The intention of enterprise resource planning (ERP) is the aggregation of all departments and functions into one computer system(3). In order for hospital leadership to make better informed decisions, evidence-based decisions must be the backbone of effective leadership. Implementing an ERP solution can help to meet these objectives. An ERP solution can assist healthcare leaders by:
“aligning resources with best practices and improved financial outcomes; optimizing patient safety and outcomes while achieving needed financial return; and driving sound decision-making through real-time access to key business performance metrics”(4).
Utilizing an ERP solution’s dashboard allows healthcare leaders to better manage their finances across all departments, which helps streamline reporting, budgeting and compliance requirements.
Key ERP Value Points
- Cost Savings
Effective ERPs save companies and average of 1.6 million annually(3). ERPs offer hospitals with a variety of cost saving solutions including: budgeting; financial management accounting; financial supply chain management; & cost and profitability management(1). From a strategic standpoint, having all departmental financial data in one system is an invaluable asset to healthcare leaders.
- Meaning from Data
The power of an ERP to evaluate data and find meaningful answers regarding departmental spending and outstanding invoices are benefits of adopting an ERP.
Some Risks of ERP Adoption
- Start-up Costs
Implementing an ERP is costly and is a considerable investment that can take on average 8 months to realize any benefits(3). Organizations operating on thin margins will find the start-up costs associated with ERP implementation a barrier to their adoption.
- Time Investment
Establishing an ERP can take 6 months or more to implement(3). The required time needed to implement an ERP solution may not be feasible for all organizations.
- Failure to Implement an ERP Solution
As with any IT project, the risk of failure is present. IT projects across the board have a 65% failure rate. Detailed plans and risk analysis should be conducted prior to investing in and new IT solution.
Blueprinting is Key
Implementing an ERP is a serious undertaking that requires proper blueprinting(2). Involving key stakeholders from the beginning and listening to their feedback during ERP planning will help to decrease the risk of ERP failure(2,3). Proper blueprinting will also help to establish the intended goals of the ERP once it is operational.
1. SAP. (2005). Enterprise management and support in the healthcare industry. Retrieved on August 19, 2013 from http://hoffmanmarcom.com/docs/mysaperp_sod_healthcare.pdf
2. Sahadevan, D. (2011, June 11). Healthcare ERP Implementation. Retrieved August 19, 2013 from http://www.hospitalinformationsystem.com/2011/06/healthcare-erp-how-do-i/
3. Wailgum, T. (2008). ERP definitions and solutions. CIO. Retrieved August 19, 2013 from http://www.cio.com/article/40323/ERP_Definition_and_Solutions
4. McKesson. (2013). Enterprise resource planning. Retrieved August 19, 2013 from http://www.mckesson.com/providers/health-systems/department-solutions/enterprise-resource-planning/
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Christopher M. Bell