- Enterprise resource planning (ERP) is a necessary tool for healthcare organizations to better manage business processes by collecting data from business tools and applications. Organizations need to consider how ERP fits into their health IT infrastructure and the best way to deploy it to ensure success.
While many IT infrastructure tools are moving to the cloud, ERP is not moving there fast. According to Gartner’s latest ERP market guide, less than 5 percent of enterprises across all major verticals will host their operational ERP deployments in the public cloud.
The public cloud offers entities a more cost-effective way to host solutions by giving them the option to only pay for the space they need, rather than investing in privately hosted or on-premises servers.
The report urged organizations to consider public cloud-based ERP solutions because of the flexibility and scalability it offers, as well as ERP’s management capabilities.
“Companies of all sizes need to carefully balance the benefits and challenges of cloud ERP against the best fit for business purpose to gain access to the right functionality that best supports their future business strategy,” report authors advised.
ERP vendors are developing product suites that are pushing organizations to adopt postmodern cloud ERP solutions. ERP vendors are also developing industry specific solutions. However, entities need to be aware of the benefits of ERP suites vs point solutions.
Postmodern ERP solutions use the strategy of using the best applications in each individual area of the ERP suite. At the same time, these solutions make sure all the applications are interoperable with each other and other IT infrastructure tools.
“While suites have some benefits, they don't always represent the best solution to business needs,” said the report. “Customers should find the balance between ERP suites that will reduce the need for integration when deep functional differentiation is not needed and cloud-point solutions that will offer a competitive advantage and quick time to value for a particular process.”
For the healthcare industry in particular, ERP solutions are closely tied with value-based care. Organizations without ERP solutions lose money because they do not know exactly how their IT infrastructure systems are performing. IT systems that waste space or don’t function to their highest capacity waste resources and can slow down workflow.
A Black Book Market Research report conducted late 2017 found that the healthcare industry is still underinvesting in resource and performance management solutions. This underinvestment comes from other infrastructure technology taking priority over management systems, such as cybersecurity, population health, and analytics.
Redundancy in IT systems is the biggest challenge healthcare organizations face when the proper resource and performance management solutions are not in place.
Many advanced health IT solutions come with different features so the technology can more easily integrate into an environment. Several different solutions may contain the same features that are working simultaneously to achieve the same goal.
"Crucial back-end software that manages finance, supply chain and inventory management, purchasing, payroll and coding have been disregarded into a confused entanglement of different products that don't communicate and left executives with the inability to realize cost savings in preparation of value-based care," Black Book Managing Partner Doug Brown said in a statement. "There has been user opposition to deploying a new or upgraded ERP, perceived as carrying a high price tag in a time when clinical deployments overwhelmed hospital staff and budgets."
For example, a cloud solution may have built-in app security, but the deployed applications may already have adequate security protecting them. Having two security solutions performing the same task is redundant and can cost an organization money.
The redundant technology has no value and takes up space in the environment that could be used for a more advanced solution that has a better return, such as more storage space or a virtualization solution.
Organizations need to implement ERP solutions that function easily and help entities gain visibility over their digital tools. Using a cloud-based ERP solution can give organizations a lighter weight tool that will help improve business processes.