International Journal of Management and Strategy

International Journal of Management and Strategy (IJMS) 2012, Vol. No. 3, Issue 5, July-Dec. 2012 http://www. facultyjournal. com/ ISSN: 2231-0703 SIGNIFICANCE OF BPR &ERP IMPLEMENTATION IN HEALTHCARE INDUSTRY: AN EXPLORATORY RESEARCH Akondi Srikanth, Research Scholar, Dr. B. R. Ambedkar Open University, Hyderabad, India ABSTRACT This paper seeks to signify the implementation of Business process Reengineering (BPR) and then Enterprise Resource Planning (ERP) for the betterment of existing scenario of organizations’ under Healthcare Industry in India , as the market is still at the nascent stage.

This paper also explores different critical success factors (CSR) factors in BPR and ERP implementation towards Healthcare Industry. This paper is based upon exploratory research i. e analysing the historical cases dealt with national and International hospitals and Pharmaceuticals, where the BPR and ERP played their significant role in enhancing their overall efficiency. This paper analyses the significance of BPR in increasing the effective use of pre-operating area and equipment, reduces waiting time of patients at Emergency Department and service Work stations and provides better value for purchases.

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By implementing ERP along with BPR the organization improves the performance of existing business processes, reduces receivable days, credit returns and also improves the back –end efficiency. This paper is only restricted to healthcare Industry and its findings are based on the cases analysed. Therefore it is left to the researches to what extent they use them. This paper has not considered the financial aspects involved in implementing BPR and ERP. The analysis may help only for those similar organizations those are under study. This paper provides different ways to reduce patient waiting times, credit returns, improve backend efficiency.

This paper also reveals different top ERP solution providers and their clients who got benefited in Indian Context. Key words: Healthcare, exploratory research, case study, business process re-engineering, enterprise resource planning. International Journal of Management and Strategy ISSN: 2231-0703 1 International Journal of Management and Strategy (IJMS) 2012, Vol. No. 3, Issue 5, July-Dec. 2012 http://www. facultyjournal. com/ ISSN: 2231-0703

obal health care industry accounted for nearly 38. 7% of the industries total value. The Americans accounts for 50. 3% of the global healthcare provider sector. Studies reveal that G8 countries contributed an amount of USD 4,591. 1 bn, BRIC nations contributed USD 633. bn, NAFTA contributed about USD 2,941. 5bn for the Healthcare Industry where US, China and Canada are the major contributors. In the latest survey, PWC global healthcare (Q1, 2012 analysis) has found that the china has stood in rank 2nd for the first time in global M;A of worth USD 3,709 bn, next to USA. From the studies, the key driving factors for the growth of global health care identified are one company Philosophy, Competitive Advantage, Workforce mobility, Shared best practices and Global leverage. In this way the global healthcare is growing in a faster pace.

Let us look in to the healthcare scenario in India. a. Indian Scenario The Indian Healthcare sector currently represents a USD 65 Billion industry as of 30th May,2012 and is expected to be USD 280bn by 2020(IBRF, Nov. 2011-Healthcare Report). The healthcare industry in India is divided in to five sectors as shown in chart no. 1. The Industry led by Hospital segment with 71% occupancy followed by other sectors as expected. A break-up of the sectors as is provided in Chart. No. 1

t and Strategy ISSN: 2231-0703 3 International Journal of Management and Strategy (IJMS) 2012, Vol. No. 3, Issue 5, July-Dec. 2012 http://www. facultyjournal. com/ ISSN: 2231-0703 Chart No. 1 – Market Breakup by Revenues Source: IBRF, Health care – November 2011 Report.

In providing healthcare services, the private sector and public sector are taking a lot of initiatives such as introducing day care centres by Nova and developing Public – Private Partnerships i. e. PPP models respectively. There is lack in number of Medical colleges, hospitals, doctors (6 for 10,000 people), nurses, dentists, patient beds and others related to the health care Industry. Government schemes such as Rashtriya Swasthya Bima Yojna, Niramya Health Insurance Schemes and allowance of 100% FDI in health related services encourage Industry to grow a lot. ii. Business Process Re-engineering ( BPR) – An Overview

BPR originated in the 1950s as large enterprises began to explore the potential impact of computers on the efficiency and effectiveness of their business processes. In the early 1990s, BPR had an explosive dissemination, especially after the publication of the book by Hammer and Champy (1993) entitled “Reengineering the Corporation: A Manifesto for Business Revolution”. Hammer and Champy (1993, p. 32) had defined BPR as “the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed”.

They sold more than 1. 7 mn copies and got translated in to 19 languages. Whitman and Gibson (1997) developed a study for discovering why enterprises use BPR. The reasons identified are to improve inefficient business processes, to be industrial leader, to reorganize business functions, and to improve current industry position. It was observed from the studies that 75-80% of the companies namely IBM, Texas, Johnson ; Johnson, Ford, Shell oil, American express, Wall-Mart, Tacobell, Hawlett Packard like so many had started reengineering and achieved tremendous success( Muthu, cheraghi.

And Whitman, 1999; Sunil Thanwani, 2000). Forrester Inc. has shown 60 – 70 % of BPR efforts have either failed or did not achieve the expected benefits. Accordingly, to implement BPR successfully, critical success factors should be identified and analyzed (Maleki and International Journal of Management and Strategy ISSN: 2231-0703 4 International Journal of Management and Strategy (IJMS) 2012, Vol. No. 3, Issue 5, July-Dec. 2012 http://www. facultyjournal. com/ ISSN: 2231-0703 Bhekhhakhain, 2011). Caccia-Bava (2005) argued that hospital’s BPR implementations were more successful than before.

The other studies revealed 29 best practices in relation with healthcare Industry by analyzing 10 case studies, in which the previous best practices are included (Netjes, Mans, Reijers, Aalst, vanwersch,

In case of Tan Tock Seng Hospital, the 2nd largest in singapore the BPR had totally eliminated the waiting time of patients in Accident & Emergency Department that used to be 27minutes and reduction in overall waiting time of a patient in the hospital from 133. 93 min to 123. 33 min. using SIMUL 8, a simulation tool in the process. Chart No. 2: Market Share of ERP Vendors in Service Sector Source: 2011 ERP Report of Panorama Consulting iii. Enterprise Resource Planning (ERP) – An Overview ERP is defined as a process of integrating all functional information on a single computer system.

Tsai, Lin, Chen, and Hung (2007) in ERP Implementation. ” 15 February 2010. Bhattacherjee, Anol. “Begining SAP R/3 Implementation at Geneva pharmaceuticals. ” Communications of the Association for Information systems 4, no. 2 (August 2000): 1-39. “Children’s Hospital Central California. ” http://www. vmware. com/files/pdf/customers/vmw_10q1_cs_chldrns_hsptl_uslet_en. pdf (accessed 06 28, 2012). Dantes, Gede Rasben, and Zainal Arifin Hasibuan. “Comparison of ERP Implementation process of two organizations: An Exploratory Research. ” 2100 International conference on social sciences and humanity.

Singapore: IACSIT press, 2011. Emerging Trends in Healthcare : A journey from bench to bedside. KPMG, 2011. “global healthcare deals quarterly 1q 2012. ” 2012. http://www. pwc. com/en_gx/gx/healthcare/dealsquarterly-mergers-acquisitions-market-activity/assets/pwc-global-healthcare-deals-first-quarter20z12. pdf (accessed 07 08, 2012). Hawari, Ala’a, and Richard Heeks. “Explaining ERP failure in Developing countries: A Jordian Case study. ” Development Informatics. Center for Deveopment Informatics, 2010. Healthcare. India Brand Equity Foundation, 2011. Kohn, Linda t. Methods in case study analysis.

PhD, Center for studying health systems change, 1997. Kulkarni, Umesh. “Three-dimensional accounting system. ” In ACCOUNTING, 83-87. 2012. Kumar, A, and S J Shim. “Eliminating Emergency Department wait by BPR Implementation. ” Kumar, Arun, and Linet Ozdamar. “Business process reengineering at the hospitals: A Case study at singapore hospital. ” 18th European simulation Multiconference. Graham Horton, 2004. Maleki, Tahereh, and Yokabed Beikkhakhian. “Business process reengineering implementation: an investigation of critical success factors. ” 2011 International Conference on Information and Finance.

Singapore: IACSIT press, 2011. 17-21. Malhotra, Yogesh. “Business Process Redesign: An Overview,” IEEE Engineering Management Review, vol. 26, no. 3, Fall 1998 International Journal of Management and Strategy ISSN: 2231-0703 12 International Journal of Management and Strategy (IJMS) 2012, Vol. No. 3, Issue 5, July-Dec. 2012 http://www. facultyjournal. com/ ISSN: 2231-0703 Mans, S, and Hajo A Reijers. “BPR best Practices for the healthcare domain. ” INBIP, 2010: 605-6016. O’Leary, Daniel E. “Enterprise Resource Planning (ERP) Systems: An Empirical analysis of benefits. Journal of Emerging Technologies in Accounting 1 (2004): 63-72. Olson, D L, and F Zhao. “CIO’s Perspectives of Critical success factors in ERP upgrade projects. ” Enterprise Information Systems, February 2007: 129-138. Plant, Robert, and Lesli Willcocks. “Critical success Factors in International ERP Implementation: A Case Research approach. ” Journal of computer Information systems, 2007: 60-70. Resource center: Panorama consulting. 2012. http://panorama-consulting/resource-center/2012-erpreport/ (accessed 07 04, 2012). Sage Software Solutions: Just What the Doctor Ordered for Piedmont Healthcare.

February 2007. http://cmshris. com/success/abra_piedmonthealthcare_ss. pdf (accessed July 11, 2012). Shim, Sung J, and Arun Kumar. “Simulation for Emergency care process Engineering in Hospitals. ” Business Process Management 16, no. 5 (2010): 795-805. Thanwani, sunil. “BPR or ERP – What comes first ? ”,(2000). Torrentpharma. jan-feb 2006. http://www. torrentpharrma. com/pdf/torrentian/2006_jan_feb/14_15. pdf (accessed July 10, 2012). Tsai, Wen-Hsien, Shu-ping Chen, Elliot Y Hwang, and Jui-Ling Hsu. “A Study of the Impact of Business Process on the ERP

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