A methodical approach to ERP, combined with stakeholder engagement and communication, encourages vital conversations that help organizations achieve their strategic goals

Selecting the right enterprise resource planning (ERP) solution for your healthcare organization might feel like a daunting task — especially for lean IT teams with even leaner budgets. But the experience doesn’t have to be fraught with delays, miscommunications, and problems.

In fact, by following a proven process and utilizing best practices for change management, communication and governance, it is possible to streamline the ERP selection process.

To accomplish this goal, IT teams first need to create a foundation for success — and that means beginning the process with the end in mind.

“Teams need to clarify the transformational drivers behind the change, which may include data, cost, standardization, integration, streamlining, workflows, operational inefficiencies, user experience and more,” said Christine Francis-Hymes, ERP Practice Director at Healthlink Advisors. “The next question is whether the goals for the ERP solution align with the enterprise strategy.”

From there, teams can compare the current state of their ERP solution with their desired future state, assess bolt-on and third-party solutions that may need to be replaced or retained, and look at the impact and risks of the project.

Strategies for Stakeholder Engagement

According to Steve Hendrick, Vice President at Healthlink Advisors, change management is another key component of success — and stakeholders should be engaged early and included in the process from selection to implementation.

“ERP selection can’t be a closed-off process where IT is making decisions and pushing the project down the path,” said Hendrick. “Stakeholders need ownership in the path forward, and effective change management combined with frequent communication from the beginning will set the project up for successful implementation.”

Strategies for effective stakeholder engagement include:

  1. Implementing a strong leadership and governance model with shared accountability between stakeholders, SMEs, and IT.
  2. Incorporating strategic planning and a shared vision.
  3. Creating a sound communications plan.
  4. Building an infrastructure to support implementation.
  5. Requiring high user engagement and involvement.
  6. Creating champions within the organization who can assist with implementing change.

Establishing Criteria for Evaluating Vendors

As teams begin to establish the criteria they will use to evaluate vendors, Francis-Hymes said there are six factors they need to weigh to determine what is most important. Using these factors, teams can narrow down key decision-making criteria.

The six factors include:

1. Differentiator-Based Features and Functions.

“Most vendors can meet 80-90 percent of an organization’s needs,” said Hendrick. “But what teams should be focusing on is how a particular vendor addresses their pain points, and whether the vendor relationship will be a partnership versus transactional — these are the differentiators.”

2. Market Presence and Stability.

“By identifying unique business needs and pain points, teams can begin to assess whether they have confidence that a vendor’s standard suite of solutions will meet their long-term needs and provide them with standardized workflows and protocols,” said Francis-Hymes.

3. Business Case/TCO.

“The value proposition a vendor is offering is key — understanding the total costs and what the vendor is bringing to the table can help to develop the business case,” said Francis-Hymes.

4. Strategic Alignment.

“Organizations should be asking, ‘Does the functionality meet the organization’s needs? Are there opportunities for growth? Are the systems scalable?”, said Francis-Hymes. “These questions can determine whether a solution will accelerate or support targeted growth or competitive advantage goals.”

5. Technology Architecture.

“Mobile apps, hosting, cloud capabilities, platform, implementation methodology, digital health strategy, privacy and security, and future development are all considerations in the technology architecture space, and teams should carefully consider what is most important to them,” said Francis-Hymes.

6. Integration/Interoperability.

“Common considerations in this area include single-platform vs. multiple-platform, whether the solution will interface with existing clinical and EMR systems, and needs for third-party support or bolt-on solutions,” said Hendrick.

Streamlining the Vendor Selection Process

Healthlink Advisors helps organizations navigate the ERP selection landscape by following a six-step selection process that is modified to meet the organization’s unique needs. Steps include:

1. Determining organizational needs.

During a kickoff meeting, the team will align on the project plan and identify key stakeholders — essentially defining the people, process and technology needs that are driving the organization to consider a new system.

“We will complete an application inventory to determine what solutions the organization currently has and what they’re paying,” said Hendrick. “This can be a challenge for organizations, so we encourage them to start on this step early.”

2. Conducting a market scan.

At this stage, the team will identify vendors that should be involved in the RFP process.

“Most of the time for large complex organizations, we look at Infor, Oracle and WorkDay as our core ERP vendors, but may evaluate others if a health system is smaller, or they have unique needs,” said Hendrick.

“If an organization is looking for solutions that leverage AI in selection and recruiting or cloud-based storage, we use our knowledge and experience to identify vendors that can meet those requirements,” said Francis-Hymes.

3. Initiating the RFP process.

After solidifying the list of vendors, Healthlink Advisors helps teams create an overview of the organization for vendors and document requirements — making it easier for teams to evaluate, compare, and discuss options. The team will also assist in creating a scoring system to evaluate responses.

4. Facilitating vendor discussions.

When responses are received, Healthlink Advisors helps organizations review and score them, ensuring that the team asks the right questions to determine whether there is strategic alignment between the vendor and the organization’s business and clinical needs.

The team will also facilitate and document vendor demonstrations, breakout sessions, executive presentations and vendor reference calls or site visits, depending on the organization’s preferences.

“We need to make sure we’re comparing apples to apples, so it’s important to develop a scoring system and keep things consistent from vendor to vendor,” said Hendrick. “Discussion sessions are time-intensive, so if a vendor just isn’t aligning on cost or isn’t meeting needs at this point, cutting a vendor from the process could save the team a lot of time.”

Optimizing vendor demonstrations is also critical to successful selection.

“Make sure vendor demonstrations address pain points and be prepared to provide vendors with samples of problematic use cases, so they can model the demo to the organization’s needs,” said Francis-Hymes.

5. Cost modeling.

In parallel to vendor discussions, Healthlink Advisors helps teams work on the cost model, providing a full understanding of the 10-year costs for vendor fees, other costs, and contingencies.

“This is one of the most important steps, because the cost model drives the budget — and no team wants to go back and ask for more money in the budget,” said Hendrick.

“Staffing and utilization is one aspect of cost modeling that organizations struggle with, and we recommend including a financial contingency for resources — because ERP can be very consuming, especially for lean teams,” said Francis-Hymes.

6. Decision facilitation.

Healthlink Advisors guides teams to build a business case for change based on the facts gathered during steps 1-5, identify gaps or concerns with each vendor, and create a “pros and cons” list.

“All the pros and cons, plus the cost model will drive the decision,” said Hendrick.

Tackling the Timeline

When deciding on a timeline, organizations need to consider stakeholder dedication and availability. In most cases, a four-month selection timeline is ideal — but teams can shorten or extend the timeline based on their needs.

“Toward the end, the RFP process, vendor discussions, cost modeling and decision facilitation are running in parallel, so that can be a time-saver,” said Hendrick. “However, organizations should make sure they are giving vendors time to prepare a thoughtful response to the RFP — and one week isn’t enough. Teams should allow 2-4 weeks for that step.”

Hendrick and Francis-Hymes both agree that a methodological approach is necessary to identify a vendor of choice w/in a four-month timeline.

“A dedicated PM can make sure things are on track, communicate with vendors and deliver status reports,” said Francis-Hymes.

And although a four-month timeline might feel aggressive, it can be feasible with a methodical approach.

“By sharing best practices and what we’ve learned across our combined experience, Healthlink Advisors’ goal is to pave the way for organizations to have vital conversations that lead to long-term ERP success,” said Hendrick.