Rx for growing pains: clean data, consolidation and an e-commerce solution streamline the purchasing process at a Chicago healthcare network

For many healthcare organizations, growth makes good financial sense, enabling them to lower costs through shared services and take advantage of better contract pricing afforded to high-volume customers. While Ed Friese looked forward to lower supply costs that expansion at Resurrection Health Care would bring, he knew trying to reconcile five different materials management information systems (MMIS) would create "a headache and a half for everyone in the organization." The Chicago-based healthcare system ultimately found synchronicity and success with e-commerce solutions vendor Global Healthcare Exchange (GHX), Westminster, Colo.

Growing Pains

Three years ago, Resurrection Health Care doubled the number of hospitals included in the system from four to eight in an 18-month period. Disparate technology made it virtually impossible for the healthcare system to capture aggregated data on total purchasing, which was necessary to secure the best contract pricing. While many of the hospitals ordered identical products from the same vendors, these items were often listed differently in each of the eight item masters hosted by the various hospitals.

Friese needed to improve the overall purchasing process--still a highly manual effort--leaving the purchasing staff with little time to handle special needs such as urgent requests for products or services required for critical patient care. Similar problems plagued the accounts payable department, which entered and paid invoices by hand. The time involved often delayed payments to suppliers, making it difficult to take advantage of lucrative early pay discounts.

Friese had tried earlier to consolidate purchasing and automate the process, with limited results. Electronic data interchange (EDI) connectivity had been set up with a few vendors, making it possible for buyers and their assistants to send purchase orders electronically, but corresponding purchase order acknowledgements were "sporadic at best," he says. The purchasing staff still had to follow up with vendors, usually by phone, to confirm that orders were received and the products were shipped. Even when suppliers sent electronic confirmations, the information mapped in the purchase order did not include the name of the buyer. As a result, there was no way to directly notify that person about back orders or other problems that needed attention.

Using dial-up connections also had its inherent problems. The slow batch process made it difficult to make cutoff times for next-day and second-day deliveries. Without technical notification that the full transaction had been successfully received, purchasers were never sure if any of the data was lost during transmission. There were also capacity issues. Dial-up connectivity simply could not handle the volume necessary for Resurrection Health Care to significantly expand the number of electronic vendors and, most importantly, the percentage of orders handled via e-commerce.

Cleansing Data

Resurrection Health Care ultimately chose GHX for its integration, data cleansing and automation processes. The healthcare system also wanted GHX's ability to connect to a wide variety of MMIS, its reporting capabilities, the number of suppliers connected to the exchange, its revenue- neutral business model and broad industry ownership.

Before its July 2002 go-live with GHX, Resurrection Health Care tackled its data cleansing needs. GHX and the healthcare system's staff first compared information in each of the eight hospital item masters to product data maintained and verified by suppliers in the GHX AllSource content repository. They made necessary corrections to item numbers, unit of measure and supplier divisions, and removed duplicate or obsolete entries. Once all of the item masters were cleansed and synchronized, the healthcare system utilized GHX Content Intelligence to maintain that level of accuracy and synchronization.

The GHX solution relies on supplier-established business rules and updates to the AllSource repository to identify and correct inaccurate product data in purchase orders during the transactional process. Hospitals are also notified of changes needed to keep their item masters current. Resurrection Health Care was eventually able to consolidate the original eight item masters into a single and more manageable database, with less than half the number of products contained in the multiple databases combined.

Resurrection Health Care connected to GHX using the Connect Plus solution, which provides standard connectivity to the majority of MMIS commonly used in healthcare and requires little effort from a hospital's IT staff. GHX placed a communications server behind the healthcare system's firewall, into which information was funneled from the various MMIS. The on-site server provides more reliable connectivity than dial-up, improved order monitoring, and secure and confidential (HIPAA-compliant) data transfer back to the MMIS, while minimizing much of the work that the MMIS had to handle. Orders placed via GHX are secured through encryption with non-repudiated high-speed delivery, enabling purchasers to confirm they were received in time. They can also be mapped to specific buyers to handle any necessary follow-up.

Online games and e-business: architecture for integrating business models and services into online games

Online games are the future of the interactive entertainment industry. The idea of integrating business services into online games holds a number of exciting possibilities for new business models, new markets, and new growth. We describe an architecture, Business Integration for Games, and an implementation prototype, for integrating online games with business services. We also describe a demonstration system that embeds our prototype into the popular first-person-shooter game Quake II[TM].

INTRODUCTION

Online games, which give the player the ability to compete against other players over a network, emerged seriously in the mid-90s. This rapidly evolved from a novelty feature to an expected function by players, and game designers adopted this approach to build multiplayer (MP) and massively multiplayer (MMP) genres of games.

A key difference between these genres is scale, and with it, the associated infrastructure to support it. The MP games confine the number of concurrent players in a single game to somewhere between 16 and 32. Usually, the game can be played either stand-alone or in multiplayer-network mode, and one of the players' machines acts as the server. The game session is relatively short-lived (minutes to hours). If the server crashes, the game is, at worst, over or, at best, severely disrupted. The MMP games, though, are a very different affair. The most popular MMP games today have subscription bases in the millions, with hundreds of thousands of players online at any one time, spread over hundreds of servers. The shared game session lasts indefinitely. This requires a much more stable environment; thus, these games have to run on dedicated servers equipped with a persistent database. Network bandwidth to support the game-related traffic is also required, and all this obviously has an associated cost.

These two different genres and their associated infrastructure requirements and costs spawned two different approaches to sustained revenue generation. The first one, mostly associated with the MP games, is based on the provision of a portal to act as a hosting and matchmaking Web site for players of these games. The portal site offers either a free membership to players and generates revenue through online advertising or a premium membership, free from advertising. The members gain access to services for locating other players and games, league tables and high scores, patches and add-ons, and use of the portal's dedicated server machines for playing games. An example of such a portal is GameSpy.com, (1) which maintains a subscription-based membership and provides an aggregation point for a variety of games that run on a variety of platforms. Some game publishers run their own portal sites with free membership, dedicated to hosting their own games and ensuring a quality experience for the community of players. The downside from the player's perspective is that these sites are limited to the products of the publisher. An example of a publisher portal site is Battle.net, (2) dedicated to games from Blizzard Entertainment.

The second business model, associated with the MMP games, is based on subscriptions that include a persistent presence in the game environment. For typically ten to fifteen U.S. dollars per month, a player has access to a game character that may be developed over time to accrue additional features for a more enjoyable game experience. The reasons players continue to subscribe include a strong community spirit, exciting game experiences, and an ever-increasing investment of time and money in the game character--if you stop paying for your subscription then your character (and all the experience and wealth gained) is lost. It is not uncommon for the subscription to be continually renewed while the account is dormant.

These games belong to the role-playing game category, and are often referred to as MMORPGs (massively multiplayer online role-playing games). Game characters are often involved in adventure and exploration jointly with other players, and aim to achieve some objective and gain rewards. The more rewards gained, the more powerful the character. Virtually all of these games have some kind of embedded trading mechanism that allows players to exchange wealth among them in the game world. For instance, in one of the most popular MMP games, EverQuest ** (3) from Sony Online Entertainment Inc., players assume the roles of pseudo-medieval fantasy heroes, gaining magic and gold in a land of dragons and wizards. Players are able to buy and sell their virtual property in exchange for virtual wealth, but this virtual economy is confined to the game world and is not a means by which the game service provider makes any of its revenue. Trading virtual wealth in the game world, however, has spawned a third business model that is now emerging.

From the earliest use of MMPs (Ultima Online ** (4), EverQuest, Asheron's Call ** (5)), the players in the community have recognized a gap in the market. Whereas some players are unable to devote the time, or lack the skill, to develop powerful characters and gain access to the more enjoyable game experiences, they are willing to pay real money (above and beyond the subscription fee) in order to acquire this virtual property. Thus, a real economy has emerged in which artifacts of the game world, such as magical items, weapons, or even whole characters, are bought and sold for real-world money. The means by which these transactions occur are often through an external medium, such as an online auction site like eBay. (6) The game service providers have historically frowned upon this practice, claiming that it is they who own the intellectual property rights to the items being traded, not the players, and that the trade is therefore illegal. But despite various attempts to prevent it, the practice is now an acknowledged side effect of the MMP game genre, and some newer MMP releases have attempted to build this into their design from the outset by providing auction functions and the ability to exchange real-world currency for virtual in-game currency. The open market, however, is a strong force, and this has not really deterred players from continuing to use external auctions and payment services.

Digital River Acquires NetSales' Software Services Division - e-commerce service companies

Digital River announced that it has acquired the software services business of NetSales, which provides B2B and B2C e-commerce services for software publishers and software retailers. The acquisition of the NetSales' technology division further establishes Digital River's position as a provider of both B2B and B2C e-commerce services for software and digital content publishers.

Under the terms of the agreement, Digital River acquired NetSales' software services assets in exchange for 1,000,000 shares of common stock, with a contingent earnout for an additional 350,000 shares of common stock based on performance over the next 180 days. NetSales generated 1.3 million in net transaction revenue in 1999 with over 500 clients. All of the operations will be consolidated at Digital River.

Over the next 90 days, NetSales' clients will be transitioned to Digital River's commerce system and can immediately tap into the company's comprehensive e-commerce services.

Office.Com Expands E-Commerce Capabilities with Request for Quote and Auction Services

Winstar Communication Inc.'s Office.com recently began offering business-relevant auctioning, bidding, purchasing, and selling opportunities for small- and medium-sized businesses (SMBS) on the marketplace section of the Web site.

Through its partnership with BizBuyer.com Inc., a business-to-business Request-For-Quote (RFQ) marketplace, Office.com business users can now receive competitive quotes on a broad range of products and services from qualified sellers. Office.com's partnership with FairMarke, a provider of on-line, outsourced distributed selling solutions, gives its customers access to on-line auctions and AutoMarkdown services in approximately 200 product categories.

"These new e-commerce capabilities give our users even more tools to grow their businesses," said Jeff Cutler, general manager and COO of Office.com Inc. "Working with these top-rated service providers, we make on-line RFQ purchasing and auction-style selling more objective and applicable for the SMB marketplace by putting control in the hands of buyers and sellers."

Office.com rigorously evaluates every marketplace partner and highlights third-party reviews on hundreds of business-relevant products, allowing users to browse detailed research before buying. In addition, Office.com's extensive content covering nearly 150 vertical industries and professions is integrated with its marketplace area, enabling SMBs to research and procure goods and services in a targeted fashion.

New telematics a success in Japan - Asia Report - there are currently over 40 services available, including e-commerce and music

Although the jury is still out, early signs indicate that the latest generation of telematic services by Japan's Big 3 carmakers has been more favorably received than their predecessors.

Toyota Motor's 'G-Book,' the most comprehensive of the systems, debuted last October on the new WILL Cypha. Through December, an estimated 80 percent of 8,090 Cypha buyers had enrolled in the service.

Honda Motor's 'InterNavi Premium Club,' introduced last fall on the remodeled Accord, has had similar success with nearly 100 percent of domestic customers opting for car navigation (some 60 percent of the total) signing up.

Meanwhile Nissan Motor's CarWings,' introduced on the remodeled March last spring, is now available on the Cube, Primera, Elgrand and Fairlady Z. Nissan provided no sales results, but was encouraged by the level of interest in the service, particularly among younger drivers.

Analysts note that it is still too soon to gauge profit potential, though they also feel that Toyota, judging by the range of G-Book services, has decided such offerings will help it sell cars--if not now, in the future.

In total, there are more than 40 services ranging from music and entertainment to vehicle security and e-commerce. Half are provided for free.

Included in G-Book's basic package: online business, financial and general news, weather forecasts, sports scores, traffic advisories and incoming email messages, all read out load in synthesized voice. Tapping into "Gazoo," a related Toyota service, G-Book provides a broad listing of hotels, restaurants, golf courses and other recreational facilities, complete with reservation procedures and fees. And in the safety field, G-Book features a mayday' service that automatically alerts the G-Book center in the event of an accident or breakdown. The center, which is paid for and staffed by Toyota, then notifies the appropriate repair or emergency service.

With all these features, the main question left is whether Toyota can price G-Book at affordable levels. For the WiLL Cypha, it may have done so. However, no one believes that the $5.40 monthly fee or $55 yearly rate comes close to covering costs.

Verizon and Interland Announce Three-Year Agreement to Offer Web Hosting and E-Commerce Services

Verizon Communications and Interland Inc., a provider of Web enabling solutions, announced a three-year strategic relationship to market and sell a full range of Web hosting, design, and consulting services, as well as bundled packages of these and other Internet services, to small and medium-sized businesses.

"Surveys have indicated that Internet hosting and e-commerce are the hottest emerging issues with business managers, and there is a strong demand in the market right now for reliable access and hosting services to enhance the competitive position of small and medium-sized businesses," said Bob Ingalls, president of Verizon's business solutions group. "Interland's extensive customer support system and the reliability and scalability of its technology will enable us to deliver to our customers solutions that will enable them to grow their business and work more efficiently via the Web," Ingalls said.

The relationship is outlined in three agreements: a marketing channel agreement, a service provider agreement, and a billing and collection agreement. Under the marketing channel agreement, Interland and Verizon will jointly market Interland's full suite of Web hosting, managed services, Web design, and related e-commerce solutions to over two million Verizon small and medium-sized business customers in the Northeast and Mid Atlantic states beginning in November. Under this agreement, the services will be sold and supported by Interland's sales and customer support teams to businesses that will become Interland customers.

As part of this agreement, Verizon and Interland will equally split marketing expenses, with each company initially committing a minimum $6 million in co-marketing funds. The Interland-enabled services will be co-branded and will be Verizon's only stand-alone shared Web hosting offering to small and medium-sized businesses in the region. Prices for the hosting and support services will depend on the hosting plan, storage capacity, and other features selected from Interland suite of services.