In terms of supply chain management practice, acute care providers have been historically criticized as “laggards” when it comes to non-patient facing technology adoption. Has it been a fair characterization? Absolutely. But without dwelling on all the reasons, whether or not it’s still true is clearly a better question.
I bring it up because the hospital solution market for all-things-supply-chain-management-related (SCM) has hit an interesting inflection point. Yes, health systems keep getting bigger (consolidation), more sophisticated (better managed) and more competitive (eat or be eaten). And while the tug of war with the industry’s old guard Group Purchasing Organizations (GPOs) continues its ebb and flow, there’s something even more fundamental in play:
Reasonable budgets supporting investments in the tools of the trade have been finally established. Furthermore, because ERP has actually “happened” in a good chunk of the market (it’s all relative), SCM professionals now have a chassis to which they can integrate value-adding, modern applications.
And what is one the more popular apps currently headlining everyone’s short list? Those Amazon-like shopping solutions that live behind corporate firewalls to control what is bought and how much is paid. They are otherwise known as “internal marketplaces” and they support an objective known as contract compliance. And they’re turning up the heat under an age-old argument: “to ERP or not ERP.” Do I go with a third party best in breed solution provider or do I opt for the option that is already available to me through my ERP vendor?
I recently had the opportunity to chat with Shelu Bhandari, Director for Supply Chain at Rush Hospital in Chicago about contract compliance. Ms. Bhandari emphasized her organization’s success was largely due to its use of significant core systems, including a requisitioning capability native to her ERP. “While I’m always interested in investigating alternatives to the apps they provide, I have to admit, I’m getting sales pitch fatigue causing me to default more toward working to increase user adoption of our installed systems.” Shelu added something else very interesting. She mentioned how the requisitioning capability provided through her ERP system was improving the quality of her item master(s) which was making it easier for physicians and nurses to collate the record of items used in individual patient procedures and propagate them in their electronic medical records (EMRs).
That said, David Walsh, Director of Supply Chain Administration at Boston’s Children is a client of Pittsburgh’s Prodigo Solutions (Prodigo), a leading provider of an Amazon-like internal marketplace solution to the acute care market. (Note: before I continue, notice the language difference -- “ERP requisitioning” versus “Amazon-like shopping?”). Unlike its competitors, Prodigo’s product is specifically designed for healthcare providers. The company is dedicated to them, so as you might imagine, its solution is packed full of features and capabilities that wouldn’t even make sense outside a hospital setting.
But here’s the rub: Prodigo would also claim that its success is largely driven by the ease at which it integrates to those same systems cited by Ms. Bhandari (i.e. item master, finance and EMR integration performance) and that a big chunk of the value it creates is based on its effective extension of ERP.
So is there a right answer? Of course there isn’t. Despite the promise of the cloud, every computing environment is different and the way in which applications behave in those environments (e.g. user interface rendering, integration, load and response times, etc.) is generally going to vary. Upon reviewing my notes from my discussions with Shelu and David, who both placed a great deal of emphasis on user adoption, I am, however, reluctantly drawn to a conclusion.
It got me to thinking. Many of us now say that we’re going to “Google” something when we execute a search. Similarly, “Amazon-like” is now a metaphor for a great user experience. And if user-adoption is the goal, especially for requisitioning/compliance systems, then there is, in fact, an answer, albeit one that the ERP vendors may not fully appreciate.