The Same Fate of ERP Software Will Happen with Hospital EHR Software

Posted on March 12, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

I’ve often thought of the challenge associated with selling an EHR or other related enterprise software to a large hospital. As I think about this purchase process it’s made me wonder why any hospital would change out that software. I’ve often said that Epic’s approximately $1 billion contract with Kaiser (along with a number of other similar contracts) is one reason that Epic is going to be in the healthcare IT business for a long time to come.

In fact, these contracts and the process of change in hospitals has often led me to feel like change in the hospitals is almost impossible.

The amazing thing is that the same arguments could be made for ERP software in large companies. I know some people don’t like the comparison, but I think there are a lot of really interesting similarities.

In fact, I was reading through this somewhat older article which talks with Aneel Bhusri and Dave Duffield who founded PeopleSoft which was taken in a hostile takeover by Oracle and Larry Ellison. Turns out that Aneel and Dave decided to start another company a few months after the takeover of PeopleSoft. As he describes it, “we had a lot of fun so should we start another one?”

Aneel offers this insight that they found with their new Workday software as it tries and competes with the larger Oracle and SAP ERP software systems:

The big vendors are vulnerable because they require big expensive upgrades. Workday doesn’t go into startups — it’s selling to big companies that have HR and financial software in place. But companies have to update this software periodically, and the traditional vendors like Oracle and SAP make it hard and expensive to upgrade. That’s when startups like Workday jump in.

Can you see the Hospital EHR fate the same as what’s mentioned above?

Sure, the other big hospital EHR vendors will continue doing business much like Oracle and SAP are doing in the ERP world. However, there is a great opportunity for the people that have the right connections and knowledge of the hospital world to do a startup hospital EHR company that steps in and gains some market share.

I will admit that it’s going to take a gutsy hospital CIO to make this happen, but you can be sure that it will happen. Many of these hospital CIO will be rewarded handsomely for the choice as well.