How to Tackle M&A Challenges in the Medical Devices Industry with Master Data Management
Life Sciences | 8 min READ
    
The State of M&A in Medical Devices Industry
Since the first half of 2021, pharmaceuticals, life sciences, and healthcare services have continued to pique investors’ interests all the more. As the impact of the COVID-19 pandemic has started to subside in some regions, mergers & acquisition deals, show a sharp rise.
Dr. Sharada Rao
Dr. Sharada Rao

Vertical Head - Delivery

Life Sciences

Birlasoft

 
According to a recent study, this trend is likely to continue for 12 to 18 months. This has pushed the entire ecosystem towards digital disruption and faster technological adoption. The impact is felt across patient care, treatment dissemination, and service delivery to practice management and the development of advanced medical devices.
M&A deals are now frequent and a welcoming change as the healthcare industry seeks to meet value-driven goals. IT is a primary consideration when two entities are merging and needs a major revisit before planning begins. It is also not the only factor. A robust IT integration strategy is important; however, it takes more than that to bring efficiency and coherence to the entire system.
The MedTech industry is covering a fair share of the entire healthcare pie. Medical devices form an integral part of this industry. M&A in this area are becoming popular by the day. But success brings in challenges. Let’s throw some light on these challenges.
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Challenges Stemming From M&A in the Medical Devices Industry
The era has rapidly transformed to digital. But, certain traditional industries like the medical device manufacturers mostly depend on paper-based operations that are archaic and slow to bring value. Demand in production is becoming a challenge for these manufacturers because of the manual processes and silos in system operations. Though M&A are rampant workers, they don’t have quick access to the right data and information to perform their jobs. This impacts compliance and risks quality on the shop floor.
There is an increasing need for centralized systems, unifying all the customer data and process metrics in one place. A system that can track, and disseminate content aligned to mobile applications and offer easy access to any process, is what these manufacturers are looking at. As an outcome, companies are integrating advanced mobile and cloud solutions that put shop floors online.
The job of IT is to carefully scrutinize people, technology, process, and delivery across both source and target organizations based on the priorities and objectives of the two in contracts. Bringing two companies' data under one roof and creating a Master Data is a tough task, but it could be seamless with the right tools and processes. On this note, let’s try and understand what Master Data Management is all about.
What is Master Data Management
Master data management (MDM) consolidates each person, place, or process in a business, from across all verticals, internal and external data sources and applications, to bring it under one unified system. This information eliminates redundancies and duplicates to provide quick access to enriched, reliable and consistent data.
Once put together, this master data forms a trusted one-point source to view critical business data that helps people in the system to make informed decisions.
Master Data—A Problem For The Enterprise, Not Only IT
Stakeholder management, primarily customers, vendors, and workers, has been a complex task when there’s a growing demand for faster and efficient outcomes across all the areas. But, let’s say, when customers’ information is loosely scattered across hundreds of applications, it is tough to meet the timelines with efficiency and ease.
Without consolidation and coherence, this small task appears to be a massive roadblock for all businesses, withholding them to perform their best. Especially during a crisis, this adds to the chaos, detracting the company’s performance both in terms of cost-effectiveness and customer experience. Even if the information is present in the consolidated form, it is organized poorly, often leading to incomplete or obsolete information. Thus, Master Data is a major concern for IT, but its mismanagement stunts organizational growth.
The Problem For Business
Businesses – be it SMBs, large or mid-enterprises, deal with huge data sourced from internal and external customers. Especially for the medical device manufacturers, end customers are not the only ones in the game. There are internal employees, vendors, and distributors in the chain too. When the operations of two entities are fusing, there’s an increased overhead count.
Managing this sheer volume of data is a tough job. There are inaccuracies and redundancies. The effort to put together all the information and disseminate it to the people when they require them is way too much. A poor master data management leads to unreliable reports and insufficient metrics, eventually crippling the whole system. Plus, the high integration and maintenance cost weighs heavy on the businesses.
How to Tackle M&A Challenges in the Medical Devices Industry with Master Data Management
The Problem For IT
Scattered data and improper management prove costly for IT too. The problem of data in silos with multiple versions and sources within and outside the organization leads to duplicates, errors, and inefficiency. This negatively impacts data quality. Inconsistent, incomplete, and error-prone data is pushed through different channels. This unstructured data complicates the system, blocking the development in its entirety.
Lack of structure comes with data errors, and when this data is feed into the new system, it proves to be a disaster for the ERP and CRM catalogs and webshop. The framework starts showing cracks, and the internal team collaboration, customer service, product, and communication take the hit. Without proper data control and syndication, end customers receive incoherent data.
Therefore, before a merger or acquisition happens, it is essential to plan and set up a master data system to balance business and IT operations.
Strategic Costs of Keeping the Status Quo
To maintain the status quo between the Business and IT between two entities, it is essential to consider the strategic costs for an efficient Master Data Management:
Cost of Maintenance
Complex devices, small batches, increasing demands, high-mix orders, and complex shop floor management need to be combined. It comes with a maintenance cost to manage a master data that serves all of these individual verticals. However big the amount seems, the cost is much lower than any business will pay for the unstructured and ambiguous information disbursal.
Cost of Integration
On the occasion of mergers and acquisitions, two companies are merging their master data. This is like the integration of two existing frameworks and will incur an IT cost. Once integrated, it would give the stakeholders all the visibility they need to control their operations. It would bring the much-needed calm after initial chaos, which would be lasting and improve organizational performance.
Analytics For Informed Decision Making
When data is unified, integrated, and properly maintained, setting up the metrics to assess the goals and outcomes is a cakewalk. Finding loopholes, what’s failing, and what’s working would eventually help the manufacturers make decisions aiming towards improving efficiency and bettering ROIs.
Why Master Management Data Strategy is Crucial to M&A Success in MedTech
Now that we have understood the importance of master data management in healthcare and medical devices industry, let’s look at why it’s crucial to the M&A success. Master Data Management is the focal point that keeps two entities in the deal connected, disbursing operations in a seamless and simplified manner. For instance, procurement can support manufacturing around the clock with a connected shop floor and improve production. Automating and integrating the Master Data introduces new capabilities such as real-time analytics, business intelligence, demand forecasting, and more. This leads to a smart, holistic approach towards agility and efficiency of manufacturing processes while keeping in mind quality and compliance.
Medical Device Regulatory Compliance
Digitally maintained master data applications lead to a faster alignment of the shop floor with the production needs, increasing responsiveness towards new regulatory requirements. Supporting cloud framework and built-in mobile applications help users get faster access to tailored data at the right interfaces.
Governed Process for Master Data Changes
We are dealing with data here! Sometimes, one minor change in one touchpoint might alter the course of operations for an entire system. It takes a lot to integrate and govern the process manually. Hence, automated maintenance modules make the job easier. With the help of new-age technology and AI, manufacturers can detect the impact of the changes in the entire system.
How to Tackle M&A Challenges in the Medical Devices Industry with Master Data Management
Integration and Business Excellence
Companies can expect better results from timely integration and training programs. Setting up the right framework and educating the workforce on the organizational changes simplifies the process. Keeping learning deeply contextual, mapping training content based on workflows ensures that workers are well-equipped with the latest involved processes.
Support Enterprise Growth
M&A is always a strategic move, especially when companies want to remain competitive in a changing environment with improved federal regulations, altered payment incentives, and increased demand for efficiency. Keeping IT high on the priority list and part of due diligence, develop a thoughtful plan and a concrete roadmap for organizational growth.
Centralization
The Healthcare industry M&A specifically has a higher number of complex IT operations, interfaces, and systems. Bringing it all together is half the job done. Therefore, centralization is essential to reduce any disruptions and facilitate seamless patient care.
Real-World Examples – MDM in Medical Device M&A
In the US in February 2021, recorded a total worth of $831.84 million M&A deals in medical device manufacturing. Veracyte acquired Decipher Biosciences at $600m. NuVasive’s acquisition of Simplify Medical at $150m. Mind Medicine MindMed’ acquired HealthMode at $32.66m. These are some of the most celebrated deals.
Data and information exchange also happens when any deal is cracked, and trusted data forms the basis of informed decision-making. A cloud-based Master Data Management system makes the job easier by matching, merging, and maintaining the data, providing a single unified view of customers, vendors, suppliers, and every stakeholder through one system from any location and on any device. This makes services more streamlined, consistent, and scalable.
The future of medical devices manufacturing looks brighter with more M&A and streamlined processes. Master Data Management is fundamental to connect the finer points in the system, erecting a sound architecture. In a world driven by data, MDM equips businesses to hold their ground in times of sudden disruptions and make smart moves towards optimizing productivity.
 
 
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