The Strategic Value of B2B Commerce in Healthcare –Still not Sure?
Tags: EDI Integration, GHX, GXS, healthcare cost management, healthcare supply chain, Steve Keifer
Mr. Steve Keifer joined GXS in 2004 and has been a key evangelist of B2B e-commerce, speaking at conferences around the world about its societal, economic and competitive benefits. In fact, he recently authored a book entitled Herding Geese—The Story of the Information Supply Chain. It’s a good read –I recommend it.
While trying to find the book, I also ran across an older post written by Steve that caught my attention. He was commenting on the age-old debate about the strategic legitimacy of Information Technology (IT) investment. On the one hand, especially given its pervasiveness, it is argued that IT is no longer strategic –that it lost that luster a long time ago. On the other, it can be argued that organizations who make their IT investments more earnestly(?), not only view their investments as strategic, but believe they’re competitively defining. Damn near mission critical.
That’s quite a chasm.
As he pointed out, if you just look at the numbers, say licensing fees paid by Fortune 500 companies to vendors like Oracle and EMC, you might conclude that these technologies are strategic. But, let’s face it, they clearly aren’t. So Steve cleverly moved on to investigate his own area of passion –B2B commerce. And what did he learn? 34 of the Fortune 50 had made significant and strategic investments in B2B integration technologies over the past 15 years. Their investments were unarguably strategic, because these companies either:
- Built their own B2B integration products such as FedEx has done with its EDI services;
- Purchased an equity stake in a B2B integration company such as Ford’s original investment in Covisint or;
- Divested their interests in B2B integration products to another company.
Here is the list:
- Wal-Mart Stores – was an investor in RetailersMarketXchange
- Chevron – was an investor in RetailersMarketXchange
- ConocoPhilips – was an investor in TradeRanger
- General Electric - sold off its Global eXchange Services (GXS) division; also was an investor in GHX (Global Health Exchange)
- General Motors – was an investor in Covisint
- Bank of America – recently sold off Paymode; also is a member/owner of SWIFT
- Ford – was an investor in Covisint
- Hewlett Packard – recently acquired a B2B Group via the EDS transaction
- AT&T – recently spun off its investment in Sterling Commerce
- J.P. Morgan Chase & Co – acquired Xign, also is a member/owner of SWIFT
- Citigroup – recently spun off Interchange Brazil, also is a member/owner of SWIFT
- McKesson – owns its Relay Health division, also was an investor in Health Nexis
- Verizon – former MCI group spun off its EDI division to nuBridges
- IBM – recently acquired Sterling Commerce after selling off its EDI network (Advantis) as G International; also was an investor in e2open
- Cardinal Health - was an investor in Health Nexis (now owned by GHX)
- CVS Caremark - was an investor in the e-prescription network Surescripts and WWRE (World Wide Retail Exchange)
- UnitedHealth Group - owns its Ingenix division which offers EDI-based services to the health care community
- Wells Fargo – is a member/owner SWIFT
- Kroger – was an investor in GNX
- Procter & Gamble – was an investor in Transora
- AmerisourceBergen – equity investor in GHX
- Walgreen – was an investor in WWRE (World Wide Retail Exchange)
- Target – was an investor in WWRE (World Wide Retail Exchange)
- Medco Health Solutions - was an investor in Surescripts
- Boeing – was an investor in Exostar
- Microsoft – developed BizTalk Server, which offers B2B integration capabilities
- Johnson & Johnson - equity investor in GHX
- Dell – recently acquired Boomi
- PepsiCo – was an original investor in Transora
- United Technologies – was an original investor in Cordeim
- Dow Chemical – was an original investor in Elemica
- Best Buy – was an an original investor in WWRE (World Wide Retail Exchange)
- UPS – has developed its own EDI services for corporate clients; also was an investor in nuBridges and the exchange Cordeim
- Kraft Foods – was an original investor in Transora
With clinical integration viewed as the foundation to accountable care, it’s interesting that EDI integration can remain fodder for debate. With 40% of the total cost equation up in the air –relatively speaking– enforcing standards in supply chain competence seems well within the prevue of payers. Bundled payments for episodes of care, shared savings, etc., the levels and different types of transparencies that are going to be required compel transaction-based standards. And frankly, the bells and whistles of today’s solutions (e.g. track and traceability) will most certainly become tomorrow’s “requirements.”
Source: Steve Keifer’s blog.