Healthcare

From potential to performance by design Healthcare Report TCS AI for Business Study

2 TCS AI for Business Study – Healthcare Report About the TCS AI for Business Study TCS surveyed senior executives at almost 1,300 companies in 12 sectors across 24 countries, approximately half of which had annual revenues over US$5 billion. This report includes study findings from 80 survey respondents in the Healthcare industry, including from 49 provider and 31 payor companies What’s driving AI implementations? How is AI redefining the Healthcare industry? How are employees, skills and roles shifting? What customer engagement AI trends are emerging? Where is AI strategy headed in Healthcare? Are business results aligning with aspirations?

3 TCS AI for Business Study – Healthcare Report The findings in this report reflect a survey sample of 80 senior executives — CEOs, divisional and business unit heads, and senior VPs or VPs with profit-and-loss responsibility — working for major Healthcare companies headquartered in the following countries: Additionally, seeking to find correlations between a company’s business success and its approach to implementing artificial intelligence, each executive’s company was ranked alongside the others in that same industry for its financial success, as measured by a combination of revenue growth and profit growth over the last three years. These “Pacesetters” represent the top 28% of companies — 22 companies – among the Healthcare executives we surveyed. Where relevant, this report notes differences between the industry’s overall survey answers and the responses of its Pacesetters.  Australia  Belgium  Canada  Chile  Denmark  Finland  France  Germany  India  Ireland  Japan  Mexico  New Zealand  Norway  Spain  Sweden  UK  USA

The transformative potential of AI

5 TCS AI for Business Study – Healthcare Report An optimistic outlook on AI’s impact Few technology advancements have gripped the public imagination like artificial intelligence. The majority of senior executives in the Healthcare industry believe AI’s impact on their business model will be greater or equal to earlier disruptive technologies, and they’re optimistic about its potential. say they are optimistic or excited about AI’s potential impact on their business 56% believe the impact of AI will be greater than or equal to smartphones 61% 69% believe the impact of AI will be greater than or equal to the internet Q. How would you compare AI's potential impact on your business model with the following technological developments: Internet; smartphone. Q. Which of the following is closest to how you're feeling about AI's potential impact on your business?

6 TCS AI for Business Study – Healthcare Report Humans, not AI, expected to remain the competitive differentiator Q. In your business, which of these statements most closely matches your own expectations for how AI will impact decision making in the next 3-5 years? More than two-thirds of Healthcare executives say human creativity or strategic thinking will remain their company's competitive advantage. Most Healthcare executives believe that rather than replacing human workers, AI will augment and enhance human capabilities, enabling people to focus on higher-value activities that require creativity, empathy, and strategic thinking. 69% expect AI to make more tactical decisions, freeing up workers to think more strategically believe human intuition and creativity will remain central to their company’s competitiveness 29% 40%

7 TCS AI for Business Study – Healthcare Report Executives want to innovate and make money with AI The Healthcare industry is more focused on using AI to spur innovation and grow revenue than are most other industries. On a 10-point scale between “optimization” and “innovation,” Healthcare executives averaged 7.03, compared to an average of 6.70 for all other industries. Q. On a scale of 1 to 10 — where 1 is solely interested in using AI to lower costs and optimize operations and 10 is solely focused on spurring innovation and revenue growth — where would your company's current approach toward AI fall? 49% 24% 16% 10% 55% 32% 9% 5% Healthcare Focused on optimization, but with an eye toward innovation Solely or mostly focused on using AI to grow revenue and spur innovation Solely or mostly focused on using AI to lower costs and optimize operations Focused on innovation, but with an eye toward optimization Healthcare Pacesetter firms are firmly in the camp of using AI to focus on innovation and revenue growth. of respondents at Pacesetter organizations said they were primarily focused on innovation 86% said they were more interested in using AI to cut costs 14% Only PACESETTERS

8 TCS AI for Business Study – Healthcare Report Productivity is an AI benefit, but quality will be its lasting value Other industries (where declines in quality have less adverse results) tend to give more emphasis to enhancing productivity with AI than on improving quality. But over time, the more balanced the approach to integrating AI – through optimization, productivity, innovation and quality – the better the outcomes and the elevation to excellence. QQ. On a scale of 1 to 10 — where 1 is solely focused on using AI to improve quality and 10 is solely focused on using AI to enhance productivity — where would your company's current approach toward AI fall? On a 10-point scale between “improving quality” and “enhancing productivity,” Healthcare executives scored an average of 6.78, compared to the 6.91 average across other industries. Healthcare Pacesetters were even more focused on improving quality with AI, scoring 6.41. 46% 22% 25% 8% 41% 23% 27% 9% Healthcare Focused on quality, but with an eye toward enhancing productivity Solely or mostly focused on using AI to enhance productivity Solely or mostly focused on using AI to improve quality Focused on productivity, but with an eye toward improving quality PACESETTERS

9 TCS AI for Business Study – Healthcare Report Personalized interactions are top AI customer focus areas When it comes to customer engagement, organizations say they’re moving beyond commonplace chatbots. While chatbots for sales and product support remain important to Healthcare companies, their use is being supplanted by other AI-driven means to accomplishing these goals. 6% 23% 31% 43% 39% 33% 21% 8% Al-designed go-to-market strategies Gaining insights by analyzing customer behaviors and data More personalized, Al-driven interactions with our products/services themselves More personalized interactions/engagements for post-sales support (other than chatbots) More personalized interactions/engagements with our marketing initiatives (other than chatbots) Chatbots for product/service support Chatbots for marketing/sales support We are not exploring the use of Al in any customer interactions Q. In what ways are you exploring AI's impact on your relationships with customers?

The journey to AI

11 TCS AI for Business Study – Healthcare Report One size fits one? AI adoption strategies vary AI is not plug-and-play technology with a one-size-fits-all strategy, and the findings from Healthcare executives reflect their varied approaches to AI. Over a quarter favor establishing an enterprise-wide AI strategy – but nearly as many are willing to wait and see how other Healthcare companies use AI and follow their lead. Q. Rank three areas in order of importance to your company's leadership regarding the use of AI in the enterprise. want to establish an enterprise-wide Al strategy to maximize its benefits to the company 28% 21% want to stay true to their purpose and success model in exploring how they might leverage Al 25% want to experiment and take risks with Al to maximize its benefits 26% want to wait and see how Al gets used in their industry and follow the lead of others 18% P A C E S E T T E R S

12 TCS AI for Business Study – Healthcare Report Fast or slow, Healthcare organizations are adopting AI Q. What is the state of implementation for AI- enabled operations in the following areas of your company? While the pace of AI adoption differs, the ultimate objective is overwhelmingly consistent. The vast majority of Healthcare executives (91%) have AI implementations planned, in process or already completed. of departments are planning Al implementations 35% of corporate functions have Al implementations in-process or completed 56% 66% P A C E S E T T E R S

13 TCS AI for Business Study – Healthcare Report A gap between aspiration and reality Q. L ooking at your organization overall, which most closely describes your company's current relationship to AI? The merging of reasoning and recognition intelligence into generative models offers tremendous potential to help companies reimagine entire value chains and transform the way they do business . But most Healthcare respondents say they have a long way to go to realize these outcomes. say it’s currently a differentiating factor for business transformation Only 8% are cleaning up their data and moving it to the cloud 24% 18% P A C E S E T T E R S haven’t even moved beyond the initial AI exploration phase 28% 5% P A C E S E T T E R S

14 TCS AI for Business Study – Healthcare Report What’s hampering AI progress? Q. What are the top 3 challenges to making effective use of AI in your company? Cost of deployment Short-term thinking Current IT service providers Customers’ expectations Industry standards/regulations Current IT infrastructure 1st 3rd 2nd Healthcare All others Healthcare executives say the cost of deployment , their current IT service providers , and short-term thinking are slowing their overall AI efforts.

15 TCS AI for Business Study – Healthcare Report Generative AI brings its own set of challenges 51% of Healthcare executives surveyed expect up to half of their employees to be using GenAI on a daily basis within the next 3 years . Of issues that GenAI has brought to the fore, Healthcare executives say security and privacy concern them the most. Q. In three years, what percentage of your employees do you believe will be using/interacting with Generative AI capabiliti es on a daily basis? Q. Rank the top 3 statements, which most closely reflect how recent attention to Generative AI (specifically) has changed you r c ompany's assessment of AI's benefits and risks more generally Security and privacy focus Cultural shifts Top ranked GenAI adoption concerns Healthcare All others Ethical and responsible AI use 1st Increased focus on talent development and training Security and privacy focus Shift towards automation and efficiency Lack of IT readiness Increased investment in AI research and development Reevaluation of business strategies and models Increased focus on talent development and training 2nd 3rd 4th 5th

Balancing risk with opportunity

17 TCS AI for Business Study – Healthcare Report Making way for AI Q. Have you given any thought to how your company's strategic direction needs to be revised due to AI's potential benefits or risks for your organization or your industry? Introducing such powerful technology into organizations comes with a great weight of responsibility. Extensive preparation and stringent governance that foster trust in outcomes and investment values must go hand in hand with AI adoption. Healthcare businesses are not only aware of the changes involved, but actively planning for them. of Healthcare companies are currently reworking or are planning to rework how they operate across the enterprise 65% 86% P A C E S E T T E R S

18 TCS AI for Business Study – Healthcare Report Homegrown implementation prevails for now Q. On a scale of 1 to 5, how much are you relying on external vendor and partnerships (including academic or government partn ers ) for your AI implementations and how much are you doing in-house?; Q. Are you planning to create your own enterprise- specific LLMs for use in Generative AI implementations? plan to create their own enterprise-specific LLMs for use in GenAI implementations 46% say they are relying solely or mostly on in-house talent to implement this new technology 58% As AI preparation turns to implementation, organizations face numerous decisions to achieve the right mix of artificial intelligence and investment. Despite the complexity, over half of Healthcare companies are likely to rely on internal teams to develop and implement AI — even for tasks as difficult as creating their own enterprise-specific large language models (LLMs). 50% P A C E S E T T E R S

19 TCS AI for Business Study – Healthcare Report Implementation metrics fall short Healthcare executives say they need better KPIs to measure the success of their AI implementations. Without KPIs, organizations will struggle to demonstrate AI’s value and gain internal traction for its adoption. Only 23% say they have “good enough” metrics and KPIs for their current stage of AI deployment. 13% said they aren’t even aware of any useful metrics for AI implementations. Q. Which statement most closely matches how you feel about measuring the success of and financial return on AI implementations? need both 26% need better non-financial KPIs for Al-enabled operations 21% need better financial KPIs for Al-enabled operations 18% 65% need better metrics to measure the success of their Al implementations 73% P A C E S E T T E R S

20 TCS AI for Business Study – Healthcare Report Navigating ethical, security and privacy dimensions The debut of sophisticated AI applications has intensified the focus on security and privacy concerns, and the ethical dimensions of AI use have also garnered significant attention. Most senior Healthcare executives prefer global standards, debating whether specific use cases are better covered at this scale or more locally. Q. Which regulatory landscape is most appropriate for your business's use of AI? 1% think it's too early or unnecessary to regulate Al 18% prefer a heterogenous environment of local regulations 38% prefer global Al standards, plus specific regional controls 44% prefer global Al standards regulating specific use cases and outcomes

21 TCS AI for Business Study – Healthcare Report A regulatory partnership between industry and government More Healthcare executives think regulations should be established by governments than by their own industry. Close to half also think academic expertise deserves a seat at the table given how complex this technology already is and how quickly it is evolving. Q. Which organizations should be involved in establishing regulations about AI? Government 64% Industry 49% Academia 48% NGOs 18%

22 TCS AI for Business Study – Healthcare Report TCS recommendations Based on this research, here are our recommended next steps. Embrace an AI strategy based on prioritized initiatives and use cases that have the potential to drive tangible business outcomes. Focus on the business value, not the technology Invest not only in the necessary technology and infrastructure but in a culture that embraces change, experimentation, and continuous learning. Make your business & culture AI-ready Consider the broader strategic value of AI initiatives and how they can be used to improve operational efficiency, reduce risk, and enhance decision-making — all of which can contribute to overall business performance. Adopt a more strategic approach Let business and IT staffs focus on core competencies and strategic objectives, seeking partnerships and external expertise where appropriate, rather than shouldering the entire burden of AI implementation internally. Don’t go it alone Implement AI with the goals of expanding revenue, opportunity, and innovation, which offers the potential to create new jobs and enhance human capabilities. Plan for success, not scarcity Leverage more modern AI to deliver highly personalized, proactive and more value- added experiences across the customer journey for competitive differentiation and to build long-term loyalty. Create higher-level relationships with customers

23 TCS AI for Business Study – Healthcare Report Demographics: role and revenue Revenue representation (in USD) Role representation CEO Unit/divisional head SVP/VP (P&L responsibility) $500m to $1bn $5bn to $100bn $100bn+ $1bn to $5bn 1% 50% 39% 18% 31% 51% 10% Healthcare n = 80

24 TCS AI for Business Study – Healthcare Report Demographics: 24 countries represented in the study United States Canada Mexico United Kingdom Ireland Germany /Austria Switzerland France Netherlands Denmark Spain Luxembourg Belgium Norway Sweden Finland India Australia New Zealand Japan Colombia Brazil Chile Total = 1,272 Healthcare = 80 Note: All countries except for Austria, Brazil, Colombia, Luxembourg, Netherlands, Switzerland are included in the Healthcare sample

25 TCS AI for Business Study – Healthcare Report Demographics: 12 industries represented in the study Life Sciences Healthcare Energy & Resources Consumer Packaged Goods Communications, Media & Information Services Banks, Financial Services & Insurance Logistics Manufacturing Retail Technology Travel & Hospitality Utilities n = 1,272

26 Executive champions Dr. Harrick Vin Chief Technology Officer, TCS Abhinav Kumar Chief Marketing Officer, TCS Siva Ganesan Senior Vice President and Head, AI.Cloud, TCS Krishna Mohan Vice President and Deputy Head, AI.Cloud, TCS Sankaranarayanan “Shanky” Viswanathan Vice President and Head of Business Innovation, Chief Technology Office, TCS Nidhi Srivastava Vice President and Head of Offerings, AI.Cloud, TCS Suranjan Chatterjee Global Head of Engineering, AI.Cloud, TCS Ashok Krish Head, Advisory and Consulting, AI.Cloud, TCS Serge Vatin-Perignon Global Head, TCS Thought Leadership Institute Get more insights If you would like to get additional research based on the TCS AI for Business Study, visit on.tcs.com/2024-global-AI-study For more information or any feedback, email the TCS Thought Leadership Institute at TL.Institute@tcs.com The TCS AI for Business Study explores how companies around the world are looking at the strategic implications of AI technologies and how they are responding to its transformative potential. A survey of 1,272 senior executives with profit-and-loss responsibility at their companies was conducted November 28, 2023, through January 17, 2024, with responses from 24 countries across 12 industries, exploring the strategic implications of artificial intelligence and their expected impact on large, for-profit enterprises. Some data presented will not add up to one hundred percent due to rounding, and not every answer is included in the findings reported. About the Thought Leadership Institute Since 2009, the TCS Thought Leadership Institute has initiated conversations by and for executives to advance the purpose-driven enterprise. Through primary research, we deliver forward-looking and practical insights around key business issues to help organizations achieve long-term, sustainable growth. For more information, visit tcs.com/insights/global-studies For the most up-to-date content and news, download the TCS Perspectives app for your iOS and Android device. About Tata Consultancy Services Tata Consultancy Services is an IT services, consulting and business solutions organization that has been partnering with many of the world’s largest businesses in their transformation journeys for over 56 years. Its consulting-led, cognitive powered, portfolio of business, technology and engineering services and solutions is delivered through its unique Location Independent Agile™ delivery model, recognized as a benchmark of excellence in software development. A part of the Tata group, India's largest multinational business group, TCS has over 601,000 of the world’s best- trained consultants in 55 countries. The company generated consolidated revenues of US $29 billion in the fiscal year ended March 31, 2024, and is listed on the BSE and the NSE in India. TCS' proactive stance on climate change and award-winning work with communities across the world have earned it a place in leading sustainability indices such as the MSCI Global Sustainability Index and the FTSE4Good Emerging Index. For more information, visit www.tcs.com About the study