Improving Service Delivery (the Old-fashioned Way?) in the Medical Device Industry
Stan Lepeak, Director, KPMG Global Sourcing Advisory Research
Vicki Phelan, Director, KPMG Shared Services and Outsourcing Advisory supporting the Pharma and Life Sciences Industry
KPMG Management Consulting recently completed a market study assessing how North American-based medical device firms are approaching efforts to improve to global business services (GBS). Other KPMG research conducted across multiple industries typically finds firms employing a mix of shared services and outsourcing efforts, along focusing on improving efforts already in the field, as the top means to achieve these goals.
While shared services and outsourcing are tools being employed in the medical device industry, the more traditional approaches of internal process improvement or process re-engineering was the top means cited both to improve service delivery as well as reduce service delivery costs (see figure below).
Top Means to Improve Service Delivery/Reduce Costs
KPMG research and client experience has found that many organizations feel that process improvement efforts can only take them so far. Often more radical change, in the form of shared services or outsourcing, is required to take efforts to the next level. It is possible that for participants in this research study greater use of shared services or outsourcing could result from the process improvement efforts. Or it could be that medical device firms place less value on shared services or outsourcing, though the study did find satisfaction levels with outsourcing for those firms that had undertaken it in line with other research findings.
For many adopters, shared services have delivered early gains but then improvement efforts have slowed or stagnated and outsourcing efforts have hardly been the panacea envisioned by some of its adopters. This being said the use of shared services and outsourcing continues to grow. Recent research conducted by HfS Research found that across major industry groups more than 70 percent of firms currently using outsourcing plan to expand efforts in the next three years and more than 50 percent of shared services users plan to increase those efforts. It’s these growth levels that create the foundation for and drive the maturation of global business services.
The best means to improve business services delivery and improve cost levels will vary across different industry groups as well as geographies and economies. It is important, however, that organizations assess all available options and tools as their disposal, recognizing the best solution is often likely a complex mix of multiple means and methods.
For more from KPMG on shared services and outsourcing, visit the KPMG Shared Services and Outsourcing Institute. For KPMG’s latest thinking in the Healthcare industry, visit the KPMG Healthcare and Pharmaceutical Institute.
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