ERP in healthcare industry: Why & How to use it?

What is the use of ERP in healthcare?

Most healthcare businesses use separate software for each function. As the facility scales up, the demand to transfer and communicate data between departments arises. 

This is when an ERP comes in handy. The system integrates and connects complex information from separate departments into a single centralized storage location. Staff can easily get a quick overview of what data they need instead of checking each system one by one. It also eliminates duplication or discrepancies among departments and makes it easy to make correct decisions.  

For example, thanks to ERP, doctors can check medical inventory before writing prescriptions, and pharmacy can make timely orders to ensure there are enough supplies. When the pharmacy makes a new order, the finance department will be alert, and detailed info is updated in the ERP.  

Benefits of ERP in healthcare industry

Not just aiding in data management, healthcare facilities can do so much more with ERP: 

1. Improve the quality of healthcare

Although it does not directly affect medical examination and treatment activities, ERP significantly improves the quality of healthcare services. Why? This system reduces the burden of paperwork and administration for medical staff, removes stress from these tasks, and gives them time to focus on researching and providing healthcare services to patients. 

2. Financial management

ERP provides hospital financial management solutions, including patient payments, insurance claims, and hospital operating expenses. With ERP, the financial condition is always under control, minimizing errors in invoices and financial statements. 

3. Allows business strategy

ERP allows business owners to make the right decisions and create strategies based on analysis and reporting of hospital performance to improve future performance indicators. 

4. Integration

Many hospitals still use outdated software to manage each department, creating a discreet and difficult-to-control system. ERP will integrate all information, as well as third-party solutions, giving you an all-in-one workplace. 

5. Enhanced security and compliance

Hospitals contain many sensitive patient information. If cyber threats exploit this information, it will cause great damage to both patients and hospitals. ERP is a highly secure and HIPPA-compliant storage solution, helping hospitals better protect their information and avoid legal risks. 

6. Better collaboration

ERP enhances the efficiency of engagement and communication between departments. By integrating all aspects of a healthcare service into a unified system, departmental staff can easily coordinate and create a seamless workflow. 

7. Information storage

Hospitals deal with a large amount of data and information, with complex data requiring separate storage. ERP provides effective storage and management solutions for these patient and hospital data. The system is highly secure and allows authorized individuals to access it easily and quickly. 

Must-have components and features of a healthcare ERP

As a comprehensive solution, ERP contains different modules and functions. Depending on your need, you can request additional specialized modules.  

Here are some important features: 

1. Patient management

The module streamlines patient registration and appointment scheduling. In addition, it includes very useful information in patient management, such as medical history, treatment history, medication history, treatment plan, insurance information, and visit histories. 

2. Inventory management 

ERP provides modules for inventory management, including storage checking for drugs and medical equipment. This allows hospital staff to track inventory levels in real-time and control prices, expiration dates, and machine maintenance dates. 

3. Human resource management

This module helps to effectively manage hospital staff, including work schedules, payroll, training schedules, training results, and work performance, ensuring that staff is always in the best working condition. 

4. Financial management

ERP provides financial management solutions for invoicing, payment, reporting, claims, and compensation. These features allow healthcare facilities to constantly update their financial issues and optimize revenue. 

5. Reporting and analysis

ERP integrates custom tables, reports and analyzes real-time indicators, helping administrators grasp the situation and performance of the facility to come up with appropriate solutions 

Types of ERP in healthcare industry

Now that you understand how ERP works in your healthcare facility, how do you know which one is right for you? There are several healthcare ERP types based on technology infrastructure and use. 

Cloud-based ERP systems

The fastest and most cost-effective solution is to use SaaS Healthcare ERP or build one in the cloud. Cloud storage allows access to systems and tools without any complicated software or infrastructure.  

This solution helps healthcare facilities dramatically lower IT staff costs, hardware and maintenance. However, if you opt for SaaS, scalability and flexibility can be quite limited, which is unsuitable for large facilities. 

This Healthcare ERP is best for small to mid-size facilities. 

On-premises healthcare ERP systems

For this type, your ERP system is directly installed in your facility. It will operate on your facility server, both online and offline. In this way, your facility will have almost 100% control over the modules and data. However, an on-premises healthcare ERP system requires IT infrastructure and in-house IT staff. 

This Healthcare ERP is best for large enterprises or healthcare franchises with in-house IT teams.  

Hybrid ERP systems

This model combines on-premises and cloud-based ERP. It is highly flexible and benefits from the advantages of the two systems. For important and sensitive data, you can store it directly on your server to maximize protection while saving others on the cloud to optimize space.  

This type of healthcare ERP system is adored by many mid-size to large enterprises since it guarantees them the resources to scale easily, without switching to an entirely new system. 

Generalist and Specialist ERP systems

A generalist ERP provides features that can meet the needs of any industry. Since it is made for commercial use, it usually lacks adaptiveness to your niche requirements. Of course, this leads to a relatively low price, which is ideal for many small to mid-size facilities.  

In contrast, specialist ERP systems are designed to meet the specific needs of an industry, in this case, the healthcare sector. This is why we recommend you opt for customization, as you can make it fit your requirements. Healthcare has many regulations, cross-departmental processes, and multiple end-users (doctors, administration staff, patients, partners), which generalist ERP might not be able to solve. 

Ways to build your ERP healthcare: Commercial ERP or Custom?

1.  Top commercial/ SaaS healthcare ERP software to use

If you decide to choose a SaaS, here are the top ones to consider.  

• Oracle NetSuite: Best for small and midsized healthcare, NetSuite offers modules for finance, billing, inventory management, human resources, CRM, and sales order management.  
• SAP: You can choose SAP Business One, suitable for SME healthcare facilities. You can also choose SAP ByDesign, a more flexible ERP with strong integration and localization for 80 countries.   
• Sage Intact: Focusing on finance management and process optimization, this cloud-based healthcare ERP system provides solutions to manage every aspect of healthcare financials. 
• Workday: If you are looking for an agile yet powerful healthcare ERP, this one is for you. Best for enterprise-level needs, Workday claims to improve nurse retention, reduce the PAR count cycle, and free up staff time with AI.   
• Microsoft Dynamic + Microsoft Power Platform: A strong combo from Microsoft that allows you to take advantage of pre-built ERP, yet still leaving space for customization. This is why Microsoft is better than the above solutions, as you can adjust it to match your data flow, current processes, regional regulations, and set up a favor interface.  

Just a reminder, using a SaaS ERP for healthcare has its pros and cons:  

Pros	Cons
Lower initial investment with predictable fees. User-friendly interface for easy access. Adhere to global healthcare standards. Support, training, maintenance, and upgrade provided by the vendor. Doesn’t require much in-house IT resources.	Higher investment in the long run. Concern about data security and vendor lock-in. May not adhere to local healthcare standards. Lack of flexibility and scalability.

2. Develop healthcare ERP from scratch

If you want to build an ERP from scratch, bear in mind that the initial investment can be high, but the running cost will go down soon and after. Customizing ERP in healthcare industry also drives better flexibility and scalability but at the expense of lengthy development. In the end, you must make some trade-offs. A customized ERP is adored by many businesses for its tailor-made nature, serving the facility better n the long run.  

The key to successful custom healthcare ERP development is a reliable partner, and Synodus is proud to be one! 

With over 250+ developers, we specialize in ERP development and have healthcare as our top industry. Our team is ready to take your facility to the next level in performance and management.  

What route you can take while working with us for healthcare ERP development: 

• Save time and money using low-code technology (Microsoft, Salesforce, or Sitecore) or a packaged solution.  
• 100% customization guarantee by building ERP from scratch using top-notch tech stack in cloud and data management.  

Need more proof? Working with a global pharmaceutical company, we created a robust ERP, connecting data points across departments and even supporting them by implementing a change management and training program for all staff.  

Promised on quality deliverables and cost-effectiveness, we are not just coders but a strategic sidekick focusing on long-term results and usability for your facility. 

Challenges in ERP implementation

ERP implementation has several challenges that must be considered before deciding to get one for your organization. 

Data security

Hospitals handle many sensitive patient information; any data breach or leakage can have serious consequences for patients and healthcare providers. To address this issue, healthcare facilities need to invest heavily in cybersecurity measures, encryption protocols, and access control mechanisms to protect patient information and avoid legal issues.  

A good healthcare ERP system should adhere to regional standards and not just take security measures. If anything happens, your facility will be protected in court. 

Compatibility

Healthcare organizations often have a complex system of applications across multiple departments, some of which are outdated. To simplify the process, find a healthcare ERP solution or a vendor with great integration ability. 

Lack of IT expertise

Hospitals’ primary mission is to conduct medical research and provide the best healthcare services to patients, they often do not pay attention to information technology departments, so many hospitals and medical facilities lack the necessary IT professionals to monitor, deploy and maintain software systems.  

Outsourcing to a healthcare ERP development company can be a worthwhile solution. They offer a wide range of IT specialists to hire and ensure a resourceful team throughout the project. 

Cost

Cost is also a major barrier to implementing ERP systems because most healthcare facilities must focus on investing in medical equipment and medical staff salaries, so the cost of purchasing, building and maintaining an ERP system can be a barrier for healthcare facilities, especially small or non-profit facilities. 

You can optimize development costs by using a packaged solution or deploying low-code technology, which Synodus is best known for! 

Wrapping up

ERP is an important software system in managing medical facilities. Hopefully this gives you an overview of the role, types of healthcare ERP as well as the advantages and disadvantages of each type.