Thanks for these ideas, Nicolas. You definitely made me think.
My industry is Healthcare and Life Sciences.
When I think why “software has not eaten healthcare industry” yet, I come up with the following ideas:
1. Legacy systems in place. Hospitals have their EHR (Electronic Health Records). It is usually the most expensive part of the IT budget (both in implementation and in maintenance every year).
3. IT budget available is low. The amounts spent by healthcare providers and national/regional health systems on IT and Information Systems is usually between 1 and 2% of their total budget. It is impossible to “switch” to better solutions without heavily investing in IT. This has not been the case so far, and it does not seem likely in the near future.
4. Pharma companies have enjoyed a very comfortable business model, with very high margins (20-30%). They also have a very stable workforce, with attrition rates of 2%. Nobody wants to leave pharma. Staff are well paid and relatively safe/stable. For software to eat the world, you need certain type of expertise in pharma and hospitals that are not there.
Thanks for these ideas, Nicolas. You definitely made me think.
My industry is Healthcare and Life Sciences.
When I think why “software has not eaten healthcare industry” yet, I come up with the following ideas:
1. Legacy systems in place. Hospitals have their EHR (Electronic Health Records). It is usually the most expensive part of the IT budget (both in implementation and in maintenance every year).
2. In the US, some hospital/hospital systems entered bankruptcy because of the huge bills associated with the implementation of their EHRs: http://www.statnews.com/2015/12/07/brigham-budget-electronic-health-records/
3. IT budget available is low. The amounts spent by healthcare providers and national/regional health systems on IT and Information Systems is usually between 1 and 2% of their total budget. It is impossible to “switch” to better solutions without heavily investing in IT. This has not been the case so far, and it does not seem likely in the near future.
4. Pharma companies have enjoyed a very comfortable business model, with very high margins (20-30%). They also have a very stable workforce, with attrition rates of 2%. Nobody wants to leave pharma. Staff are well paid and relatively safe/stable. For software to eat the world, you need certain type of expertise in pharma and hospitals that are not there.
Interesting! I've had the IT issue on my radar for quite some time (see https://europeanstraits.substack.com/p/toward-better-cheaper-healthcare ) but not so much the talent shortage that incumbents face when it comes to deploying more software.