HC Integration Build vs. Buy

Healthcare

An integration platform for yourmedical technology organization

Facing the ongoing question of building vs. buyingMedical technology organizations spend years—sometimes decades—building life-saving and life-enhancingtechnology, with the specific goal of helping patients. But with new rules and regulations in place surroundingelectronic health records (EHR), and a shift in focus from volume- to value-based reimbursement, your organizationalso needs to consider how to link data from your device to the patient’s EHR.

Many organizations struggle with the question of whether to create a point-to-point integration solution fromscratch or purchase existing resources from outside. It can turn into a perennial dilemma.

But deciding whether to build or buy technology can have strategic implications, as well. Simply choosing “make”when the capacity exists, or “buy” to avoid investment when your organization has adequate capital, might worksome of the time. But a wrong decision can have dramatic, enduring consequences, according to a report by A.T. Kearney.1

For medical technology companies in the post-Affordable Care Act world, the build versus buy question now holdsspecial relevance. Medical technology companies must change core aspects of their business to align with thevalue-based agendas of their health system customers, a Deloitte report notes.2

At the same time, companies need to move more rapidly and take different approaches than they used to in orderto maintain their innovative edge, a KPMG survey reveals.3 To compete aggressively, they must collaborate withmore partners and pursue greater integration with suppliers and providers.

2Healthcare Industry Perspectives

3 Guidelines for building or buying

4 Cost considerations of buildingversus buying integration technology

5 Can you keep up with the pace of change?

6 Consider the time and talent required

7 Choose a partner with deep industry insight

8 Make a smart decision

Table of Contents


Guidelines for building or buyingFollowing are some considerations to help yourcompany navigate the build versus buy decision whenit comes to creating an integration platform.

Know your business strategy—Can you make astrong business case for building in house? Assumingyou have the internal HIT Java, .Net, and coderexpertise required, as well as the capital to invest,fundamentally, a strong business case can be made ifthe solution in question is something that heavilyinfluences or builds your core competitive advantage.

Define your competitive advantage—In defining yourcore competitive advantage, the question is fairlystraightforward: Why do your customers come to you?As a medical technology organization, the answermost likely relates more to the quality, safety,reliability, and innovativeness of your solution(s), suchas niche software, medical devices, or tele health,than to your ability to deliver connectivity withphysician, hospital, and health system EMRs. And thatconnectivity is crucial to interoperability. You need toconsider whether it’s a differentiator that only you canoffer, or something available from an establishedvendor as a core offering.

Explore what already exists—Put another way, ifrespected connectivity solutions with long trackrecords of success are already available to do the jobfor you, why reinvent the wheel? The need forinteroperability looms so large in healthcare now thatit has spawned an industry of its own.

Consider this: High quality portable operating systemshave already been developed to spare you fromhaving to develop an operating system for yourdevice. You can purchase or download one of thesesystems and then build your solution on top of it.

The same holds true for an integration platform. Youdon’t need to build your own network infrastructure.You can access an effective third-party solution thathas already been successfully implemented inhundreds of hospitals and healthcare facilities aroundthe world.

Also, determine if building the technology yourselfadds to your intellectual property to make yourorganization more successful or profitable. If you cananswer yes, then score another point in favor ofcustom development rather than buying from outside.But if the solution in question is not closely tied to yourcompetitive edge, and if it is not something thatdefines who you are and distinguishes you in themarket, then it might not be worth investing therequisite resources. As the late business consultantPeter Drucker so aptly said, “Do what you do best andoutsource the rest.”

Develop a custom solution—Some healthcareproviders, such as Montefiore Health System, arepartnering with startups like Menon Group in variousways to build their own custom applications.4

The approach has advantages, including functionalitythat can be incorporated from the outset and tailoredclosely to the organization’s unique needs. However,custom-built applications also open IT developers andthe company to risks and extensive losses of financial,technological, and other resources, if the technologydoes not work and the application ultimately fails.


Cost considerations ofbuilding versus buyingintegration technologyA custom solution gives you the opportunity to designan application to your specific needs and fine-tune itas needed. That flexibility remains one advantage ofthe in-house, do-it-yourself approach; however, it’sgoing to cost you a premium.

On the other hand, many external solutions comeready built with capabilities that meet and exceed theneeds of the market majority, so that you just need toconfigure them, rather than customize. In addition, anoutside solution can help you:

Offload must-have functionality—When a functionbecomes a must-have while no longer differentiatingthe product, offloading that functionality onto aspecialized third-party can be a cost-saving, low-riskstrategy to keep pace with market changes. You maybelieve that there are no costs associated withbuilding and maintaining your own integrationplatform, but when you scratch beneath the surface,you might find the opposite to be true.

Free up resources for innovation—You might beable to custom-build an integration platform and makeit work, but considering the competitiveness andunpredictability of the current environment, askyourself whether you really want to allocate resourcesto an IT development and maintenance load this largewhen your IT dollars could be more prudently spenton product innovation that will strengthen your core offerings.

“More than other manufacturing sectors, medicaldevices have a special stake in innovation,” says ChrisStirling of KPMG. “The nature of the business requirescompanies to elevate their performance to offer betterlife-enhancing and life-saving technologies.”5 Thesame holds true of other organizations as well.

Reduce risk—Even if you consider an integrationplatform to be a core strength for your company,building one will probably cost more than buying asolution from an outside source. There is no need togamble on a custom strategy when a solution hasalready been developed by a vendor whose solefocus is supporting the solution and keeping on top of standards.

When it comes to connectivity in the currentenvironment, the goalpost is always moving. You canbuild your own cloud solution, for example, but youwill still have to contend with the development ofinterfaces for a host of disparate systems.

Cut maintenance and staff costs—There are manycost-associated reasons why choosing an outsidesource is a good idea, starting with the savingsassociated with maintaining applications on your own.

RubyCMYK: 10, 100, 100, 2

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GraphiteCMYK: 25, 18, 12, 55

CoralCMYK: 0, 65, 100, 0

AmberCMYK: 0, 38, 100, 0

CitrineCMYK: 2, 10, 100, 0

JadeCMYK: 42, 0, 100, 0

EmeraldCMYK: 60, 0, 95, 0

RubyLight: 10, 100, 100, 2Dark: 10, 100, 100, 22

GraphiteLight: 25, 18, 12, 55Dark: 25, 18, 12, 75

CoralLight: 0, 65, 100, 0Dark: 0, 65, 100, 20

AmberLight: 0, 38, 100, 0Dark: 0, 65, 100, 0

CitrineLight: 2, 10, 100, 0Dark: 0, 38, 100, 0

JadeLight: 42, 0, 100, 0Dark: 60, 0, 95, 0

EmeraldLight: 60, 0, 95, 0Dark: 65, 0, 100, 20

TurquoiseLight: 71, 0, 48, 0Dark: 71, 0, 48, 20

TopazLight: 61, 0, 0, 0Dark: 75, 20, 0, 0

AzureLight: 75, 20, 0, 0Dark: 95, 45, 0, 0

CobaltLight: 95, 45, 0, 0Dark: 87, 70, 0, 0

SapphireLight: 87, 70, 0, 0Dark: 87, 70, 0, 20

AmethystLight: 67, 90, 0, 0Dark: 67, 90, 0, 20

TourmalineLight: 4, 94, 46, 0Dark: 4, 94, 46, 20

TurquoiseCMYK: 71, 0, 48, 0

TopazCMYK: 61, 0, 0, 0

AzureCMYK: 75, 20, 0, 0

CobaltCMYK: 95, 45, 0, 0

SapphireCMYK: 87, 70, 0, 0

AmethystCMYK: 67, 90, 0, 0

TourmalineCMYK: 4, 94, 46, 0


An external solution partner will also bear the burden of:

■ Maintaining and managing applications

■ Replacing and training IT staff

■ Assuming responsibility for system and data centercapacity

■ Adding new customers and maintaining thosecustomers over three to five years

■ Staying competitive with external solutions thatprovide niche offerings to customers, such asconnecting to disease registries or pulling datafrom wearables and placing it back into patients’electronic health records

Can you keep up with thepace of change?Think about the rapid evolution in standards forinteroperability in HIT, most recently with thedevelopment and implementation of Fast HealthcareInteroperability Resources (FHIR), spearheaded byHealth Level Seven International (HL7) and theindustry-sponsored Argonaut Project.6

The resources and expertise needed to stay on top ofindustry developments like these are daunting. In anenvironment as rapidly changing as the current one,partnering with a vendor that specializes in keepingabreast of interoperability standards offers a smarteralternative. Working with an external partner frees youto funnel resources toward innovations that increaseyour ability to remain competitive.

Even if you consider

an integrationsolutionto be core IT for your company, it will probablycost more than buying a solution from anoutside source.

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Consider the time and talent requiredYou’ve heard the phrase “not invented here.” Itreflects a way of thinking among many ITprofessionals that an application not developedinternally is likely to be inferior. It’s understandablewhy many IT specialists assume that the internal team,which already knows the company’s productsintimately, should also build custom applications forthem. This notion actually might have elements of truthto it in some cases, such as when using applicationprogram interfaces (APIs).

But it doesn’t make sense for in-house staff to devotetime to building something that is already available.The time spent developing a custom integrationplatform could distract from a focus on your corecompetencies.

Even if your IT specialists believe they are up to thetask, keeping current with interoperability standardsand federal regulations regarding HIPAA andMeaningful Use might not be the best uses of theirtime. For example, FHIR is an emerging standard thatmany believe will rapidly advance interoperability.How will your organization adapt to handle both FHIRand HL7 integrations and the subsequent revisions?

The effort and expertise required to remain up-to-datewith these standards and regulations could quicklyoverwhelm your people and slow you down in areasthat focus on the core offering in your organization.

According to a report by Forrester Research, Inc.,“While the cost of acquiring a third-party integrationsolution adds capital expense, making packagedintegration capability available to the developmentstaff can lead to significant improvements indeveloper productivity, lower maintenance costs ofnew integration functionality, and provide fasterresponse time to the business."7

In anenvironment asrapidly changingas the current one, partnering with a vendorthat specializes in keeping abreast ofinteroperability standards offers a smarter alternative.

RubyCMYK: 10, 100, 100, 2

CMYK Color Palette


CoralCMYK: 0, 65, 100, 0

AmberCMYK: 0, 38, 100, 0


JadeCMYK: 42, 0, 100, 0


RubyLight: 10, 100, 100, 2Dark: 10, 100, 100, 22


CoralLight: 0, 65, 100, 0Dark: 0, 65, 100, 20

AmberLight: 0, 38, 100, 0Dark: 0, 65, 100, 0


JadeLight: 42, 0, 100, 0Dark: 60, 0, 95, 0



TopazLight: 61, 0, 0, 0Dark: 75, 20, 0, 0

AzureLight: 75, 20, 0, 0Dark: 95, 45, 0, 0







AzureCMYK: 75, 20, 0, 0






Choose a partner with deepindustry insightDeveloping an integration platform requires adedicated team of developers, while partnering withan external solution would provide the resourcesneeded to:

■ Stay abreast of constantly changing regulationsand standards through support from a largedeveloper community with industry-recognized skill sets.

■ Maintain the system.

■ Perform ongoing enhancements and upgrades.

■ Test the application with multiple configurations,including the more than 200 standard EMRs.

■ Deploy trained support staff to troubleshoot with customers.

■ Meet aggressive project targets

As articulated by CIO magazine, “If an organizationhas an in-house development team, there is alwaysthe push to build because they can supposedly satisfyall needs. However, from my experience andobservation, it is usually far cheaper and faster to buythan to build. After all, if a problem has beenadequately solved in a commercial product, why solve it again? Why not focus on a new and moreinteresting problem?”8

RubyCMYK: 10, 100, 100, 2

CMYK Color Palette


CoralCMYK: 0, 65, 100, 0

AmberCMYK: 0, 38, 100, 0


JadeCMYK: 42, 0, 100, 0


RubyLight: 10, 100, 100, 2Dark: 10, 100, 100, 22


CoralLight: 0, 65, 100, 0Dark: 0, 65, 100, 20

AmberLight: 0, 38, 100, 0Dark: 0, 65, 100, 0


JadeLight: 42, 0, 100, 0Dark: 60, 0, 95, 0



TopazLight: 61, 0, 0, 0Dark: 75, 20, 0, 0

AzureLight: 75, 20, 0, 0Dark: 95, 45, 0, 0







AzureCMYK: 75, 20, 0, 0





It does not make sense for

in-house staff todevote timeto building something that is already available.

1 “Make Versus Buy Revisited: Reassessing Your Company’s Manufacturing Strategy,” A.T. Kearney, 2010.

2 “The Three Rules in Medical Technology: The Transformation of an Industry,” Deloitte University Press, 2013.http://dupress.com/articles/three-rules-medical-technology/

3 “Collaboration: The Future of Innovation for the Medical Device Industry,” KPMG, September 29, 2015.https://home.kpmg.com/xx/en/home/insights/2015/09/innovation-for-the-medical-device.html

4 ”Innovation Pulse: The Bold Art of Build-Your-Own IT,” Tom Sullivan, Healthcare IT News, February 20, 2015.http://www.healthcareitnews.com/news/innovation-pulse-bold-art-build-your-own-it?mkt_tok=3RkMMJWWfF9wsRoiuqrKZKXonjHpfsX56e8oXaexlMI%2F0ER3fOvrPtUfGjI4FTcdlI%2BSLDwEYGJlv6SgFQ7LHMbpszbgPUhM%3D

5 “KPMG Survey: Innovative Collaborations Poised to Fuel Next Wave of Medical Devices Breakthroughs,” press release, October 5, 2015. https://home.kpmg.com/xx/en/home/media/press-releases/2015/10/kpmg-survey-innovative-collaborations-poised-to-fuel-next-wave-of-medical-devices.html

6 Fast Healthcare Interoperability Resources, https://www.hl7.org/fhir/.7 “Should You Build, Buy, Rent or Download Your Integration Capability?” Ken Vollmer with Mike Gilpin, Henry Peyret, Forrester Research, Inc., December 9,2009.https://www.forrester.com/Should+You+Build+Buy+Rent+Or+Download+Your+Integration+Capability/fulltext/-/E-res55813

8 “How to Determine When to Build or Buy Enterprise Software,” Steve Doig, CIO, November 5, 2015.http://www.cio.com/article/3001357/software/how-to-determine-when-to-build-or-buy-enterprise-software.html

Make a smart decision

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In an era of exceptionally high expectations for medical technology organizations to consistently deliver in theareas of innovation and quality, purchasing a tried and tested interoperability platform from an outside vendoroffers important advantages in terms of cost and overall competitiveness over the custom-built, do-it-yourself approach.

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Infor Healthcare delivers industry-leading healthcare-specific solutions, available on-premise or in the cloud, thatare used by more than 5,000 organizations globally to transform the integration, planning, tracking, andmanagement of a healthcare organization's vital assets, including people, supplies, clinical data, relationships,and financial resources. To learn more about Infor, please visit www.infor.com/healthcare.

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HC Integration Build vs. Buy