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Innovation in Healthcare through E-procurement: An Adaptive Results-based Business Model
May 06, 2022
5 min read
The COVID-19 crisis has impacted the healthcare industry and the already present need for change in conducting its procurement processes. Here is an overview of the main benefits for healthcare goods online sellers if they choose to join an E-procurement plan.
What is E-procurement?
E-procurement is a web-based interface designed for multiple parties to enable the sourcing, purchase, payment, and delivery of supplies and services.
The main goal of implementing an E-procurement solution is to centralise and automate interactions of the entire procurement process, from acquisition to the buyer’s doorstep.
The why of E-procurement solution in the healthcare industry
The E-procurement business model has gained traction because of its overall efficiency. A one-stop-shop model, typically provided by third parties with relevant expertise, E-procurement is fundamentally an online (i.e. accessible anywhere) and data-driven solution. The general cost-reducing and operational improvement characteristics of E-procurement enables diverse stakeholders to tap into an already designed and developed supply chain system, instead of heavily investing in creating their own from the ground up.
The main advantages of including an E-procurement solution are the following:
- Transparency and efficiency
- Cost-efficiency
- Data-driven analytics
- All around Operations Management improvement
An E-procurement solution can offer a digital environment for everything from: supplier sourcing and contract creation, inventory visibility, streamlined payment and settlement, order tracking, and auditing.
We will now look into each of its aforementioned business-developing advantages.
Healthcare industry E-procurement paradigm
Healthcare industry organisations and businesses have succeeded in creating business driving benefits by choosing to add an E-procurement business model to the enterprise operations. Having looked into E-procurement in general, let us now focus on the benefits it brings to healthcare professionals and their suppliers.
1. Transparency and efficiency
The Healthcare Industry in the US, EU and other parts of the world is a traditionally heavily monitored business market with various shifting factors to be accounted for in its business conducting strategies. The legal and ethical regulations loom large for all the stakeholders of aesthetic industry professionals. Hence, transparency and efficiency are at the top of the criteria for any business considering upgrading its procurement model. E-procurement offers free and easily accessible information, thus enabling more transparent and reliable procedures.
Vendor information is stored and centralised, thus making it easier for the healthcare industry stakeholders to track their compliance with shifting relevant regulations. As with other digital systems, E-procurement allows for standardisation of procedures, reducing the potential for human errors and the time each task requires.
2. Cost-efficiency
One of the core goals of procurement is to discover competitive prices. With an E-procurement solution, this goal is achievable because of its diversified nature.
According to the EBRD report, E-procurement drives efficiency gains by facilitating broad market access to goods, improving competitive advantage, and decreasing administrative burden and operational costs. By offering a one-stop-shop way of doing business, E-procurement offers easily manageable and entirely digitally sourced information and services, resulting in better-informed options for all business parties involved.
3. Data-driven analytics
E-procurement has the proven ability to enable health care professionals, suppliers, and manufacturers to communicate with clearer understanding of the business and patient-driving patterns that define their relationships.
An E-procurement solution enables medical e-commerce businesses to make informed, reliable, and time-sensitive decisions that ultimately serve the end-users of goods and services in a more holistic and needs-driven way.
By utilising and participating in an E-procurement model, all parties involved can build end user-oriented systems. By gaining comprehensive insights through real-time data, this type of procurement enables all the involved parties to make informed decisions and discover how to offer more unique products, services and patient care.
Medical product suppliers can lead their business development strategies by better understanding the client demand. This kind of approach enables them to strengthen existing business relationships and locate previously unseen market opportunities. For website owners, data collected at the patient level can offer insight informing price control, and in particular treatment outcomes thus contributing to all-around better care provided by all involved parties.
Additionally, the healthcare industry stakeholders can significantly improve their internal and external communications by utilising a comprehensive approach to procurement. According to the latest studies, healthcare professionals can advance their communication methods in a meaningful manner. This finding pertains to both acute patient care and the communication with the suppliers, with all involved parties greatly benefiting from timely and accurate information.
4. All around Operations Management improvement
Reduction in the operational complexities typically found in healthcare industry supply chains are net benefit from E-procurement solutions: from environmental advantages gained in waste management due to paperless processes, to improved inventory visibility from the built-in tracking systems in a digital solution.
Since 2015, the greening of the health sector has been on the UN’s agenda for worldwide improvement. Paper-based procurement procedures are among some difficulties noted in reducing environmental costs of healthcare industry services and business.
Operations are more efficient in regard to the tracking process of orders, payments, and customer service. Fulfilment accuracy and on-time deliveries are significant pain points that can be better managed. Each of these examples have a positive impact on an enterprise’s financial performance.
By introducing an E-procurement business model, health care professionals can advance each of the areas noted above. A highly competitive aesthetic industry business that can respond to the changing market environment and assume a proactive role in spearheading innovative digital processes is ultimately more adaptable and thus better able to react to contemporary global challenges.
COVID-19 perspective
We witnessed how COVID-19 has brought challenges to all healthcare industry stakeholders, requiring fast policy and procedural changes to address obstacles not expected to be relevant for many years to come. While the demand for goods and services skyrocketed, supply chains and service delivery models needed to quickly adapt to keep pace. Globally, healthcare professionals and online businesses were forced to adjust their approaches to suboptimal processes they had often accepted as immutable. Budgets also needed complete overhauls to address the new normal of healthcare procurement and patient services.
The supply chain became the prevalent issue with E-procurement recognised as the solution to cost-savings, and operational impediments. What will hopefully emerge as the most significant improvement change is for online businesses to have a more comprehensive supply selection, thus enabling the healthcare industry to turn to E-procurement more than ever before.
All stakeholders in the supply chain can now offer or find whole categories of relevant competitively priced goods, and to have an end to end visibility, regardless of their position in the chain.
Although the procurement procedures are yet to be fully transformed, during the global pandemic, E-procurement helped alleviate more than just the need for cost reduction. It effectively enabled healthcare industry stakeholders to continue their work of helping other businesses and clients in their moments of greatest need.
Final notes
E-procurement is proving to be a reliable and business-driving solution for healthcare industry professionals and suppliers. By delivering alternative solutions for otherwise resource-consuming and environmentally unfriendly procurement processes, E-procurement enables businesses to stay informed and conduct their work more profitably.
Cost-efficiency, end to end transparency, and data-based insights all lead to businesses and practitioners becoming more resilient and up to date.
Are you considering implementing the E-procurement business model? Contact us, and we will provide you with all the information you need.
References:
https://www.kean.edu/~rmelworm/5040-00/Laudon_6e_Ch.2-3.pdf
https://hitconsultant.net/2019/08/13/6-ways-hospitals-can-benefit-from-e-procurement-portals/
https://www.ebrd.com/documents/legal-reform/guide-to-eprocurement-reform.pdf
https://www.ivalua.com/blog/healthcare-procurement-digitization/