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Top 5 Hidden Costs of Delaying Digital Transformation in Life Sciences

by Mark Spencer | posted on June 26, 2025

In my last post, I explored the “Build vs. Buy” dilemma and offered five key questions to help life sciences organizations evaluate their platform strategy. Today, I want to focus on what happens when organizations don’t take action, meaning when digital transformation projects are delayed, deprioritized, or put on hold. The costs of inaction are real, and in our industry, they can be the difference between leading and falling behind.

Let me be clear: every day that life sciences organizations postpone digital transformation, they risk more than just missed deadlines. Delays erode competitive advantage, drain budgets, and, most importantly, slow the delivery of therapies and diagnostics to patients who need them. To make matters worse, the risks multiply with every month of delay. Here are the top five hidden costs every leader should consider:

 

1. Lost Productivity and Innovation

When your teams are bogged down by manual processes, fragmented data, and outdated systems, they spend more time “keeping the lights on” than driving innovation. Deloitte’s 2025 Life Sciences Outlook¹ highlights that nearly 60% of industry executives are increasing investments in digital technologies and generative AI, moving beyond pilots to realize value at scale. Organizations that accelerate digital transformation are already seeing stronger productivity and innovation outcomes. In life sciences, speed to insight and discovery matters… and delaying digital transformation means leaving productivity and breakthrough potential on the table.

 

2. Rising Costs and Budget Bloat

When digital transformation is delayed, inefficiencies and redundancies persist, and the financial consequences quickly add up. Manual, disconnected systems increase headcount requirements, lengthen project timelines, and lead to higher per-program spending. According to McKinsey², biopharma organizations that fail to streamline research and early development processes can face up to 40% longer cycle times than digital leaders, resulting in millions in extra costs for each asset. Over a full pipeline, these delays can add hundreds of millions in unnecessary expenses and drain resources that could be directed toward innovation. Every month spent relying on outdated systems compounds operational costs and inflates budgets, often with little to show for the extra spend.

 

3. Missed AI and Data Opportunities

Generative AI is already transforming life sciences… but only for those who act. Gartner³ predicts that 30% of generative AI projects will have to be abandoned after proof of concept by the end of 2025, primarily due to the lack of data readiness or delayed infrastructure investment. Deloitte’s research¹ also shows that biopharma companies could generate up to 11% in value relative to revenue through AI investments, while medtech firms could achieve up to 12% in cost savings within two to three years. In other words, delaying digital transformation means missing out on the full potential of AI and advanced analytics.

 

4. Regulatory and Compliance Risk

Compliance is non-negotiable in life sciences, and outdated systems only increase risk. Deloitte’s 2025 Life Science Regulatory Outlook⁴ emphasizes that digital transformation is essential for maintaining data integrity, streamlining audits, and ensuring timely, accurate regulatory submissions. Digital platforms provide the transparency, traceability, and automation required to stay ahead of evolving regulations. Delaying these upgrades means exposing your organization to unnecessary compliance risks and costly consequences.

 

5. Talent Drain and Turnover Overhead

The competition for talent in life sciences is fierce, and top performers want to work with modern, data-driven organizations. Companies that are slow to modernize struggle with knowledge retention, onboarding, and audit readiness, especially as teams evolve. McKinsey’s research⁵ shows that organizations with strong digital cultures empower their people to make the most of new technologies and retain critical expertise. A modern digital platform fosters an engaging, efficient, and stable work environment that attracts and retains the talent you need for the future.

 

The Bottom Line: Now is the Time to Act

Industry research is clear: the cost of delaying digital transformation in life sciences is far greater than the investment required to move forward. Every month of inaction means lost productivity, higher costs, missed AI opportunities, increased compliance risk, and talent challenges. The best time to act is now.

At L7 Informatics, we’re here to help you move faster. Whether you’re building, buying, or blending both. Our platform, L7|ESP®, is designed to unify your data, streamline your workflows, empower your teams, and accelerate your digital journey, all without disruptive rip-and-replace.

If you’re ready to explore how to reduce the hidden costs of delay, let’s start a conversation

 

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Sources

¹ Pete Lyons, Todd Konersmann, Leena Gupta, and Darshan Gosalia, Deloitte 2025 Life Sciences Outlook (December 10, 2024)

² Ahsan Saeed, Gaurav Agrawal, Guang Yang, and Stephan Wurzer, with Alana Horowitz, Daniel von Bornstädt, and Jan Günthner, McKinsey Report ‘Operational excellence in biopharma research and early development’ (January 9, 2025)

³ Gartner Predicts 30% of Generative AI Projects Will Be Abandoned After Proof of Concept By End of 2025 (July 29, 2024)

⁴ Paul Siver, Matin Shaikh, Shuba Balasubramanian, Clarissa Crain, and Jack Tanselle, “Deloitte 2025 Life Sciences Regulatory Outlook” (2025)

⁵ Hannah Mayer, Lareina Yee, Michael Chui, and Roger Roberts, McKinsey Report ‘Superagency in the workplace: Empowering people to unlock AI’s full potential’ (January 28, 2025)

ABOUT THE AUTHOR

Mark Spencer, President & CEO

Mark Spencer serves as the President and Chief Executive Officer of L7 Informatics, headquartered in Austin, Texas. He is a seasoned executive with substantial experience directing laboratory software technology enterprises in healthcare and life sciences. Previous to joining L7 in 2024, Mr. Spencer occupied prominent leadership positions at Clinisys and Abbott Informatics (StarLIMS). Throughout his professional tenure, he has been dedicated to advancing technological innovation to facilitate personalized medicine for patients. L7|ESP empowers biopharmaceutical clients to digitally transform and automate their Research & Development, Technology Transfer, Clinical, and Commercial Manufacturing processes, thereby expediting the safe and efficient delivery from conception to consumer.