Respondents feel the least prepared to adopt AI (traditional AI and GenAI) and advanced analytics; to deploy applications that improve talent acquisition, retention, and staffing processes; and to implement solutions that reduce operating costs. Less than 30% of respondents feel well prepared to undertake most of these tasks.

Somewhat surprising is that respondents aren’t prepared for consumer centricity or for retail and big tech players to enter in the space.

Leaders should choose a course of action that suits their organization’s preparedness.

Respond now. More than 70% of the digital and technology leaders surveyed think that several trends and priorities, such as reducing operating costs, are important, but they do not feel well prepared to address them. Organizations need to take action in the important areas if they are not prepared. They should reallocate funds and organically develop the needed capabilities, or they should form strategic partnerships and make acquisitions to strengthen their capabilities and bring them to market quickly. It is particularly critical to move fast to identify use cases for GenAI and deploy solutions.

Maintain momentum. Changes in the way care is delivered significantly impact an organization’s digital and technology agenda, and about 60% of leaders think that their organization is prepared to address these changes. Going forward, these organizations must maintain their momentum to either develop or sustain capabilities that support virtual health care and value-based care and ensure workforce efficiency. To maintain momentum, leaders should periodically reassess the time and money they have invested to determine if they need to recalibrate or shift from building to sustaining these capabilities.

Address blind spots. Blind spots are trends that most leaders do not see as shaping their agenda but that could significantly impact the industry. We have identified two trends as particularly critical. The first is consumer centricity. Increasingly, patients are expecting higher service levels and personalized engagement, similar to the enhanced digital-shopping experiences that are provided by consumer services industries.

The second blind spot is the entrance of retail and high-tech players into the health care industry. These companies are introducing advanced capabilities, such as monitoring medication adherence and transcribing physician-patient conversations, for personalized, proactive follow-ups. Incumbent organizations should take steps to address these critical blind spots in the near term.

What Barriers May Prevent Organizations from Acting?

As organizations prepare to address external trends and internal priorities in their digital and technology agenda, they are mindful of two potential barriers to execution.

Resource constraints were highlighted as a significant barrier by about 50% of the leaders surveyed. Securing timely and adequate funding for investments can be particularly difficult. A leader at an integrated delivery network stated, “A key challenge is demonstrating the fiscal impact of any changes recommended to free up the budget for investing in additional digital and technology capabilities.” An insufficient pool of skilled talent and legacy technology that’s incapable of driving a tech transformation quickly were also cited as constraints.

Misalignment between the strategic business goals and the digital and technology agenda poses another barrier. “There’s a clear disconnect between the IT and health care sides of the company; the IT team isn’t aligned with the larger business,” noted a digital and technology leader. The result is a lack of leadership support, which exacerbates the resource constraints as the digital and technology function struggles to demonstrate the fiscal impact and return on investment in digital capabilities. Organizations need to be clear about their long-term goals and how the digital and technology agenda can best support them.

How Can Organizations Strengthen Their Digital and Technology Agenda to Win?

It is crucial that payers, providers, health care systems, and services invest in the right digital capabilities either to stay ahead of competitors or to close the gap with them. To understand what it will take for organizations to keep up with external trends and achieve their strategic priorities, we evaluated a set of capabilities through the lenses of criticality, maturity, and planned investments. What we found suggests that organizations often invest in areas that are less critical to their success. (See Exhibit 4.)

Many survey respondents think that their organization prioritizes investing in capabilities that it finds critical, such as cybersecurity and digital care tools. Respondents also tend to perceive their organization’s capabilities as more mature, on average, when those capabilities are deemed most critical. Roughly 75% of respondents rated cybersecurity as a critical capability, and about 50% ranked their organization as mature or very mature on the topic. By contrast, less than 30% of respondents rated augmented reality and virtual reality or next-generation sales and marketing as critical, and less than 20% ranked their organization as mature in these areas.

However, more than 60% of digital and technology leaders surveyed do not think that their organization is mature in critical capabilities. Within this group, less than roughly 45% of respondents said that their organization is planning major investments in AI and big data, new ways of working, a digital front door (a platform that helps patients navigate the points of care), and understanding the customer.

Organizations can strengthen their digital and technology agenda in three ways and find advantage in the future. (See Exhibit 5.)

Reduce the amount invested in noncritical capabilities. While organizations primarily invest in critical capabilities, we still see some planning major investments in capabilities that they consider noncritical. Funding the modernization of the technology architecture, digital care tools, and the modernization of the technology organization stand out, with roughly 30%, on average, planning to continue investing. Organizations need to make a baseline investment to ensure that their infrastructure continues to mature. However, if an organization is investing more than that, it may have the opportunity to reallocate funds toward emerging technologies.

Continue investing selectively in critical and mature capabilities and foundational capabilities. On average, two-thirds of the leaders we surveyed plan to make major investments in critical capabilities that are already mature. Among this group, roughly 78%, on average, are investing heavily in AI and big data, the modernization of the technology organization, a digital front door, and digital care tools. Overall, organizations with more-mature capabilities can respond faster to changing demands and trends than those with less-mature capabilities. Modernization of the technology organization has an outsized impact on preparedness, compared with the advancement of other capabilities.

Boost the amount invested in critical capabilities that are not mature and in blind spots. Typically, an organization’s biggest capability gaps involve skills that leaders consider critical for the business but that are not mature. Yet, on average, less than half of the leaders we surveyed plan to invest in capability gaps. Only 28% are considering investing in new ways of working, 32% in understanding the customer, and 40% in a digital front door. Perhaps most noticeably, only 46% are investing in AI and big data.

These results underscore the need for organizations to rebalance their investments, direct resources to these areas, and place selective bets on AI while navigating the ethical and legal considerations. In light of mounting cost pressures, the increasing rates of burnout and turnover among health care workers, and growing patient expectations for higher levels of service, leaders need to advance critical capabilities and avoid blind spots.

The speed of technology’s evolution carries promise and challenges for payers, providers, health care systems, and service organizations. Yet many aren’t ready to gain advantage or address the issues. To move forward, business and digital and technology leaders should jointly consider external trends and agree on their organization’s goals, identify the needed capabilities to achieve them, and allocate investments. In short, leaders need to develop a digital and technology agenda that responds to the pace of change. Then, their organization will be positioned to deliver competitive care and services.