Enterprise Resource Planning (ERP)

By SYED MURTUZA HUSSAIN BAKSHI

Over the past couple of decades, enterprise resource planning (ERP)

systems and associated technologies have garnered considerable traction
across diverse industries beginning with the manufacturing sector.

The Gartner Group first used the abbreviation ERP in the 1990s to extend
upon the capabilities of material requirements planning (MRP), and the
later manufacturing resource planning (MRP II) as well as computer-
integrated manufacturing.
The promise of several gains accrued from the deployment of ERP system
underpins its burgeoning popularity. The gains entail large efficiency
improvements across business processes of organizations, streamlining
communication across departments, better productivity, and the several
strategic benefits to managers

Healthcare providers have become increasingly interested in implementing

enterprise resource planning (ERP) systems as part of their operations
excellence, business intelligence and revenue cycle management suites.

ERP systems are modernized business management tools that give

healthcare users an integrated view of core business operations, such as
cash flow, production capacity, orders and purchasing, and payroll. The
systems gather and consolidate data from across several departments to
facilitate information exchange and automate back office functions.

In healthcare, organizations use ERP systems to eliminate financial data silo

that have traditionally separated back office functions. With an ERP system,
providers can break down the walls between front-end revenue cycle
management duties, such as patient access, and back-end responsibilities,
including claims management. The integration of ERP with their health IT
infrastructure has enabled players in the healthcare industry to modernize
their IT systems.

Providers also employ ERP systems to link healthcare supply chain

management data to revenue cycle and other financial information. By
eliminating data silo in the financial space, healthcare organizations gain a
comprehensive picture of their revenue cycle.
ERP systems typically include the following characteristics:

 An integrated system
 Operates in real time
 A common database that supports all the applications
 A consistent look and feel across modules
 Installation of the system with elaborate application/data integration by
the Information Technology (IT) department, provided the implementation
is not done in small steps
 Deployment options include: on-premises, cloud hosted, or SaaS

Postmodern ERP: - The term "postmodern ERP" was coined by Gartner in

2013, According to Gartner's definition of the postmodern ERP
strategy, legacy, monolithic and highly customized ERP suites, in which all
parts are heavily reliant on each other, should sooner or later be replaced by
a mixture of both cloud-based and on-premises applications, which are
more loosely coupled and can be easily exchanged if needed.

The basic idea is that there should still be a core ERP solution that would
cover most important business functions, while other functions will be
covered by specialist software solutions that merely extend the core ERP. This
concept is similar to the so-called best-of-breed approach to software
implementation, but it shouldn't be confused with it. While in both cases,
applications that make up the whole are relatively loosely connected and
quite easily interchangeable.

Healthcare sector is an untapped market for the ERP industry. Having robust
ERP software will help hospitals and healthcare organizations channelize their
day to day activities and integrate their clinical systems and other flows of
data in real-time.
 Most Popular ERP Systems
Hospitals are starting to invest more into ERP solutions as they set their sights
on business improvements. Some of the most popular, powerful, advanced
and sophisticated ERP solutions are as follows.

 SAP
 PROGNOSIS INNOVATION HEALTHCARE
 ORACLE
 MEDITECH
 MCKESSON
 INTACCT
 INFOR
 HEALTHLAND
 HARRIS ENTERPRISE RESOURCE PLANNING
 EVIDENT

Types of ERP

 Industry Specific ERP: They are mostly complex and requires heavy duty
hardware to run. Mostly meant for large companies or even factories
for data automation.

 Cloud ERP: Preferred for small companies. Usually, a provider will rent
out their Central ERP system via internet and companies can purchase
the service in accordance with their need. The most important feature
of this system is its scalability. Rental charge will depend on the
specification of services availed.

 Small Business ERP: ERP systems can control supply chain or even
accounting tasks for a company. However, small companies do not
need that. For them, customized ERP systems are available where they
can choose what all the ERP system will have the authority to control.
Benefits to Enterprise Resource Planning in a Hospital Environment

1. Patient information, data archives and supply chain information can be

integrated and managed better

2. Systems can be standardized with a common data dictionary to

reduce duplication of effort and reduce errors

3. Customer Relationship Management (CRM) results in cost savings,

income generating opportunities and better patient service

4. Significant efficiency is realized from Electronic Health Records (EHR)

over manual charting. Information can be forwarded to other care
givers more efficiently and storage is dramatically reduced.

5. Care plan and treatment plans can be significantly improved with all
systems working together in harmony.

6. Considerably better financial controls because information is

centralized, integrated and more accessible to everyone concerned.

7. Complete management and interpretation of patient database

8. Schedules appointment of patients, doctors, test etc.

9. Visibility on accounting system of hospitals

 Expectation after the installation of ERP software

1. Better care for patients: Lesser waiting time in diagnosis, pharmacy

purchase, report construction, tests, bills as well as patient
information registration. Thus, satisfied patients.

2. Streamlined process: Integration is the beauty of ERP software. Since

every procedure is automated all the proceedings will be
streamlined and organized.

3. Better Communication: Communication between doctors, staff as

well as patients will happen quickly and effectively.

4. Increased standards: ERP system ensures that certain standards in

each and every department have been met and there by the
increasing the quality of the service.

5. Better Supply chain: Inventory of ERP software has impeccable

management features. Purchase, expiry date, stock list etc can be
thoroughly checked.

6. Centralized Data: ERP system does not just stores the data. It has the
ability to process the data in accordance with various input
parameters.

7. Considerable reduction in operation cost: Confusions and less

efficiency are two major causes for the unnecessary cost in a
hospital. These two will be eliminated once and for all if an ERP
system is installed