KLAS Finds ERP Vendors Not Dazzling Customers
No 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.
(click on the link below to hear a Podcast interview with the report authors)
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.
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.
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.
To purchase the full report, visit www.KLASresearch.com/reports.
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Paul Roemer says
A very timely and interesting report. I have three observations that may offer a slightly different twist on the issue up for discussion. Clearly, the focus of this discussion was on ERP systems, but the same issues are relevant when providers evaluate EHR systems.
1. If the name-brand vendors are all within a hair’s breadth of one another in terms of their reported functionality, and most of the installed base is thinking, “It must be the shoes,” perhaps it is not the fault of the shoes. With some providers having spent more than $100 million dollars switching from Vendor A to Vendor B while other providers are switching from Vendor B to Vendor A, I think it is time to quit blaming the shoes and to take a look at what culpability could the providers have in the failure of their EHR to perform as hoped?
a. What quantifiable measures did the providers employ to select one vendor over the other?
b. What could be so wrong with an implementation that only by spending another hundred million dollars could correct it?
c. Did the provider spend as much money on change management and processes as it did on implementation?
d. Did the provider go with the vendor’s artificial implementation date, or did they set their own. If the implementation price was a fixed bid, it is in the vendor’s interest to get their team out of town and off to another moneymaking implementation.
2. The second observation has to do with the nature of the rankings. Even if one assumes that the Klas report provides the best available information, a provider must ask themselves, “How relevant is that information to what they are doing?” What if, for example, the provider is a large specialty practice, say cardiology? If a provider studies the ranking of let’s say the name-brand EHRs, are they likely to come away with valuable insight about which system to choose, or will they base their decision on too small of a sample size?
a. Let us say that the top three EHR vendors each have more than 1,000 customers.
b. Of those thousand, what if they each have an installed cardio base of ten large cardio practices—that is 1% of their business.
c. That number, although it is high enough to get them ranked as offering a cardiology solution, is not a statistically significant portion of their business.
d. So, what can be concluded? Does the vendor have a cardiology specific EHR, or do they simply have an EHR that has been installed by a few cardio practices?
e. A message to the specialty providers, do not be drawn in by what appear to be facts.
f. Is it of more value to a provider if the vendors were ranked by their specialty offerings?
g. Be wary of vendors who tell you, “We handle cardiology,” or who state, “This is how we get our system to do this.”
h. Lastly, are those ten clients referencable? Ask for the full list of their clients. Call the physicians you actually use it—doctor to doctor—not someone in admin.
3. Providers should also look for what information is not included in the rankings. For instance, a reason providers purchase an EHR is to improve productivity. How many of you have seen an increase in productivity? If you have, you break the mold. I spoke recently with the CIOs of two large, prominent hospitals who both implemented the same death-by-a-thousand-cuts name brand EHR, both whose productivity is down twenty percent two years after implementation.
a. Might it not be helpful if the vendors published productivity numbers by specialization?
b. Does it do a provider any good to select a vendor who has all the requisite features yet whose product is unlikely to have you even performing at the level you were prior to spending $100 million?
c. Without the possibility of improving your operation, what value is there in implementing an EHR?
Numbers may not tell you the full story, or they may, but it may not be the story you need to hear. In a subsequent posting titled “KLAS: CIOs Must Consider Total Cost of Ownership,” the post’s avatar reads, “Caveat Emptor”–buyer beware. Caveat Emptor also applies when studying the value of rankings.