“How will AI change strategy?” The opening line to an interesting thought experiment written by the Harvard Business Review. In the article, the authors use a speculative scenario to answer the question. They describe a world in which AI has enabled Amazon’s business model to change from shopping-then-shipping to shipping-then-shopping. They predict a world in which artificial intelligence pulls data from shopping habits, social media data and offline behaviour to predict purchases and send them directly to the consumer. Before they have even expressed interest in it on Amazon.
This concept does not feel all that far-fetched with how quickly technology is moving. But how could this change in strategy be relevant to the pharma and biotech industry? We already see AI assisting in earlier diagnosis and AI assisted drug discovery is on the horizon. Is the most impactful opportunity for our industry in its potential in personalized medicine?
Pharmaceutical strategy predominantly focuses on one key competitive element – a unique product. With AI allowing companies to get closer to patients, will the element driving strategies forward become the patients themselves?
A good strategy has three key elements:
- Understanding of current market challenges
- Clearly articulated overall approach
- Distinct steps that will be taken to carry out the approach
If the healthcare industry are to move towards a more patient centric strategy, AI data can be instrumental in these elements.
Historically, challenges have been understood through the information provided by doctors. Market assessments are completed through a review of epidemiology, utilization and treatment rates data and a competitive comparison. AI’s ability to collect and analyse large amounts of data has enabled social media listening to become a tool for pharmaceutical companies to understand customer challenges, directly from the source.
With a more accurate understanding of the challenges, a more comprehensive and customized approach and tactics can be developed. For example, with the addition of valuable customer insights, you may realize that there is a large proportion of patients not reporting their medication-related insomnia.
Finally, the key to a successful strategy is the ability to be flexible and innovative. Whether it be a new competitor or a difference in expected data outcomes, the ability to react to changes and amend accordingly is critical to strategic success. The historical way of developing strategies requires data gathering and analysis to be done manually, which makes it quite arduous. AIs ability to process data and predict changes in the marketplace enables companies to be reactive, responsive and revolutionary.
Of course the healthcare industry has many more restrictions than Amazon when it comes to engaging with customers directly. But can you imagine a world where you a package of antihistamine is dropped at your door the day before your hay fever flares up?
How will AI change strategy? That’s the single most common question the three of us are asked from corporate executives, and it’s not trivial to answer. AI is fundamentally a prediction technology. As advances in AI make prediction cheaper, economic theory dictates that we’ll use prediction more frequently and widely, and the value of complements to prediction – like human judgment – will rise. But what does all this mean for strategy?