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9/9/2010
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Oracle, McKesson, Lawson Ranked Below Average For HIT

Overall client satisfaction with ERP solutions in the healthcare industry is not high, but no alternatives stand out enough to warrant changing vendors, according to KLAS.

Slideshow: Who's Who In Healthcare IT
Slideshow: Who's Who In Healthcare IT
No enterprise resource planning (ERP) vendor overwhelmingly satisfies clients more than others, but with so few options migrating to a new vendor may not be worth the cost, according to a new report published by KLAS. Accounts payable, human resources management -- such as time and attendance and payroll -- and supply chain and materials management all fall under the broad umbrella of ERP.

For the new study, "The Conundrum of ERP: Is It Possible to Get Functionality and Service?," KLAS interviewed 225 provider organizations, focusing primarily on the three most prominent players, Lawson, McKesson and Oracle. All three rated below the KLAS average for HIT.

"Here's the interesting thing," said Mike Smith, KLAS general manager of financial and services research, "if you look at the research we're doing with ERP, and you look at the scores, the overall client satisfaction is not high. With that said, if someone came in and delivered at a very high level and separated themselves, people may consider their options. But right now, as things stand, [customers] are paying a lot of money, it's taken them a lot of time to implement an Oracle or a Lawson solution and, as they look around, I don't think they see anything that stands out that much to make them move away from their current solution, despite the fact that they may not be getting very good support and, in some case, despite the fact that they may have a product which isn't quite as robust as they would like."

According to the report, most hospitals already have an ERP solution of some sort and constitute a captive audience, so vendors have little reason to develop and support their core ERP products. Instead, they focus on developing peripheral modules to address related markets, such as human capital and workforce management or acquiring new technologies to augment their existing offerings.

According to Lorin Bird, KLAS research director and author of the report, talent management is a hot niche. "(A high growth area) is in the human capital management space. Hospitals are realizing that the management of their labor force is becoming quite critical. (Success) comes down to hiring the best talent and finding a career path for that talent, and so talent acquisition applications -- such as e-recruiting, applicant tracking, those areas where Oracle has traditionally been strong -- are becoming more important."

Smith agrees: "Hospitals need the ability to recruit, to retain, to expand the capabilities and the talent of their people. I think that as you see vendors come into that area and do a great job - and perhaps have the ability to provide a nice integrated suite of solutions -- that will start to catch the attention of people."

The top-rated vendor in the report was McKesson, with a score of 74.5 out of 100. It was followed by Oracle (71.8) and Lawson (68.6). API and MediClick were also highlighted, though neither could be included in the head-to-head comparison with the above vendors, providing only some system components. Electronic Healthcare Systems, Kronos, MEDITECH, Microsoft, Oracle and SAP are also included in the early data portion of the report.

Anthony Guerra is the founder and editor of healthsystemCIO.com, a site dedicated to serving the strategic information needs of healthcare CIOs. He can be reached at aguerra@healthsystemCIO.com.

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