Health Care Moves in to CRM and ERP

As the industry continues to warm to the benefits to IT, a new report suggests that customer and resource software will be the next infrastructure layer.

To date, the health care industry has had relatively little use for investment in database and management tools such as enterprise resource planning (ERP) and customer relationship management software (CRM). But thats all slated to start changing in the next year or so, according to a newly released report from market research firm Datamonitor.

The market for CRM software in the United States and major European countries is expected to increase by 9 percent annually over the next six years. Thats a much more rapid rate than the 3 percent advance anticipated for the CRM market overall. Likewise, spending on ERP software is expected to grow by 7 percent over the next six years.

Author of the Datamonitor report, analyst Jim Adams, attributes the accelerated growth rate to the maturation of health care IT. Health care organizations have been "historically poor adopters of IT across the board, but they are starting to invest now," notes Adams.

"In the past its been sort of a moot point. Extra tech spending went to high tech medical equipment," he observes. But now "patient record and imaging management" applications have been driving IT applications."

"In their wake these applications bring a lot of infrastructure. Plus, all physicians do use a PC now. That was not the case even five years ago," continues Adams.

With this infrastructure and change in attitudes, health care organizations "can begin to think about the kind of cost savings that CRM and ERP systems represent," concludes Adams.

The need for fiscally-squeezed health care organizations to wring increasing efficiencies out of their operations, particularly when faced with the ever-more voracious health care requirements of the aging boomer generation, is acute and helping to further the trend.

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More knowledgeable and demanding consumers, in the form of businesses and individuals, are also making a variety of customer interfaces, including the Internet, a must for health insurers. In addition, next-generation technologies are maturing making these applications more stable and less expensive for health care companies to employ.

Specifically, CRM applications may eventually help companies to more easily – and cheaply – manage customer interactions, a particular benefit for payer organizations like health insurance companies. Meanwhile, ERP software is expected to aid in the more efficient management of financial resources, such as research grants and other funding sources, as well as in the management of employee resources by providing for enhanced recruitment and retention in addition to more efficient management of staffing needs.

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