The Strategic Value of B2B Commerce in Healthcare –Still not Sure?

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:

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.

—Tom Finn

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