The Indian Healthcare Sector Erp Systems Information Technology Essay

The Indian Healthcare sector is rapidly expanding in terms of revenue and employment with its total value estimated about $34 billion. Some of the reasons for the same are:

Growing population and economy

The biggest driver of the expansion of the healthcare sector in India is its booming population, which is currently estimated about 1.1 billion. (Appendix-Figure1)

Rising middle class

Due to the rise in the average income, as of now, around 50 million Indians can afford to use advanced healthcare services and medicines.

Increase in the spread of disease

One of the significant driving factors for the growth of India’s healthcare sector is the rise and spread of various diseases, infectious and chronic degenerative in nature.

1.2 ERP need in Heath Care Industry

ERP has got a huge scope of implementation in the healthcare industry since more and more hospitals are coming up and the customers are now looking for better professionalism and improved and efficient healthcare services.

Key healthcare organization objectives:

The specific healthcare industry objectives include:

Improved productivity and efficient workflow with proper information at various care points.

Integrating various systems across individual departments in a hospital and also across hospitals under the same management.

Performing core hospital activities and increasing customer service to enhance Hospital Image.

Implementation of SAP ERP in Wockhardt

About Wockhardt

Wockhardt is one of the major players in the Indian sector for Healthcare services. Besides providing the healthcare services via its chain of hospitals, Wockhardt also manufactures and markets various formulations, nutrition products, biopharmaceuticals, active pharmaceutical ingredients (APIs) and vaccines.

2.2 Summary

Name of the Organization : Wockhardt Limited

Head Office Location : Mumbai, India

Services : Healthcare

No. of Employees : 9,000

Revenue of the Firm : Rs 26 Billion

Implementation partner : IBM India

2.3 Pre-ERP Environment in Wockhardt

Wockhardt had a non-integrated, non-SAP IT system

The IT hardware used were of IBM P-Series

IBM AIX was the IT Operating System in use prior to ERP implementation

Oracle 10g database at Wockhardt

Some of the challenges faced by Wockhardt prior to ERP implementation are as follows:

Inability to handle the business growth due to poor existing technology

Integration and formal communication among the existing systems were low.

High cost dependency on independent product vendors adding to maintenance costs.

Difficulty in managing and controlling disparate data.

Dependency on multiple small packages and SMEs for day to day operations.

Overall service levels and patient satisfaction levels were low.

2.4 Choosing an ERP vendor

Some of the issues that were considered while choosing a vendor were:

Data accuracy – Hospitals have to supply all the essential information to the vendor at the time of making the proposals. This will help him to easily configure the required software.

The mistake of not disclosing information – Many hospitals do the mistake of not disclosing crucial information at this juncture. They are reluctant to disclose confidential information.

Demonstrations – The hospital will be able to rate the vendors suitability more so during practical demonstrations. His level of competencies and technicalities will be revealed to the company.

The reason why SAP solution was chosen as the ERP vendor was:

It’s a robust, integrated solution with multiple customized functions and features

It’s positioned for future growth with global credibility

It’s a well defined reliable partner with assured support

It strategically aligns itself with the Wockhardt’s business requirements

2.5 Objectives of SAP implementation

The company’s vision to integrate and standardize global processes was a major reason for introducing SAP solutions. Wockhardt was looking for an ERP solution that would:

Establish a single, integrated ERP solution.

Improve visibility and standardize the current business processes across the organization.

Provide a platform for free flow of information and a central data repository.

Introduce best practices of Life Science Industry for all locations.

Provide a common technology platform with capabilities of analyzing business data.

Meet the global business requirements, with simultaneously adhering to the country specific necessities.

2.6 SAP® Solutions & Services used in Wockhardt


SAP® Business Information Ware house

SAP NetWeaver,® SAP NetWeaver® Portal,

SAP® Solution Manager, a tool found in the SAP NetWeaver® platform

2.7 SAP Implementation Highlights

Time-frame of implementation : 8 months (From May 2005)

Top Management’s support with highly dedicated team

Highly successful implementation with a big bang approach in India

Subsequent rollouts to subsidiaries in Europe & US by the Wockhardt In-house team

The average 3 year cost of a SAP deployment is shown in Appendix -Figure2.

The various stages for the same were:

Project Planning

Business Process Study



Business Requirement mapping



Data Conversion




Post production support

2.8 SAP R/3 Architecture in Wockhardt

SAP R/3 works on Three Tier Architecture comprising of the database, application and presentation layer. (Appendix – Figure3)

The Database server is solely responsible for Wockhardt’s data storage.

The Application server interacts with the other two servers to manage user requests.

The User terminal is responsible for data creation, modification and retrieval.

2.9 Benefits of SAP to Wockhardt

The benefits that Wockhardt got on implementing SAP ERP were:

Real-time access to higher quality information

More structured data forming a basis for informed strategic and operational decisions

A consolidated, single view of the business with efficient working practices due to standardized and integrated business processes

Improved inventory management with better coordination of work across multiple locations

Faster decision-making and improved Planning and customer service, efficiency, enhanced Visibility

2.10 Wockhardt’s future plans with SAP

Wockhardt’s future plans with SAP include:

SAP® Customer Relationship Management (SAP CRM)

SAP® Supplier Chain Management (SAP SCM)

SAP® Advanced Planning & Optimization component (APO)

SAP NetWeaver® component for integration.

With the SAP CRM module, Wockhardt can:

Implement one, multichannel contact center to control and coordinate the interactions between patients and Wockhardt.

Link the contact center directly to the appointment system so a patient can make, change, cancel, or inquire about appointments.

Improve communication with patients by using demand management software to remind patients of appointments, manage waiting lists, and fill late cancellations

The Vendors Perspective

About SAP and IBM

IBM was finalized as the implementation partner for starting the SAP ERP implementation in May of 2005. The implementation team took around eight months to complete the project. With vendors like SAP and implementation partners like IBM, it has definitely resulted in lowering the pressure on healthcare organizations like Wockhardt.

3.1.1 SAP

SAP is the market leader in ERP solutions. Since its foundation in 1972, SAP (Systems, Applications and Products in Data processing) have helped companies of all sizes and industries run better. Currently SAP departments are located in greater than 50 nations and serving 110,000 customers worldwide. SAP for Healthcare industry helps the firms like Wockhardt in integrating their healthcare processes by providing an end-to-end portfolio of solutions.


IBM has world class reliable, scalable and responsive business solutions and on collaboration with SAP, both will help the firms in various industries like healthcare by providing quality, simple and customised solutions with high returns.

IBM and SAP are committed to delivering affordable end-to-end solutions scaled to meet the needs of SMBs. The combined solutions of IBM and SAP enable the organizations to speed up their business operations in order to comply with the dynamic changes in the marketplace.

Challenges faced by IBM, SAP for ERP implementation

The major challenges faced by SAP and IBM during Wockhardts’ ERP implementations are as follows:

To cope up with the dynamic and ever-changing business processes and consumer needs

To be in-line with the regulatory guidelines

To assist the hospital service with regular up gradation .

Integration with Legacy Systems

Integration of ERP Modules of different vendors or versions and E-Business Applications like SCM, CRM, KM.

4. ERP modules used at Wockhardt

Some of the important SAP ERP modules used by Wockhardt are mentioned below:

Materials Management (MM)

Customer Service (CS)

Quality Management (QM)

Sales & Distribution (SD)

Human Resources (HR)

Production Planning (PP)

Financial Management (FM)

Product Life Cycle Management (PLM)

The material management module (Appendix- Figure4) comprises of the features mentioned below:

Stock Reconciliation- At warehouse / item(s) level

Alerts and notifications on Shelf Life

Storage Differentiations for Quarantine / Approved / Rejected items.

Item tracking based on Expiry dates and Serial No. / Lot numbers

Bar code interface integration

Patient Administration:

This module handles the front office, back office and nursing station of Wockhardt.

Some of the modules of front office are handling the appointments, reservations, admission and discharge of patient along with the deposits, refunds of cashier department.

The back office includes the maintenance, in-patient billing and scheduling of the Wockhardt’s back office.

Besides this, SAP ERP integrates the administrative and clinical processes of the nursing station. (Appendix – Figure5)

Clinical Management

The clinical management of the SAP package in Wockhardt includes:

Laboratory- Lab scheduling, records, kit management, etc.

Operation theatre- Theatre scheduling, maintenance, medical equipments usage, etc.

Medical records – Visit details of Outpatient and In-Patients, etc.

Blood bank – Donor registration list, Blood stock, etc. (Appendix – Figure6)

Resource Management

The resource management of the Wockhardt SAP module includes:

Pharmacy – In and out-patient pharmacy, central pharmacy, etc.

General stores – Purchase orders, material receipts, inventory control, etc.

Ambulatory – Ambulance and personnel scheduling.

Medical equipment management – Equipment and AMC details, stock management, etc. (Appendix – Figure7)

Financial Management

The financial management module includes functionalities like maintaining the:

Accounts payable

Accounts receivable

General ledger

Doctor’s accounting


Care contracts

Federations grants, etc. (Appendix – Figure8)

5. Conclusion and Findings

The Indian healthcare sector can be considered to be as a glass half empty or as a glass half full. This is so because, even though the healthcare sector has improved significantly over the years but still the challenges it is facing are significant. Improvisation needs to be done by developing the existing physical and IT infrastructure in order to provide quality healthcare services.

The need of the hour is to perform core hospital activities and increase the quality of customer service by integrating its various components and avoid data redundancy.

Industries look for ERP solution that can provide a common technology platform with capabilities of analyzing business data. They expect to meet the global business requirements, with simultaneously adhering to the country specific necessities.

Because of the availability of a single unified platform for data sharing and standardization of the various healthcare business processes, the redundancy of data entry has minimized significantly and has resulted in saving valuable administrative time.

The SAP ERP implementation has assisted the Wockhardt staff in successfully updating, recovering and managing the data in real-time. Also, reports can now be produced quickly, thus minimizing the logistical headaches.

The most striking benefit of implementing SAP ERP in Wockhardt has been the significant visibility in its service operations which has lead to improved planning and coordination across Wockhardt.

Hence sooner or later, most of the companies need to change their traditional practices and have an advanced technology supported with state of the art IT infrastructure to support its core business activities and integrate them efficiently across the organization.


Figure 1 – Indian economy growth rate

Figure 2 – 3 year cost of a SAP deployment

Figure 3

Figure 4

Figure 5 – Patient Administration

Figure 6 – Clinical Management

Figure 7 – Resource Management

Figure 8 – Financial Management

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