When it comes to healthcare, we often think about hospitals and doctor visits. Although this is a big part of the industry, there’s so much more going on behind the scenes that make this industry one of the largest and most labor intensive across the globe. The global healthcare market reached $8.7 trillion in 2017, and it is projected to grow at a compound annual growth rate (CAGR) of 5.4 percent to reach $10.059 trillion by 2022.
The healthcare industry is under immense pressure to digitize in order to improve workflow efficiency and cut costs. In addition to the ever-growing demand for better and more efficient healthcare services, the industry has witnessed a massive push during the pandemic.
The healthcare industry has made great strides in terms of technological advancement, and this only means that the scope of digitization is only going to increase in the future. From hospital IT systems to medical devices, healthcare has adopted technological innovations at every level. Today, we’re seeing this phenomenon extend to procurement.
However, there is a lot of ground that needs to be made up in terms of integrating existing institutions and preparing for future global outbreaks. One of the most critical aspects of this transformation is the procurement machinery, which needs to be overhauled with innovative technologies that can optimize workflow and reduce costs.
Challenges of traditional procurement practices in healthcare
There are a number of challenges that the healthcare industry is currently facing, and digitization can be the answer to many of them. Some of the most pressing issues that need to be tackled include:
- The need for greater efficiency in order to keep up with demand
- The challenge of integrating existing institutions into a cohesive system
- The need to prepare for future global outbreaks
- The challenge of reducing costs while maintaining quality care
- Lack of reliable data for analytics, forecasting and planning
- Inefficient inventory management and wastage due to poor visibility into data
- Lack of compliance and accountability
- Manual processes with paperwork and unorganized media
- Dissatisfaction among suppliers due to lack of standard onboarding processes.
The Digitization of Healthcare Industry – A Journey Through Procurement
Each of these challenges can be tackled with the help of digitization and with so much at stake, it is critical that the healthcare industry embrace digitization in order to stay ahead of the curve. It has been estimated that around 70% of the total cost of a typical pharmaceutical product lies in the supply chain. This indicates how important it is for an organization to be able to control its assets effectively, manage its processes, and comply with regulations and policies. The digitization of the procurement department is key to business impacts including, but not limited to:
- Efficient Workflow: Digital platforms enable almost instantaneous access to a wide range of global suppliers. By turning their procurement teams into value providers, the organizations can ensure that they are providing quality services at a competitive price while improving efficiency across the board.
- Cycle time reduction: In general, healthcare contracts were originally designed for very different business models, with long-term relationships being the norm. However, as digitization progresses, there will need to be a significant reduction in the cycle times of transactions, which will lead to a high level of flexibility. Digitalsolutions enable faster procurement processes and reduction of overall cycle times for ordering, contracting, and sourcing.
- Supplier satisfaction: With transparency on orders, payments, and contracts supplier satisfaction reaches new heights.
- Data-Driven fact-based decision making: it is important for businesses to receive actionable information at the right time to make fast and confident decisions. Real-time visibility into data from various sources helps organizations make faster, more value adding decisions and reduced maverick spend.
- Compliance: Improved processes and automation result in better compliance with the industry regulations.
- Optimized Cost and Increased Savings: Getting instant visibility into the savings and statistics would help organizations grab opportunity on savings. Moreover, it can help them access greater awareness of spending and risk management.
The impact of digitization is undeniable. It has already led to the emergence of a new set of business processes and practices, enabled by technology. And the extent of this change can be felt across industries and sectors. Digitization in healthcare is expected to continue to flourish, especially as the sector transitions from an analog approach to digital health. The positive impact of digitization cannot be overlooked and will lead to a sustainable future for the healthcare industry and its stakeholders alike
As with most trends in technology, business process reengineering and organizational change are crucial prerequisites for a successful digital transformation. While there might be multiple reasons behind a business decision to embark on a digital journey, there is usually one overarching reason: the promise of enhanced and sustainable value creation on a wider scale. The key question then is: How does your organization intend to capture this value?
If you’re looking for help in making this transformation, you can visit our website to learn more about our solutions: www.zycus.com