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Novation's E-Commerce Play

Executive Summary

One of the last of the major hospital groups to commit to an Internet strategy, Novation has leaped into e-commerce with both feet through its recent deal with Neoforma. The company faces a host of challenges, not the least of which come from uncertain hospitals and reluctant product companies. For suppliers, the alliance of leading groups and dot-com companies raises questions about the future of the hospital marketplace.

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Burden of Proof

Early efforts to define the opportunity for e-commerce identified the problem--an inefficient hospital supply chain--but failed to prove that e-commerce is necessarily the answer. Now, Novation and Neoforma, a leading hospital group and its e-commerce partner, have released an industry-wide look at Internet-enabled supply chain economics, done by consultants Arthur Andersen, hoping to prove the value to both providers and suppliers of widely implemented e-commerce.

The Value of E-Commerce

For much of the past year, the promise of Internet-enabled e-commerce to deliver savings seemed just that: a promise. But a new study from Novation and Arthur Anderson goes a long way to finally putting some figures on the value and potential cost savings of a web-based supply chain.

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