ERP in Healthcare

Martin Mucheleka and Raija Halonen

University of Oulu, Oulu, Finland

Keywords: Enterprise Resource Planning, ERP, Healthcare, Literature Review.

Abstract: Attempts to improve healthcare services have increased worldwide and the role of information technology

(IT) is increasing to find solutions for various issues facing the healthcare sector. The purpose of this study

was to find out how enterprise resource planning systems (ERP) have been used in the healthcare sector and

how these systems could be used to improve healthcare services. The field of IT now encompasses all in-

dustries, including the healthcare sector, which is currently going through fundamental changes. Based on

the literature reviewed in this study, the use of ERP systems in the healthcare sector has not been widely re-

ported. However, some findings showed that ERP systems could be used in the healthcare sector to improve

the quality of services. Based on these findings, if ERP systems were successfully implemented in

healthcare organisations, they would promote significant changes in certain areas such as in finance, human

resources and capacity, revenue and admission resources. ERP systems could also improve both the profita-

bility and services of healthcare organisations. Because of the lack of research in this area, further studies

should investigate the usage of ERP in healthcare organisations.

1 INTRODUCTION

Information is an important aspect of the healthcare

industry. Sharing knowledge has become important

in order to reduce costs and improve the services

rendered to customers. Therefore, the healthcare

system needs to be able to collect and share infor-

mation amongst several entities, such as clinics and

customers. It also needs to provide information

about billing and medical knowledge within the

healthcare organisation and to stakeholders. (Bose,

2003.) Moreover, the increased use of IT has been

led by the desire to reduce costs, to increase compet-

itiveness in the healthcare sector, and to improve

personalised personal healthcare (Siau, 2003).

This study analyses ERP in the healthcare sector

and seeks ways to improve healthcare services by

implementing ERP systems. The literature review,

as described by Kitchenham (2004), was applied.

In general, current business environments have

taken different shapes, and ERP systems are essen-

tial in improving the efficiency of an organisation

and its strategic decision-making. Therefore,

healthcare organisations are not an exception to the

new business changes currently taking place. Indeed,

the many business challenges faced today can be

tackled by the adoption of ERP. (Lee and Kwak,

2011.) However, implementing ERP in healthcare

environments faces several challenges such as long

time for implementation as described by Abukhader

(2014).

The healthcare sector worldwide is facing chal-

lenges, such as the rising costs of healthcare services

(Woodside, 2007). Population aging and increased

disability is reflecting on the services requiring mul-

tiskilled services especially in middle and high in-

come nations (Hirdes et al., 2008). Furthermore, the

management of the healthcare industry involves

several stakeholders, such as governments, clini-

cians, service providers and users (Soltan-Zadeh and

Córdoba, 2014).

This study focuses on how ERP systems have

been used in healthcare organisations and how they

could be used to improve their efficiency. Tradition-

al healthcare organisations use segregated infor-

mation systems. Therefore, these organisations are

challenged in sharing important information

amongst different entities. The study also highlights

the benefits of ERP for organisations that successful-

ly implement and integrate this system.

162

Mucheleka M. and Halonen R..

ERP in Healthcare.

DOI: 10.5220/0005376801620171

In Proceedings of the 17th International Conference on Enterprise Information Systems (ICEIS-2015), pages 162-171

ISBN: 978-989-758-096-3

 2015 SCITEPRESS (Science and Technology Publications, Lda.)

2 RESEARCH METHOD

In this study a literature review was conducted, and

it required the following: formulating a research

question, planning the review, doing the review and

finally reporting the review (see Kitchenham, 2004).

The literature review is also defined as a method

of identifying, assessing and analysing published

primary studies in order to answer research ques-

tions (Staples and Niazi, 2007).

Therefore, literature reviews are research studies

conducted for many different reasons, such as de-

termining how much is known about a topic and

answering a research question about the existing

research on the subject (Okoli and Schabram, 2010).

A literature review can also explain and find an-

swers to research question, illustrate activities in

different forms, such as pictures, graphs and so on,

in order to make connections among and describe

activities. A rigorous literature review identifies the

most important aspects of the study and places the

citations correctly. (Levy and Ellis, 2006.)

Regarding the conclusion to the literature review,

Rowley and Slack (2004) observed that the literature

review identifies the existing knowledge about a

subject or research question, which serves to organ-

ise the relevant literature to be used in the study.

Prior studies are scanned and examined for data that

will serve to answer the research question. Digital

libraries are used to find journals that are relevant to

the study.

In this study, the followings digital libraries were

used: ACM Digital Library, Emerald Insight,

Google Scholar, IEEE, Science Direct, Web of Sci-

ence, Inderscience, World Scientific and the Oulu

University Library.

In this study, the first scientific search for articles

was done in Google Scholar, using the search string

“ERP systems in healthcare”, which yielded only 42

hits, thus indicating that the specific topic has not

received much attention so far. The search then was

modified to individual words and narrowed to arti-

cles published from 2000 to 2014 and that included

the following keywords: decision support systems,

information systems, healthcare, knowledge man-

agement, public health, business processes and soft-

ware. This search yielded 380 articles.

The search was then refined to obtain articles

that addressed or contained phrases and information

about ERP, healthcare, social science and medicine.

This was further limited to the topics of healthcare,

health service, health system, health insurance,

health promotion, which yielded 80 articles. This

paper is a limited version or those reviewed.

3 LITERATURE REVIEW

This section first the context of the study opening

concept of ERP and continuing to research about

ERP in healthcare. After that, benefits due to ERP

are summed followed by disadvantages due to ERP.

3.1 Context

Healthcare providers such as physicians can no

longer entirely rely on their knowledge and memo-

ries to realise their scientific knowledge required for

professional practice (Karsh, Holden, Alper, and Or,

2006). To respond this problem, Orzano, McInerney,

Scharf, Tallia, and Crabtree (2008) introduced a

knowledge management model. They believe that

knowledge management processes and tools can be

thought of as ways to organise and influence learn-

ing and decision making within practices to achieve

overall health.

The healthcare industry is strongly depending on

its customers and information relating to the cus-

tomers, pharmacies and other service providers

(Hung et al., 2010). Seeking ways to improve ser-

vice quality is related to costs and higher demand in

the services (Akbar, 2003). Because of competition

amongst healthcare providers, healthcare organisa-

tions have changed rapidly in the last few years in

the attempt to improve the effectiveness and effi-

ciency of healthcare delivery (Helfert, 2009).

As hospitals have been transforming their organ-

isational structures, van Merode, Groothuis and

Hasman (2004) recommended a central planning and

control system to manage the transformation and

related processes. They note that the restructuring of

healthcare sector and implementations of case-mix

systems have forced hospitals to organise their ser-

vices according to patients' needs. After that they

question the type of information systems that could

support the new healthcare delivery organisations.

The role of knowledge management is significant.

Their answer is an ERP system that is planned for

healthcare delivery organisations. ERP systems have

been known in manufacturing and service organisa-

tions since 1990’s and later early 2000 they have

been implemented also in healthcare sector (Botta-

Genoulaz and Millet, 2006).

The concern of van Merode et al. (2004) was

known already earlier as Berler, Pavlopoulos and

Koutsouris (2001) described their best understanding

about how to manage interoperability of a regional

healthcare system. They introduced a framework

that was based on Health Level 7 (HL7) and argued

that their approach is pragmatic, achieves data inte-

ERPinHealthcare

163

gration and provides an acceptable solution. HL7 is

widely used today in healthcare (see e.g. Nowak,

2014).

ERP systems are software packages that allow an

organisation to view information about the entire

organisation, as well as the power to influence the

operations of an organization (Gargey and Brady,

2005). Amoako-Gyampah (2007, p. 1233) defines

ERP as ‘programs that provide single integrated

software that aim to provide single integrated soft-

ware to handle multiple corporate functions includ-

ing finance, human resources, manufacturing, mate-

rials management, and sales and distribution ERP

systems are programs’.

Sammon, Nagle, and Carlsson (2012) report in

their review about early ERP that as there is no gen-

erally agreed definition for EPR systems they define

that 'by design' an ERP is an operational-level sys-

tem. On the other hand, Al-Saleem, Junaid Qayyum,

Ziani, Mansoor, and Amin (2012) value EPR sys-

tems as the most groundbreaking progress in infor-

mation technology.

Klaus, Rosenman and Gable (2000) noted that

three types of ERP systems are commonly offered

by ERP vendors:

 Generic form software targets specific in-

dustries and must be configured.

 Packaged software is preconfigured ERP

software that is tailored according to the in-

dustry sector.

 Configured packaged software is the most

often used in operational installations that

have been individualised according to the

client’s specifications and requirements.

In addition, Kunkel, Rosenqvist and Westerling

(2007) asserted that organisation observed that IT

plays an important role and adds value to an organi-

sation. Therefore, organizations have been acquiring

IT systems in the last 20 years, and the healthcare

sector has invested heavily in technology (Menon,

Lee, and Eldenburg, 2000).

3.2 ERP in Healthcare

Clinicians, physicians, nurses and managers need

quality tools in order to improve and cope with

emerging medical technologies and methods to

maintain quality healthcare services (Miller and Sim,

2004).

Recently Poonam and Divya (2014) asserted that

previously the healthcare sector used IT mainly for

billing and accounts. However, this trend has ex-

tended to include complex areas, such as reducing

costs, improving efficiency, managing and caring for

patients, and keeping track of inventory and supply

chains.

Healthcare organisations handle huge amounts of

information that they rely on to carry out their ser-

vices (Grimson and Hasselbring, 2000). For exam-

ple, a hospital handles data from many different

departments, some of which must be shared in order

to provide services. The information is used differ-

ently according to the function of departments, such

as controlling and planning. Therefore, it is im-

portant to make this information accessible to the

appropriate departments at the right time. (Stefanou

and Revanoglou, 2006.)

Because information is an important part of the

healthcare system, it is relied on to carry out the

duties of physicians, patients’ home care, and chron-

ic care. Hence, the integration of different services

and processes would benefit the healthcare organisa-

tion and eradicate the traditional segregation of pro-

cesses, which has resulted in the reduced sharing of

information. Integrated systems would allow the

healthcare organisation to coordinate management

and support the efficiency of patient care. (Bose,

2003.)

Furthermore, Handayani, Rahman, and Hi-

dayanto. (2013) emphasised that healthcare organi-

sations need to have automated information systems,

such as an ERP system in order to meet the demands

for the quality of healthcare services. In addition,

Chen, Dolan, and Lin (2004) pointed out that the

healthcare sector has lagged behind other sectors in

making these changes. Currently, several different

systems are used in the healthcare sector in order to

help conduct daily work and manage resources ef-

fectively.

Lee and Kwak (2011) argued that many business

environments have changed, including also the

healthcare sector. Therefore, ERP could help the

healthcare sector by improving the integration of

processes and services. They suggested that if ERP

was successfully implemented in a healthcare organ-

isation, it would promote significant change, espe-

cially in finance, human resources and capacity,

revenue, and admission resources.

Furthermore, Tarn, Yen, and Beaumont (2002)

noted the importance of information technology as a

key factor in organisations. Therefore, technologies

such as ERP systems could play a major role in fa-

cilitating organisations in meeting their goals. The

benefit of technologies such as ERP systems is the

integration of the organisational processes, data and

organisational elements. Tarn et al. concluded that

combining all elements into a single system has

many benefits, such as improving the operational

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efficiency of an organisation.

Healthcare systems rely on information from dif-

ferent sources and entities to carry out duties, such

as physicians’ diagnoses, patients’ home care and

chronic care. Hence, the integration of different

services and processes would benefit the healthcare

organisation and eradicate the traditional segregated

processes, which result in the reduced sharing of

information. Integrated systems would allow the

healthcare organisation to coordinate management

and ensure the efficiency of healthcare provided to

patients. (Bose, 2003.)

Integrated systems are an important aspect of

every service organisation; the healthcare sector is

no exception (Reay and Hinings, 2005) and integrat-

ed electronic information systems can effectively

transform the healthcare sector (Haux, Ammen-

werth, Herzog, and Knaup, 2002). For example, the

use of telemedicine is increasing, allowing for the

administration of healthcare to remote patients

(Connell, 2006).

Huq, Huq, and Cutright (2006) reported that the

delivery of services is complicated and depends

heavily on information. Hence, healthcare organisa-

tions depend on information about individual pa-

tients, care providers, results and the science of care.

Furthermore, today, patients are managed by differ-

ent physicians, unlike the days when a single physi-

cian was responsible for a patient’s health.

Based on Schnayder, Chen, Lorincz, Jones, and

Welsh (2005) and Padhy, Patra, and Satapathy

(2012), the rough architecture of an ERP is shown in

Figure 1.

Figure 1: Physicians and Central Patients’ Database.

Figure 1 illustrates a central database of patients in a

healthcare organisation, which is accessed by several

physicians. In this case, all physicians are able to

access specific information regarding a patient.

Because many physicians collaborate in the

management of a single patient, it is important that

they have access to readily available information

about that patient (Shnayder et al., 2005). ERP sys-

tems may help healthcare organisations to facilitate

the administration of their services through access-

ing various ERP information systems in different

locations. Being able to access medical information

is vital to the health fraternity because it helps them

to be efficient and effective. (Padhy et al., 2012.)

Grimson et al. (2000) observed that although

healthcare organisations handle large amounts of

data, the inability to share these data has led to their

inefficiency, preventing them from operating effec-

tively or reducing costs. This further affects the time

taken to handle and share various data within the

organisation and with stakeholders. Gupta and Kohli

(2006) noted that every organisation aims to im-

prove its services and operations. Therefore, ERP

systems have been used to improve the internal op-

erations of organisations. Business dynamics require

an organisation to have a more prudent system for

decision-making, as well as monitoring and control-

ling information.

In addition, Grimson et al. (2000) argued that

healthcare organisations handle large amounts of

data and information. However, the inability to share

this data and information has led to the inefficiency

by most healthcare organisations to operate effec-

tively and reduce costs. This further affects the time

taken to handle and share various data and infor-

mation within the organisations and with stakehold-

ers.

A case study conducted by Stefanou and Re-

vanoglou (2006) revealed that implementing a sim-

ple system in a healthcare organisation can have a

tremendous impact. Therefore, there is no doubt that

implementing an entire ERP system can have a posi-

tive effect throughout an entire organisation.

Although ERP systems are recommended as a

solution to several challenges, Gupta (2000) claimed

that these systems are costly and that they change

the operation of an organisation. Organisations that

have successfully implemented an integrated an ERP

system may face resistance from employees (users)

that are required to shift to the new systems Because

of the resistance to embracing change, it therefore

could take a long time for the organisation to realise

the benefits of the new system, which might result in

budget overruns.

3.3 ERP Benefits

This section reports the benefits of implementing

ERP in four departments in a hospital.

Front Office

The front office, often called Front Desk, is one of

ERPinHealthcare

165

the most important components of every hospital

because provides patients and their families with

updated information. People working at the front

desk have access to information about - for example

- appointments, bed availability, specialised ser-

vices, and schedules of doctors. ERP software great-

ly assists in the efficient organisation and smooth

operation of the front desk.

Financial Management

ERP software can help identify solutions to cut

costs, improve managerial reports, reduce risks and

anticipate results. It allows a hospital to integrate

numerous financial processes and manage them in

an improved manner. Many industry experts think

that no tailor-made ERP solution is available for the

healthcare industry. Nonetheless, there is no doubt

that the healthcare industry can benefit tremendously

from ERP software in many ways. (Shang and Sed-

don, 2000; Stefanou and Revanoglou, 2006.)

Inventory Management

Inventory management is one of the most prominent

features of ERP systems. It has also proven to be

important in the healthcare industry. Hospitals find it

difficult to manage inventories on a daily basis.

Therefore, an ERP software can offer significant

help in this regard, such as, for example, coordinat-

ing the purchase and maintenance of instruments,

keeping track of the expiry period and reorder status,

finding economical suppliers. (Stefanou and Re-

vanoglou, 2006). Furthermore, a single computer

system promotes transparency and access to the

organisation’s database, which allows the managers

to make informed decisions and report on the per-

formance of the organisation (Kumar, Maheshwari,

& Kumar, 2003; Klaus, et al., 2000.)

In addition, Shehab, Sharp, Supramaniam, and

Spedding (2004) pointed out that implementing an

ERP system in an organisation brings significant

changes, such as the following:

 Having automated and integrated business

processes within the organisations

 Sharing of information and practices within

the organisation and reducing repetition and

error

 Ability to access organisational information

in a real-time environment, which makes it

easier to make quality decisions

Therefore, it would be difficult and time consuming

for management to make decisions without having

access to vital information. However, with a single

computer system, management would have access to

information, thus enabling them to make decisions

that further reduce administrative costs.

Operational Costs

According to Stefanou and Revanoglou (2006), ERP

systems significantly reduce human interference in

various tasks because information transfer is raped

and completely automated. ERP systems also reduce

the workforce needed to manage patients’ registra-

tion, billing, discharge, and transfer. Therefore,

healthcare organisations saving such costs will im-

prove efficiency and productivity.

In addition, Gattiker and Goodhue (2005) assert-

ed that organisations implement and integrate ERP

systems for various reasons, such as reducing costs,

having centralised data storage accessible by various

departments, integrating business, and providing the

opportunity to redesign business practices. In his

literature review of 79 journal articles Moon (2007)

pointed out that even if ERP systems are not the

major decision support systems they are usable also

in that function.

In summary, ERP systems, such as web applica-

tions, may help the healthcare organisation to carry

out its processes effectively, such as filling orders.

Furthermore, both academicians and practitioners

consider ERP systems are considered an important

part of technology and vital to the improvement of

business processes (Hendricks, Singhal, & Stratman,

2007).

3.4 ERP Disadvantages

Despite their advantages, ERP systems have some

drawbacks. Lengnick-Hall et al. (2004) asserted that

ERP systems follow strict routines, which does not

encourage other options. On the other hand, this

promotes the transparency of an organisation, as the

information is shared and accessed through the cen-

tral database. They continue that ERP systems have

defined processes that allow for no alternatives.

Furthermore, Gupta (2000) claimed that ERP sys-

tems change how organisations operate. Organisa-

tions that have successfully implemented and inte-

grated an ERP system may face resistance by the

employees (users) who are required to shift to the

new systems. Because of the resistance to embracing

change, it therefore takes a long time for the organi-

sation to realise the benefit of the new systems,

thereby causing budget overruns.

In addition, Gupta (2000) pointed out that in an

ERP system, errors are not usually detectable, and

there is always a chance that errors are carried all the

way through the single ERP system without being

noticed. Furthermore, ERP systems are very costly

to acquire.

On the other hand, Shehab et al. (2004) pointed

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166

out that organisations that successfully implement an

ERP system will require sufficient data storage,

networking capability and overhead needs, such as

training staff on in using the ERP system.

In conclusion, Wailgum (2008) claimed that ERP

systems have several hidden costs that are caused

after the successful implementation and integration

of the systems. Hidden costs include staff training,

testing the integrated software, in addition to the

possible customisation of the system by add-ons if

the integrated system does not fit well with other

systems and components of the organisation.

Table 1: ERP system—advantages vs. disadvantages.

Advantages Disadvantages

Operations – this helps

to reduce costs and

cycle time, which results

in improved customer

services

ERP systems may have

too many features and

modules that users need

to consider, thus imple-

menting only the most

important ones.

Finance – ERP can help

to identify solutions to

cut costs, improve man-

agerial reports, reduce

risks and anticipate

results. It allows a hos-

pital to integrate numer-

ous financial processes

and manage them in an

improved manner

Implementation – ERP

systems are expensive to

implement and may

result in unsuccessful

implementation, costing

the organisation money

and resources. Mainte-

nance is expensive be-

cause it requires the

entire system to be main-

tained as a single unit.

IT infrastructure – Build

business flexibility for

current and future

changes in the organisa-

tion, IT costs reduction

and increased IT infra-

structure capability.

Organisations often

depend on the ERP ven-

dor that implemented

and integrated the sys-

tem for maintenance and

future upgrades, unless

they decide to change

the system.

Central database – Eve-

ry department and busi-

ness unit of an organisa-

tion will have access to

the information readily

available when needed.

Reliability – Organisa-

tions using ERP systems

risk breaks in their ser-

vices when their ERP

systems break down,

thereby causing interrup-

tions in various services.

Table 1 summarises some advantages and disad-

vantages of ERP systems, as discussed in the litera-

ture review. The table provides examples on how an

organisation may benefit from specific advantages

and indicates how disadvantages can affect the or-

ganisation that has implemented or intends to im-

plement an ERP system.

In conclusion, ERP systems are expensive to

implement and integrate into an organisation, as

noted by Abukhader (2014), Shehab et al. (2004),

and Rashid, Hossain, and Patrick (2002). Moreover,

ERP systems are dependent on the vendors for fu-

ture maintenance. (Rashid et al., 2002).

4 DISCUSSION

This study conducted a literature review with the

objective of gaining knowledge about using ERP to

improve the healthcare sector. The review focused

on the advantages and benefits of the ERP system

for healthcare services. Eighty articles were exam-

ined.

ERP could help healthcare organisations to im-

prove their decision-making processes, which are

critical for both the organisation and its managers.

Having access to a single database would allow

managers to make informed decisions and report on

the performance of the organisation. (Kumar et al.

2003.) As pointed out by Shehab et al. (2004), ERP

systems allow all organisational activities to be au-

tomated into a single computer system, thereby im-

proving the access and sharing of organisational

information and reducing repetition and errors.

Stefanou and Revanoglou (2006) noted the dif-

ferent types of ERP system integration, including the

healthcare-specific process, as follows:

 Business process integration (BPI) or best-

breed ERP: serves the computerised pro-

cess systems of the administration, finan-

cial and clinical functions

 Non-ERP applications: integration of pa-

tient relationship management systems, pic-

ture archiving and communication systems,

laboratory information systems, operation

theatre systems and clinical decision sup-

port systems

 ERP as a web-based application and system

integration: systems, E-procurement of

medical supplies, information integration

among several different hospitals

(healthcare organisations), physicians, med-

ical suppliers, insurance, telemedicine,

pharmaceutical industries and e-learning

 ERP as a mobile device integration, which

takes into consideration mobile healthcare

systems and telemedicine.

Huq et al. (2006) pointed out that having access

to information in healthcare organisations is im-

portant as they depend on information to provide

services. ERP systems bring various changes and

benefits to healthcare organisations. Therefore, ERP

ERPinHealthcare

167

systems help to streamline the processes of an or-

ganisation. This helps the healthcare organisation

manage and control various departments, as the

information is immediately available. Furthermore,

ERP systems are known to help organisations reduce

operational costs. (Bose, 2003.)

According to Stefanou and Revanoglou (2006),

healthcare organisations handle huge amounts of

data that often is also sensitive, and information in

different departments on the different information

systems currently being used. This information is

meant for various departments, and it must be shared

if it is processed and used by various stakeholders.

Each department collects data intended for pro-

cessing and planning their work. This information is

shared among the departments according to need.

Padhy et al. (2012) demonstrated the need for the

connectivity of healthcare organisations, such as

those in urban and rural areas, in order to provide

quality service and share vital information that might

be lacking in remote healthcare centres. Therefore,

ERP systems and other integrated technologies

would be important in meeting such challenges be-

cause they can be used through web technologies

that promote connectivity, such as WAN technolo-

gies. Figure 2 illustrates a solution that enables con-

nectivity within an organisation.

Figure 2: ERP integration in a healthcare organisation.

Figure 2 shows an example of connectivity among

integrated healthcare departments that share infor-

mation for different purposes through the ERP cen-

tral database, as suggested by Huq et al. (2006),

Stefanou and Revanoglou (2006) and Padhy et al.

(2012).

Furthermore, the ERP system shown in Figure 2

integrates various business units connected to the

central database, thereby giving each one access to

the information from other business units in the

organisation and promoting transparency. In addi-

tion, Stefanou and Revanoglou (2006) stated that

ERP systems support several critical functions relat-

ed to clinical, administrative, financial, and daily

processes, such as patient flow, versatile reorders at

clinics, and billing. They also pointed out that the

implementation of ERP in a healthcare organisation

may result in the organisational reengineering of the

organisational processes and applications, leading to

organisational change.

Despite the assertion that ERP systems promote

transparency (Kumar et al. 2003; Klaus et al., 2000),

Stefanou and Revanoglou (2006) stressed that ERP

systems cannot entirely be integrated and used in the

healthcare sector because healthcare organisations,

such as hospitals, are complex and have several

specialised clinical systems, such as the EAI tech-

nologies used in operating theatres and laboratories,

which seemingly can only be integrated with ERP

systems.

5 CONCLUSIONS

The focus of the study was to find out how ERP

systems have been used in the healthcare sector and

how they could be used. This was done by applying

literature study.

The results of the literature review showed some

aspects of what has been done in the healthcare sec-

tor with regard to ERP systems. For example, Stefa-

nou and Revanoglou (2006) described how hospitals

started to implement SAP’s R/3 ERP software.

Stefanou and Revanoglou (2006) also asserted that

improving the availability and quality of information

in the healthcare organisation may lead to better

decision making processes, thereby improving the

quality of healthcare.

Healthcare organisations are knowledge-based

and depend on information to execute their services

(Bose, 2003). Healthcare organisations tend to be

complex and have become more complex in recent

decades, now handling huge amounts of data.

Healthcare providers depend on these data to attend

their patients. Thus, it is important for healthcare

organisations to manage data and share them with

stakeholders. This could help them to reduce costs

and the duplication of tasks and improve the

healthcare services offered to patients.

The study further found that ERP systems could

help healthcare organisations improve their services.

Tarn et al. (2002) asserted that technologies play an

important role in organisations and have the capacity

to improve services. Hence, ERP systems could have

a positive effect on healthcare organisations because

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168

they integrate various organisational systems and

processes into a single computer system that allows

accessing and sharing information.

Nonetheless, ERP systems are expensive to im-

plement into an organisation and they also induce

changes in the operations of the organisation. More-

over, organisations that successfully implement and

integrate an ERP system will further depend on the

vendor for maintenance and upgrades of the system

(Gupta, 2000). On the other hand, Brehm et al.

(2001) argued that in tailored ERP, vendors provide

free support, such as help desks and fixing bugs.

However, the adopters have the responsibility for the

maintenance of the system, such as configuration.

This study reviewed studies published from 2000

to 2014. The studies were collected from various and

electronic libraries that were accessible through the

University of Oulu, Finland.

It is recommended that further research be con-

ducted in this this subject area. To date, only a few

case studies have examined how ERP systems have

been used to produce quality results, such as stream-

lining the operations and reducing the costs of the

healthcare organisation.

ERP systems need further exploration in relation

to the healthcare industry. Empirical research could

be supplemented by further case studies that exam-

ine the potential use of ERP systems, as well as how

they have been practised in healthcare organisations.

Conducting such research would provide scholars

and researchers with the opportunity to create

knowledge. This would in turn help organisations

that offer ERP services to gain reliable information

regarding what they need to know and what the

healthcare expects from ERP vendors. This infor-

mation would also contribute to the existing

knowledge of the use of ERP systems in the

healthcare sector.

Despite the recommendations about ERP sys-

tems accepted as viable solutions, most authors ar-

gued that implementing the ERP systems is expen-

sive and that it requires millions of dollars to imple-

ment. Moreover, it has hidden costs such as staff

training and maintenance of the ERP system (see

e.g. Rashid et al., 2002; Shehab et al., 2004).

Although much of the relevant literature favours

ERP implementation in healthcare and public ser-

vice organisations, it could be argued that previous

research has focused on the implementation of ERP

systems, not their potential to improve healthcare

services and reduce operational costs. Future re-

search should work to fill this gap in the earlier

knowledge.

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