Web First: Q&A with Allscripts CEO Glen Tullman
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) and a dismal quarterly report, all of which led to stock price plunging 44 percent.
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 marketshare 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. Why the so-called poison pill, or shareholders rights approach?
A. This is a common approach when companies believe their stock is undervalued. We are committed to act in the best interests of our stockholders and our clients, which is why we increased the size of our current plan from $200 million to $400 million. We adopted the shareholder rights plan to protect against efforts to obtain control of Allscripts that are inconsistent with the best interests of the company, our clients and our stockholders. As described in a recent article in The Street, “The decision to enact a poison pill by Allscripts, though, also places the company in the camp of target market properties that are deciding to gut it out rather than sell out…”
More of the interview on the next pages.