Frost: Enterprise Management Systems Benefits Promote Expanded Use

August 9, 2006 // Published as a news service by IHS

To date, growth of enterprise management systems has been limited to the manufacturing sector. Now, according to Frost & Sullivan, several health care systems have begun to take an interest in these applications after struggling for years to find effective ways to accomplish system-wide integration of staffing and patient care processes.

Backed by significant justification in using enterprise resource planning (ERP) systems in the health care environment, vendors are actively offering administrative and logistical solutions for health care provider organizations.

Recent analysis from Frost & Sullivan found that the European health care provider enterprise management systems market earned revenues of $165.0M in 2005, with estimates to reach $224.2M in 2010.

Both large and medium health care providers across Europe have witnessed extensive deployments of disparate business and financial applications over the years. Instead of clunky interfaces between separate systems, one system with all the data held in a single database could boost quality, productivity and profitability. Analysts said providers realize the benefits of enterprise management systems and this is set to drive market growth over the long term.

"The appeal of enterprise management software to health care providers is obvious," said Frost & Sullivan industry analyst Konstantinos Nikolopoulos. "Instead of a host of separate (and largely disconnected) applications keeping track of business activities such as finance, human resources and payroll, a single system, from a single vendor, could handle everything."

However, analysts said one of the most discouraging aspects for customers in acquiring enterprise management software has been both the cost and length of implementation. While vendors have been able to persuade large providers of the overriding benefits of return on investments (ROI), they are yet to dispel the fears of smaller customers.

"The implementation of enterprise management software remains a big concern in terms of time frames, budgets and the complexity of the software," said Nikolopoulos. "Stories of projects dragging on continuously for years with resulting costs getting out of control have had a sobering effect on many potential customers and disillusioned those at the receiving end."

To overcome this, analysts said health care providers will need to ensure that their systems' supplier provides the best levels of experience and service. Due to the expansive project scopes associated with the implementation of an ERP system, vendors will have to exhibit a demonstrable track record of understanding health care business, thereby establishing a solid basis for future growth.

Source: Frost & Sullivan.