This article and the accompanying slide deck are part of a series exploring how companies in specific industries can adopt the mindset, expertise, and ambition required to win in an AI-first world.
Medtech companies can capture massive value from AI with the potential to increase revenues by 10% and productivity by 50%.
Companies will not achieve these results by running isolated experiments or deploying tactical AI solutions. Rather, they need to become AI-first. This is a fundamentally different way of organizing people, resources, and decisions. AI becomes an organization’s central nervous system.
To become AI-first, companies need to embark on an ambitious, business-led approach to reshape and invent their functions. This cannot happen all at once. Companies must focus on scaling a few high-value use cases in a few functions to transform each of them end to end.
Reinventing the Value Chain
Medtech executives can think about three approaches to AI: deploy, reshape, and invent.
- Deploy delivers quick wins—automating reporting, drafting documents, or giving sales teams simple AI assistants.
- Reshape goes deeper, redesigning end-to-end processes such as clinical trial management or supply chain planning, unlocking gains in productivity and efficiency.
- Invent is the most transformative approach, in which companies create entirely new business models, products, and services, such as agentic AI customer service.
Too many companies get stuck at deploy. AI-first companies instead focus 80% of their efforts on reshaping and inventing functions from the ground up.
A few examples across the value chain: In R&D, AI can help reduce the time to create and validate the feasibility of product designs by up to 70%, to set up and operate a clinical trial by 15%, and to draft regulatory documents by 50% to 90%. These improvements have the potential to reduce total R&D cycle time by 50% and increase market share by 10%.
Operations are being reshaped, too. A leading medtech manufacturer embedded AI forecasting capabilities across its end-to-end planning and inventory processes. The result: improving forecast accuracy by 15 percentage points while reducing backorders by 60% and inventory by $125 million.
Commercial activities must also evolve. Autonomous AI agents can qualify inbound leads, engage in upselling and cross-selling, and address a physician’s ongoing service needs, pulling in a human as necessary. With this approach, companies have seen 30% increases in average revenue per user, 10% increases in sales, and 60% to 70% reductions in servicing cost.
What Sets Leaders Apart
AI leaders in medtech are following five key success factors. First, C-suite leaders set a bold ambition and back it by investing heavily in AI capabilities and resources. Second, business leaders, not just IT, set the AI agenda and identify and prioritize operational and financial pain points.
Third, leaders resist the temptation to spread themselves too thin. They focus most of their investments on reshaping one to three core functions. Fourth, they identify a few high-value, scalable use cases with high ROI potential within these functions. Both factors ensure that their efforts have the potential to generate outsized returns.
Fifth, they follow the 10/20/70 principle, by devoting 70% of their energy to rewiring how their organizations work—redesigning workflows, reshaping roles, and helping teams adapt. Technology and data (20%) and algorithms (10%), though essential, play smaller parts.
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A Practical Starting Point
In short, medtech companies can capture value quickly by setting a bold ambition, rapidly launching pilots in a few priority functions, and achieving scale within a full function. A quick self-check can reveal whether your organization is prepared to start on the right path.
- Leadership and Strategy. Is AI a strategic priority, with a clear sponsor at the C-suite or board level? Are leaders setting an example by using and talking about AI and listening to the concerns of their people?
- People and Ways of Working. Do you have a deliberate approach to ensuring your leadership team and broader organization are building the right AI skills?
- Solutions and Business Value. Have you considered and shortlisted the specific functions where AI will create measurable ROI and better outcomes for patients and providers?
- Funding and Investment. Have you defined a three-year AI investment horizon to sustain momentum and scale?
- Data and Technology. Is your critical data AI-ready—clean, structured, accessible, and compliant?
- Governance and Responsible AI. Do you have a responsible AI framework and governance council in place to ensure safe and compliant adoption?
The future of medtech belongs to those that make AI central to their strategy and operations. AI-first companies don’t just move faster. They spark growth and innovation and help improve societal health and well-being.
The authors thank Erik Adams, Alex Baxter, Dan Belz, Kevin D’Souza, Marcus Erhardt, Paari Rajendran, Krishna Srikumar, Beate Steen, and Gunnar Trommer for the contributions to the article and deck.
