Paper Example. SAP Systems and ERP Systems in Health Care

According to Conteh and Akhtar (2015), SAP systems and ERP systems provide the best examples of technological concepts commonly used in the contemporary health care industry. SAP is a common term used in data processing that stands for systems applications and products. By definition, SAP refers to an enterprise resource planning (ERP) software conceptualized and developed by SAP SE, a Germany-based company that deals with the integration of business functions. ERP, on the other hand, refers to the incorporated management of the significant business process of a company, usually in real-time and controlled by a combination of unique software applications (Kontio, Lundgren-Laine, Kontio, & Korveranta, 2014). This paper provides a comprehensive literature review on the use of SAP and ERP systems in the field of healthcare. Also, the article discusses SAP SE as the preferred company by providing a personal opinion and critical reflection on its operations alongside looking at a real case of using ERP systems in healthcare.

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Literature Review

According to Ngafeeson (2014), numerous researchers directed their focus to the need to have a detailed comprehension of the use and application of ERP systems in the field of healthcare, their benefits, and associated challenges. Sanja (2013) studied the impact of the ERP systems and identified various issues that healthcare stakeholders must consider while integrating them into their operations. For instance, managers in the global health industry should provide a clear articulation on how integrating an ERP system can help in executing their organizational strategy. Muscatello and Chen (2008) also supported this recommendation and, in turn, identified the ability to provide an advanced infrastructure as the main benefit linked to the use of ERP systems in the implementation of a company's strategy.

According to Muscatello and Chen (2008), ERP systems provide health organizations with a comprehensive, integrated platform for the management of their enterprise data while creating a value chain. Also, health organizations should manage their human resources properly to realize the benefits associated with ERP systems (Fiaz, Ikram, & Ilyas, 2018). Thus, ERP systems can help health facilities to manage different human resource-related tasks virtually. For instance, ERP systems can assist in hiring and recruiting highly talented health workers with the ability to help the organization reach its goals by providing high-quality services (Kontio et al., 2014). Also, ERP is essential in assisting health companies in managing employee benefits and retirement plans effectively. Sanja (2013) added ERP systems could help healthcare institutions to conduct and manage the processes of employee training and compensation. These systems can also help in providing better patient care by allowing convenient storage and sharing of their information between various departments in the organization. The use of ERP systems entails the electronic storage of information (Fiaz et al., 2018), which allows medical practitioners to share information promptly to provide high-quality health services within the recommended schedule.

Conteh and Akhtar (2015) added that hospitals could also use ERP systems to not only keep but also have fast access to essential information regarding their business operations and their patients. ERP systems help such organizations in ensuring and promoting the safety, privacy, and confidentially of their data. Fiaz et al. (2018) also found that the use of ERP systems reduces the risk of losing information by storing everything in a highly secured place, which requires every user to receive permission from the manager to gain access. ERP systems also provide better business intelligence and allow strategic planning for health organizations, such as hospitals, by measuring and analyzing their performance (Conteh & Akhtar, 2015). Afterward, ERP systems provide valid information about requisitions, budgeting, and analyzes patient visitation to ensure that every patient receives appropriate care. ERP systems help healthcare companies to properly manage their finances by maintaining track of the payments made by patients as well as recording and keeping the operational costs incurred through purchasing drugs and other supplies (Kontio et al., 2014). Lastly, ERP systems reduce the cost of administering a healthcare facility and minimize all sorts of inventory errors incurred in the organization.

On the other hand, Conteh and Akhtar (2015) emphasized the need to identify and to solve some of the fundamental challenges associated with the use of ERP systems in the global healthcare industry to fully realize their benefits. According to Sanja (2013), integrating the ERP system in organizational operations is not only challenging but also expensive for modern health companies to execute. The implementation process also faces resistance, particularly from health practitioners, such as doctors, nurses, and pharmacists used to the previous functional systems. Thus, it can be difficult for an organization to gain the cooperation required between its diverse workforce to deploy and use the ERP systems effectively. Conteh and Akhtar (2015) also found that this resistance may culminate in increased medical errors, poor quality healthcare, and low levels of satisfaction among the targeted customer. Lastly, implementing ERP systems in the organization requires technical competence in terms of skills, knowledge, and experience. Many organizations have inadequate staff with such expertise, which creates problems of configuration and utilization (Ngafeeson, 2014). Therefore, the manager must address such challenges through gaining adequate financial resources, creating awareness among workers on the significance of ERP systems, and training employees to ensure successful implementation.

Analysis and Discussion

According to Garefalakis, Mantalis, Vourgourakis, Spinthiropoulos, and Lemonakis (2016), the use of ERP systems is increasingly becoming common in the contemporary healthcare industry. This increasing utilization is as a result of the benefits that many health stakeholders and organizations obtain from these systems. SAP SE, which is a Germany-based multinational software firm, serves as the leading organization in the development of business software for assisting organizations to manage customer relations and run their operations (Matende & Ogao, 2013). The ERP system provides the best example of the software applications developed and deployed in diverse industries across the world. SAP SE bears its headquarters in Walldorf town in the state of Baden-Wurttemberg, Germany, and has multiple regional offices in more than 180 countries. The company availed in the global market its current version of ERP, abbreviated as V.6.0, in 2006 and continues to play a vital role in the health industry by improving patient care and service delivery (Sanja, 2013). However, SAP SE released an enhanced package of the 2006 ERP version in 2016.

Personal Opinion and Critical Reflections on SAP SE ERP

Analytically, SAP SE played a vital role in the global health industry by developing the ERP system. Healthcare firms and stakeholders realized the benefits of this system both directly and indirectly (Garefalakis et al., 2016). Some of the direct benefits of ERP include improved management of patient records, minimizing the cost incurred while using the traditional paperwork, and enhanced sharing of information between different departments. Also, ERP systems contribute to improved organizational flexibility, provides reliable and timely data, and reduces wastage of time among patients while seeking services (Sanja, 2013). The improvement of the brand and image of a typical health organization, such as a hospital before its target clients alongside creating a competitive edge over rivals, are the indirect benefits.

I believe that this system can still benefit health organizations when properly implemented and managed. For instance, ERP systems present a critical opportunity for health organizations to increase their sales revenues and profitability (Ngafeeson, 2014). However, organizational managers must identify the challenges associated with these systems to maximize their benefits. Also, SAP SE needs to assess the problems related to its latest version of the ERP and develop new applications that can align with the current needs of the industry (Garefalakis et al., 2016). Failing to come up with innovative versions of the original software put a plethora of health firms at the risk of losing their data due to imminent failure and as a result of hacking.

Real Case Application from the Healthcare Industry

According to Sanja (2013), India provides the best example of a country with numerous organizations benefiting from the decision to reengineer their business processes through the use of SAP SE software, such as the ERP systems. These health organizations operate both on the national and international levels and provide high-quality health services to their clients not only in India but across the world. Some of these companies include the GCR Hospital, Geneva Pharmaceuticals, Singapore Hospital, and Indraprastha Apollo Hospital (Matende & Ogao, 2013). Comparative studies evaluating IT applications in the Indian health industry acknowledged ERP as the latest solution that the country's health industry is using to improve the efficiency of its business operations. Managers of most of Indian health firms cited improved patient care, reduced waiting times, and enhanced sharing of patient and business data among health practitioners and departments as the benefits realized from using ERP systems (Conteh & Akhtar, 2015). However, conducting more studies could help in understanding the benefits of these systems and improving their applications in the global health industry.

Conclusion and Recommendations

SAP SE made a significant decision in developing the ERP System. Practical application of this system has far-reaching benefits not only to health companies but the entire healthcare industry. Therefore, there are different recommendations that modern health managers need to consider to realize the potential of ERP systems. First, these managers need to train and empower their employees on how to use the ERP systems. Secondly, managers must create awareness in their organizations on the significance of these systems to encourage collaboration and cooperation of their diverse workforce to achieve effective implementation. Lastly, health facility leaders must develop alternative financing mechanisms, such as seeking foreign aids to help in catering for the expenses incurred when purchasing, utilizing and maintaining the ERP systems, as discussed in this paper.

References

Conteh, N. Y. & Akhtar, J. A. (2015). Implementation Challenges of an Enterprise System and Its Advantages over Legacy Systems. International Journal on Computer Science and Engineering (IJCSE), 7(11), 120-128. Retrieved from https://pdfs.semanticscholar.org/bb7a/c434e09f936fbce982643638f6d2b0595a19.pdf.

Fiaz, M., Ikram, A., & Ilyas, A. (2018). Enterprise resource planning systems: Digitization of healthcare service quality. Administrative Sciences, 8(38), 1-12.

Garefalakis, A., Mantalis, G., Vourgourakis, E., Spinthiropoulos, K., & Lemonakis, C. H. (2016). Healthcare firms and the ERP systems. Engineering Science and Technology Review, 9 (1), 139 - 144. Retrieved from http://www.jestr.org/downloads/Volume9Issue1/fulltext91212016.pdf.