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ERP Decision Insights 2020
New Energy Reflects Changing Customer Expectations
Author
Tanya Egbert
Author
Sam Eaquinto
Recent purchase decisions in the healthcare ERP market (defined by KLAS as financials [GL/AP], HR & payroll, and supply chain management) have been largely dominated by provider organizations looking to move to the cloud. Hoped-for benefits include improved system reliability and security, improved efficiency, and reduced capital investment. But there are challenges with cloud solutions as well, such as poor implementations, limited functionality, and outages and connectivity issues. This report examines 73 ERP purchase decisions made since the beginning of 2019 to determine the reasons behind ERP replacements and new selections. What is most important to provider organizations: technology and innovation, or vendor experience and relationships? Which vendors are gaining momentum, and which are being left behind?
Data in this report comes from two sources: KLAS Decision Insights data (information on which vendors are being replaced, considered, and purchased and what factors drive these decisions) and KLAS performance data (quantitative ratings from current customers on metrics like vendor relationships, product quality, value, etc.). For more information, see the About This Report section of the full report.
Cloud Solutions from Workday, Oracle, and Infor Dominate Considerations
Over the past few years, healthcare organizations have come to view Workday as a market leader; the vendor is almost always considered and is often chosen, commonly due to the strong user experience the solution provides. Many respondents highlight the solution’s intuitive workflow. Organizations who don’t choose Workday (and one replacing the vendor) see the supply chain functionality as still limited, though several others are confident in the vendor’s road map and development plans for closing supply chain gaps. Some respondents say their organization passed on Workday because Workday’s sales team was arrogant during the sales and demo process.
Oracle and Infor also have high mindshare. While Workday considerations surged at the end of 2019, Oracle and Infor have begun closing the gap. Respondents who consider or choose Oracle often do so because of the enterprise platform and its full breadth of data. Oracle has recently become a more competitive option in new deals and has replaced Workday in a couple of instances. Most customers planning to replace an Oracle solution use the older, on-premises PeopleSoft platform and are looking for newer technology. Nearly all Oracle customers considering such a change consider the Oracle cloud option, though selection of other ERP vendors is common. Only one interviewed organization on Oracle’s cloud product plans to replace it. Infor’s cloud offering is often considered by organizations looking for upgraded technology. Infor has a large base of clients who either have replaced or will soon be replacing Infor’s on-premises solution. Organizations who have chosen or likely will choose CloudSuite are impressed by Infor’s progress in the last couple of years. They also cite the product’s value for the cost. KLAS has validated one Infor replacement of Workday. The large number of Infor replacements comes almost entirely from legacy clients, many of whom have decided to migrate to the Infor cloud solution. Two CloudSuite customers are replacing the product (see next section for details).
Functionality/Technology & User Experience Driving Decisions
Premier & Allscripts Not Often ConsideredÂ
Premier, who offers a healthcare-only ERP solution, is considered in a few decisions, but the fact that their platform lacks an HR module causes some organizations to look elsewhere. Allscripts’ offering is older and not cloud based, making it a less-attractive option in potential purchases and driving some Allscripts replacements as well.
Cloud Solutions Generating Energy
Almost all validated ERP replacements were made by organizations choosing a newer cloud product to replace an older, on-premises solution they viewed as outdated. The vast majority considered other vendors in addition to their incumbent vendor. A small number of organizations have replaced a cloud solution because of relationship issues, a poor implementation, or functionality gaps. A few Workday customers have moved to Oracle or Infor after insufficient issue resolution. A couple of respondents are replacing Infor’s CloudSuite product because of a difficult implementation or poor support, and at least one Oracle Cloud client is replacing the product due to unmet expectations for system capabilities and speed.
Wins/Likely Selections—by Organization Bed Size
Vendor Summaries |  Vendors listed alphabetically
Allscripts’ ERP offering has been around for many years (it was originally a McKesson product) and is not cloud based. The solution is not often considered in new purchase decisions. Organizations replace Allscripts for a variety of reasons. Many have chosen new EMR systems and are taking the opportunity to consolidate their ERP tools under the new suite as well. Others lack confidence in Allscripts’ ERP road map. Current customers rate Allscripts low for delivery of new technology and executive involvement. Many are dissatisfied overall, and only 59% say they would buy the product again. More satisfied customers say the product gets the job done and that customer support is a strength.
With a full complement of ERP modules (HR & payroll, financials, and supply chain), Infor has gained consideration energy in the past year. Organizations making purchase decisions see CloudSuite as a competitive product worthy of serious consideration. Many Infor customers are replacing the older legacy solution; about 40% chose Workday, about 20% will go to Oracle, and about 15% have chosen to remain with Infor and migrate to CloudSuite (the rest are undecided). Current customers’ satisfaction with CloudSuite is mixed—44% of respondents indicate they are dissatisfied. Problems include implementation and training challenges, and only 54% of clients would buy the solution again.
Organizations frequently consider Oracle in purchase decisions, often out of a desire to have an integrated enterprise suite. Oracle offers the full complement of ERP products, and respondents who choose Oracle express excitement about hoped-for benefits from having all modules provided by the same vendor. About one-third of interviewed customers replacing the older PeopleSoft version have chosen to upgrade to ERP Cloud. Among respondents who considered Oracle but did not select them, some (especially smaller organizations) feel that the vendor targets larger organizations and that Oracle’s sales approach and pricing were not a good fit. According to interviewed cloud customers, Oracle’s strengths are product quality and ease of use. Support is an area of concern for a few. Most customers are satisfied overall, and 81% would buy the solution again.
Premier is not frequently considered in ERP purchase decisions. Lacking an HR module of their own, they often partner with Ultimate Software for this piece, and they have demonstrated the ability to integrate their offering with other HR solutions. Interviewed organizations making purchase decisions mention concern that the need to integrate different pieces (the HR system in particular) could possibly hinder the end-user experience. When Premier is considered, it is because organizations appreciate Premier’s focus and experience in healthcare supply chain and financials. Few current clients are dissatisfied; most customers report the product works as promoted and feel they receive their money’s worth from it.
Workday continues to have the highest mindshare and to garner the most selections in the healthcare ERP market. A common reason is the improved user experience they provide. In a few cases, organizations say they were put off by the sales team’s approach, which can be perceived as arrogant. Current customers are very satisfied across all product- and service-related metrics. All current customers in this report sample would buy the product again; a few organizations who reported purchase plans but did not share performance feedback either have replaced Workday or are planning to do so. This small group typically cites supply chain limitations as the reason for replacement.
Other Vendors in the ERP Space
ADP
Offers outsourced payroll solution; often partners with Kronos
API
Offers HR & payroll only; not considered by any respondents in this study
Kronos
Offers HR & payroll only
SAP
Well-known provider of ERP solutions outside healthcare; virtually no presence in healthcare ERP
Ultimate Software
Offers human capital management (HCM) module; often partners with Premier
What Are Decision Insights?
KLAS’ Decision Insights data conveys the future plans of current and potential customers in a given market segment. When a provider organization reports they have made a solution change in the last 12 months or plan to do so in the next 24 months, that decision is captured in the form of Decision Insights data. Decision Insights data does not represent a comprehensive census or win/loss market share study. Rather, it is intended to help provider organizations understand which vendors have market energy and why.
Writer
Amanda Wind Smith
Designer
Jess Wallace-Simpson
Project Manager
Robert Ellis
This material is copyrighted. Any organization gaining unauthorized access to this report will be liable to compensate KLAS for the full retail price. Please see the KLAS DATA USE POLICY for information regarding use of this report. © 2024 KLAS Research, LLC. All Rights Reserved. NOTE: Performance scores may change significantly when including newly interviewed provider organizations, especially when added to a smaller sample size like in emerging markets with a small number of live clients. The findings presented are not meant to be conclusive data for an entire client base.