Increasing Erp Implementation In The Health Industry

Published Date: 02 Nov 2017

ERP implementation has hit many industries and with the growing processes and scope of each business, there is a definite need for a system wide ERP implementation in most companies. All ERP tools are designed with the same needs without regard for the size of the organization. It is the differences in the business processes between industries that complicate the seamless implementation of ERP. Major vendors modify the software requirements so as to suit the needs of various industries and this is what has made it easily recognized and welcomed all over the world. Talking on those terms, an industry that is as of now growing in terms of ERP implementation has been the Health industry. The evolving business needs are a result of the ever changing demands of the healthcare market driven by patient, regulatory, government, financial, and environmental conditions which seem to be getting more difficult for the industry. There is not one vendor solution to address the unique requirements of each hospital and that is the technological reality of aligning to the vast business needs in healthcare. In the remainder of this paper we will cover the challenges, unique requirements and cultural change required in the health industry for a successful ERP implementation.

Unique Requirements: It takes a great deal of research, vision and operational fortitude to understand the vast requirements to implement ERP,SCM systems, strategies and solutions needed to support the health industry. Lawson covers 75% of the share in the Healthcare industry (HIMMS,2007). It has customized its service based software to satisfy the needs of healthcare industry by offering services to process the industry’s enormous data and processing requirements. The ability to forecast budget in the healthcare industry is as difficult as in any other business as it is determined based on the expected patient census. This uncertainty in connecting the financial process pervades in all healthcare technological solution. Thus there is need to plan the crucial step in managing the financial health of healthcare providers. The need for operational and analytical requirements mandates a model that has to fit all requirements to drive daily operations in the health industry. The core financial applications are general ledger, accounts payable, accounts receivable, and asset, grants, and cash management. With the growth in population expected in the next 10 to 15 years, the hospitals will need to fund construction and building projects to meet market demands. This requires a project accounting and management tool set. In the human capital management domain, the demanding needs of the healthcare industry lies in managing and retaining the talent. There is a high need for training, positioning, payroll, benefits and absence information data management especially with providers having many employees. With Supply chain management, the challenge has been to manage the tradeoff between the increase in the supply cost which is about 25% of their budget to not just effectively procure supplies but also to analyze the periodic spend and use that data to in value analysis and forecasting(HIMMS,2007).

Challenges in implementation: Apart from the need to align the software development to the unique requirements in the health industry, there are other significant challenges in managing the successful implementation of ERP in this industry. Electronic health records can make patients’ medical histories more easily accessible and can reduce errors related to disorganized paperwork and undecipherable handwriting. Realizing these benefits, however, requires the same determination that drives ERP success in other industries. The healthcare industry is unique but the basic principles of implementation still apply. With the growing need for EHR (Electronic health record) systems, there is a need to ensure appropriate security and access to these records. EHR systems are just as vulnerable to IT failure as any ERP system. Organizations should ensure that data is backed-up and all departments are ready to revert to paper records if necessary. A phased rollout is another preventative measure that can help work out glitches before the entire organization is faced with reduced productivity. Since every patient has unique needs, EHR systems may need a significant amount of customization. Before deciding which processes to customize, organizations should engage in business process reengineering (Panorama Consulting, 2013) and optimize inefficient processes before customizing software to accommodate those inefficiencies. Another major challenge in ERP implementation lies is choosing the best vendor for your company. Many of my best clients are 'sold' by the vendor's marketing team; however once the implementation is complete they are surprised by system functionality restrictions, lack of capabilities, and the impact on existing internal best practices. This has been one of the major issues. And also selecting industry specific vendors will make the implementation of ERP much easier. Lawson positioned itself as the premier healthcare ERP and SCM vendor starting in 1996 through the re-deployment of its product solutions. Other vendors, such as Oracle, SAP, and McKesson have the same functionality, but only Lawson’s Healthcare Solution, Oracle’s E-Business and PeopleSoft Enterprise Financial, and McKesson’s Pathway Financial Management product have been consistently identified as a core solution in Financial and Accounting Management.

Need of Organizational change management and cultural adaptation: Implementing ERP systems is one of the major challenges any organization can take up and also end up in failure if plans get derailed with no proper stakeholders identified in every aspect of decision making. Instead of focusing on getting approval from executives, the organizations should focus on gathering key participants from across the organization and different business units like finance, operations, manufacturing, purchasing warehouse etc. in addition to IT to align the overall ERP implementation to the business process. A lack of proper training is one of the most common reasons that ERP projects fail, and it can also result in employees resenting the new system because they don't understand it. Making sure employees have a chance to become comfortable with the new system before it goes live will do wonders for your chances at ERP success. Some doctors complain that EHR systems are difficult to use. Mastering a new system can be so time-consuming that doctors are sometimes forced to serve fewer patients. An organizational change management plan that incorporates extensive end-user training can mitigate this issue and satisfy all potential stakeholders.

Organizations that are unable to meet the demands of the market are suffering from information overload, lower patient census, increased supply costs, and shortages in skilled labor leading to bankruptcy or financial ruin. To mitigate or eliminate cost and productivity problems there is a need to implement enterprise technological solutions. ERP systems can help health industry meet its ever growing demands and also meet the regulatory requirements in terms of proper reporting systems and maintaining critical patient information.ERP systems will be tools in the drive to increase quality and safety through seamless integration and coordination of the procure-to-pay, order-to-cash, and financial reporting cycles. With increasing changes from vendors in their software packages to suits health needs, the industry is sure to see huge benefits and process optimization in the future years.