by Vishal Patel
Are ERP systems better than best-in-class supply chain solutions for managing healthcare supply chains? What are the pros and cons, and what supply chain strategy will pave the way to higher margins, improved supply chain risk management in healthcare and improved patient care?
When RiseNow’s Matt Stewart hosted a recent panel discussion with Procurement and Supply Chain experts, we joined consultant Michael Wentling, Owner and Principal, Wentling Consulting to answer that specific question and to explore this issue in depth.
The verdict? Best-in-class solutions come out ahead in all areas — from user experience, to ROI, to features and functionality that help organizations run world-class healthcare supply chain operations.
According to Gartner, up to 67% of ERP implementations fail — and as more solutions migrate to the cloud, they predict the failure rate could climb to as much as 90% by 2025. Why?
According to the experts, there are three common reasons:
Aside from these three common pitfalls, if IT or the business rushes forward with an implementation before fully understanding the needs and concerns of each other, problems inevitably arise. For example, a single-stack approach can lead to low user adoption, because the incumbent sourcing solution, for example, fails to meet the needs of various business units.
As a result, point solutions have to be added on to fill the gaps, leading to complexity, integration issues and high overhead. This could be why, according to Forrester, 82% of organizations regret their software selection within 12 months.
In such cases, a better approach is to implement a best-in-class supply chain solution, because the business and IT can find common ground. When key processes, features and functions are integrated into a single suite, there are no integration issues, less IT complexity, and the end-user experience improves.
According to the panelists, there are some key features and functionality that make best-in-class supply chain solutions a better choice for healthcare organizations:
In addition to all of these benefits, the total cost of ownership of an ERP-based solution is higher. In fact, 74% of ERP implementations go Over Budget and they take longer to roll out. Upgrades can be disruptive to the rest of the business. By contrast, implementations of best-in-class solutions are typically done on budget due to fixed fees and reduced complexity. Because they’re SaaS-based, they can be implemented in about six months, and upgrades are seamless — you just turn them on to start using them.
What is the benefit of using a single source to pay solution?
During the webinar, Ivalua’s Zinkand explained how Baylor Scott and White has leveraged the many benefits of the best-in-class approach by implementing Ivalua’s best-in-class Source-to-Pay solution as part of its digital transformation effort. By building a world-class operation, with supply chain resilience built-in, Baylor Scott and White’s procurement organization recouped its initial investment within a year and is on track to save $100 million over three years.
Given all of the benefits of going with a best-in-class supply chain solution over an ERP-based implementation, it’s no surprise that Gartner predicts just 10% of organizations running a cloud-based ERP will leverage their ERP solution for more strategic processes such as e-sourcing, contract management and spend analysis by 2025. It seems that the era of best-in-class supply chain solutions has arrived.
Ivalua is helping leading healthcare organizations transform their supply chains and better align supply chain operations and spending to care delivery models. Organizations stand to reduce operating costs, increase supply chain visibility and automate procurement processes, enabling clinicians to focus on delivering exceptional patient care. Learn more about Ivalua’s healthcare-focused solutions today.
Senior executive with a proven track record of success in starting, growing, and leading consulting firms over his 20-year career. Matt’s unique ability to predict trends before they become trends; identify, recruit, and retain the best consultants; and build a culture in which top performers desire to stay long-term make RiseNow stand out as a premier supply chain advisor and integrator.
Highlights: RiseNow has experienced an average of more than 58% growth per year over the past 10 years, helping more than 360 global to mid-size organizations transform their supply chain.
Notable clients include: IBM, Trinity Health, Banner Health, Lincoln Financial, Memorial Sloan Kettering, Highmark, Citibank, PPG.
You can connect with Matt on LinkedIn
At Ivalua, Ken leads the Healthcare Industry Solution, Go to Market, and Business Development functions working closely with customers to support their Digital Transformation journeys. Prior to his current role, Ken spent 13 years as an Executive with Accenture and leader in their Healthcare practice. Before Accenture, Ken spent several years in professional services with automotive, manufacturing, consumer packaged goods, and retailers focusing on supply chain solutioning. Ken started his career in supply chain working for United Parcel Service and worked his way up from loading trucks to being an Account Executive.
You can connect with Ken on LinkedIn
Vishal has spent the last 15 years in various roles within the Procurement and Supply Chain technology market. As an industry analyst, he researched and advised organizations in various industries on best and innovative practices, digitization and optimization. He brings a thorough understanding of market trends and digital technologies that can help enterprises be more effective with their Procurement and Supply Chain strategies. He works to ensure that organizations are empowered with technology platforms that enable flexibility, innovation, and agility.
You can connect with Vishal on Linkedin