Enterprise Resource Planning in the Healthcare Industry

Healthcare spending in the United States is projected to surpass $3.3 trillion in 2015, with annual growth expected to take that total to almost $4.8 trillion by 2021.

Healthcare spending in the United States is projected to surpass $3.3 trillion in 2015, with annual growth expected to take that total to almost $4.8 trillion by 2021, according to the federal Centers for Medicare & Medicaid Services.

Various factors are driving this trend while also transforming the industry, including expanded access to healthcare services, an aging population and evolving technology, such as electronic medical records, telemedicine, mobile health apps and big data analytics.

“Across the world, health care systems are recognizing the need for innovation; advances in health technologies and data management can help facilitate new diagnostic and treatment options,” according to a 2014 outlook by Deloitte.

As healthcare providers seek to maximize efficiency and productivity, they are expected to turn increasingly to enterprise resource planning. By providing access to real-time data, ERP systems can boost the performance of business processes such as customer relationship management, analytics, supply chain management and human resources management.

ERP is “positioned for accelerated growth among hospitals,” HIMSS Analytics noted in its 2014 report “Essentials of the U.S. Hospital IT Market.”

Benefits of ERP

Through the availability of internal and external data across departments and functions, ERP systems allow for automation of processes in order to reduce risk and increase efficiency. Additionally, the implementation of enterprise resource planning in the healthcare industry may lead to:

  • Optimized business processes

  • Improved information flow and communications among departments and doctors, providing for timely and accurate patient care

  • Enhanced operational efficiency for administrative staff, support personnel and physicians

  • Integration of real-time data in clinical systems and multidirectional data flow

  • Reduced operational costs

  • Improved decision-making capabilities for patient care and resource management

Overall, ERP systems can enable healthcare organizations to sharpen their focus on their primary mission: providing patients with the right care at the right time.

ERP Implementation

Although ERP can provide benefits in areas such as information technology spending and business process efficiency, effective implementation is the key to success. Even the most advanced software systems will perform poorly in the absence of a carefully integrated and customized plan for implementation.

In a healthcare setting, ERP implementation may include input from clinicians, healthcare managers and other stakeholders, as well as intensive training programs for all users, not just IT specialists.

Healthcare providers also must determine which type of enterprise resource planning solution best fits their specific needs and goals. Hospitals, physicians’ groups and other organizations may need to select from among on-premises, cloud-based or hybrid ERP systems.

“A well-defined ERP strategy that is agreed to by business leaders is key to success for ERP initiatives,” noted a 2014 report by Gartner, a global IT research firm.

Why is ERP Needed in Healthcare?

Implementing an ERP system can provide significant benefits for healthcare providers, not only in the promotion of proficient performance and functionality, but also in positioning organizations to respond to a quickly evolving industry.

From complying with patient confidentiality regulations to shifting to digital-based record keeping and attracting highly qualified employees, healthcare providers face numerous challenges in a competitive, multitrillion-dollar marketplace. As it has done for decades in manufacturing and other industries, enterprise resource planning can bring greater efficiency and heightened effectiveness to the healthcare arena.

This post was written by Haley DeLeon, who writes content for Florida Tech University Online’s website, including health, business and tech articles for Florida Tech’s online MSIT in Enterprise Resource Planning program.