B2B on the Internet: Is it for you?

Many fields of dreams have been built with the hopes of great returns on investment only to find out that many "dot coms" are struggling to stay afloat. How does all of this translate to the healthcare industry?

The health care industry is a billion-dollar vertical industry, and it is inevitable that the Internet will play some role in shaping its future. With the aging baby boomers there will be an increased demand for health care and health information.

What is all the hype about e-business? What do you really need to know? What do you need to do your job smarter, faster and better?

What is all the hype about e-business? What do you really need to know? What do you need to do your job smarter, faster and better?

The Internet is just one great big information system. Information systems are no longer just a good investment to help your company run more efficiently; they have become the essence of what your company is.

New tools will dramatically change the way companies do business, especially in regard to customer-relationships management, purchasing and fulfillment of products and human resources, just to name a few.

The Internet will improve processes through greater collaboration; help to improve customer value through better communication and involvement, and enhance profitability through more efficient and automated business functions.

What is the difference in the traditional business model and the model of the future using the Internet? Consider what functions your company has to perform when a customer comes in to order a wheelchair, for example.

First, you have to determine what the customer's needs are: Do they need elevating leg rest? adjustable armrests, or fixed? Once all of the specifics have been determined, the request will be passed to the purchasing department, where someone has to check through supplier catalogs to determine the availability and pricing of the wheelchair. Once a supplier is selected, the purchasing agent must issue a purchase order and either fax or call the order in to the supplier.

Once the supplier has received the order, the supplier verifies your credit and sales history, checks the warehouse for the inventory and finds out which carrier will be the best to deliver the product. Finally, after all the verifying has been done the supplier can create a delivery ticket, notify the warehouse to pull the order and create an invoice, and deliver the wheelchair. The invoice gets mailed and you pay the bill after you have received the invoice and the product.

Now consider how this might be done using the Internet as a tool.

Your employee would visit the website of either a distributor or manufacturer, or simply enter into their web browsers what they are looking for and allow the search engine to bring them back the list of suppliers and products that match. They could select, with the customer, the correct wheelchair to meet the requirements and needs. A digital request could be sent to the purchasing agent, who would add any additional information into his or her database to order the wheelchair from the supplier.

Once that was done, the purchase order would be sent electronically to the supplier. This is why we are hearing all about the business-to-business (B2B) solutions now.

When the supplier receives the order, the B2B solution would automatically create a pending order in the supplier's computer system, check the inventory level in the warehouse, check your company's credit status and tag the product for delivery. All of this is being done with your initial request, electronically, so there are no order entry errors or missed communication between you and the supplier.

Once the product is pulled, the system will notify the correct carrier to pick up the product for delivery, but only after shopping for the best rate and the quickest delivery time. At the same time, the system would notify the purchasing agent that the product has been shipped, who the carrier is, the tracking number for the shipment, and when to expect delivery.

Compared to the traditional way of doing things, the electronic version has many of the same steps, but the way the information is obtained and transferred is completely different. Information was exchanged in several different modes in the traditional model making it very difficult to coordinate the step, thus increasing the time required to process the order. But with a B2B solution, the fulfillment process starts digital and stays digital throughout the entire supply chain cycle.

The initial request for a wheelchair might have come from a doctor's order for the patient, which you could have also received electronically, so that you already would have all of the patient's demographics and diagnosis to bill the product to the payer. You can then verify with the patient's insurance provider if the diagnosis qualifies the patient for the wheelchair and how much they will be reimbursing you for your services, as well as when you can expect the payment from them.

In the traditional sales cycle, many forms of media are used when you purchase an item: printed catalogs (which are obsolete as soon as they are printed), interoffice mail, the telephone, or perhaps a fax machine. The payment for the products can take several forms as well: writing a check, using a credit card, or including the item in a monthly payment to the supplier.

Imagine how much more efficient this process would be if you were able to obtain all the information you needed right at your fingertips, make your purchases and check eligibility using one medium. That is the promise of the Internet and B2B solutions.

Even before your customer finds you or was referred to you by his or her doctor, you need to make them aware of your products and services. That means advertising and marketing or more generally, providing customers or referrals with information about your company. Potential customers or referrals must get information about your company and the products and services that you provide, while you must learn what they are looking for so you can design your products and services to meet their needs.

The Internet provides one effective medium for communicating with your customers, suppliers, physician, payers and more. You can design websites to include a product catalog that can be searched electronically and that provides new types of product information. If you maintain an online catalog, you can obtain data on which products are requested in searches and how often requests have been made. You also can request information from potential customers visiting your site which can tie demographic data to the products and services that you are providing - this will be invaluable in your sales and marketing strategies. You also can send periodic updates on services and products that you offer to interested parties by e-mail.

The Internet offers you a number of different avenues to provide more value to your customers. You can include a form to ask questions from the customers and direct those questions to your staff. From that you can create a frequently asked questions file. You can also develop chat rooms or support groups related to health questions for which you provide services.

You can even use the Internet to build the same type of solution that you use to procure your products from your suppliers for your customers, giving the customers the freedom to easily follow up on any questions that they might have on the products and services that you are providing.

We have only begun to see the opportunities and synergies of working together. If you are considering a venture on the Internet, make sure that it is more than a front end system and that it encompasses all of your business needs. The way you do your business using the Internet may change somewhat, but with all of the possibilities, it will only help you manage your information better and help your customers more.

One thing is sure regarding starting a venture on the Internet: If you build it, they will eventually come.

Barnes is the director of marketing for TeamDME! Inc., which provides information solutions for the home health industry. He has been involved in management, operations and system automation for nine years. Contact: TeamDME! Inc., 1321 Murfreesboro Road, Nashville, TN 37217; (888) 832-6363; email: [email protected].

This article appeared in the September 2000 issue of Home Health Products, Vol. 8, No. 8.

This article originally appeared in the September 2000 issue of HME Business.

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