The State Of Digital Excellence In The Global Pharmaceutical Industry, 2021
Digital excellence in pharma companies improved in 2021 – a positive sign given the tremendous strain that the COVID-19 pandemic put on commercial operations in the industry. If pharma firms want to maintain this upward trajectory, they need to further strengthen their capabilities, starting with more effectively communicating their vision of what digital can do for customers. Pharma companies’ failure to make significant progress on highly relevant but complex behind-the-scenes digital capabilities like analytics and CRM remains the biggest missed opportunity.
The Current State of Digital Excellence in Global Pharma
The COVID-19 pandemic spurred an unprecedented digital transformation of the healthcare and pharma sectors, hugely accelerating the uptake of existing technologies. Based on research that began after the pandemic’s first wave and continued during the series of large spikes in case numbers that followed, this report looks at how pharmaceutical companies—and their drive for digital excellence—fared during this tumultuous period. Our data shows that:
- Digital excellence continues to improve, albeit slowly. The average digital excellence score in the pharmaceutical industry increased by eight percentage points between 2019 and 2021 (see Figure 1). Overall, two-thirds of the companies we surveyed scored in the Good or Excellent range. This is promising, but pharma firms can’t rest on their laurels. The two firms with Excellent scores were near the bottom of that range and need to boost their performance to avoid slipping back into the Good category. The Good scores were distributed across the range, varying from one within striking distance of an Excellent rating to four that have work to do to maintain their Good rating.
- Behind-the-scenes capabilities hold the most promise. The improvement in digital excellence was driven by maturing behind-the-scenes capabilities, which more than offset a slight decline in the maturity of on-stage capabilities (see Figure 2). Given that all on-stage capabilities rate as Good or Excellent, focusing more on behind-the-scenes capabilities like analytics, CRM, and multichannel engagement (MCE) strategy—all of which rated Fair—offers the most potential to improve overall digital excellence.
- Expectations of digital need to be higher. Two-thirds of respondents felt that digital capabilities deliver on their promises (see Figure 3). This is despite the fact that the digital excellence of the vast majority of both on-stage and behind-the-scenes capabilities only rated Good or Fair and either declined in 2021 or showed no meaningful long-term improvement. On-stage capabilities fell by two percentage points, reverting to 2017 levels. After a very poor showing in 2019, behind-the-scenes capabilities did rebound by nine percentage points in 2021, but remained behind where they were in 2015. For pharma firms to roll out top-flight capabilities in the future, they need to promise—and deliver—more than they do at present.
Simplicity, Not Relevance, Drives Digital Maturity
The maturity of a capability is inversely correlated with its complexity (see Figure 4). On-stage capabilities often fill an immediate, product-specific need; respondents found on-stage capabilities simpler to implement than their behind-the-scenes counterparts—but also as less relevant to the organization. The danger for pharma firms is that tactical on-stage needs overshadow the greater opportunities to improve digital maturity by focusing on the development of behind-the-scenes capabilities. Our respondents:
- Give the highest digital maturity ratings to simpler on-stage capabilities. Elements such as rep-triggered emails, tablet detailing, and campaign email are regularly in demand for time-sensitive product milestones. This creates a virtuous circle: the more they’re used, the more refined and mature they become. As a result, respondents rated these and the other on-stage capabilities as more mature than all but one behind-the-scenes capability.
- Find behind-the-scenes capabilities more relevant. All of pharma’s core MCE capabilities have an important impact on customer engagement, but with only one exception respondents rated behind-the-scenes capabilities as being more relevant than their on-stage counterparts. Content creation, CX management, and customer engagement analytics all did particularly well.
Organizational Readiness for Digital Excellence Dips
While COVID-19 catalyzed digital transformation across the pharmaceutical industry, it also brought an element of paralysis. As more local and regional commercial leaders got involved, digital teams finally saw the demand they were waiting for, but couldn’t respond in a coherent way and lacked capacity to participate in all the conversations they were asked to have. However, they did step up their planning—and their attention to realigning strategic plans and drawing up road maps saved organizational readiness from dropping by more than four percentage points. We found that:
- Pharma companies could be more ambitious. Assessing the digital opportunity open to a pharma firm and the disruption that transformation is likely to enable is a useful proxy for the company’s ambition. Most of the firms surveyed say that they are undertaking this work to some extent (see Figure 5). But the fact that only 6% strongly agree that their firm has performed these assessments indicates that few pharma firms excel at demonstrating digital ambition by preparing to capitalize on the opportunities that are on offer. There’s also room to improve at the other end of the scale: nearly one-third of respondents say that their firm has not performed such an assessment at all.
- Continuous improvement slowed even as planning improved. Strategic planning—whether in the form of short-term road maps or a more forward-looking overarching plan—rose to its highest levels since our first study of digital excellence in pharma in 2014, putting the industry average on the cusp of moving from Good to Excellent (see Figure 6). However, continuous improvement, handover, and (worryingly) vision all saw notable declines, indicating where future improvements are likely to be most needed.
- Clear plans facilitate clear communication. Three-quarters of respondents agree that the digital/ MCE team leading the digital transformation is working from a clear road map of digital capabilities. Having a clear digital road map in place vastly increases the chances that the team leading a pharma firm’s digital transformation will be able to effectively communicate its ideas, plans, and activities. Two-thirds of pharma companies are effectively communicating these outputs.
- Senior backing for digital is strong, but functional buy-in lags. Some 81% of respondents agree that the leadership team supports the digital/MCE team, frequently endorsing and committing to its role, vision, and responsibilities. But marketing, sales, and medical affairs leaders have yet to fully throw their weight behind the digital/MCE team: 56% of the respondents agreed that functional leaders actively support the digital road map and ensure that their teams stay committed to it, but one in five saw no functional buy-in.
- Digital organizations continue to grow. Organizational readiness—which encompasses planning, leadership, assessment, implementation, and resourcing—is a key metric to assess whether firms are prepared to pursue digital excellence. However, the industry appears to be less ready for digital transformation in 2021 than it was in 2018: pharma companies are evenly split between digital leaders and digital laggards (see Figure 7).
- Investment is expected to increase. The average digital budget declined slightly, from just under $7 million in 2018 to $6.3 million in 2021, but overall the tide has risen (see Figure 8). In contrast to our 2018 report, no firm reported a budget of less than $200,000; at the other end of the scale, the number of digital budgets exceeding $30 million increased by seven percentage points. Moreover, respondents’ expectations for their next annual budget were generally positive: nearly half expect their budget to increase, and one in five anticipates a rise of more than 15% (see Figure 9).
DT Consulting fielded its 2021 The State of Digital Excellence in the Global Pharmaceutical Industry survey to twenty-four VPs of digital (or multichannel customer engagement or multichannel marketing) inside pharmaceutical commercial organizations from September 2020 to May 2021. Respondents received a copy of this report containing the collected survey data prior to publication. The sample is not guaranteed to be representative of the population and responses do not convert directly into precise maturity scores for respondents’ respective companies. Unless otherwise noted, data is intended for descriptive purposes.
- The State of Digital Excellence in the Global Pharmaceutical Industry, 2018: Organizational Readiness
- The State of Digital Excellence in the Global Pharmaceutical Industry, 2017: Capabilities
- Digital Excellence in the Global Pharmaceutical Industry in 2016: Organizational Readiness
- Digital Excellence in the Global Pharmaceutical Industry in 2016: Organizational Readiness
- The State of Digital Excellence in the Pharmaceutical Industry in 2015: Capabilities
Tim van Tongeren
Dennis van Rooij