REPLACE OR UPGRADE ERP IN THE CLOUD

TO IMPROVE SERVICE AND REMOVE
OBSTACLES
March, 2015
In order to improve services, keep costs in check, and report effectively, constituent and patient-oriented organizations are
often forced to rely on disconnected, outdated technology. When top performers choose to replace or upgrade their
solutions, what aspects of cloud solutions do they use as selection criteria?
 Nick Castellina, Research Director,
Business Planning and Execution

Time for a Change

This report examines constituent or
patient-centered organizations. These
include the 31 healthcare, government,
and education organizations that
participated in Aberdeen's 2014
Business Management and ERP
Benchmark Survey.

Constituent or patient-oriented industries, such as government
and education institutions or healthcare providers, are faced
with a unique set of challenges that are often exponentially
increased due to inadequate technology infrastructures. These
organizations must optimize their labor costs, improve the flow
of service, maintain compliance, and increase their ability to
utilize assets while keeping costs low. Oftentimes, these tasks
are managed in completely different business systems to
manage an organization's finances, supply chain, purchasing
and workforce that may not be integrated effectively.
Unfortunately, Aberdeen's 2014 Business Management and ERP
Benchmark Survey found that only 38% of constituent or
patient-centered organizations have integrated business
systems that serve as a complete and auditable system of
record. This can cause major problems such as poor service, high
costs, and inaccurate, fragmented data that is difficult to use
and support. On the other hand, Best-in-Class organizations are
49% more likely than All Others to have these integrated

unsecure. some administrative systems may become obsolete. another 38% of constituent or patient organizations plan to implement this capability in the near future. supplier relations. Stay On Top of Things Best-in-Class organizations understand the pitfalls of obsolete technology. 65% of ERP implementations in constituent or patient-centered organizations are over eight years old. those that are not the Best-in-Class are more likely to be two or more releases behind. webbased systems that support self-service processes for staff. Managing this type of landscape can be expensive. Enterprise Resource Planning (ERP) solution to integrate core back office functions across accounting. But even with outdated ERP. For example. AP/AR. inflexible. Implementing a new solution or upgrading an existing one is a way to ensure that technology is up-to-date and effective. constituents and suppliers. As a result. The best way that this can be accomplished is through the implementation of an end-to-end. it becomes difficult for IT staff to ensure that all technology is up-to-date. many of these same problems can persist.systems. or upgrade existing technology. www. When managing multiple systems. This leaves organizations with a choice: replace the technology they have. both options would provide the organization with an end-to-end solution. On the other hand. purchasing.com . the Best-in-Class organizations are more likely than All Others to take advantage of available upgrades to their business systems (Figure 1). In fact. For this reason. Therefore. this could mean consumer-like. personnel and benefits administration. Regardless of the exiting technology environment. budgeting. and unable to mesh with other new technologies. old systems can cause problems. Ideally.aberdeen. and payroll. unsupported.

. or simply new best practice workflows and processes supported in the most current release.Figure 1: The Best-in-Class Stay Updated 50% Implemented on latest release 31% 35% One release behind 27% 6% Two releases behind 12% Best-in-Class All Others 3% 7% Three or more releases behind 0% 20% 40% 60% Percentage of Respondents. This could mean emerging technologies such as social or mobile. social. mobile. August 2014 So why would a constituent or patient-centered organization choose to upgrade their existing solutions? When polled. the number one reason that these organizations cited for upgrading their solutions is the need to take advantage of new functionality (Figure 2).aberdeen. features related to maintaining compliance to new regulatory mandates.com . etc.) 36% New version is more flexible 29% Performance of old version is inadequate 29% 0% 20% 40% Constituent or Patient Oriented 60% 80% Percentage of Respondents.e. August 2014 www. n = 31 Source: Aberdeen Group. Figure 2: Why Upgrade? Want to take advantage of new functionality 64% Vendor no longer supports old version 36% Old version is incompatible with emerging technologies (i. n = 201 Source: Aberdeen Group.

Unsurprisingly. Ultimately. among other reasons. the reasons chosen are similar to the reasons that organizations upgrade (Figure 3).com . upgrading brings more flexibility. it's all about a lack of technology that can support the needs of a constituent or patient-centered organization in the current environment. This is important for both commercial and federal healthcare organizations that are tasked with sharing data with outside healthcare systems. and more robust reporting. Upgrading solutions can ensure that these new processes are supported and that the organization can focus on patient care.But it's about more than just providing new functionality. and changing reimbursement initiatives. Again. Constituent and patient-centered organizations upgrade their ERP because their existing solution is inadequate. August 2014 www. enhanced views into executing workflows across the entire business process. For constituent or patient-centered organizations. avoiding readmissions penalties. improving patient outcomes. some constituent or patientcentered organizations may choose to replace their existing technology environment. managing flexible labor. On the other end of the spectrum. and replace their ERP because it lacks features. This includes the ability to alter processes to maintain compliance as well as the ability to connect with other organizations in order to provide clinically relevant information to care providers. Disconnected systems that were created before these requirements became essential are inadequate and lack the transparency afforded with upgraded technology. or in order to provide mission relevant information to program managers. n = 31 Source: Aberdeen Group. Figure 3: Why Replace? Obsolete technology foundation or infrastructure of ERP system 35% Lack of features 29% Constituent or Patient 24% Oriented Cost of maintenance and support 0% 10% 20% 30% 40% Percentage of Respondents. This includes better tracking of costs. upgrading is essential when the existing technology versions can no longer support the organization or agency. and it is very likely that they are inflexible to modification.aberdeen.

August 2014 There are many reasons that constituent or patient-centered organizations cite for implementing their solutions in the cloud (Figure 5). an organization is going to end up with a solution that can change the way the organization works. solutions delivered in the cloud can be an attractive option. Leading organizations with over 1. Why is that? Figure 4: Shifting Focus to the Cloud Leaders Percentage of Respondents. When faced with cost constraints and limited IT www. In fact. This is a perfect opportunity to reassess how the technology is delivered and supported. Twenty-nine percent (29%) of solutions in constituent or patient-centered organizations are hosted by the software vendor. For constituent or patient-centered organizations. the top reason is the lower total cost of ownership. Unsurprisingly.aberdeen. upgrading. cloud technology is an emerging trend for organizations of all types. constituentcentered organizations are actually more likely to have implemented their solutions in the cloud.com . While this is still an emerging trend. or implementing a new ERP solution.000 employees are more likely than All Others to deploy their ERP solutions in the cloud (Figure 4).Either Way: Consider the Cloud Whether replacing. n = 74 60% 50% 40% 44% Followers 54% 48% 39% 30% 20% 10% 0% On Demand / Software as a Service (SaaS) / Cloud Traditional licensed on premise Source: Aberdeen Group.

constituent or patient-centered organizations want to look to solutions that require lower capital investments and allow them to rely on the resources of the software vendor to manage the IT infrastructure and operations. compared to 6 incidents for those that are cloudbased. provide an attractive option.¹ 59% Ease of use 48% Ease of implementation 38% Ability to scale solution 34% Lower risk 34% Reduces the cost and effort of upgrades 31% 0% 20% 40% Constituent or Patient Oriented 60% 80% Percentage of Respondents. Security is extremely important for protecting information in government organizations. can integrate with other organizations. Cloud solutions. and letting the software vendor handle the hard parts of supporting the technology.com and reference the following information: #6572 and "Web Security in the Cloud: More Secure! Compliant! Less Expensive!" www.services@aberdeen. For constituent or patient centered organizations. Cloud solutions can continually provide the latest functionality and user experience trends.com.staffs. If you would like a copy. please email member.aberdeen. The organization can simply focus on serving its constituents or patients.com . Figure 5: Why Cloud? Lower total cost of ownership on average. and can help to improve service quality and cost controls. August 2014 But selecting a business solution should never rely simply on costs. This is accomplished through more robust solutions that can improve visibility into financials and spending as well as staffing and supply needs and costs. ¹ This report is no longer available on Aberdeen. they want easy to use solutions that can support new and changing business models and regulations. which are actually more secure. n = 31 Source: Aberdeen Group. No longer will the organization have to rely on a technology environment with varying components or disparate ages. on-premise solutions had 11 incidents of data loss or data exposure in the previous 12 months. the ability to be constantly updated with little disruption to the organization. as well as the application. This leads to one of the biggest benefits of cloud solutions for constituent or patient-centered organizations. Aberdeen’s Web Security in the Cloud: More Secure! Compliant! Less Expensive! found that.

Therefore. end-to-end.aberdeen. the benefits of any technology come from the ways in which organizations can be improved and transformed through the capabilities contained within that software.6 times as likely to have real-time visibility into the status of all processes. This visibility can impact a constituent or patient-centered organization in many ways.But ultimately. including non-PAR purchases  Track receivables  Monitor claims and service requests  Maintain and utilize assets more effectively www. n = 74 120% 100% 80% 100% 83% 80% 56% 60% 40% 29% 20% 67% 50% 50% 35% 35% 40% 20% 0% Real-time visibility Decision-makers A fully integrated view of all can drill down into status of all constituent or from summary processes patient data to information transactions Unified view of labor costs and workforce data Automatic Workforce scheduled based notification based on defined on patient or conditions constituent demands Source: Aberdeen Group. Figure 6: Improved Service and Administration with the Cloud Cloud On-premise Percentage of Respondents. including spending for contract labor  Identify supply costs. due to having one complete system of record that can be accessed from anywhere.com . the organization can:  Identify labor costs. organizations with cloud solutions are 2. Note that 83% of organizations with cloud ERP enable decisionmakers to drill down to individual transactions from summary data. In the case of cloud ERP. frequently updated. useable software brings capabilities that can help to improve constituent or patient-centered organizations (Figure 6). August 2014 For example.

com . can patients or constituents be serviced more effectively and efficiently.aberdeen. the workforce can also be scheduled based on patient census and acuity. public sector and healthcare institutions with cloud ERP saw a 38% improvement in time to decisions over the past year as a result of their solution. But really. can costs be contained. this could help organizations to improve Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) scores in healthcare. nonemergency (311) or tax-related services in real-time. real time visibility can help to provide insight into patient or constituent information. Lastly. The Benefits The success of an ERP implementation really comes down to whether or not the organization is able to use the emerging technology to induce improvements to the organization. immediate notifications can ensure that the organization as a whole is managed in an agile manner. Service can become more effective. For example. This technology can provide the foundation for a successful constituent or patient-centered organization. For example. Aberdeen has uncovered improvements in a variety of metrics (Table 1). Another example would be to track citizen requests for first responder.Additionally. supply and financial data. For example. With a unified workforce. from workforce to finance through managing patient care needs. and is decision-making more effective? In the case of constituent and patient-centered organizations with cloud ERP. www. And since this information is integrated with other operational data. or improve constituent engagement in government or education. smarter decisions can be made in relation to staffing. these capabilities enable an organization to work in a more holistic manner.

where costs are constrained.Table I: The Results Average Performance Improvement in operational costs as a result of ERP Cloud On-premise 25% 7% Improvement in complete and on-time service delivery as a result of ERP 26% 9% Improvement in internal schedule compliance as a result of ERP Improvement in profitability/balancing budgets over the past two years 19% 11% 19% 6% Improvement in time to decisions over the past year 38% 12% Improvement in the cycle time of key business processes over the past year 31% 14% Source: Aberdeen Group. there is a need for a change in the technology that supports the organization. not disruptive. ERP delivered in the cloud is an attractive option for constituent or patient-centered organizations. www. this will require organizations to either upgrade or replace their existing business solutions. These solutions are cost effective. and there is high pressure to maintain care or service levels while providing high visibility into essential data. A modern ERP system that is updated with the latest advances in best practices and supports constantly changing regulatory mandates is the solution. Ultimately. As a result.com . technology is outdated and disconnected. August 2014 In constituent or patient-centered organizations. The goal is to provide a single solution that enables improved processes while providing security and reliability at a lower cost.aberdeen. and will enable constituent or patient-centered organizations to focus on servicing their constituents' and patients' needs.

www. Aberdeen Group has published research that helps businesses worldwide improve performance. vendor-agnostic insights from a proprietary analytical framework independent of outside influence. custom research. distributed. Unless otherwise noted. The resulting research content is used by hundreds of thousands of business professionals to drive smarter decision making and improve business strategy.About Aberdeen Group For 27 years. We identify Best-in-Class organizations by conducting primary research with industry practitioners. archived. Inc. Our team of analysts derives factbased.com . Inc. MA. the entire contents of this publication are copyrighted by Aberdeen Group. or transmitted in any form or by any means without prior written consent by Aberdeen Group. Located in Boston. speaking engagements.aberdeen. This document is the result of primary research performed by Aberdeen Group. Aberdeen Group is a Harte Hanks Company. and may not be reproduced. and content creation services. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Aberdeen's content marketing solutions help B2B organizations take control of the Hidden Sales Cycle through content licensing.

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