Allscripts had a great fall
CEO says he and his team will put it back together again – better and stronger
In real estate, it’s all about location, location, location, they say. In healthcare IT, you might say it’s about integration, integration, integration. Allscripts CEO Glen Tullman is keenly aware of how critical product integration is, he says, and he’s working on it. It’s the difficulties with integration that seem to have led to the EHR company’s recent troubles – at least it’s what Allscripts customers and analysts mention most often.
Then came April 25 and the ousting of Allscripts’ board chairman, which triggered three board members to quit in protest, the departure of its CFO (for reasons unrelated, according to the company), a dismal quarterly report, all of which led to stock price plunging 44 percent. (See story page TK.)
Allscripts CEO Glen Tullman discusses the challenges that face the company, plans for recovery and its future in the market.
Q. Can you make Allscripts whole and thriving again? How? How long will it take? What’s your vision?
A. Yes, I believe we can. Many companies would love to have our positioning, our products, our market share and our earnings and cash flow. But to be clear, we can execute better than we have, and we will. We have the right leadership team in place and have made the investments to enable us to lead the industry. And we have the best client base in the industry. Relative to timeline, we are making improvements right now.
Our main areas of focus are product delivery and client experience. We are investing $190 million in 2012 in improving performance, integration and innovation with a number of major releases and improvements in motion. Relative to improving product performance, we have established test labs to eliminate past integration challenges, especially third-party products and the new apps being built for our open platform.
Additionally, Wand, our native iPad app for our Enterprise and Professional EHRs, was recently launched and has been positively received in the market. Our iPad application for our Sunrise Acute offering is already on the market. Wand is another example of the innovation that Allscripts is known for.
Over the course of the year, we have added more than 400 frontline support personnel to our team, many of whom are now just coming on line. And, we continue to upgrade our hosting capabilities through a new data center as well as improved monitoring capabilities to better serve our current customers and future prospects. Additionally, at the beginning of the first quarter we launched a major reorganization, bringing together our sales and services teams into a single organization. This is absolutely the right move for our clients, providing them a single point of contact and a team that is not just accountable for selling, but delivering.
Q. What do you view as the greatest challenge to recovery?
A. Last quarter we added more than 300 new clients and made solid progress with many of our existing products. From a client perspective, we have to deliver on robust integration and focus on our client experience with our offerings given the number of upgrades and new installs we have. That’s one reason we hired more new employees in development, services and support. These are the right investments and they will pay off for our clients and our shareholders.
Q. What are the issues with product integration? Allscripts/Eclipsys integration?
A. ADX 1.0 [software that integrates Allscripts’ acute and ambulatory technologies] was released some time ago and met the technical requirements, but it didn’t meet our clients’ needs. So we worked side by side with our clients to rebuild the product using Agile rapid prototyping techniques to ensure it was what our clients wanted and needed. ADX 1.5 will go into Beta at clients within 60 days and is scheduled for release at the end of September 2012. The client feedback and early testing has been excellent.
Q. Some of your customers have given you kudos for leadership, but one of your largest shareholders asked for your resignation citing problems with execution and leadership. How do you see it?
A. In my 15 years as CEO, I’ve learned that the best way to build long-term value is to deliver for our clients – they have always been and will always be my primary focus.
Q. Should Allscripts customers be concerned about support for their EHRs going forward?
A. Our clients have seen and will continue to see improved support and continued investment in products, processes and people. A big part of our focus over the last year has been upgrading our clients to help them achieve meaningful use. To put this in perspective, we have the largest client base in the industry, and no competitor had to touch more clients in such a short time. Given that many of our clients are smaller practices, the challenges have been not just about upgrading software but also include hardware connectivity and workflow.
Q. In hindsight, what do you wish you had done differently?
A. Allscripts finished 2011 with the best results in our history: profit up 23 percent, bookings up 17 percent and free cash flow exceeding $160 million for the first time in our history. We’re proud of what our team accomplished. That said, our own internal plans were higher and we could have executed more effectively, especially along the lines of software development as it relates to product integration. This is a critical area where we need additional traction and it is now heading in the right direction, led by our head of solutions development, Cliff Meltzer, who joined us last year. Cliff has the right background, having spent many years at Apple, Cisco and IBM where he focused on user experience, connectivity and large data set analytics – perfect for where healthcare is headed today and where our products need to be. Our next version of integration (ADX 1.5), developed with client input using Agile rapid prototyping, will be delivered for early validation to the first clients within 60 days. We’re always focused on getting better and have a set of clear priorities to ensure our focus going forward.
There’s more to this newsmaker interview. Read the full version at healthcareitnews.com