MEDTECH

What the Data Tells Us About Digital Transformation,
by Industry

The key ﬁndings for medtech companies
About 30% of medtech companies
have been successful with digitaltransformations, slightly below thecross-industry average.

Companies score well on leadershipcommitment but fall short on agile
governance and deploying
high-caliber talent.

Top priorities have been geared
mostly toward digital reengineering of
the value chain, led by digitizing
support functions.

Going forward, medtech’s priorities
are shifting to digital products andservices innovation—in particular,
digitizing the supply chain, support
functions, and next-generation sales.

Priority initiatives include
understanding customer needs andpreferences, improving demand
forecasting to increase supply chain
agility, digitizing ﬁnance activities,
prioritizing digital customer
demand, and creating a digitallyenabled salesforce.

Social priorities top the ESG agenda,
including improving employee healthand safety and creating personalized
training programs.

Source: BCG analysis.

The data in more depth

Rates of successin digitaltransformation

Source: BCG analysis.

Topics of focus
for medtech
companies

Top priorities forthe future

The criticalhuman andtech enablers

The role of ESG
in digitaltransformation

RATES OF SUCCESS

Only 30% of medtech companies fall in the win zone, slightly below thecross-industry average
CASES BELOW SUCCESS SCORE (%)
10080

Medtech data points
Medtech60
40

Cross-industry

2021 cross-industry
average: 7.4

Medtech sector
average: 7.2

Woe zone (success score <6)
Worry zone (success score ≥6–<8)

20

Win zone (success score ≥8)

002

4

6

8

10
SUCCESS SCORE1

2021 BCG Global Digital
Transformation Survey overall

Medtech sector

13%52%35%(Range: 5%~25%)(Range: 30%~71%)(Range: 16%~58%)

17%

54%

29%

Limited value created(<50% of target); no
sustainable change

Value created but total Target value met ortargets not met;
exceeded; sustainable
limited long-term change change created

Source: 2021 BCG Global Digital Transformation Survey.
Note: Survey question: “Across the following dimensions, please rate your organization’s digital transformation experience to date on a scale of 1 to 10, using the guidelines in the table below.”
1Success score is calculated from respondents’ answers on six dimensions of transformation: strategy; leadership; talent; agility; monitoring; and tech and data.

RATES OF SUCCESS

Medtech companies score well on leadership commitment, but moststruggle to attain agile governance and deploy high-caliber talent
DISTRIBUTION OF SUCCESS SCORES ON INDIVIDUAL KEY FACTORS1Integrated strategy with clear transformation goals

2

Leadership commitment from CEO through middle management3

Deployment of high-caliber talent

4

An agile governance mindset that drives broader adoption

5

Eﬀective monitoring of progress toward deﬁned outcomes6

Business-led modular technology and data platform
Medtech average

123456789107.0

1Lower extreme

08.0
6.7
6.5
6.9
6.9

Upper or lower quartile Upper extremeWoe zone (success score <6)

Worry zone (success score ≥6–<8)

Source: 2021 BCG Global Digital Transformation Survey.
Note: Survey question: “Across the following dimensions, please rate your organization’s digital transformation experience to date on a scale of 1 to 10 using the guidelines in the table below.”
1Success score is calculated from respondents’ answers on six dimensions of transformation: strategy; leadership; talent; agility; monitoring; and tech and data.

Win zone (success score ≥8)

TOPICS OF FOCUS

Medtech’s transformation priorities have been geared primarily toward
digital reengineering of the value chain
Strategic objectives

Scope of digital transformation1

SHARE OF RESPONDENTS (%)

SHARE OF RESPONDENTS (%)
Digitizing support functions

27

28

Improvement incustomer experienceand go-to-market
Innovation and growthin the core and beyond

75

Customer experience and journeys

64

Digital manufacturing and operations

61

Digital ecosystem and partnerships

61

Sales and market acceleration

59

Growth and business model innovation

57

Digital procurement
26

20

Performance improvement
through the operational
value chain
Performance improvementin support functions

52

New business venture

43

Building resilience via cybersecurity
and compliance39

Supply chain

36

Marketing and dynamic pricing

34

Source: BCG Global Digital Transformation Survey, 2021, n = 44.
Note: Because of rounding, the percentages given for the strategic objectives do not add up to 100%.
1
Respondents were asked to select all priorities that applied.

TOP PRIORITIES FOR THE FUTURE

Medtech companies plan to devote 30% of spending toward digitalproduct and services innovation
PLANNED SHARE OF WALLET SPENDING ALLOCATED ACROSS DIGITAL TOPICS IN THE NEXT TWO TO THREE YEARS (%)1100Digital product andservices innovation

3091

Digital support functions

1882

Digital supply chain

1877

Next-generation sales
and marketing

1564

Smart after-sales services
Smart factories

1152
7
Share of respondents allocating any investment toward each digital topic

Average share of total investment

Source: 2021 BCG Global Digital Transformation Survey.
1For example, the uppermost pair of bars can be read as “100% of medtech respondents plan to invest in digital product and services innovation, allocating an average of 30% of total digital investment.”

TOP PRIORITIES FOR THE FUTURE

Medtech companies’ digital priorities: Digital product andservices innovation
Digital initiatives (bars indicate relative prioritization of initiatives)
Understanding customer needs and preferences

1.00

Automation of new product development
processes, including regulatory ﬁlings
Developing products based on real-world data
(e.g., failure usage, claims, and EHR)

0.76
0.53

Real-time collaboration and iterations

0.41

Digital/connected devices

0.41

Modeling and simulation tools

0.33

Digitization of clinical trials

0.33

Supporting apps and services

0.31

Virtual testing

0.13
Relative prioritization for all medtech companies

Source: 2021 BCG Global Digital Transformation Survey, n = 44.

Top priorities for win-zone companies

TOP PRIORITIES FOR THE FUTURE

Medtech companies’ digital priorities: Digital support functions
Digital initiatives (bars indicate relative prioritization of initiatives)
End-to-end record-to-report digitization of ﬁnance activities

1.00

End-to-end procure-to-pay digitization for procurement

0.72

End-to-end source-to-contract digitization for contracting

0.69

End-to-end order-to-cash digitization formanagement of accounts receivable

0.56

End-to-end hire-to-retire digitization(including integrated training) for HR

0.54

Forecasting for budget planing

0.38

End-to-end contact-to-resolve digitization for contact center
Optimization of cash/working capital management
Relative prioritization for all medtech companies
Source: 2021 BCG Global Digital Transformation Survey, n = 44.

0.35
0.21
Top priorities for win-zone companies

TOP PRIORITIES FOR THE FUTURE

Medtech companies’ digital priorities: Digital supply chain
Digital initiatives (bars indicate relative prioritization of initiatives)
Demand forecasting

1.00

Real-time supplies tracking

0.59

Capacity planning

0.45

Dynamic inventory planning

0.44

Real-time product tracking

0.43

Automated warehouse

0.19

Real-time inventory tracking

0.16

Route/network optimization

0.14
Relative prioritization for all medtech companies

Source: 2021 BCG Global Digital Transformation Survey, n = 44.

Top priorities for win-zone companies

TOP PRIORITIES FOR THE FUTURE

Medtech companies’ digital priorities: Next-generation sales and marketing
Digital initiatives (bars indicate relative prioritization of initiatives)
Digital customer demand creation, including own andthird-party owned digital channelsDigitally enabled salesforce, with mobile, digital data-driven
support for sales reps

1.00
0.87

Data-driven personalized targeting of sales activities

0.75

Automated lead generation and handling

0.71

Smart customer segmentation

0.62

Digital and remote sales capability building, including e-commerce

0.60

Real-time demand forecast analytics

0.58

Dynamic pricing optimization

0.38

Digitally enabled coaching of commercial teams
Relative prioritization for all medtech companies
Source: 2021 BCG Global Digital Transformation Survey, n = 44.

0.05
Top priorities for win-zone companies

TOP PRIORITIES FOR THE FUTURE

Medtech companies’ digital priorities: Smart after-sales services
Digital initiatives (bars indicate relative prioritization of initiatives)
Digital customer self-service portal

1.00

Real-time customer inventory management

0.47

E-enabled technical service (technical self-service
portal, virtual agent, etc.)

0.46

Remote AR- and VR-enabled customer training and information

0.44

App-based incident management

0.37

Analytics to identify service improvement areas,
based on customer feedback

0.34

Remote predictive and prescriptive assets maintenance

0.33

Real-time after-sales service scheduling

0.19
Relative prioritization for all medtech companies

Source: 2021 BCG Global Digital Transformation Survey, n = 44.

Top priorities for win-zone companies

TOP PRIORITIES FOR THE FUTURE

Medtech companies’ digital priorities: Smart factories
Digital initiatives (bars indicate relative prioritization of initiatives)
Manufacturing analytics (production optimization, default detection, etc.)

1.00

Robotics and automation on the assembly line

0.94

Predictive and preventive maintenance for machinery

0.62

Digital twin

0.55

Remote AR and VR assistance for troubleshooting

0.34

Shop-ﬂoor labor-force optimization and schedule/shift management

0.32

3D printing and additive manufacturing of components and medical devices
Energy eﬃciency optimization

0.23
0.17

Wearables for workers’ safety and traceability

0.13

Shop-ﬂoor simulation

0.13
Relative prioritization for all medtech companies

Source: 2021 BCG Global Digital Transformation Survey, n = 44.

Top priorities for win-zone companies

THE CRITICAL ENABLERS

Medtech companies intend to invest across a broad range of tech andhuman enablers
Eight out of ten medtech companies plan to invest in infrastructure and cloud enablement, tech architecture modernization, andAI and big data, allocating about 45% of total digital enablers spending to these areas
PLANNED SHARE OF WALLET SPENDING ALLOCATED ACROSS ENABLER DIGITAL TOPICS IN THE NEXT TWO TO THREE YEARS (%)1Tech

83

79

Human

83

83

75

71

79

75

54
15

Infrastructure
and cloudenablement

18
12

Modernizationof techarchitecture

12

AI and big data

Cybersecurity

11

Modernization oftechnology
organization andoperating model

Share of respondents allocating any investment toward digital topic

10

New ways ofworking

8
New talent andleadershipmodelsAverage share of total investment

Source: 2021 BCG Global Digital Transformation Survey, n = 44.
1For example, the leftmost pair of bars can be read as “83% of medtech respondents plan to invest in infrastructure and cloud enablement, allocating an average 15% of their total digital enabler spending.”

8Continuous
learning

5Integratedecosystems

ROLE OF ESG IN DIGITAL TRANSFORMATION

About 85% of medtech companies
plan to increase ESG investments,
above the cross-industry average… with greater emphasis on Sand G

Share of respondents planning to increase/decrease/maintain investment toward ESG in coming years

Leading digital initiatives being prioritized
to support E, S, and G goals

35

Moderatelyincrease50

Maintain as inprevious year(s)Decrease vs.
previous year(s)25150Source: 2021 BCG Global Digital Transformation Survey, n = 44.

1~39· Improving employee health and safety
through software solutions, wearables, etc.
· Creation of targeted, personalized training
programs that are interactive and support
long-term behavioral change~66· Critical risk incident management,
building cyber resilience· Improved adherence to code of conduct
through digital trails and monitoring~4256

17· Waste reduction driven by analytics· Digital supply chain optimization

SocialSigniﬁcantly
increase

CROSS-INDUSTRY AVERAGE (%)

Governance

MEDTECH AVERAGE (%)

Environment

SHARE OF RESPONDENTS PRIORITIZING (%)

If you would like to discuss this topic, please contact one of the authors:
JOHANNES THOMSTORBEN DANGERManaging Director & Partner, London
thoms.johannes@bcg.com+44 207 753 6235

Managing Director & Senior Partner, New York
danger.torben@bcg.com+1 646 509 8566

BARRY ROSENBERG

KARALEE CLOSE

Managing Director & Senior Partner, Chicago
rosenburg.barry@bcg.com+1 312 715 2288

Managing Director & Senior Partner, London
close.karalee@bcg.com+44 207 753 6273

STEPHEN WADDELL

BASIR MUSTAGHNIManaging Director & Senior Partner, Austin
waddell.stephen@bcg.com+1 214 468 2310

Managing Director & Partner, Frankfurt
mustaghni.basir@bcg.com+49 699 150 2227