Major Initiatives - Medical Device Industry

In most of the consulting organizations the Medical Device industry falls under manufacturing, the business processes of medical device industry are the same as manufacturing but are much more bound by regulatory compliance issues.

There are three distinct investment/new initiatives that I have seen in this industry in the past one year.

Trend 1: Moving to SAP

Most of the MedDevice companies have grown in scale in the past few years. Their earlier systems could handle most of the processes, lately the top 5-7 MedDevice companies seem to have large initiatives on SAP. They want to consolidate and move their core business processes from existing system to SAP.

Trend 2: Device Tracking

The requirements of a MedDevice company are unique on device tracking - from manuf to recall.

• Device Registration - Keeping track of where/who the device was sold to
• Device Internationalization - Forms for various countries if sold outside of US
• Device Recalls - Field action notification
• Overall device tracking - supply chain management

Most of the out of the box ERPs like SAP do not seem to provide functionality that will enable device tracking, huge efforts are being spent on customizations.

Trend 3: Compliant Handling

Compliant handling in most of the device companies has been primitive, with the complaints increasing in volume, nature of complaints and complexity - Compliant management systems are being implemented afresh. There are off the shelf products and inhouse applications being developed.

Overall, these three trends are the investment areas gaining CIO mindshare other than all the common areas of concern for a CIO.

Major IT players betting big on Healthcare

Every time I come back from HIMSS I see a new crop or the old wine in new bottle betting big on healthcare. This year was no exception.

I would watch out for the following companies

Tier 1 Technology Vendors

• Microsoft - Have yet to get their model right, but with the focus they can make it big
• Sun Microsystems - With plans of making SeeBeyond open source - they could disrupt the market
• Cisco - A pure technology player having a CMO? Yes its true - should I say any more?
• Oracle - Looks like they are out to root Lawson
• Business Objects - wants to be a leader in analytics

Tier 1 consulting vendors

• IBM - Big blue, big boy and will try to stay in the race - Clinical, IT, Outsourcing
• Accenture - NHS has been a blow but who cares they still are a force in US
• KPMG - Strong practice in the Providers, watch out they may have a trick or two out of thier hat
• First consulting group - is their demise near? loosing ground to compeition on rates and scale, thier offshore operations have not been able to scale.

Tier 1 Offshore vendors

• Wipro - Lots of focus and investment in Healthcare, betting big on IT,Outsourcing, Clinical given their clinical,IT strengths
• HCL - It their booth size were to tell something - they have had a good last year
• Infosys - Missing in action at HIMSS? Not sure if Healthcare is still a focus and growth area of them.

Trends I see to watch out for

• Niche deals in Healthcare analytics space - Reporting, modelling etc
• Outsourcing of Provider infrastructure to offshore companies
• EMR implementation deals - will still continue
• Application maintenance and support outsourcing
• Customers wanting vendor skin in the game in deals - investments, risk sharing etc.
• Consumerism - payers adopting the retail model to interact with individuals

In a nutshell, the inustry is going to adopt IT and its outsourcing practices the way Retail/Manuf industries did in the 90's. The hype and hoopla around HIPAA, Security and Privacy are cooling down.

Providers - Clinical and Financial Reporting

I have been attending HIMSS since the past few years and I am thrilled to see the level of participation by vendors and customers, it just seems to b increasing. This year the weather not being too kind - lots of people got stranded and did not make it. I was one of the lucky few that did make it.

I have seen a unique trend catch up since the past few year, earlier it was all about how we can help capture data for you. Voice to text, EMRs, EHRs, PHRs etc.. that trends still continues but with a twist. I have seen more compaines come out with business intelligence and analytics solution now than before.

I got a chance to talk to few leaders in the provider space. One of the C-Level guys told me this "We are sitting on a pile of data now, we have the systems that capture them in place. Its all about how we can mine the data, build intelligence and make financial sense out of it". I think he was bang on. I see traditional BI vendors like Busienss Objects, Informatica starting to get really active in the Healthcare market.

Microsoft seems to be all guns on the BI market as well. Here are a few areas that I figured are ripe for reporting solutions..

1. Financial reporting off MEDTECH
2. Clinical reporting off all the HIS systems

Unfortunately there are very few niche players in this market that do not have the teeth to cut the market. If there is a package that can sit on top of HIS systems and just enable reporting - that is going to be a kill. I am aware that is want MS wants to do with its new acquisition - Azyxxi.

Payers have been grapelling with the BI issues for sometime now, they have relied on inhouse build algorithms to manage the predictive modelling etc. I feel this area is out to explode in the next few years with more investments in analytics being the trend across Provider and Payers.