the sector in its mission to find life-saving treatments in a productive manner. Typically, the journey from treatment discovery to approval is long, expensive and prone to failure. Life sciences companies are looking to technologies, including robotics and automation, to methodically fast-track the discovery process, maximize output and minimize waste. But innovation cannot happen in a vacuum, which is why life sciences organizations are expanding their partner and vendor ecosystems.
Innovation demands a well-managed partner ecosystem
“Innovation is stifled when it is kept within the same four walls,” says Hoss. “It’s unrealistic for companies to be experts in everything — whether that is in people, IT or facilities. So, life sciences organizations understand that in order to innovate rapidly they need to expand their ecosystems.”
However, while collaboration brings valuable knowledge to the table, it also complicates the value chain. Life sciences executives in the research are 10 percent more likely than those in industries overall to say that managing an ever-growing ecosystem of partners is the technology stack challenge that is most impacting their ability to innovate. And collaboration can open up new risks. Increasing the potential for cyber security risks is the flip side of expanding the value chain. This is why life sciences companies are taking a step back to figure out which partners they need for their business requirements and holding them to high security standards.
High security standards lead to a cautious approach
The data stored by life sciences companies is becoming more sensitive as the sector continues to develop personalized medicine and therapeutics. And new technology is being developed and adopted so quickly that it is vital the sector remains diligent about safeguarding its data throughout the value chain.
Yet the sector’s determined pursuit of partnerships demonstrates its appetite for responsible innovation. “Within the past six months, leaders in the sector have been discussing how best to use ChatGPT and generative AI,” says Hoss. “And how these technologies will impact their ecosystem of products, services, employees, patients and partners. The culture of life sciences is understandably risk averse, because human lives and extremely personal data are on the line so, organizations understandably want to innovate in a cautious and methodical manner.”
Data and analytics are key to supporting innovation ambitions. For example, 36 percent of respondents say that data and analytics have improved innovation in recent years — which is higher than the average across all industries surveyed (30 percent). These tools give staff an overview of operations and where improvements are required, and that kind of visibility is especially important for prudent industries like life sciences.
Robotics and automation may be key to improving efficiency
Many in the life sciences sector are turning to robotics and automation to make their operational processes more efficient. Half of the life sciences executives surveyed say that robotics/automation will be one of the most important technologies to achieve their short-term ambitions. The average across all sectors surveyed is 41 percent.
Robotics is used to automate supply chains and manufacturing facilities, and it also helps companies to be more precise around quality assurance. At the same time, automation and AI enable life sciences organizations to take some of the friction out of the value chain, making processes more efficient and allowing employees to focus on more high-value tasks.
The decision to invest in robotics/automation is not only coming from the top. Life sciences executives are 12 percent more likely than average to be investing in robotics because of employee feedback.
“Robotics, automation and AI free up human capital,” says Hoss. “This is essential for companies and people that are looking to make breakthrough discoveries, cure diseases and drive innovation.” Sure enough, life sciences executives in the research say that the top metrics they plan to use to measure the success of their robotics/automation investments are an increased rate of output productivity and the launch of new revenue streams.
The KPMG research suggests that while life sciences leaders are innovating cautiously, they are also taking seriously their employees’ opinions and the potential of new technologies. “There’s a lot of optimism around technology in the sector,” says Hoss. “Life sciences companies believe in the power of AI and digitalization. They believe in the interconnected ecosystem of providers, patient advocacy groups and their distributors. And that’s a great start, because it encourages the sector to innovate together.”
Key takeaways
- Life sciences companies are more likely than organizations in other industries to use data analytics, XaaS, AR/VR, and low-code/no-code platforms to boost innovation. Driven by employee feedback, companies in the sector are also looking to use robotics and automation, to free up staff, and fast-track the discovery process, maximize output and minimize waste.
- While collaboration is essential to innovation in the sector, it also complicates the value chain. Managing an ever-growing ecosystem of partners is the technology stack challenge that is most impacting the innovation abilities of life science organizations.
- Life sciences companies around the world are relying on digital transformation to address the many issues they face. These complex challenges require robust and thoughtful approaches to realize desired value for their staff and the stakeholders they work with including payers, providers and patients.
How KPMG can help
KPMG firms have deep expertise in business technology. Our transformation, innovation, and profound industry expertise positions KPMG professionals to help address market challenges and provide in-depth industry perspectives. We use technology in ways that help to increase competitive advantage for life sciences organizations such as leveraging the KPMG Connected Enterprise framework, deploying digital solutions to help address concrete issues and employing a strong group of alliances with some of the world’s leading technology, data and services companies.
Get in touch to learn more about how KPMG can support transformation in your organization.
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