Functional medicine is rapidly gaining momentum as patients, providers, and investors look for more personalized, preventative, and outcomes-driven models of care. In this panel discussion, Rozy Vig, Ph.D., Managing Director in Healthcare Services at LEK Consulting, moderates a conversation on how functional medicine is evolving from a niche approach into a scalable, technology-enabled, and increasingly investable segment of the healthcare ecosystem.

Rozy is joined by Chris Dorn, Managing Director of HCIT at Fifth Third Securities, who brings an investor and deal-making perspective; Tom Blue, Founding Partner at Ovation Lab, a longtime leader in functional, integrative, and longevity medicine strategy; and Ryan Obermeier, Chief Commercial Officer of Evexia Diagnostics, who offers deep operational insight into the diagnostic infrastructure supporting functional medicine practices. Together, the panel explores what’s driving growth, where challenges remain, and how innovation, data, and AI may shape the next phase of the market.

“Functional medicine is fundamentally about looking beyond symptoms and asking what the underlying cause really is; it’s how we solve problems everywhere else in life, and it’s finally arrived in healthcare.” — Tom Blue

“We’re still in the early innings, but interest from investors, providers, and consumers has accelerated dramatically over the past few years.” — Chris Dorn

As the medtech contract development and manufacturing organization (CDMO) market matures, private equity (PE) investors are finding that scale alone no longer guarantees optimal valuation. Increased competition, integration risk and diminishing arbitrage have shifted the value creation imperative from aggregation to optimization. At L.E.K. Consulting, we see forward-looking sponsors asking a sharper question: How do we build an asset that is designed for a better exit from day one?

Our answer: a deliberate, multidimensional value creation strategy supported by operational discipline, commercial excellence and a robust, proactive “exit checklist” that transforms portfolio companies from good businesses into exit-ready platforms.

CDMO exit checklist: What maximizes valuation?

While not comprehensive, the following components are often key pillars of a value creation plan and can vary widely for specific medtech CDMOs depending on the historical context, management vision and roadmap.

• Commercial optimization
  • End market mix: Portfolio exposure to higher-growth markets and resulting weighted average market growth rate (WAMGR)
  • Customer mix and distribution: Diversified, strategic relationships
  • Commercial sophistication: Proven ability to acquire and grow strategic accounts (e.g., clear roles, aligned incentives, rigorous sales tools/processes, diversified pipeline)
  • Geographic footprint: Aligned geographically with original equipment manufacturer (OEM) supply chains, providing resiliency and cost effectiveness
• Operational optimization
  • EBITDA margins and trajectory: Clear and credible margin story at or above peer average
  • Product and service offerings: Full-service capabilities across preproduction, production and postproduction; internally integrated for effective handoffs and cross-selling
  • Technical capabilities: Demonstrated depth of technical expertise
  • Compliance and scalability: Quality systems and infrastructure designed to scale

The waning effectiveness of the traditional rollup model

While there is still plenty of room for consolidation, the market is increasingly crowded and multiple expansions and arbitrage can no longer be relied upon as a primary source of value creation. All this results in the increased importance of a proactive exit checklist to create incremental value. Value creation plans are not a new concept, but the confluence of macroeconomic trends (e.g., supply chain disruption, inflation, tariffs), CDMO consolidation and added complexity, and evolving medtech OEM priorities (e.g., return to margin, segment focus, destocking, new launches) have added complication to historical value creation playbooks.

A smarter value creation approach: Beyond the basics

To deliver outsized returns, PE sponsors must encourage management teams to mature from episodic initiatives to a multidimensional, ongoing value creation model. A clear strategic value creation vision should be ready early in the investment hold period (optimally from day one) and should be designed with the exit in mind. Below is a selection of value creation pillars L.E.K. regularly leverages to support medtech CDMO value creation.

Exit checklist: Example commercial optimization pillars

Growth strategy in the core markets and customers we know well versus the adjacent markets and customers we should expand into:

• WAMGR-driven prioritization: Are we in the right end markets?
• Customer segmentation and white space mapping: Are we active with the right customers? Are we reaching their correct divisions? Said differently, is our CDMO “winning with the winners”?
• Geographic expansion strategy aligned with regulatory capabilities: Where can we go next?
• Technical adjacency strategy: What technical capabilities should we add next? What new programs, new parts of current programs, new customers or new markets might that position us for? Do we have differentiated technical capabilities for mission-critical parts or key bottlenecks in the supply chain?

Commercial excellence in an increasingly sophisticated medtech CDMO market:

• Go-to-market (GTM) model design for new services or geographies: Is our GTM model (channels, coverage, partnerships, pricing and support model) fit for purpose for the priority target customer segments?
• Sales force effectiveness and account targeting: Are our reps targeting the right platforms at the right OEMs at the right time?
• Business development: How concentrated or diversified is our pipeline by product/platform, by OEM customer and by market? Are we landing and expanding across decentralized OEMs effectively?
• Key account management and pricing discipline: Are we treating all customers equally? Do we have a structured tiering to balance resource utilization and return with our key customers? Are we giving white-glove service to those customers that deserve it?
• Talent: Do we have the right mix of sales talent to balance “hunting” and “farming” expectations?
• Commercial enablers: Does the organization have the right tools, processes and enabling functions in place to effectively and efficiently target and convert priority customers?

Pricing strategy in what has historically been a “cost plus” environment that leaves value on the table:

• Margin value capture: Are we capturing the value we are creating (especially in mission-critical applications or complex device programs)?
• Contract architecture (volume tiers, inflation pass-throughs): How do we protect ourselves against cost, inflation and tariff uncertainty?
• Pricing processes: Are we limiting our financial returns due to process, people and tool limitations when quoting business?

Exit checklist: Example operational optimization pillars

Margin levers and scalability

• Cost structure: What are the largest cost drivers that could be optimized through various mechanisms (e.g., automation, computer vision quality inspections, procurement, use of artificial intelligence in back-office functions)?
• Facility readiness (i.e., capacity, throughput, downtime): Are we buying an asset that can keep up with demand in priority markets, especially high-growth markets (e.g., the pulse field ablation revolution in electrophysiology)?
• Quality systems’ robustness and regulatory risk: How sophisticated is the asset in managing quality and regulatory risks?
• Scalability of standard operating procedures, enterprise resource planning (ERP) and workforce capabilities: How hard will it be to find, train and retain requisite skilled labor to scale the business?
• Operational competitiveness: How do our roles, resourcing, key performance indicators and ways of working stack up to the competition’s?

Capability/asset integration

• Functional integration (e.g., finance, quality assurance, supply chain roadmaps): What is essential for day one? How do we ensure no deterioration of out-of-tolerance or failure rates? How do we capitalize on improved buying leverage with key vendors?
• System and process harmonization (e.g., ERP, manufacturing execution system, quality management system): Where, if at all, do we harmonize with other existing businesses?
• Cultural alignment and leadership continuity: How can we proactively address cultural friction that could lead to loss of key engineering or sales talent, and do we have the right leadership for the long term?
• Synergy-capture tracking and governance: How do we deliver and diligently track the synergies identified (e.g., general and administrative, work transfers that enable right-sizing capacity or labor efficiencies, capabilities cross-sell)?

Conclusion: Designing for exit from day one

The playbook is changing. Scale alone no longer commands premium valuation. Today’s buyers want operational maturity, growth potential and defensible commercial strength. By embedding structured diligence, a strong integration capability and targeted value creation levers early in the hold period, PE sponsors can create assets that are not only scalable but also prepared for a more optimal exit from the beginning of the holding period.

L.E.K. brings the sector insight, toolkits and rigor to help medtech investors transform good assets into great exits.

For more information, please contact us.

L.E.K. Consulting is a registered trademark of L.E.K. Consulting LLC. All other products and brands mentioned in this document are properties of their respective owners. © 2026 L.E.K. Consulting LLC

Artificial intelligence (AI) is gaining real traction within operations across the energy sector. Limited trials have given way to broader deployment, and it is becoming a part of how utilities and oil and gas (O&G) operators manage commercial growth, reliability, risk, cost and system planning. L.E.K.’s 2025 Global Energy Study captures this shift clearly.

Adoption is increasing across the value chain, though progress is uneven and often held back by data limitations and organizational hurdles. Even so, companies remain committed to strengthening the foundations required for reliable, scaled use.

AI adoption is expanding into high-value workflows

Viewed through L.E.K.’s AI Delta lens, AI use cases typically fall into three categories: performance (driving efficiency, reliability and cost reduction), competitiveness (improving decision quality and commercial outcomes), and differentiation (enabling new business models and revenue streams). Today, energy companies are deploying AI most actively in performance use cases, with selective progress in competitiveness applications and more limited adoption of differentiation-driven models. This pattern reflects a sector focused on reliability and near-term value creation as it moves from pilot activity toward broader, scaled use.

Utilities are taking the lead in operational AI. Survey data shows that 62% use AI for energy-demand forecasting, helping operators anticipate load more accurately during periods of rising electrification. Fifty-three percent use predictive maintenance and asset monitoring tools, which aid early identification of equipment risks and reduce unplanned outages.

Utility adoption extends beyond system operations. Forty-eight percent apply AI to customer experience and service management. A smaller share deploy AI in supply chain and procurement functions, reflecting slower data standardization in those areas. These patterns signal steady movement toward broader digital operations, with a clear priority placed on applications that strengthen reliability.

O&G companies show a distinct pattern. More than half rely on AI for market-sentiment modeling and performance analytics. These tools support trading, planning and operational scheduling. Additional use cases include inventory optimization, supplier-risk analytics, anomaly detection and real-time drilling support. Uptake varies widely across these applications, with analytical functions seeing higher adoption than field-level automation.

Together, these results show that AI is taking on a more central role. Usage is rising where data volume is sufficient and where the link between model output and operational efficiencies is direct (see Figure 1).

Scaling hinges on data readiness and process integration

AI expansion brings operational constraints. Survey respondents identify three barriers more often than others: data quality limitations, workflow integration challenges, and governance gaps around ownership and oversight. These issues appear across both utilities and oil and gas firms.

Implementation difficulties are cited most frequently, with more than one-quarter calling them the clearest bottleneck. Executives describe cases where model accuracy is strong but integration into existing workflows remains incomplete. Others highlight inconsistent data availability or insufficient feedback loops for model refinement. These challenges limit AI’s reliability in production environments.

Importantly, these constraints are less about the underlying technology and more about organizational readiness. As seen across other asset-intensive industries, the majority of AI value creation depends on process integration, data quality and operating-model alignment rather than model performance alone. Without clear ownership, redesigned workflows and consistent governance, even technically robust AI solutions struggle to deliver repeatable impact at scale.

Companies are addressing these issues through infrastructure upgrades and more structured approaches to deployment. More than half identify IT system modernization and data platform improvements as top priorities. Many are also advancing initiatives to clarify governance, improve data hygiene, and ensure alignment between digital teams and operational leaders.

The study’s interviews reinforce this picture, as leaders point to a real need for standardized inputs and clearer accountability. These steps determine whether AI contributes consistently to operational or commercial results.

Return on investment remains difficult to capture, yet long-term confidence is strong

Executives express a mix of caution and confidence when evaluating AI’s current value. Some rely on AI in limited settings, while others apply it broadly yet struggle to quantify the impact. Data fragmentation and incomplete integration are some of the biggest roadblocks which continue to inhibit performance.

The long-term view is markedly more optimistic than the current assessment. While only 49% of utilities and 44% of O&G respondents believe their organizations are fully realizing AI’s value today, that figure rises to 83% and 78%, respectively, when looking ahead 10 years. This gap highlights a consistent pattern across the sector: Leaders recognize that meaningful value has yet to be captured at scale, but remain confident that the underlying opportunity is substantial (see Figure 2).

Segment-specific trajectories are taking shape

Utilities: Strengthening system intelligence

Utilities rely on AI to improve forecasting accuracy, enhance asset visibility and support outage management. These applications help operators manage load variability and rising levels of distributed generation. AI adoption is also growing in customer-facing tasks, especially those that benefit from real-time service data. Utilities remain cautious about more advanced operational applications, reflecting the need for stable data foundations.

O&G: Deepening use of analytics and optimization

O&G companies emphasize commercial and analytical use cases. Market models, performance analytics and inventory optimization tools are among the most common applications today. More advanced operational capabilities such as virtual flow metering or real-time drilling optimization show lower penetration but rising interest. Adoption is accelerating in areas with clear links to cost reduction and risk management.

This trajectory helps explain why O&G executives express particularly strong confidence in AI’s long-term impact. A significant majority believe AI will materially reshape O&G networks over the next decade, reflecting the breadth of potential applications across upstream, midstream and downstream operations. Each segment is building AI maturity through applications aligned with its operational priorities (see Figure 3).

AI is becoming an integral part of how energy companies run their systems. Future progress depends on stable data, coherent governance, closer integration between technical and operational teams, and consistent deployment through the workflow.  Together, these factors increasingly determine whether AI remains a collection of pilots or becomes a durable engine of operational and commercial value.

This article concludes our Powering Forward series which examines the realities of the energy transition in 2025.

Across the series, we explore how energy leaders are recalibrating capital allocation, strengthening grid resilience and embedding AI into core operations.

Explore the full series:

• Powering Forward: Energy’s Next Phase
• Powering Forward: 2025 Energy Transition Snapshot
• Gridlock or Go? Why Grid Resilience Is the New Bottom Line

How L.E.K. can help

Our teams advise energy leaders on where to invest, how to build the data, process and operating foundations for AI at scale,and when to accelerate transition bets. Our 2025 Global Energy Study provides the data and insight and our consulting expertise helps clients translate these findings into decisions that create value today and secure a position for tomorrow.

For more details on the full study or to learn how these insights apply to your business, please contact our global energy team.

L.E.K. Consulting is a registered trademark of L.E.K. Consulting LLC. All other products and brands mentioned in this document are properties of their respective owners. © 2026 L.E.K. Consulting LLC

Electricity networks are quickly becoming the defining constraint of the energy ecosystem. The network was not built for today’s demand profile, and it shows. Surging electrification and industrial load growth, coupled with unprecedented data center expansion, are stretching grids that were already under pressure from aging assets and unpredictable weather.

The result is a structural mismatch. Demand is accelerating faster than grid reinforcement can keep pace, and utilities are now reorienting capital programs in an attempt to respond. L.E.K.’s 2025 Global Energy Study reveals a sector moving urgently to protect the backbone of modern energy systems, with grid readiness becoming as important as generation itself.

A demand surge the grid cannot ignore

Executives across the power sector describe a common challenge: Growth is arriving faster than the network can respond. U.S. utilities report multiyear load increases driven by hyperscale data centers and industrial expansion. Dominion Energy, for example, expects 6%-7% annual growth in Northern Virginia in contrast to a historically flatter demand profile.

In Europe, demand growth is less concentrated but still rising, driven by electrification and data-intensive infrastructure, placing sustained pressure on networks even where year-on-year increases are more modest. In the UK, the National Energy System Operator (NESO) expects electricity demand to rise steadily through the 2030s, reversing decades of flat consumption.

This surge in consumption requires large-scale reinforcement. Duke Energy allocates roughly half of its five-year plan to modernization, grid hardening and substation upgrades. European utilities are prioritizing digitalization and network intelligence to integrate renewables, electric vehicles and battery projects efficiently.

The message is consistent across regions: Demand growth is structural, and grid strength is now a prerequisite for system reliability.

Grid modernization is the priority

L.E.K.’s survey data reinforces this direction. Most utilities are investing in grid modernization, alongside backup or dispatchable power, reflecting a recognition that capacity constraints and intermittent generation cannot be resolved through new supply alone.

Transmission and distribution (T&D) dominate near-term investment priorities. Utilities rank T&D network upgrades as their most likely area of investment, well ahead of new generation technologies (see Figure 1). Modernization efforts include the reinforcement of substations and lines, storm hardening, the use of smart devices, cybersecurity improvements and the integration of battery storage.

This represents a decisive turn from a generation-led transition to a grid-first approach. Executives are making clear that system flexibility and resilience must underpin any credible decarbonization pathway.

The data center effect: A new reliability stress test

The exponential rise in data center demand is intensifying pressure on already-constrained grids. Utilities report multigigawatt clusters requiring near-continuous power and full redundancy. Survey responses confirm a growing dependence on temporary behind-the-meter (BTM) solutions as interconnection queues and equipment bottlenecks slow grid access (see Figure 2).

This is consistent with our recent client engagements, which indicate that BTM use for data centers is set to more than double between 2026 and 2030 as operators seek reliable, controllable power sources. The trend is also mirrored in our study, with 63% of oil and gas respondents that lack confidence in the grid now adopting BTM solutions to maintain project certainty.

This creates a two-speed system: Grid upgrades take years; data centers scale in months. BTM generation provides a bridge for operators, but companies consider it a short-term workaround of less than two years rather than a structural solution. The long-term answer remains the same across the board: grid capacity, reinforced and modernized to handle both daily load and future growth.

A new reliability equation for renewables and gas

The growing share of renewables has brought valuable generation diversity, but it has also raised concerns about firm capacity. Our survey reveals that 59% of utilities believe renewable intermittency poses a risk to power reliability. In response, storage integration is becoming central to resilience planning. Battery systems are ranked in the top tier of five-year investment priorities, reflecting a shift from seeing storage as a supplementary asset to recognizing it as integral to network stability.

Utilities are also turning to flexible gas capacity to stabilize the system. When asked about expected baseload generation composition, respondents forecast natural gas to remain the largest share through 2030. However, only 22% are confident that new gas plants can meet near-term demand. This reflects a practical need for dispatchable power during a period of intense load growth and infrastructure strain. In a recent discussion, a leading U.S. investor-owned utility cited a major “shift of the center of gravity from what has been solar to natural gas-focused generation priorities.”

Regional dynamics: Different pressures, similar priorities

The pressures on grids vary by region, even as investment priorities converge.

The U.S. faces the steepest load increases, propelled by AI-driven data centers and industrial reshoring. Companies such as Duke Energy, Dominion Energy and Southern Co. have increased capital plans to expand and reinforce transmission and distribution networks, citing the need to connect large new loads while strengthening resilience against extreme weather.

European utilities face a different set of challenges. Demand growth is more moderate, but high renewable penetration and increasingly interconnected markets place a sustained strain on networks. Companies such as E.ON are directing the majority of capital toward network expansion and digitalisation to manage congestion, integrate renewables and maintain system stability.

Across regions, the objective is consistent. Whether driven by load growth or system complexity, utilities are investing to modernise networks, improve resilience and unlock additional capacity, reinforcing the grid’s role as a critical enabler of reliable power systems.

From bottleneck to enabler

Grid modernization is now the foundation of the energy transition. Investment logic has shifted from supply-side expansion to system-level resilience. Utilities are directing capital to the assets and technologies that guarantee reliability, create capacity for large-load customers and integrate renewables without compromising stability.

The pace of the transition will be determined by the strength and readiness of the networks that support it — and utilities are acting to ensure those networks are ready.

This article is part of our Powering Forward series:

• Powering Forward: Energy’s Next Phase
• Powering Forward: 2025 Energy Transition Snapshot
• AI Breaks Out: From Pilot Projects to Energy’s Digital Engine

How L.E.K. can help

Our teams advise energy leaders on where to invest, how to build resilient infrastructure and when to accelerate transition bets. Our 2025 Global Energy Study provides the data and insight; our consulting expertise helps clients translate these findings into decisions that create value today and secure a position for tomorrow.

For more details on the full study or to learn how these insights apply to your business, please contact our global energy team.

L.E.K. Consulting is a registered trademark of L.E.K. Consulting LLC. All other products and brands mentioned in this document are properties of their respective owners. © 2026 L.E.K. Consulting LLC

CPM software is drawing renewed attention amid a broader wave of investment across office of the CFO solutions. What used to be cyclical budgeting and planning is now broadly expected to function as a live decision system. CFOs want real-time visibility into performance, not just month-end outputs. Furthermore, vendors have pushed CPM solutions beyond finance-only use cases, making CPM relevant to operations, sales, human resources and marketing as seen with extended planning and analysis (xP&A).

As explored in a recent edition of L.E.K. Consulting’s Executive Insights on accounts receivable and accounts payable modernization, finance systems across the office of the CFO are being rebuilt around real-time data and AI. CPM solutions reflect a different expression of that shift; they are focused on enabling forward-looking, cross-functional decision-making rather than transactional efficiency.

The category is growing, but investor appetite hinges on hard questions: Can CPM solutions vendors maintain differentiation as ERP offerings improve? Is AI delivering measurable workflow value today? Which vendors can effectively serve different customer segments without adding unnecessary complexity? These questions matter more as transaction activity picks up and acquirers sharpen their evaluation frameworks. 

What is CPM and how does it differ from FP&A?

“CPM” still means different things to different people, complicating how buyers and investors evaluate vendors. CPM is best understood as the evolution of traditional FP&A.

FP&A historically meant periodic budgeting, forecasting and variance review. CPM takes that foundation and adds the capabilities leaders now expect: more frequent updates (including near real-time), scenario modeling and analytics that support planning and decision-making rather than retrospective reporting. Two shifts enable this:

1. CPM pairs traditional FP&A workflows with business intelligence (BI)-style capabilities, enabling users to pull live snapshots rather than waiting for quarter-end reports.  
2. It extends planning beyond finance through xP&A, turning what used to be a CFO dashboard into an operational tool for sales, supply chain, marketing and other functions.

For example, rather than finance producing a quarterly forecast in isolation, a CPM solution enables teams to pull live snapshots of performance and model the potential impact of pricing, hiring or operating changes, with finance, sales and operations working from the same planning model (see Figure 1). 

Why CPM is gaining traction now

Three demand drivers are converging, with disproportionate impact on CPM relative to other office of the CFO systems (e.g., transactional point solutions).

Finance teams are hitting scalability limits. Manual processes, data fragmentation and spreadsheet dependency create bottlenecks. Leaders want snapshots in time, not just quarterly narratives, which pushes planning from a recurring fire drill into an always-on capability best supported by CPM platforms.

The CFO role keeps expanding. CFOs are increasingly responsible for strategic planning, capital allocation and value creation alongside chief executive officers (CEOs) and boards. That shift raises the bar for finance systems, with CPM expected to support real-time decision-making rather than retrospective reporting, reflecting a growing overlap between CFO and chief operating officer (COO) responsibilities. This convergence is explored in our recent piece on CFO-COO alignment.

xP&A is pushing CPM beyond finance. Planning and analysis are no longer viewed as finance-only outputs. Sales, operations, supply chain, marketing and IT want shared planning models and a single source of truth for live performance data. This cross-functional demand is one of the clearest drivers of sustained CPM solution adoption.

These forces are pulling CPM into new territory, and vendor responses vary widely.

How vendors are positioning and where gaps remain

CPM vendors have entered the market from different starting points, including financial close, FP&A and more specialized reconciliation workflows. Over time, functionality has converged as vendors expand to address broader planning, reporting and decision-making needs. 

Three shifts define the current era:

1. Cloud and integration maturity: There are more data sources, more connectors and more ability to pull from ERPs, customer relationship management (CRM) systems, human resources information and other operational systems into a unified planning layer.
2. Analytics as core, not adjacent: BI-like capabilities have become part of the value proposition rather than a separate system that finance “also uses.”
3. Broader stakeholder set: CPM increasingly serves finance plus the rest of the business through xP&A, which changes who influences buying decisions and what features matter.

Buying behavior increasingly favors platforms that unify data and workflows rather than point solutions that create reconciliation headaches. Integration and data security are table stakes. Differentiation comes from usability, real-time analytics, implementation ease and whether the platform can handle complex planning requirements without breaking.

All three shifts raise the same question: What actually differentiates vendors now? AI is often part of the answer, though its role varies in practice.

What role does AI play in CPM?

CPM is well-positioned for AI because it’s data-heavy, recurring and central to how leadership measures performance. The harder question is whether those features land in real workflows, across messy data environments, in ways CFOs trust enough to act on.

AI in CPM isn’t a single story. There’s already meaningful value in machine learning-driven capabilities: predictive forecasting, anomaly detection, pattern recognition and automated data cleansing. Generative AI use cases in CPM solutions are emerging, but adoption remains uneven. These use cases primarily appear in natural language querying, automated variance explanations and narrative reporting layered on top of existing models. The gap between roadmap promises and production deployment matters more for investors evaluating defensibility than it does for buyers focused on immediate workflow improvements.

Beyond AI adoption, the next biggest strategic question facing CPM vendors is platform consolidation.

Will ERPs absorb CPM functions?

This debate keeps surfacing, and it’s the one that most directly affects how durable CPM solution vendors will be.

There’s a credible case for CPM solutions as a durable best-of-breed layer:

• Large and complex organizations may have multiple ERPs across entities, so CPM solutions serve as connective tissue that no single ERP can provide.
• CPM solutions pull data beyond ERP (including from CRM systems, operational systems and departmental tools), expanding their role beyond financial data aggregation.
• ERPs have historically been more rigid and slower to deliver the analytics and cross-functional planning capabilities buyers want.

There’s also a credible case for ERP disruption:

• CPM solutions are increasingly viewed as a core operating layer for finance, making them deeply embedded in workflows.
• That centrality makes CPM a natural consolidation target for broader platforms seeking to own planning and analytics end to end.
• If ERP vendors close the gap on analytics, planning user experience and cross-system integration, significant portions of CPM functionality could compress into broader suites.
• Large enterprise buyers often prefer fewer vendors, and ERPs have existing vendor relationships and implementation infrastructure.

CPM capabilities continue expanding even as ERPs improve, sharpening questions about where planning and decision support ultimately reside. Surviving vendors will need clear answers to the question of what they do that ERPs can’t or won’t do and whether that differentiation is defensible.

How should investors evaluate CPM vendors?

CPM remains an attractive category, with sustained demand driven by expanding planning use cases, cross-functional adoption and increasing strategic relevance within the office of the CFO’s tech stack. At the same time, that relevance has intensified competitive pressure as more platforms push into planning and analytics.

Vendors now face pressure from two directions: ERPs are expanding upward with better analytics, and emerging players are competing on faster implementations. Which solutions justify their position in an increasingly consolidated stack?

For investors evaluating CPM vendors, the key questions are:

• Does the product offer genuine differentiation in analytics and planning capabilities, beyond surface-level feature parity?
• Is AI delivering measurable user value beyond roadmap positioning?
• Can the vendor remain durable if ERPs continue improving their planning workflows?
• Will the vendor be able to expand into new customer segments without adding unnecessary complexity?

The category has momentum along with real strategic questions. For most buyers, CPM is unlikely to be swapped out wholesale for ERP-native functionality in the near term. Instead, differentiation will hinge on how vendors defend their role as planning systems evolve, ERPs expand capabilities and buyers reassess where advanced decision support truly belongs.

Our Financial Services team helps investors and software leaders navigate investments across the office of the CFO’s tech stack. We bring deep expertise across CPM, ERP and related financial software to uncover growth opportunities, support transactions and guide strategic decisions. Contact us to explore how we can support your next move in this space. 

L.E.K. Consulting is a registered trademark of L.E.K. Consulting LLC. All other products and brands mentioned in this document are properties of their respective owners. © 2026 L.E.K. Consulting LLC 

Beauty and personal care services are often treated as a single category, but consumers do not think about them that way when it comes to budgeting. L.E.K. Consulting recently conducted a consumer study on pricing perceptions within multiple beauty service categories. We found that the same pattern repeats: Consumers sort services by how essential they feel, how often they use those services and how difficult it is to “do it yourself.” They then apply different rules about what feels like a fair price, what feels expensive and what is easy to postpone when budgets are tight. This is why pricing playbooks that work for one service can fail quickly in another, even when the underlying operations look similar.

To make this concrete, we will compare three common beauty services: haircuts, massages and microneedling. Haircuts are viewed as an everyday essential “critical moment” that creates price resilience even as a consumer’s budget fluctuates. Meanwhile, massages and then microneedling begin to be seen as an indulgence or a lower-frequency “treat” with price thresholds that drive strong and sensitive value expectations (see Figure 1).

Shaping the pricing resilience story: Essentiality and frequency

When a service is both frequent and perceived as essential (see top left “Critical moments” in the figure), it is more resilient to (although not completely unaffected by) price changes driven from macroeconomic impacts such as inflation. In these categories, the challenge is usually not whether people will still buy, but whether service providers can ensure predictable demand.

On the flip side, when a service is less frequent or more discretionary, price sensitivity typically rises because consumers have the option to delay the experience or to simply decide they can live without it for now. In these categories, it becomes less about small price moves and more about whether the perceived quality or consistency of the experience justifies the spend.

Finally, the highest-price, lowest-frequency services face the steepest drop-off when prices rise, but they deliver strong margins when value is well articulated.

This pattern is consistent with what we have seen in other fixed-capacity service domains. In a tougher macroeconomic environment, price change resilience increasingly depends not just on category, but also on how effectively businesses lock in repeat behavior and concentrate demand among their most loyal customers. For example, in the car wash sector, disciplined menu design, smart memberships and clear price governance help operators keep volume and cash flow steady, especially when inflation puts pressure on both consumers and operators.

Drivers of willingness to pay

Across beauty services, the study revealed a simple truth: Consumers pay for what feels good and what feels fair. Providers often overestimate the role of branding and underestimate the basics.

Haircuts tend to behave like a staple. They are high-frequency, socially visible and hard to postpone indefinitely without feeling the trade-off, which is why demand is typically more resilient to price changes. In practice, this means haircut pricing can often sustain demand even when prices increase. But consumers still expect the salons to be clear about what is being paid for, with whom they are booking and why one option costs more than another (e.g., stylist experience level). The opportunity is not to complicate pricing, but to reinforce predictable behavior through value structures that feel natural for a routine purchase.

Massages usually exhibit mixed results in terms of price change resiliency because they can be maintenance expenditures for some customers and indulgences and/or gifting occasions for others, even for those within the same income bracket. This also results in consumers’ dependency on consistent quality, since they will pay when the experience reliably delivers but will trade down or space out their visits when quality feels variable. In short, pricing power is earned through service quality and repeatability.

Microneedling is typically a premium, lower-frequency service, and that combination tends to create the sharpest thresholds. Consumers expect a clear value proposition — with service speed and ease of scheduling playing outsized roles — because they are making a deliberate, higher-stakes purchase rather than following a routine habit. More importantly, the higher-stakes purchase is also based on the trust a consumer has in a provider who has the experience, training and equipment to ensure the microneedling is done correctly.

For operators, this has two practical consequences. First, if service quality is really the product, then the consumers’ experience with an individual provider becomes the core economic unit because consumers will follow a person more readily than they will stay loyal to a brand. Second, if transparency is what builds trust, then unclear pricing, inconsistent inclusions and surprise fees tend to trigger immediate elasticity, even in categories where consumers are otherwise willing to spend.

A frequently missed dimension: Workforce segmentation

Beauty services are fixed-capacity businesses where the binding constraint is practitioner time, and not all time is equal. When consumer budgets tighten, the highest-performing and more experienced stylists and practitioners tend to drive outsized retention, higher tickets and greater resilience. This means pricing strategy should explicitly support their retention. Stylist capacity is not interchangeable.

For salons, this creates a clear imperative: Pricing, loyalty and scheduling strategies should explicitly support the retention of top talent, not just the acquisition of new customers. Effective talent strategies increasingly combine flexibility and earnings potential, with income covering a range that encompasses base compensation, variable upside, benefits and demand stability. Segmenting the workforce by value contribution (rather than tenure alone) allows operators to align pricing, loyalty benefits and growth investments with the stylists who most directly drive customer lifetime value and reinforce the consumer relationship with the talent and, by extension, with the salon.

Pricing strategy: One model does not fit all

Because the value perception and buying cadence are different, consumers do not expect the same pricing model across all beauty services. For haircuts, straightforward upfront pricing tends to remain the anchor, but there is a growing trend toward bundles or memberships that reward routine behavior with predictable scheduling or preferred-provider access rather than blunt discounts. For massage, multi-visit packages and loyalty tiers can work well when they reinforce consistency and reduce friction, especially if the benefits feel like access and convenience rather than price cutting. For microneedling, structured series packages can resonate with customers who want a treatment plan, while clear per-session pricing and transparent policies matter more to customers who are cautious about upfront commitments.

Across categories, loyalty programs and memberships represent a growing lever to stabilize demand, smooth revenue and increase customer lifetime value (particularly as consumers become more selective in where they spend). However, the point is not to push everyone into memberships, but to use the right mechanisms to make value apparent through features such as priority booking and preferred-provider access.

The hidden revenue engine: Add-ons and bundles

We found a striking insight in the study across all three services — consumers’ openness to add-on or ancillary services, which is a revenue lever underutilized by many providers. Add-on interest runs high across categories: approximately 47% for haircuts (conditioning, scalp treatments), about 53% for massage (aromatherapy, facials) and approximately 67% for microneedling (Botox, filler, facial upgrades). These add-ons can expand the ticket without forcing a base price increase that consumers may see as a fairness test, and they can also help operators create tiers that feel grounded in real value. Bundled services (e.g., hair + nails, massage + facial, microneedling + skincare) can help justify premium pricing while reinforcing perceived value.

In beauty, add-ons do more than drive revenue per visit. They create a way to further monetize services provided by top-tier talent while keeping an accessible entry point for newer practitioners. They also can make premium pricing feel justified because the consumer sees a fuller outcome rather than a higher line item.

What it all means for beauty operators and investors

Pricing in beauty works best when it starts with how consumers budget, and not with how operators wish they would buy. In an environment where consumers are more selective, resilience to price changes increasingly depends on building trust through transparency and ensuring willingness to pay by providing consistent quality, along with designing pricing strategies that drive demand among consumers with their go-to providers.

L.E.K. Consulting is a registered trademark of L.E.K. Consulting LLC. All other products and brands mentioned in this document are properties of their respective owners. © 2026 L.E.K. Consulting LLC

In most states, managed services organizations (MSOs) let investors deploy capital into law firms without violating ethics rules that prohibit nonlawyer ownership. Recent regulatory opinions have clarified how these structures can work within existing rules.

For more on how MSOs are structured, see Part I of our series. Part II focuses on the investment case: deal economics, practice area fit and what separates successful platforms from failed ones.

MSO payment models

MSO investors deploy capital through infrastructure acquisition (office leases, technology systems, equipment, operational contracts) and growth investments (marketing spend, intake operations, business development). The MSO is compensated through a management fee defined in the management services agreement.

Two payment structures dominate:

Flat-fee model: A midsize firm generating $20 million in annual revenue might pay an MSO $18 million annually to handle all nonlegal operations. If the MSO’s actual costs are $15 million, it earns $3 million in profit while the firm retains $2 million. The fee remains fixed regardless of firm performance.

Cost-plus model: A smaller personal injury practice with $5 million in revenue might use cost-plus pricing, reimbursing the MSO for operating costs plus a 15% margin. If the MSO invests $8 million to scale marketing, driving firm revenue to $12 million, the MSO earns $1.2 million in profit. The structure remains compliant because the margin is fixed, not tied to legal revenue percentages.

The critical variable is durability. Investors underwrite the management services agreement as the foundation, typically a long-term contract with renewal and termination protections. Since the MSO fee is paid before partner distributions, successful deals build alignment through fair market value fees, scope adjustment terms and rollover equity.

Value creation at the MSO level

Returns come from two mechanisms:

Margin expansion: Operational efficiencies from standardized processes, vendor negotiations and technology deployment allow the MSO to reduce costs while maintaining service levels.

Platform scalability: Shared services across multiple firms or practice groups create economies of scale. Centralized intake, unified technology systems and consolidated vendor relationships spread fixed costs across a larger base.

Practice area characteristics determine where these mechanisms create the most value.

MSO suitability by practice area and investment criteria

Not all legal practices benefit equally from MSO dynamics. Practice areas can be evaluated for fit across several criteria, including:

• Marketing dependence: The degree to which scalable marketing investments generate client flow as opposed to relationship-driven or referral-based acquisition
• Customer fragmentation: Whether the practice serves a high volume of individual clients or concentrates on fewer, larger relationships
• Operational scalability: The degree to which workflows are repeatable and can be standardized across cases
• Geographic scope: Whether the practice can operate across multiple jurisdictions or is tied to local courts and relationships

Evaluating a nonexhaustive sample of practice areas illustrates how these criteria shape MSO fit (see Figure 1).

High-fit practices

High-fit practices share common characteristics. Practice areas such as personal injury, mass tort, consumer bankruptcy and debt relief combine marketing-driven demand, fragmented customers, repeatable workflows and sufficient portability to support centralized services. Other practice areas with similar characteristics may also demonstrate strong MSO fit.

The “programmatic plaintiff” model illustrates this dynamic. The MSO centralizes intake, marketing, case screening and shared services, while the law firm focuses on execution. Significant costs such as advertising and working capital sit with the MSO without triggering fee-sharing concerns.

Low-fit practices

Low-fit practices typically involve bespoke work, partner-dependent outcomes and relationship-led growth. Practice areas such as corporate M&A, complex commercial litigation and Big Law-style advisory work demonstrate these characteristics.

Criminal defense faces additional structural constraints, including heightened court scrutiny, tighter regulation of marketing and economics, and strong local dependencies.

Family law and trusts and estates sit between these extremes. Marketing plays a role and workflows are partially standardizable, but local court dynamics limit scalability.

MSO case studies and diligence risks

The MSO model is still emerging. Recent transactions show how the structure is being deployed:
Rimon PC entered one of the first notable MSO deals with Alpine Investors, which invested in an MSO (NovaLaw) that took over firm operations in 2021. The structure provided capital to modernize technology while preserving lawyer-partner equity. Rimon’s CEO later characterized the deal as a success, citing it as evidence that MSOs can fund legal tech growth while aligning investor and lawyer incentives.

Certum Group, a Texas-based litigation finance specialist, launched Certum Legal Solutions in October 2025 following the acquisition of an MSO, partnering with several mass tort firms on a fee-for-service basis. The move reflects growing investor interest in MSO platforms within high-volume consumer practices.

Cohen & Gresser explored private equity financing in late 2025 via a $40 million convertible note that could convert into MSO equity, illustrating how firms can bridge capital needs ahead of a fully established managed services entity.

Failed MSO structures: Lessons from the legal and healthcare sectors
 

Regulatory failures provide cautionary tales.

UpRight Law operated a nationwide bankruptcy business where nonlawyer staff handled significant client interactions with inadequate attorney supervision. The Department of Justice found this led to misleading practices. UpRight paid over $300,000 in consumer relief and was barred from representing bankruptcy clients in Montana for six years.

Avvo Legal Services operated a platform in which clients paid Avvo for legal services, Avvo paid participating lawyers and the lawyers paid Avvo a marketing fee. State bar authorities raised concerns that the structure involved impermissible fee-splitting or referral arrangements, and Avvo ultimately discontinued the service in 2018.

Cautionary tales also exist in healthcare. Envision Healthcare, Northfield Medical Center and Orthodontic Centers of America all faced challenges when their MSO structures exerted de facto control over professional decisions or extracted economics that functioned like profit-sharing.

At the same time, healthcare MSOs such as Heartland Dental (backed by KKR, supporting 1,800-plus locations nationwide) demonstrate the model works at scale when professional independence and arm’s-length economics are rigorously maintained.

Success factors and warning signs

MSOs succeed when they offer operational expertise beyond capital and work within high-volume practices needing infrastructure discipline. They fail when investors prioritize quick exits over firm culture or when agreements drift toward impermissible control. Red flags for due diligence include:

• Pressure for profit-linked compensation
• Influence over lawyer hiring
• Terms edging toward nonlawyer ownership or control
• Weak compliance controls
• High attorney departure risk
• Structures where lawyers have minimal equity
• Key person concentration without retention protections

What this means for MSO investors

Investors evaluating these opportunities should consider several factors:

Practice fit. The strongest returns come from high-volume consumer practices with marketing-driven growth, repeatable workflows and business-to-consumer economics. Practice areas including personal injury, mass tort, consumer bankruptcy and debt relief fit this profile, allowing centralized intake, data-driven case screening and standardized operations that create measurable value at the MSO level. Bespoke advisory work presents structural challenges.

Deal structure. Investors buy equity in the MSO, often alongside partner rollover equity. Capital gets deployed to acquire nonlegal infrastructure and fund growth through marketing and intake operations. Returns come from recurring management fees, margin expansion and platform scalability. Because the MSO fee is paid before partner distributions, alignment mechanisms are critical to prevent attorney departures. Regulatory compliance must be rigorous and jurisdiction-specific.

Diligence. Regulatory scrutiny focuses on operational reality, not legal structure. Investors should underwrite the MSO’s contracts, nonlegal assets and management fee cash flows. Understanding where value gets created, how talent is retained and whether the separation between law and business is genuine separates viable platforms from regulatory exposure.

As we’ve covered in this two-part series, legal MSOs offer investors a regulatory-compliant path into an attractive and growing market. L.E.K. Consulting helps investors evaluate opportunities in legal and compliance markets, assessing deal fit, structuring diligence frameworks and supporting M&A decisions.
 
Reach out to discuss how we can help.

L.E.K. Consulting is a registered trademark of L.E.K. Consulting LLC. All other products and brands mentioned in this document are properties of their respective owners. © 2026 L.E.K. Consulting LLC 

The U.S. youth sports market generates around $40 billion annually. Every year about 30 million athletes participate in tens of millions of organized events, from local leagues to national tournaments. The sector is attractive to investors given its noncyclical demand, recurring revenue and fragmented ownership. Families continue prioritizing participation even during downturns, with about 70% maintaining involvement and roughly 60% viewing sports as essential to development and college readiness.

Household spending on youth sports has risen sharply over the past decade. Per-athlete annual spend increased from roughly $700 in 2019 to about $1,000 in 2024 across registration fees, travel and equipment. And about one-third of families now report taking on debt so their kids can participate in sports.

Participation has fully recovered from pandemic lows. Among ages 6 to 17, team sport participation rose 9% year over year in 2024. Lower-income households have posted notable gains as community programs and post-COVID-19 funding expanded.

This growth is reshaping the industry. What was once volunteer-run recreation has evolved into a year-round professionalized marketplace. Clubs that previously ran seasonal programs now operate like small enterprises, often charging $1,000-$2,000 annually per player before travel costs. Up to 35% of high school athletes now specialize in a single sport, training more than eight months per year. That intensity requires facilities, coaching and competition outside school seasons, making club sports essential infrastructure rather than optional enrichment.

The three-pillar investment framework

This shift toward professionalized operations has created three investable categories: technology, infrastructure and services, and programming (see Figure 1).

The most defensible businesses combine at least two pillars. Software paired with facilities captures both digital and physical economics. Clubs and leagues that combine programming with merchandising extend monetization beyond the season. Integrated platforms separate scalable businesses from local operators.

Over the past two years, capital has concentrated most heavily in technology.

Digital infrastructure as a natural entry point

Youth sports management platforms support the operational backbone of clubs and leagues: registration, scheduling, payments, team communication and, in many cases, livestreaming or analytics. Their economics blend predictable subscription revenue with payment-volume fees and sponsorship data opportunities.

The market remains fragmented, ranging from established players like Stack Sports and SportsEngine with broad functionality to newer entrants competing on modern design and workflow simplicity. The landscape spans a wide range of platform scope, from focused, sport-specific tools to broader multisport platforms designed to support club and league operations (see Figure 2).

This fragmentation has begun to drive consolidation. Accel-KKR has backed LeagueApps and ArbiterSports to build end-to-end capabilities across registration, scheduling and officiating. Genstar Capital continues expanding Stack Sports through bolt-on acquisitions that integrate analytics and communication tools.

Beyond core management software, investors are increasingly exploring adjacent layers, including livestreaming (Scorability), safety and compliance (Players Health) and media and events (Prep Network), building vertically integrated ecosystems rather than single-product platforms (see Figure 3).

The direction is clear: Platforms are moving toward true integration, linking payments, video, compliance and facilities through open application programming interfaces. Clubs increasingly expect one-stop solutions. The challenge is execution. Legacy platforms often rely on patchwork acquisitions that create inconsistent interfaces and redundant capability sets. Investors are betting on the next generation of clean, unified systems built around actionable data.

Physical assets follow digital

Capital is also flowing into facilities, tournaments and apparel, tying together the fields where kids play, the systems that run them and the commerce surrounding them. More than $2.5 billion has been invested in new or upgraded youth sports complexes between 2024 and 2026, with operators like The Sports Facilities Companies and Kemper Sports incorporating digital scheduling and registration into their models to maximize utilization.

Consolidators are using the same approach. 3STEP Sports, backed by Juggernaut Capital Partners, operates more than 300 clubs and has acquired operators like Front Range Volleyball Club, standardizing operations across its network. Unrivaled Sports, backed by Dick’s Sporting Goods, manages a portfolio of tournament properties and facilities including Ripken Baseball and Cooperstown All Star Village, using integrated systems to streamline payments and team management.

What makes scale difficult

Strong fundamentals and scalable technology do not guarantee easy execution. As one operator told us, “Everyone likes the underlying trends in youth sports, but it’s harder than it looks to build scale.” Several challenges stand out:

• Fragmented go-to-market: Growth is labor-intensive, with real marginal cost to sell and support thousands of small, distributed clubs, leagues and organizers rather than a centralized buyer base.
• Sport-specific credibility: Relationships, workflows and decision-makers differ by sport, making cross-sport expansion slower and more costly than a traditional software rollout.
• Capital-intensive assets: Facilities and events can generate steady returns but require significant up-front investment and long payback periods unless paired with recurring-revenue layers.
• Execution depth: Many organizations began as grassroots, mission-driven operations. As they scale, professionalized management, tighter processes and integrated systems that don’t disrupt local leadership and culture become increasingly important.

The investment case is clear: structural growth, rising spend per athlete and thousands of fragmented operators. The challenge is building platforms that scale across sports, geographies and business models.

Partner With L.E.K.

Whether you are evaluating a club management platform, exploring growth opportunities in facilities and programming, or developing a portfolio company go-to-market strategy, we bring the data, sector expertise and transactional experience to help you scale what’s next in youth sports.

For support evaluating investments in youth sports, contact L.E.K. Consulting’s Sports and Live Entertainment practice. Co-led by Managing Directors Alex Evans and Geoff McQueen in Los Angeles, this partner-led team works with investors, leagues, teams and service providers across the youth sports ecosystem.

L.E.K. Consulting is a registered trademark of L.E.K. Consulting LLC. All other products and brands mentioned in this document are properties of their respective owners. © 2026 L.E.K. Consulting LLC 

The cardiovascular (CV) segment is one of medtech’s largest and most strategically important arenas. CV is consistently among the largest therapeutic segments and sits at the center of high-acuity, high-cost care pathways (cath lab, hybrid operating room, remote monitoring, etc.). This combination of clinical burden, procedural intensity and capital utilization makes CV a disproportionate driver of value creation across the industry.

Yet CV is entering a period where technology leadership alone is no longer sufficient. Over the next three to five years, the most attractive growth and profit pools will accrue to companies that can enable higher throughput and safer procedures across constrained cath lab capacity, win in the shift of care to lower-cost outpatient settings and commercialize integrated portfolios that align with how health systems buy (i.e., illustrating clear return on investment (ROI) through cost of care and patient retention).

Underpinning all of this is a structural change in innovation: Breakthroughs are increasingly sourced from startups, while large strategics must excel at partnership, acquisition and scaled commercialization to supplement their existing portfolios.

The critical trends reshaping the sector can be segmented in terms of technology, care delivery and business model innovation. These seven trends are highlighted below with the strategic implications for manufacturers, providers and potential investors.

Technology trends

1. Imaging-therapy convergence is accelerating the shift from devices to procedure platforms

CV is moving toward a model where imaging is inseparable from intervention. The world of a preprocedure diagnostic procedure or step is evolving into real-time integrated imaging guidance that can help determine therapy choice, device size and procedural endpoints.

This is evident in structural heart imaging with an explosion of preprocedural diagnostic imaging, screening and planning software as well as visible within structural heart, coronary and peripheral vascular intraprocedural imaging (e.g., 3D intracardiac echocardiography, intravascular ultrasound (IVUS), intravascular optical coherence tomography (OCT)), physiological assessment and navigation tools increasingly defining procedural quality and optimizing cath lab capacity/procedure time.

Imaging innovation is driven by increasing clinical complexity and precision requirements, economic pressure to reduce complications and lengths of stay, and demand for reproducible results. As a result of imaging advancements, competitive differentiation is shifting from single-product superiority to end-to-end procedural ecosystems (i.e., planning, guidance, therapy, verification, follow-up). Winners will be players that can integrate imaging, software and therapy into a simple, repeatable workflow that improves both outcomes and throughput.

2. Artificial intelligence (AI) and enabling technologies will help reshape clinical decisions, lab throughput and commercialization

AI’s first wave in CV focused on image segmentation and interpretation. The next wave is likely more operationally disruptive: AI as a workflow orchestrator and procedural copilot, spanning scheduling optimization, case triage, automated reporting, complication prediction and intraprocedural decision support. The impact of AI is most likely to be felt in cath lab productivity increases, procedural guidance (i.e., device selection) and chronic management (e.g., remote monitoring, predictive alerts).

Winners in AI will need access to high-quality data at scale, integration into clinical workflows and regulatory/provider trust. Integrating AI into solutions has the potential to help accelerate the shift from transactional selling to recurring revenue models. While monetizing AI add-ons is a constant question, the decision to not integrate AI into offerings may have bigger consequences as the market rapidly evolves.

3. CV-specific robotic-assisted systems (RAS) will move from “nice to have” to an operational lever, if economics and workflow are solved

RAS in CV settings are advancing, with multiple strategics shifting focus from an early adoption phase to a future scaling phase, driven by the promise of precision, standardization and occupational health benefits (notably radiation reduction and ergonomic improvements). The long-term vision of remote or distributed expertise remains compelling, but near-term value will be determined by pragmatic workflow and ROI.

Manufacturers must solve the challenges around workflow integration (reduced cognitive load and procedure time), utilization (sufficient case volume) and interoperability. There are numerous RAS players interested in the CV market, as well as CV players interested in bringing RAS into the cath lab. The technical challenges will be solved, and the future opportunity is up for grabs.

RAS are likely to become part of broader digital cath lab modernization programs. Device companies should treat robotics less as a discrete category and more as a capability embedded into integrated solutions — potentially paired with AI-driven navigation, imaging guidance and standardized procedure playbooks.

Care delivery trends

4. Cath lab capacity is becoming a binding constraint — and a major source of competitive advantage

Demand continues to rise (aging populations, broader indications, improved diagnostics) and case complexity is increasing, while cath lab capacity faces pressure from staffing supply shortages (across interventional cardiologists, electrophysiologists, technicians, nurses), increased documentation burdens and increased operational expectations (e.g., room turnover).

Winners will deliver throughput improvement through workflow automation, procedure standardization and reduced complications, winning a disproportionate share by becoming a partner to constrained providers.

5. Outpatient shift: Ambulatory surgery centers (ASCs) and office-based labs (OBLs) are becoming strategic battlegrounds — now expanding into more complex CV and electrophysiology

Economic pressure from payers and health systems is steadily moving cases away from inpatient settings (e.g., the recent approval of cardiac ablation in ASCs). ASCs and OBLs are both highly important in this shift in care setting. Different settings create new call points that have unique purchasing criteria and are starting from scratch in terms of capital equipment. Manufacturers need to be ready with a playbook and sales team to cater to the needs of these new sites of care or risk falling behind. This includes:

• ASC-/OBL-specific product configurations and service bundles
• Simplified training and credentialing support
• Per-case pricing options and risk sharing tied to complications or reinterventions
• Dedicated evidence that speaks to outpatient endpoints: time, discharge readiness, readmission and total cost

Business model trends

6. Portfolio selling in CV will intensify as providers buy pathways, not products

Health system consolidation, procedure complexity and integrated service lines are pushing CV procurement toward portfolio decisions. Providers increasingly prefer fewer strategic vendors that can cover a broad share of cases with consistent workflows, data integration and contracting simplicity as long as it does not compromise clinical outcomes or clinician satisfaction.

Vascular provides an earlier example in terms of offering a range of vessel visualization modalities (e.g., IVUS, OCT), vessel preparation devices (e.g., intravascular lithotripsy, specialty balloons, atherectomy) and treatment options (e.g., balloon vs. scaffold, drug-eluting bioresorbable stents vs. drug-eluting stents vs. bare-metal stents, drug-coated balloons vs. plain-old balloons).

Winners will craft compelling portfolio narratives linked to patient outcomes and efficiency, provide evidence for value analysis committees and integrate services that help operationalize change. Players with narrow portfolios will either need to become indispensable through overwhelming evidence and clinician pull or partner with other players to create a portfolio.

7. Business model innovation: Pricing, risk sharing and recurring revenue will move from experimentation to expectation

Traditional per-unit pricing is increasingly misaligned with provider economics — particularly in outpatient settings and under-bundled payment dynamics. Acceleration in alternative pricing models is expected:

• Per-procedure pricing that bundles disposables, software and service
• Subscription-as-a-service models for software, analytics and workflow tools
• Outcome-linked arrangements (e.g., warranties, complication guarantees, reintervention-linked rebates)
• Managed services for capital equipment and lab operation support with or without minimum device utilizations

To avoid margin erosion, companies must build pricing architectures that tie to measurable value — throughput, complication reduction, readmissions and total episode cost — supported by data and credible analytics.

Critical activities to stay ahead of key trends

With a number of critical trends shaping the CV industry, there are a number of key steps manufacturers can take to best position their portfolios for success:

• Reframe strategy around procedures and sites of care: Define where you will win (inpatient, ASC, OBL) and tailor offerings accordingly to prioritize consistently predictable and efficient procedures for at-capacity customers.
• Build a portfolio narrative with evidence: Not just clinical superiority but economic proof tied to outcomes and operational impact from leveraging the comprehensive portfolio.
• Leverage strategic M&A to supplement core capabilities: Capture meaningful innovation from startups through early partnering and incubation, disciplined M&A and thoughtful integration.
• Invest in the workflow layer: Data, AI, integration and services that unlock cath lab throughput and standardization.

In short, the CV industry is transitioning from a product arms race to a platform-and-economics competition. The next era will reward organizations that can converge imaging, therapy, AI and service into repeatable procedure success — delivered wherever the patient is treated, increasingly outside the hospital.

For more information, please contact us.

L.E.K. Consulting is a registered trademark of L.E.K. Consulting LLC. All other products and brands mentioned in this document are properties of their respective owners. © 2026 L.E.K. Consulting LLC