The ability to collect, analyze, and act on data is intrinsic to a company’s success, but there are challenges to effectively operationalizing analytics.
In today’s market, a company’s ability to effectively collect, analyze, and act upon data is intrinsic to its success. However, effectively operationalizing analytics at scale presents obstacles.
Model N’s annual State of Revenue Report explored the medtech landscape, uncovering trends and challenges related to innovation, data management, and revenue optimization. As the industry advances into an increasingly complex future, these findings provide an important snapshot of medtech leaders’ preparedness to use data to unlock competitive advantage.
Data
Model N’s report revealed that the medtech sector is the most data-driven of those surveyed.
Data-Driven Decisions
More than 90% of medtech executives use data for most or all of their decision-making. And 98% of medtech companies have established a center of excellence (CoE) for deal and revenue optimization analytics, whether formal or informal.
However, the vast majority (97%) of leaders in all industries surveyed by Model N (medtech, pharmaceutical, high tech) have reservations about their internal data, with privacy, accuracy, and completeness being the top concerns. These fears may feed into executives’ hesitancy to use data for all their decisions. In particular, nearly half of C-level executives don’t trust the company data used for revenue management decisions.
Industry Data
Nearly everyone (99%) surveyed views industry benchmarking data as important for revenue management. External sources — such as channel data, industry reports, analyst data, and commissioned market research — feed decision-making for 93% of medtech companies. Nearly two-thirds report purchasing comparative data beyond market share statistics, and almost everyone else said they were considering it.
This industry information is so valuable that 97% of medtech executives say they are open to anonymously sharing data in exchange for receiving industry benchmarks. They believe this kind of information sharing would help identify competitive advantages and improvement opportunities.
Data management
In the 2024 report, 99% of executives report using spreadsheets for revenue management tasks. That’s down from 100% in 2023. However, the companies that leverage spreadsheets use them more frequently than last year. The reason behind this increase is unclear.
Factors Impacting Innovation
Executives indicate supply chain and logistics, customer demand, and material availability will be the top factors affecting innovation in the coming year. Supply chain concerns also topped last year’s list, with manufacturing constraints, shipping disruptions, and higher costs contributing to longer lead times.
New buying habits, price sensitivity, and inventory volatility are top of mind for medtech leaders. To meet market needs, medtech companies must be attuned to trends. Technology supports demand forecasting by analyzing leading data, such as channel and regional demand, real-time sales, and supply chain movement. This holistic understanding of the selling environment allows companies to quickly adjust strategies to match market shifts.
The medtech industry faces significant staffing challenges. Of the three industries surveyed by Model N, medtech is experiencing the most substantial shortage of talent and experts. Less than 10% of companies say they are experiencing no staffing issues, while three out of four companies struggle to fill gaps with qualified team members.
While new financing and subscription models continue to frustrate the medtech industry, executives indicate management is getting easier. Only 7% report that handling these models is “very difficult,” down from 26% last year. However, about half of leaders say the process is still “somewhat difficult.” Another interesting finding: there was a sizable increase in the number of companies not offering financing or subscription models.
Effectively managing membership data poses another challenge. Only 55% of executives characterize their membership management process as highly effective, and more than 90% struggle to manage membership-related data, potentially leading to duplicate customer records and incorrect pricing and rebate payments. These statistics indicate a significant area of opportunity for process improvements.
Innovation Priorities
Product innovation lands far down on the list of medtech priorities this year. Executives are more focused on process efficiency and cost saving. Economic uncertainty is likely driving these initiatives. By improving business practices, companies empower themselves to capitalize on future market opportunities.
More than half of executives state that increased revenue opportunities are a key driver for technology investments. Nearly 70% of companies indicate they already use or plan to use data and analytics. By automating data gathering and executing analyses, medtech teams save time and resources while optimizing revenue and gaining key market insights.
Model N’s report highlights data’s integral and expanding role within medtech companies. Organizations are well on their way to unlocking value but have many opportunities to improve data management and utilization for better revenue management. Technology empowers data-backed decision-making and agile market responses. Companies that invest in data and analytics position themselves for a successful future.
Kyle Forcier is a Senior Director of Services Sales for Model N. For more than 15 years, Forcier has focused his time in the life sciences space helping manufacturers increase their revenue, maintain compliance, and bring innovative ideas to the marketplace. He currently helps shape Model N’s strategic direction focusing on bringing complex, valuable solutions to the market to solve longstanding operational challenges within the medtech industry.
This article was originally published on Medical Product Outsourcing.
