By Gennifer Biggs, Business Solutions magazine.
This Colorado VAR has turned healthcare data capture and bar-code printing into a profit center, watching sales in that vertical alone grew 21% in 2012.
You hear it all the time: Healthcare is a go-to vertical for the channel, especially for bar-coding and media solutions providers. That statement seems sound considering industry research firms project healthcare IT spending to grow between 19% and 29% over the next few years. Hospitals and other large healthcare facilities are tackling everything from wireless connectivity to bedside patient care to cloud-based CRM, and solutions providers often provide the niche technology expertise needed to deliver those projects effectively and in a timely manner. For SK&T Integration, a Colorado VAR, success in the healthcare market is the result of investing several years into educating itself and its customers about healthcare solutions as well as identifying the right combination of hardware and media to meet the individual needs of the customer.
However, Kathy Lawson, president of SK&T, has a word of warning for her fellow VARs: While healthcare is a booming vertical, it is also a challenging one. She should know; SK&T launched its healthcare focus more than a decade ago and now services healthcare facilities large and small throughout Colorado. Revenues from that vertical account for a big chunk of SK&T’s success. “Last year, in healthcare alone, we saw 21% growth,” says Lawson. “Healthcare is, in my opinion, one of the top verticals in our industry, but it is a tough market. You need to understand the sales cycle, the decision-making progression, and the equipment and workflow needs of your customers to be successful.”
Understanding Healthcare Vertical Is Key To Success
SK&T focuses on data collection and bar-coding solutions for the healthcare vertical, which means the company typically works with admissions, the pharmacy department, and as part of the bedside-care initiatives that help facilities confirm and track patient care using wireless devices and bar-coded patient wristbands and medication labels. This type of work often puts SK&T in the position of validating IT solutions integrations and working closely with the client’s internal IT staff. “We are fortunate; our customers typically come to us already with the knowledge of what they need to do, but they need our help getting there,” explains Lawson. “We advise on hardware and media for meeting those goals.” With the internal IT teams of healthcare facilities tasked with building the software and wireless infrastructure first, by the time SK&T arrives on scene, the VAR is expected to bring expertise and integration to the table. “VARs need to take time to learn how and where their particular solutions fit with larger technology initiatives, and then wait for customers to be ready for that step,” explains Lawson.
To stay prepared for the multitude of varying data collection projects facing its healthcare clients, SK&T leans on its distribution partner ScanSource (see sidebar) and vendor partners Intermec and Zebra for education. Not only does the VAR leverage these partners’ expertise to learn more about integrating bar code and other data capture technologies into healthcare infrastructure, but also it uses them for customer education as well. “We often participate in programs and presentations from those vendors, and we use them for technology shows at local healthcare facilities and with our customers to raise awareness of our solutions,” says Lawson. “We want to make sure we are leading our customers forward, and we really rely on the vendors for help with that.”
Lawson adds that her company routinely attends conferences sponsored by the Healthcare Information and Management Systems Society (HIMSS), listening to educational presentations by top vendors in healthcare while also attending meetings with prospective and current end user clients who typically attend these events as well. The investment of time and cost is returned both in gaining knowledge and identifying new customers. “Servicing healthcare clients is really about creating a partnership. They expect you to be invested in this market and to help them stay educated about how technology can improve their services. Once you’ve achieved that and are truly part of their team, you are usually secure in that relationship for a long time,” says Lawson.
She says one of her secrets for deepening those ties involves data collection media. “We identified that it would be valuable for our clients if we eliminated their need to track and order the labels, ink cartridges, and other supplies that are a part of their bar code printing systems. So we now stock media for our clients and automatically ship supplies each quarter. It is a simple added-value task, but it makes a big impact on the customer by keeping media costs off their books and their equipment up and running,” she says. Lawson adds that the service is a solid revenue source for SK&T as well, with media sales accounting for nearly 80% of its revenues.
Four Lessons Learned In Healthcare
Lawson’s many years of selling data collection solutions to healthcare clients have yielded some valuable lessons. The first is a simple one, yet more critical in this vertical than almost any other — “You must not only pick the right vendor, but pick the right solution,” she explains. Device selection is essential in healthcare because not all handhelds stand up to alcohol swabs and the sterilization process, not all labels are waterproof, and some identification labels must easily peel off to meet privacy demands. “It is easy to go in and sell the wrong product,” says Lawson. “You have to really think through the use of the handhelds, the labels, the printers — it is a tough environment, and there is no room for failure when people’s well-being is at risk.” Lawson shares the example of privacy requirements that demand ID labels from patient IV bags be shredded. While the bar code label on the bag is an essential part of the medication verification chain, once the bag has been used, the label must be able to be peeled off and shredded to meet patient confidentiality rules. Not knowing about that detail could cost a VAR a contract.
Another lesson Lawson learned was to validate the decision-making process early and often. “Purchasing can be a hurdle; you may have been demonstrating a product with a department head for months, then they approve the solution, and it goes to purchasing only to get shut down,” explains Lawson. Her advice is to make sure you know from the start who the decision makers are and what the appropriate steps are to purchasing. Each facility is unique, which means you need to perform this validation process with every new customer.
The third lesson is to simply be patient when it comes to the sales process in this market. Typically, projects take between six and eight months to get approved. “The sales process with healthcare is long, so VARs should be ready for that. You have to be willing to invest the time to win a sale; otherwise, you aren’t going to succeed in this vertical,” she says.
Finally, she explains that in healthcare, you must be ready to provide a quick response to any problems. “Any support request we receive, the response time is, at longest, a couple hours. You simply have to be responsive given the nature of the vertical — it is about life and death.”
The Ongoing Opportunity Of Bar Coding In Healthcare
Lawson believes that although bar-coding data collection solutions are now commonplace in healthcare, many of those solutions are still in the early stages of adoption. And that means sales opportunities are still abundant. For instance, printing patient wristbands was originally completed with an expensive laser printer located in a facility’s admissions department. But in the last few years, new lower-cost printers have enabled these wristbands to be printed on-demand on any floor of a healthcare facility. That’s created a huge change in workflow for most hospitals, and a great opportunity for SK&T, which not only provides the printers and media but also the integration expertise for connecting data collection devices to a facility’s existing IT infrastructure. Having solutions like this empowers healthcare clients to streamline the admissions process, improve patient safety, and eliminate human error. Plus, when SK&T began to offer fulfillment of those supplies, it opened the door to a new line of recurring revenue for the VAR.
A push toward improved bedside care also drives sales for SK&T in this market. Hospitals need the ability to scan a patient’s wristband wherever the patient is located in a facility or medical campus and be able to know, among other things, what medication that patient is supposed to receive and when. “This is why healthcare IT is different; last year, 98,000 Americans died due to medication errors, and we can reduce that tremendously by bringing bar coding to the point of care,” explains Lawson.
Lawson expects healthcare to continue to be the lynchpin in SK&T’s success as more healthcare facilities continue to adopt technologically-advanced data collection systems, driving growth in that vertical. And this year, by riding those technology rollouts, SK&T anticipates another double-digit revenue growth success story.