Driving Compliance in Healthcare: Where Good Pitching Still Seems to Beat Great Hitting

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Since the beginning of time (it seems), industry-focused supply chain management application vendors have rushed to fill ERP solution gaps. The market’s early-to-mid-stage technology adopters have invested in these “best in breed” solutions and realized the value, accepting certain workarounds, often related to data integration.

Despite the staggeringly complex and ongoing problems of core hospital enterprise management, the ERP vendors are already moving into additional application spaces, as their healthcare customers, based on their efforts, are finally getting connected. They’re now selling a “bigger is better” platform narrative, expanding into supply chain management (SCM) and customer relationship management (CRM) solution markets, to name a few. And yet, they’re selling that message to providers that have only recently “settled” into their ERP journey, after being sold on the idea that it was a destination.

While compliance is a core SCM issue everywhere, it’s fresh to hospitals. For starters, most hospitals outsourced their supply chain management responsibility to group purchasing organizations (GPOs) years ago, so they’ve not dealt with the problem directly. But with or without GPO help, the trend now is for hospitals to take core SCM pieces back — like contract compliance — with internal marketplace implementations (Amazon-like internal shopping malls) surfacing as a popular way to get started.

That said, care providers are quickly learning that a “shopping cart” is not a solution. The best-of-breed solution providers will tell you that compliance isn’t achieved by limiting item choices; that requisitioning must be fully integrated to clinical workflows, with condition-laden contracts also integrally managed, driven by the point of service data. A mouthful, I know, but there’s a lot of experience talking there. All such systems start with commodity items, but the best ones are engineered to handle the complexities of higher preference categories of spend (e.g., system interdependencies) and are delivering benefits that weren’t thought possible.

But the ERP players have entered with their first-generation compliance/SCM solutions and (drum roll here) they’re making SCM promises that have resulted in freezing buying decisions. Meanwhile, hospital tech buyers continue to send out RFPs requesting check-the-box responses. Sound familiar? While I’m not sure whether check-the-box RFPs were ever a good idea, in ERP’s case, the argument was successfully made for several reasons, including the fact that system implementation responsibility was rarely the software vendor’s problem.

To ERP or not, and implementation politics — this is where the battle lines are now being drawn. Many experts see it as ironic, as providers can better afford to be nimble now than ever before. They can select best in breed while remaining committed to their large on-premise ERP deployments. They can rollout best in breed solutions to their subsidiaries, acquired entities and satellite outpatient facilities without confounding the data integration and confederation that happens back at the mothership.

But here’s the problem: regardless of industry segment or application space, most viable software choices today share a huge percentage of the most commonly sought after features and functions. Many solution markets have matured. So does picking a winner require years of experience and courage of conviction or a willingness to make a reference visit?

Look, it has become cliche to say that it’s not just where a system differs, but “how” it differs that matters. And for hospital SCM solution evaluators who are led to believe that the modern configuration standard has somehow obviated the need to understand the tradeoffs that have traditionally dictated how software is chosen, well, that doesn’t even sound very smart.

It’s said that good pitching always beats good hitting. In a software sales context, no truer words have ever been spoken. Despite the fact that no one, including the ERP system integrators, gets a hit at their first time at bat, one would think that the experienced best-of-breed solution providers would have an inside track, especially from an implementation perspective. But they don’t — and that begs all kinds of questions that should be explored at greater depth.

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