Introduction
As patients and healthcare providers continue to handle an increasing volume of health information, such as medical histories, clinical laboratory results, care management, and medications, among others, healthcare vendors have focused on developing new health IT (information technology) applications to assist patients and healthcare providers to manage, share, and control health information electronically and engage more actively in managing health. Healthcare applications capture a diverse range of software, hardware, and Web-based applications designed to support healthcare providers and patients in handling information. This subspecialty of health informatics encourages healthcare stakeholders to adopt electronic communication and information management to enhance healthcare outcomes and decision-making. Furthermore, healthcare applications also cover analysis of information requirements, as well as implementation of effective methods to improve healthcare information accessibility and to model and integrate patients’ preferences into healthcare records.
Today, vendors have embarked on sustained efforts to develop modern applications to run on a variety of distinct platforms, including mobile devices, Web platforms, and messaging systems, among others (Posada 2014). Vendors have designed these applications to benefit patients and their care providers (Mosa, Yoo & Sheets 2012). These healthcare applications have diverse roles in healthcare settings. They help in patient self-management, patient education, providing real time data on patients’ progress, and capturing and storing patient information in easily accessible formats. One outstanding use of these applications can be seen in messaging capabilities where patients and physicians communicate on a real-time basis, irrespective of the distance or geographical location. Additionally, healthcare applications that collect, analyze, and integrate data have provided comprehensive resources for care providers and patients. These tools enhance convenience, especially in emergencies where critical information is required for quick decision-making.
As mentioned above, healthcare applications vary in the extent to which they capture and integrate information concerning patients, as well as the extent to which they provide patient-specific information for decision-making to users. Some major healthcare applications include self-management systems, electronic health records, and interaction systems, which are provided by various vendors, run on different operating platforms and devices, and account for various needs. In this project, a comparative analysis is conducted, focusing on Cerner Corporation and Wipro Ltd in a wide range of areas. These IT companies are vendors of healthcare applications.
Background or History
Background or History for Cerner
Cerner Corporation is an American firm that supplies health information technology (HIT) services, solutions, devices, and hardware to healthcare providers. Founded in 1979 by Neal Patterson, Paul Gorup, and Cliff Illig, the company now serves more than 25,000 healthcare facilities globally with its 22,000 personnel (Cerner 2016). Cerner went public in 1986, and it has continued to grow its customer base and revenues year-over-year with device installations and support services. The company has improved in product development, especially the Health Network Architecture (HNA), an integrated IT platform designed to offer automated solutions to healthcare providers. Cerner allowed users to purchase this solution as a whole system or purchase specific components for distinct applications. Moreover, Cerner has continuously upgraded its solutions to meet industry standards and market expectations, noted after it upgraded the HNA system to Cerner Millennium.
Cerner has also formed strategic partnerships and acquired other companies such as IMC Health Care, Inc. to grow its wellness services to corporate employees. The leadership and management of the company have also changed over the years to drive the vision of the company. In 2015, the company revenue grew to $4.43 billion, with net earnings of $539.4 million.
Background or History for Wipro
Wipro Limited (Western India Palm Refined Oils Limited and, more recently, Western India Products Limited) was established in 1945, and it went public after two years. The company initially manufactured food products, but later focused on aggressive diversification and expansion after the 1960s, venturing into personal computers and software while expanding into other markets within and outside India. Today, Wipro is found across Europe, North America, and other Asian countries, including Japan, China, Singapore, and Malaysia, among others.
Wipro Ltd is recognized as a global firm with major interests in IT solutions and services. It delivers integrated systems, IT consulting, IT systems outsourcing, research and development (R&D), and other IT-driven services (Wipro Ltd 2017). Since 1980, Wipro has focused on being the best IT solution firm in India, winning several awards. The company has been commended for professionalism, innovation, and quality products and services. It commands higher prices relative to clones from competitors. Major competitors include major US IT giants, such as Cisco, Nortel, and Sun Microsystems, and other Indian firms like Infosys. With more than 174,000 employees serving in global operations, the company generated about $7.7 billion in revenue for fiscal year 2015, mainly from repeat business (Wipro Ltd 2017).
Iceberg Theory
The iceberg theory is based on a systems thinking approach to problems to assess how different factors within a system, such as an organization or an ecosystem, affect one another (Northwest Earth Institute 2017). Instead of responding to individual issues that occur, systems thinking requires thorough evaluation of a situation to identify relationships with other factors within an organization in an attempt to determine patterns and their origins.
When the iceberg model is applied to organizational analysis, a thorough evaluation of issues is needed beyond obvious observable challenges. That is, most challenges (90%) in organizations are not easily observable and, therefore, such issues must be explored effectively to comprehend their root cause and related patterns.
Top-down View
Top-down view is a management style where all decisions are made by senior executives and handed down to managers and employees to implement (Duverge, 2015). It is extremely common in traditional firms. While some line managers could offer contributions regarding how tasks may be accomplished, they cannot exercise much authority without approval from senior executives. This approach helps leaders and managers to have clear goals and expectations, but its autocratic tendencies make it less favorable in modern firms.
Bottom-up View
A bottom-up view ensures that all levels of a firm take part in the company’s decision-making processes. Hence, employees feel they are a part of a large team. Employees become engaged and, consequently, they deliver positive results. Communication is open to enhance motivation. Employees also strive to attain set goals in the best ways possible. Consequently, employees explore their full potential and talents since they are encouraged to be creative and employ unique attributes to solve issues. Employees collaborate, sharing knowledge and best practices, which leads to improvements in work processes. The bottom-up approach may be difficult to use in some instances because of diverse views.
Traditionally, the top-down view has dominated management styles. Today, however, many organizations tend to favor the bottom-up view due to changes in workplaces as employee feedback becomes more relevant in decision-making. As many firms may consider the bottom-up style, it is important to understand the most appropriate areas of application and potential drawbacks. Healthcare IT companies like Cerner and Wipro should consider the bottom-up view to encourage collaboration, knowledge sharing, innovation, shared decision-making, and employee engagement.
EGSOP (Environment, Governance, Strategy, Organization, and Performance)
Work Environment
Work environment accounts for organizational conditions surrounding areas where personnel operate. It accounts for physical aspects, social interactions, organizational culture, and work processes and procedures, among others. Studies have concluded that positive work environments enhance employee performance and job satisfaction and, thus, organizations need to improve work environments to attain their strategic objectives (Raziq & Maulabakhsh 2015).
Work Environment in Cerner
Cerner claims that its work environment is fast-paced, challenging, rewarding, and interesting to employees who wish to transform service delivery in the healthcare environment. Compensation and benefits are better in comparison to peers. Moreover, the company is known for innovation, as well as a creative and collaborative work environment. Consequently, the company promotes an organizational culture that allows employees to innovate, determine their career paths, take part in community activities, and collaborate. It encourages learning and knowledge sharing. These approaches have resulted in a favorable ranking of the firm among the most innovative in the US.
Cerner offers opportunities for employee promotion, training, and development. Additionally, other aspects of human resource management are determined by individual employee abilities and performance, skills, integrity, knowledge, and potential. The company also maintains a work environment free from any form of discrimination, intimidation, and harassment. Moreover, Cerner also strives to comply with all required local, state, and national laws and regulations in the countries where it operates.
Previously, senior management at the company has used punitive language in attempts to improve performance. Employees were warned of layoffs, termination of an Associate Center, and an employment freeze. Further, employees outside the United States have raised concerns of unequal treatment, particularly in task allocation.
Work Environment in Wipro
Wipro aims to create an open, engaging, and employee-friendly workplace for all qualified individuals without discrimination (Wipro Ltd 2017). The company focuses on action to demonstrate its work environment culture. Employees at Wipro share beliefs, practices, and values to create a strong culture. The company claims that its culture is responsible for advancing its growth over the years as it has aimed to offer positive changes for employees and other stakeholders. Wipro promotes sustained improvement, excellence, an open culture to encourage feedback, and active inputs and transformation. The Help Centre helps employees to grow, learn, and attain their full potential. It encourages employees to challenge their limits, maintain integrity, and discover new opportunities.
It is also noted that Wipro has some work environment challenges. Employees have complained about relatively expensive shuttle charges deducted every month for transport, while competitors and government shuttle services charge less. Additionally, the work schedule is regarded as rigid, and there are no adequate infrastructures in cases where employees share PCs, no “bring your own device” policy, relatively low pay, and too many appraisals and reviews. Poor employee recognition policies, a lack of standardized reward policies, and no work-from-home policy, among other issues, have been noted as major challenges in the Wipro work environment.
Governance
Governance reflects rules, practices, and procedures that a board of directors applies to ensure accountability, fairness, and transparency when balancing various interests of shareholders and stakeholders, including management, investors, employees, communities, and suppliers..
Governance in Cerner
Cerner has a well-defined corporate governance policy, which shows that the company is committed to responsible and responsive practices. The board of directors has an overall responsibility to ensure effective management for the benefit of all stakeholders. On this note, the board and senior executives appreciate that they can only advance interests of all stakeholders through responsible practices. Cerner’s board also commits to adhere to every responsibility of the business and affairs based on the highest standards of business ethics, as well as meet all requirements under state and federal laws and the NASDAQ stock market.
The board promotes member education and participation in various programs in universities, stock exchanges, consulting firms, or in any other entities that offer education to directors (Cerner 2016). Such programs target issues in financial and accounting practices, and the company readily caters for them. Further, the board acknowledges that the company’s needs change, the business environment is dynamic, and shareholders’ needs change, too. Hence, it is imperative to review guidelines periodically to ensure the highest ethical standards and better corporate governance.
Governance in Wipro
Wipro notes that its reputation emanates not only from the company’s market and business performance, but also from the core values it practices. These values are based on the principle of integrity, which provides guidelines on employees’ behaviors and work ethics. The company encourages employees to consult further when facing any ethical dilemma.
Wipro has developed corporate governance guidelines, which define the roles of the board of directors and senior executives, as well as other stakeholders and their relationships within the corporate structure. It has based the relationship between the management team and the board on sincerity, while fairness guides engagement with employees. Wipro strives for good citizenship to improve relationships with the communities in which the company operates. Additionally, compliance and adherence to laws and regulations guide the relationship between the company and the government. The CEO, the chairman, and other senior management team members are responsible for daily operations of the company and sufficiently informing the board of all activities. The management team is responsible for strategic planning, compliance, financial reporting, and risk management, and the board oversees performance of executives on behalf of all stakeholders. Notably, stakeholders play limited roles in operations of the company, but they are allowed to elect directors to represent and protect their interests and provide information on investment and voting decisions.
Strategy
A strategy reflects methods by which an entity sets out to attain its desired business objectives. These are usually long-term business plans to realize the strategic objectives of an organization.
Cerner Strategy
The company has established numerous new strategic collaborations with other companies, including “Qualcomm, Apple, Geisinger Health System, and xG Health Solutions” (Caspi 2015, para. 1). Cerner has focused on an aggressive partnership strategy based on IT and its role in the healthcare ecosystem. The company opts for strategic partnership to complement its solutions. This approach is also considered an expansion effort that leverages technology to drive strategic objectives as the company seeks to serve and meet diverse needs of hospitals, employers, and federal and state governments, as well as individuals. A focus on the individual is driven by mobile technologies that give patients opportunities to manage their wellness and health care. Consequently, Cerner has developed a set of four concentric rings to realize growth. The innermost part drives traditional healthcare activities involving clinics and hospitals and the deployment of IT.
The first ring concentrates on enhancing efficiency in hospitals by reducing readmissions, increasing quality outputs, effectiveness, and cost reduction. Cerner particularly wants to focus on device connectivity. The second ring aims to advance organizational mergers to ensure that healthcare systems have revamped control over healthcare delivery. To that end, the company concentrates on partnerships that promote industry standards while focusing on specific niche applications. The third ring is developed to improve communication in healthcare organizations. As such, the company has focused on the issue of interoperability among care providers to ensure meaningful data flow.
Additionally, it also concentrates on eliminating the challenge of patient identification common in EMRs. Cerner has also introduced population health within this ring to focus on data and meaningful use. The company’s big data application, Healtheintent, is used to mine data from disparate sources for meaningful insights. The final ring focuses the company’s strategy on people at home. In this case, Cerner sees patients as people who will take charge of their health, care, and wellness in the future. As such, its goal is to enhance independent living as homes become more wired. Cerner will collect data from homes and develop predictive algorithm solutions. Moreover, the company also wants to revamp patient portal capabilities while focusing on the consumer or personal portal.
Overall, Cerner strategy is based on partnership to drive growth, innovation, revenues, profitability, and market share acquisition, among others.
Wipro Strategy
The company has developed a six-pronged strategy to drive growth in the next few years. First, Wipro is focusing on aligning IT businesses with consulting as revenues from such areas continue to grow. It acquired Designit in Europe to drive this strategic objective while focusing on multinationals, such as Samsung, Audi, and NTT Data. The company has realized significant joint digital deals in the recent past. Wipro also trains its employees on skill sets required to drive a digital business agenda (Ganesh 2016). Second, Wipro aims to mine clients using an integrated services unit that combines technology solutions from various business lines. This strategy will help the company to scale up large accounts while mitigating account retention challenges. Third, Wipro focuses on localization through acquisition to strengthen market presence and massive investment in emerging markets, such as Africa and Latin America. Fourth, Wipro has adopted a non-linear approach involving service automation and employee retrenchment as a wave of the future. Further, automation across multiple units will lead to additional release of more employees.
Fifth, Wipro has focused on leveraging partner ecosystems, especially startups and acquisitions to derive a competitive edge. In addition, Wipro wants to acquire, service, and retain customers, which is now a common trend in the insurance business. For instance, HealthPlan Services, the new acquisition, is set to offer a completely integrated business-process-as-a-service (BPaaS) solution to individuals, companies, and support markets in the insurance sector. Finally, Wipro is following the trend of its peers such as Infosys, which has set a target of $20 billion in revenue by 2020. Consequently, Wipro has also set a target of $15 billion to be attained within the next four years, meaning it must grow by an average of 23% every year (Krishnan & Mishra 2016). Given the difficulties in the market, Wipro wants to concentrate on specific areas such as “artificial intelligence to drive growth faster without adding any headcount and product engineering services because these areas earn higher margins than traditional services” (Krishnan & Mishra 2016, para. 13).
Organizational Structure
Organizational structure shows how functions, power, and responsibilities are shared, managed, and coordinated, as well as how information flows across various units. Companies design different organizational structures to support their objectives and strategies.
Cerner Organizational Structure
Cerner has a flatter organizational structure to drive open communication and collaboration as it seeks to eliminate the many layers that hinder effectiveness (see appendix). This structure is scalable and logical for this multinational firm as it seeks to limit hierarchy to improve communication, innovation, and employee experience, and challenge traditional approaches to workplace relations.
This model is possible because of robust technologies that facilitate open communication, collaboration, and information accessibility. Executives also understand that employees require flexibility to be innovative and, thus, design is meant to facilitate employee engagement while managers provide the necessary support. Overall, the company has appreciated workplace dynamics, and it strives to provide flexibility to meet the diverse needs of the modern workforce.
Wipro Organizational Structure
Wipro has been a hierarchical organization (see appendix). However, the company has observed that the structure can no longer serve it in a competitive business landscape where talent wars continue and innovation defines organizational success. Consequently, Wipro is gradually figuring out an alternative model.
In the recent past, for instance, Wipro announced a new organizational structure targeting leadership changes across various service lines and aimed to support the CEO to deliver on strategic objectives (Phadnis 2016). This structure aims to promote service delivery and organizational productivity while supporting new business models, especially in the IT sector. In addition, this structure strives to unify service delivery and optimize value through technologies for growth.
Performance
Organizational performance reflects actual results against set goals and objectives. Richard et al. (2009) look at organizational performance in relation to three distinct areas, including financial performance, product market performance, and shareholder return.
Cerner Performance
For the last five fiscal years (2011-2015), Cerner has recorded a significant growth in revenue. Revenue has increased from $2.2 billion in year 2011 to $4.43 billion in year 2015. Additionally, net income has risen from $306.63 million in 2011 to $539.36 million in 2015. These figures show that Cerner has continued to deliver favorable financial results to investors.
After the acquisition of Siemens Healthcare IT division in 2015, Cerner is now the market leader in the EMR sector with an estimated worth of about $27 billion, implying that the company controls the globe markets in this niche.
Wipro Performance
Wipro has continued to realize sustained revenue growth from fiscal year 2012 to the present year. The company recorded INR371.97 million, INR374.26 million, INR434.27 million, INR469.55 million, and INR512.44 million for fiscal years 2012, 2013, 2014, 2015, and 2016, respectively. Net income has also continued to rise from INR55,730 million, INR61,501 million, INR79,471, INR86,609 million, and INR89,597 million for the above-mentioned fiscal years.
Wipro is a highly diversified firm and, thus, performs better relative to Cerner when consolidated returns are evaluated. Moreover, it also dominates the Indian market.
Issues/Problems/Challenges
Cerner and Wipro face diverse challenges in the healthcare IT sector. These issues emanate from both internal and external sources.
Issues and Challenges Faced by Cerner
Cerner is among the largest EMR solutions firms in the globe, and it has recorded tremendous growth. However, the company also faces implementation challenges at times. The system changeover specifically presents significant implementation issues beyond task requirements. If there is a failure to assess the system holistically, then implementation issues will derail the progress.
The company also faces lapses in coverage. Cerner offers solutions with vast coverage from individuals, small to large organizations, and health management companies. Consequently, Cerner occasionally faces rollout and system transfer issues.
Lawsuits now tend to be common in the healthcare IT sector, and Cerner has not been spared. The company has faced multiple lawsuits because of failed solutions and poor implementation. Such lawsuits ultimately damage its reputation. Additionally, some clients have also breached contracts and switched to competitors.
In some instances, Cerner has failed to implement some solutions successfully because its partners and clients lack the necessary expertise required to execute such solutions.
Cerner also needs to review human resource practices, especially for its associates located outside the United States. Some have complained that they only handle jobs transferred from the United States, but not technical aspects.
Issues and Challenges Faced by Wipro
Wipro faces human resource management issues. Most experienced employees claim that the company is suitable for recent graduates who wish to acquire experience and move to other, better organizations. As such, it experiences a higher rate of attrition, poor work environment, and work quality issues. Additionally, employees have also complained about multiple appraisals, which do not add value to their jobs, while individual recognition and reward systems are rarely implemented.
The company also faces fierce competition from some firms like Infosys and TCS. A tough business environment has forced Wipro to rely heavily on repeat business rather than seek for new clients. Moreover, closure of new deals has been difficult as competition escalates while spending cuts and pricing pressure increase.
Discussion
Of many forces changing healthcare systems across the globe, IT has been one of the leading forces delivering change to patients and care providers. The need to deliver quality services and value in a cost-effective manner have pushed healthcare application vendors to supply the best applications for various needs.
As technology evolves, smart devices have continued to change how patients and care providers relate and gain access to information (Mosa, Yoo & Sheets 2012). These processes are now real-time and cost-effective, and patients expect enhanced quality of care. Cerner and Wipro IT firms in the healthcare sector have continued to strive to deliver most of these applications. Innovation and continuous improvement define how these companies operate. Consequently, new applications always aim to deliver the best services.
Although IT firms in the healthcare sector have attained significant achievements, they still face multiple challenges from both internal and external sources. As mentioned above, Cerner, for instance, faces multiple lawsuits due to several reasons. In addition, the company has raised concerns that some hospitals lack the necessary expertise required to implement and run complex applications, leading to application failures. This implies that the quality of human resources with regard to skills continues to affect the healthcare sector negatively. It is imperative to recognize that the above-mentioned risks shall not necessarily drive these companies and the healthcare sector into further challenges. Instead, these companies have shown a wide range of strategies to mitigate risks and create applications that meet users’ needs.
Overall, the two companies continue to perform exceptionally well, but they must enhance their human resource management practices, innovate, and remain competitive in healthcare applications development. They must also focus on the development of expertise and creating partnerships that can deliver the required outcomes. Effective collaboration between vendors and providers will ultimately lead to better applications.
Way Forward
Pressure is on the IT healthcare vendors to provide sophisticated applications to drive service delivery. The healthcare sector is now becoming more technology-driven as smart devices continue to evolve. Hence, the connected world continues to offer opportunities for vendors, patients, and care providers to improve care delivery. These opportunities certainly need appropriate partnerships to drive real, sustainable transformation using applications in the healthcare sector. Hence, the future of health-related IT requires effective collaboration to develop applications and deploy them for enhanced service delivery in healthcare as patients become more involved in all processes.
Conclusion
Throughout this research paper, the focus has been on two firms that provide healthcare applications to users. These firms have demonstrated how technologies continue to shape service delivery through various applications that enhance interaction and engagement of patients and care providers. While challenges exist for the companies, innovation and partnership have defined their capabilities. Their performances remain critical for value-creation in the healthcare sector, and possible new opportunities can only be realized if Cerner, Wipro, and other vendors focus on delivering the best solutions to meet the needs of patients and care providers.
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