Company project : ZorgMatch : should ZorgMatch collaborate?

Company Project |

ZorgMatch

“Should ZorgMatch collaborate?”

January |

Am

sterdam

Business School |

Rizwan Ahmed |

Supervisor |

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Preface

“A journey of a thousand miles begins with a single step” Laozi

Two years ago my journey began with a single step. Attending the first classes and meeting my new classmates. Two years and a thousand miles later I’ve reached the end of this journey. What lies in front of you is the result of two years of balancing my private, professional and student life. From assignments, reading materials and exams to the interesting lessons, discussions and the company of my fellow students. The path was not always easy, but fortunately I’ve had some support along the way. One of the focal points was my job at ZorgMatch. I completed most of the program whilst working there. ZorgMatch is an organization with a lot of potential, intellect and strength. As a young company it doesn’t think in solving problems, rather in adressing challenges. Where everybody does everything to serve the customer as good as possible. Working in such a pleasant environment is a reward in itself. But being able to put the lessons learned from the program directly to practice is simply amazing. As a parting gift I present ZorgMatch with this report containing a strategic ambition, a strategic ambition that was already in everyone’s minds which I’ve merely put in writing. The ultimate goal of this report is to provide ZorgMatch with the means to show the rest of the world its potential. I hope it helps ZorgMatch take the next step in reducing the administrative burden to make healthcare costs more manageable.

I would like to thank everyone who made this journey possible. My fellow students, teachers, counsellors and finally my parents and in particular my family. Without the unrelenting support of my wife it wouldn’t have been possible to complete this journey. Her support has enabled me to focus on this program these two years. I’d like to thank Ron Obbens for having faith in me and trusting me during my time at ZorgMatch. I’ve spent a lot of my time acquiring a lot of knowledge, now it’s time to put that knowledge into practice. As my journey comes to an end I find myself ready to embark on a new one.

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Table of Contents

Executive Summary ... 6

I.

Introduction ... 7

II.

Theoretical Framework ... 9

A. Porter’s five forces ... 9

B. Blue oceans ... 10

C. Core competences ... 11

D. Synergetic effects ... 11

III.

Methods ... 13

A. Case study ... 13

B. Unstructured interviews ... 13

C. Data Analysis ... 14

IV.

Case Description: ZorgMatch ... 15

A. Mission & Vision ... 15

B. Long-Term Care Market ... 15

C. Main market actors... 17

D. Competitor analysis ... 18

V.

Results ... 20

A. Interviews... 20

B. Strategic ambition ... 21

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VI.

Conclusion & Recommendation ... 26

A. What is the strategic ambition of ZorgMatch? ... 26

B. What are the synergetic effects of collaboration? ... 26

C. Should ZorgMatch collaborate? ... 27

D. Recommendation ... 28

VII.

References ... 30

Appendix A: Product portfolio ... 31

A. AZR-NL ... 31

B. PGBmatch ... 31

C. iMatch ... 32

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Executive Summary

The shareholders have requested management of ZorgMatch to investigate a potential collaboration with another firm that focusses primarily on municipalities. The shareholders have also expressed that a collaboration could result in a merger. The goal of this report is to determine whether or not ZorgMatch should collaborate with another firm. The companies strategic ambition is to reduce the costs of administrative processes. To that extend the company aims to develop Software as a Service (SaaS) solutions that allow her clients to focus on their business rather than IT. ZorgMatch’s core competence is the ability to implement the various information exchange standards. ZorgMatch would like to expand her services horizontally and vertically. By horizontally expanding its services ZorgMatch wishes to provide assessment offices, municipalities, Business Process Outsourcing (BPO) organizations and healthcare providers with a high quality back-office solution. By vertically expanding its services ZorgMatch wishes to improve the integration of administrative processes to IT-systems. ZorgMatch believes that by supporting organizations in the design process the alignment of business and IT could be drastically improved. The strategic ambition is based on the vision that software vendors will evolve in knowledge partners that provide integrated solutions to their clients.

ZorgMatch currently lacks the resources, activities or position to realize the strategic ambition on its own. Collaborating with another firm could enable ZorgMatch to gain the competences, skills and knowledge that are required. In return ZorgMatch will be able to provide the collaboration partner knowledge regarding the implementation and incorporation of the information exchange standards. Furthermore, ZorgMatch will be a strong partner in the Long-Term Care Act (Wlz) market allowing the collaboration partner to lean against ZorgMatch to enlarge their market share. To realize its strategic ambition ZorgMatch should consider a collaboration with another firm. Because the candidate firm focusses primarily on municipalities it enables ZorgMatch to partly realize its horizontal and vertical expansion on a short term. On the long run the collaboration could create new competences that will enable the realization of the remaining part.

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I. Introduction

A. Background

ZorgMatch develops Software as a Service (SaaS) that supports the administrative process of the Long Term Care Act (Wlz), Social Support Act (Wmo) and the juvenile law (Jw). With the AZR-NL and PGBmatch applications ZorgMatch supports insurance companies CZ, Agis, De Friesland and Achmea in performing the duties delegated to them by the Wlz. For Zorg-Lokaal the company has developed Zorg|Portaal. With this back office application Zorg-Lokaal supports municipalities with the administrative process of the Wmo and Jw.

From January 2015 onwards the municipalities are responsible for types of care that were previously part of the Exceptional Medical Expenses Act (AWBZ) and responsibility of the healthcare insurance companies. This has caused an increase in complexity for the municipalities mainly due to an increase in the number of contracted healthcare providers, decrease of the budget and an increase in the risks. In light of these recent changes the shareholders have requested management at ZorgMatch to investigate the possibilities for a collaboration with another firm that focusses primarily on municipalities. The shareholders have also indicated that the collaboration could also result in a merger.

B. Challenges

ZorgMatch wants to support every organization that is involved in the care delivery of the long-term care, not just the municipalities. With its current software ZorgMatch also supports the healthcare insurance companies and a number of healthcare providers. By collaborating with a firm that is primarily focused on municipalities ZorgMatch fears it might not be able to continue delivering the same or a higher level of quality products it is currently providing the healthcare insurance companies and healthcare providers.

On the other hand, ZorgMatch currently only supports a part of the long-term care process with its existing suite of software. Collaboration with another firm could provide a better coverage of the entire process. However, ZorgMatch could also decide to develop the missing parts on its own.

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C. Goal

The goal of this report is to determine whether or not collaboration with another firm is in the best interest of ZorgMatch. To do this the first step is to determine ZorgMatch’s strategic ambition. This is highly influenced by the way ZorgMatch views its strategy, i.e. outside-in versus inside-out. The strategic ambition should clearly state what part of the process ZorgMatch intends to support and thus indicate the products or services it intents to provide its clients. The next step would then be to determine which part of the process is currently supported. The parts of the process that are not supported can then be divided in areas where ZorgMatch has the competences to develop on their own and areas that require the help of a collaboration partner.

D. Research questions

The main research question is whether or not ZorgMatch should collaborate with the other firm. To formulate an answer for the research question the following sub-questions need to be answered first:

1. What is the strategic ambition of ZorgMatch?

1. What is the mission and vision of ZorgMatch?

2. What part of the process is currently supported by ZorgMatch? 3. What part of the remaining process can be developed by ZorgMatch? 2. What are the synergetic effects of collaboration?

1. What part of the strategic ambition can be realized by ZorgMatch on its own?

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II. Theoretical Framework

A. Porter’s five forces

Porter has made an important contribution in formulating the theory regarding competitor analysis and strategy (Lienden & van der Poel, 2005). Porter assumes competition isn’t always in the form of another company that provides similar products or services, but provides substitute products or services (Porter, 1985). Porter distinguishes five forces that influence an organization and resemble competition. These forces are threats of new entrants, threats of substitutes, bargaining power of customers/buyers, bargaining power of suppliers and the intensity of competitive rivalry. By analysing these forces organizations are able to map their external environment. These insights can in turn be used to formulate a strategy to cope with competition (Lienden & van der Poel, 2005).

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B. Blue oceans

Existing and new markets can be differentiated into red and blue oceans (Kim & Mauborgne, 2005). The red oceans are the existing markets and full of competitors where each organization is aiming at increasing its market share. Products in these markets are commodities and the profit margin is minimal. Blue oceans are new markets, the uncharted waters. The market in blue oceans is infinitely big and demand can be created with high profit margins. The blue oceans sometimes lie just outside the boundaries of the red oceans, but sometimes they lie deep within the red ocean and emerge when the boundaries are pushed. A good example is the telecom industry. A couple of years ago the mobile phone was only used to call. By expanding the possibilities to use a mobile phone, such as texting, e-mail, games, surfing, etc. the boundaries of the red ocean have been pushed to that extent that a blue ocean has emerged. If the boundaries aren’t pushed further the competition will increase and a blue ocean could easily turn to red (blood in the water). Organizations can use the Eliminate-Reduce-Raise-Create-grid (ERRC grid) to create a blue ocean (Kim & Mauborgne, 2005).

Figure 2: ERRC Grid

Eliminate-Reduce-Raise-Create

The EERC-grid enables an organization to consider the features on which they have been competing on and the relevance of these features (Kim & Mauborgne, 2005).

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Although products and services are initially designed to fulfil a need of the client over time it is often used as a tool to compete with others. Features that have no added value for clients should be eliminated rather then competed on. Furthermore, some features only provide a marginal competitive advantage but have a high cost factor. These features need to be reduced to a level below the industry standard. Some features don’t cost a lot to develop and provide ample grounds for competition. These features should be enhanced above industry average. Lastly some features have never been competed on, these should be created to redefined sustainable competitive advantage.

C. Core competences

The inside-out perspective focuses on a resource driven strategy identifying sources of sustainable competitive advantage. The competitive advantage of an organization can be derived from its price/performance attributes of its current products (Prahalad & Hamel, 1990). The authors describe a diversified organization as a tree, with leaves, flowers and fruits that resemble the end products of the firm. The smaller branches are the business units and the trunk of the tree is the core product. The roots that nurture, stabilize and give life to the tree are the organization’s competences. Competences bring forward core products, business units and lastly end products. By focusing on the leaves (end products) alone the strength of the tree might be overlooked.

D. Synergetic effects

When two or more firms work towards a common goal transcending the transactional relationship they can form an alliance, partnership or network (Meyer, 2007). The strategy of the organization will no longer only focus around its environment, but will be a shared strategy which focusses on the network and relation to a wider environment. An organization can enter several types of partnerships, namely:

q Upstream vertical (suppliers) relationships; q Downstream vertical (buyer) relationships;

q Direct horizontal (industry insider) relationships; and q Indirect horizontal (industry outsider) relationships.

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In general, organizations enter partnerships because they expect added value that they couldn’t have achieved on their own. Organizations can achieve synergy across three levels:

q Resources q Activities q Positions

Figure 3: Various levels of achieving synergy

Organizations can leverage resources by either learning or lending them. An organization will typically leverage resources if they are scares and/or unique. To integrate activities organizations can choose to link or lump activities. By linking activities new value chains are created. By lumping activities economies of scale can be realised. Lastly organizations can align positions by leaning or lobbying. When organizations lean they get together to improve their bargaining position and stand stronger against industry actors. By lobbying organizations cooperate to gain a stronger position against contextual actors.

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III. Methods

A. Case study

This report is a case study of ZorgMatch since the research question is a current and practical issue (van Thiel, 2013). To be able to answer the main research question qualitative data is gathered to describe the organization from various perspectives. The goal is to provide a rich and holistic view of the organization. By analysing the market ZorgMatch operates in it’s possible to better understand the products that ZorgMatch develops and the competences that are at the organizations core. To enhance the understanding of the organization it’s mission and vision have also been identified. Data was gathered through field research, desk research and interviews with tactical/strategic level employees. Furthermore, data was also gathered during a 1,5 year employement at ZorgMatch. The data was gathered during meetings, discussions, but also the casual conversations with collegues. The data gathered helped to create an understanding of the challenges and opportunities the potential collaboration posed for ZorgMatch.

B. Unstructured interviews

Due to the size of the organization and the limited amount of respondents unstructured interviews were used to determine the strategic ambition of ZorgMatch (van Thiel, 2013). There are three types of interviews that can be performed, namely structured, semi-structured and unstructured (Endacott, 2005). With the unstructured interviews no or few questions are formulated beforehand, hence providing a huge amount of freedom to delve deeply into emerging topics. The respondents were the operational director (1 respondent), product owners (2 respondents), service desk (1 respondent) and the IT-architect (1 respondent). Temporary employees that were not at a tactical or strategic level were not interviewed because they had no direct influence in the strategy that ZorgMatch pursues. Because the development team consisted entirely of temporary employees on an operational level that build the software accordingly to the specifications that are provided they were not interviewed. The interview consisted of a couple of pre-determined questions. The main aim was to gather information that

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could identify the strategic ambition ZorgMatch pursues. The respondents were also asked whether or not they believed ZorgMatch should collaborate/merge with another firm and the reasons for (not) doing so.

C. Data Analysis

The data derived from the interviews was analysed and collected at the same time because answers from the respondents needed to lead to new questions (DiCicco-Bloom & Crabtree, 2006). Notes of the interview were transcribed directly after the interview (Ayres, 2007). To enhance the reliability and validity of the results as many member of the organization as possible have been interviewed. The aim was to collect as many insights as possible to create a better understanding of the strategic ambition. In case of contradicting answers additional questions were asked to determine the cause of the contradiction and enhance understanding. Data saturation was considered when no new insights or information emerged and served as an indication to end the interview (DiCicco-Bloom & Crabtree, 2006; Endacott, 2005; Ayres, 2007). By comparing the answers similarities as well as differences could be discovered. By grouping the similarities in answers a coherent understanding about the strategic ambition was then formulated.

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IV. Case Description: ZorgMatch

A. Mission & Vision

ZorgMatch develops Software as a Service (SaaS) solutions. The company was founded in 2004 when they developed an application that supported the administrative process of the Exceptional Medical Expenses Act (AWBZ) for healthcare insurance companies. With the cost of care on the rise ZorgMatch aims to reduce the costs of administrative processes. Its mission is to offer products that ensure a high standard in administrative processing allowing the organizations to focus on their business rather then IT. To this end ZorgMatch would like to work closely with their clients to understand the challenges they face.

ZorgMatch envisions that software vendors will gradually evolve into knowledge partners for businesses. Software vendors have previously been focused on building and implementing software. With the alignment between business and IT becoming increasingly more important software is not only a product but also a service. The software needs to support the administrative processes, but these processes need to be organized in the best way. In the long-term care ZorgMatch has a lot of experience with the information exchange standards in the Wlz (iWlz). A similar information exchange standard has been designed for the Wmo (iWmo) and the Jw (iJw). The experience and knowledge ZorgMatch has of the iWlz will enable them to better and faster support the iWmo and iJw standards. Thus allowing ZorgMatch to not only build solutions that will support the iWmo and iJw information exchange optimally, but also design the processes that will enable the municipalities and healthcare providers in reducing their administrative costs.

B. Long-Term Care Market

ZorgMatch focusses on the long-term care which encompasses the Wlz, Wmo and Jw. The cost of care in this market had reached a level that was no longer acceptable for the government. The way long-term care was organized in the Exceptional Medical Expenses Act (AWBZ) was no longer sustainable. Changes were implemented which resulted in a restructuring of the long-term care. Some parts were no longer considered

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long-term care and have been transferred to the Health Care Insurance Act (ZVW). The remaining parts were distributed among the new Long-Term Care Act (Wlz), the new juvenile law (Jw) and the expansion of the Social Support Act (Wmo). The redistribution of responsibilities has caused an increase in responsibilities for the healthcare insurance companies and municipalities and has created multiple financial and administrative processes for the healthcare providers.

The Wlz is a mandatory social insurance for exceptional medical expenses. Any lawful resident of the Netherlands is insured of care in case of long-term illness, disability or old age. The Wlz reimburses medical expenses that are not covered by the ZVW and consists of various types of care such as care at home, psychiatric care, care and nursing in institutions for the physically and mentally disabled and nursing homes. The Wlz typically consists of care with a higher intensity then provided in the Wmo or Jw. The Wmo was introduced in the Netherlands in 2007 and has provided a new basis for a system of Health and Welfare. The Wmo ensures every citizen can participate in society and can live independently. The Wmo has replaced a number of laws which has caused the municipalities to now be responsible for the care provided at home and the support for informal care providers. Prior to 2007 these types of care were part of the AWBZ. The Wmo has also replaced the Disability Services Act (WVG). If a citizen can’t participate or live independently without additional help they (or someone on their behalf) can petition the municipality for support, such as care at home or a wheelchair. From 2015 onward municipalities are also responsible for all forms of youth care as described in the juvenile law. Municipalities are able to organize the care closer, simpler and cheaper for their citizens as opposed to healthcare insurance companies.

To optimize the care delivery the information flow in the Wlz, Wmo and Jw needs to be integrated. The care delivery in the various laws is a value chain in which information is transferred from one organization to another where each organization is adding a bit of information. By efficiently and effectively organizing the exchange of information the care delivery for the client can be enhanced. Currently there is a standard for exchanging information in the Wlz, the iWlz. This system has proven to be beneficial in many ways. The healthcare insurance companies that have been using the iWlz are better able to predict the demand for care and to match the supply they

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contract. In addition, approximately 90% of the care assessments are automatically processed and lead to an assignment of care to a healthcare provider. The introduction of the iWlz substantially reduced the number of administrative tasks and provided healthcare insurance companies with a better understanding of the care delivery chain. Furthermore, whenever the healthcare provider starts or stops its care delivery this is communicated with the healthcare insurance company through the information system. The healthcare insurance company then uses this information to determine the appropriateness of the care in regards to the care assessment and checks for the existence of a waiting list. Municipalities have just started to use this system for the Wmo and Jw, but in time they could reap the same benefits as in the Wlz.

C. Main market actors

Currently the Wlz system requires an assessment in order to determine whether or not long-term care is appropriate. The assessment is carried out by the Care Assessment Centre (CIZ). The healthcare insurance companies ensure that enough providers are contracted to serve the needs of the population. The healthcare provider(s) not only delivers the care, but provides information as to when the care commences and when it stopped. The Central Administration Office (CAK) uses this data to calculate and collect the social contribution for every individual. The Care Institute Netherlands (ZINL) manages and reports the data on waiting lists at healthcare providers. There are however several more organizations involved in the care delivery system for the Wmo and Jw then for the Wlz.

In the Wlz the assessment is performed by the CIZ, but in the Wmo and Jw the municipalities are responsible for the assessment. Because the municipalities often lack the medical knowledge to carry out an assessment correctly medical organizations have started to provide assessment services to municipalities. These assessment offices determine the medical need for care or support for the citizen. If the severity of the care required reaches a certain threshold the citizen is forwarded to the CIZ for an assessment for the Wlz. Similar organizations have risen that handle the back office processes for healthcare providers as well as municipalities. With the introduction of the new laws the complexity in administrative process has been increased. The

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Business Process Outsourcing (BPO) partners reduce the complexity for its clients by performing those tasks. Organizations can choose to outsource the whole or a part of the process. Because of the scale BPO partners are often better equipped to invest in IT and optimize processes.

D. Competitor analysis

In the Wlz the competitive rivalry in the software market for healthcare insurance companies isn’t intense. Besides ZorgMatch there is no other commercial vendor currently developing software for the healthcare insurance companies in the Wlz. The remaining healthcare insurance companies are developing software on their own. In the healthcare provider market there is an intense competitive rivalry considering there are over 8000 registered care providers varying in size from self-employed to national organizations. The healthcare providers market is the same for the Wlz, Wmo and Jw. In the Wmo and Jw the municipalities are responsible for organizing the care in their respective regions. The software market in the iWmo and iJw is dominated by a few organizations, considering that municipalities don’t easily switch in software solutions it’s safe to state that there isn’t a very intense competitive rivalry.

To enter the Wlz, Wmo and Jw market as a software vendor some knowledge of the information exchange standards is required besides the financial means. Documentation regarding the standard is readily available on various websites. Therefore, the threshold for new entrants is very low and parties can easily enter the market. However, it has proven to be difficult to increase market share. The stable market for healthcare insurance companies and municipalities forces new entrants to focus on the healthcare provider market. The fierce competition on that market however means that it is difficult to increase market share big enough to be able to compete with the companies currently serving the healthcare insurance companies and municipalities.

There is a threat of substitute products or services. In the Wlz healthcare insurance companies have decided to develop back-office software on their own. They have chosen to attract developers that will help the organization to build its very own software suite. Any lack in knowledge regarding the information exchange services

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can be added to the team by attracting the right persons. Therefore, the main threat for software vendors in the Wlz, Wmo and Jw market are organizations that provide developers and knowledge about the information exchange standard to enable organizations to build their own software.

In the Wlz, Wmo and Jw market suppliers of software vendors have a limited to no bargaining power. The resources provided are often not scarce or unique, thus reducing the possibilities of exercising certain control over the software vendors. The customers/buyers have some bargaining power in the Wlz, Wmo and Jw market. If the organization they are doing business with is large, i.e. has many more customers, then the power of the customer/buyer is reduced. If the customer/buyer is the only client, then they have more bargaining power. Usually vendors try to create a one-size-fits-all standard solution. They are often not willing to make changes in the software just for one client.

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V. Results

A. Interviews

During the interviews it became clear that the respondents are convinced of the qualities of ZorgMatch. In their opinion ZorgMatch has a lot to offer, but they weren’t particularly fond of the idea of a merger. The respondents indicated that ZorgMatch has more clients than the muncipalities alone. They fear that by collaborating with an organization that is primarily focused on muncipalities it might deteriate the quality they are currently providing healthcare insurance companies and limit ZorgMatch’s future clientele. Furthermore, they weren’t to convinced wether the qualities of the proposed organization matched the qualities and standard at ZorgMatch.

Inside-out strategy

Based on the interviews and the products of ZorgMatch their core competences can be derived. It is clear that one of the core competences of ZorgMatch is the implementation of the iWlz, iWmo and iJw standard. It is clear that they have an extensive knowledge of the standard and are able to translate this to an IT-solution. And because of this in-depth knowledge of the standard ZorgMatch believes they are well equipped to support organizations in designing their processes to efficiently and effectively interchange the information that is required. Furthermore, ZorgMatch prides itself in designing systems that enables their clients to reduce the costs of administrative processes. Although ZorgMatch is currently a software vendor they believe they have the capabilities and competences to be a knowledge partner and support their clients in their daily operations. During the interviews one of the respondents expressed this by stating that ZorgMatch is “…the best when it comes to designing systems that reduce administrative costs in the long-term care”.

In terms of blue and red oceans ZorgMatch is not considering new markets, rather they want to create a new market inside the existing market. They believe that software vendors should be partners that strive to deliver the best integrated solutions for their clients. Those solutions could vary from IT-systems to help and support in arranging and organizing processes. ZorgMatch doesn’t want to build what the client wants, but

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what the client needs. Competition has been previously on the number of functions that their software packages provide or the price for which they sell it. ZorgMatch believes competition should be on the fit of the application with the internal organization. To achieve this fit a software package doesn’t always need to change, sometimes the organization has to change to accomplish the best result possible. Outside-in strategy

Considering the outside-in perspective the respondents currently perceive some opportunities that they would like to utilize. Healthcare providers are now confronted with the municipalities as a new client. This has complicated their administrative process. Although a similar information delivery system to the iWlz has been implemented in the Wmo and Jw, the standard differs on a couple of points. This means that the healthcare providers require additional support to ensure they can continue the care delivery. Municipalities also see themselves confronted with a new business, one they haven’t had prior experience in. If municipalities choose to implement the iWmo and iJw information exchange standard they would require additional tooling.

To support the healthcare providers and municipalities to cope with these changes new organizations have emerged in the Wmo and Jw expanding the market with new opportunities for software vendors. In the Wlz the assessment office is one executive agency. In the Wmo and Jw it has been privatized and every municipality can choose to embed the task in a different way. These assessment offices are new to the Wmo and Jw market and often lack the technical skills to implement the iWmo or iJw information exchange standard. Another development are BPO-organizations that specifically target the back-office activities of municipalities and healthcare providers. Like the assessment offices they too lack the technical skills to implement the iWmo or iJw information exchange standard.

B. Strategic ambition

The strategic ambition of ZorgMatch is a mix of the outside-in and inside-out perspective and can be divided in a horizontal and vertical direction. In the horizontal

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direction ZorgMatch would like to widen its offering to support the organizations that are involved in the care delivery from assessment to care assignment, delivery and reports. Currently ZorgMatch’s offering is primarily focused on the assignment of care (see Appendix A). But by developing new solutions ZorgMatch could offer a solution for assessment offices to register their assessment and communicate these to the municipalities and healthcare insurance companies. For the healthcare providers ZorgMatch could develop a solution to receive assignments of care, communicate notifications regarding the starting and stopping of care delivery and bill performed care to the municipalities and healthcare insurance companies. Lastly ZorgMatch would like to develop a reporting solution for all her clients to be able to analyse processes and use the data from the processes to improve and enhance the systems.

From a vertical perspective ZorgMatch would like to support municipalities, healthcare providers and their BPO partners in the integration of the business and IT processes. The municipalities and their BPO organizations are mostly new to the Wmo and Jw and ZorgMatch would like to offer support and knowledge in organizing the processes in such a way that, together with IT-systems, the system of care delivery could be drastically improved. ZorgMatch believes that by doing so it can reduce the cost of administrative processes and enhance the efficiency. This would also transform ZorgMatch from a traditional software vendor to a knowledge partner that doesn’t just build software but ensures an effective care delivery system. ZorgMatch believes that this will ensure above industry returns and create a new market of integrated solutions for its clients.

C. Synergetic effects

In order for ZorgMatch to realize it’s strategic ambition some specific resources are required. With its horizontal expansion ZorgMatch is entering uncharted waters. Although they have core competences in implementing and supporting the iWmo and iJw standard, they have no prior experience in developing back-office solutions for assessment offices, municipalities or healthcare providers. Developing those systems requires knowledge regarding the administrative processes of the various

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organizations. Knowledge that is not readily available within ZorgMatch. The knowledge could however be learned from a potential client. By involving them in the design process valuable knowledge could be acquired. However, this does require a client to place an ‘order’. If ZorgMatch wants to develop a solution in anticipation of a client it will need to acquire the knowledge beforehand and in a different way. Similarly, ZorgMatch has no prior experience with developing a reporting solution. Although they are accustomed to create reports, creating an environment in which users are able to generate their own reports and analyse data requires different skills.

In order to expand their services horizontally they will need to gain the needed skills and knowledge. These resources can be acquired through a collaboration with another firm but also by internal development. With the vertical expansion ZorgMatch is hoping to leverage the skills and resources that are currently available within the organization. By providing these resources to other organizations ZorgMatch believes it will be able to improve the fit between the administrative processes and the IT-systems. Just like with the horizontal expansion ZorgMatch does have the resources to deal with iWlz, iWmo and iJw related issues, but lacks the knowledge of the internal organization. However, in case of the vertical expansion the service isn’t performed separate from the client and therefore knowledge regarding the back-office processes can be learned from the client.

ZorgMatch also has resources that they could leverage. Their knowledge of the iWlz, iWmo and iJw could be shared with other organizations that require that information. For instance, by teaching other organizations about the iWlz, iWmo and iJw standard. ZorgMatch also has extensive experience regarding the incorporation of the standards into IT-systems. By lending its resources ZorgMatch could support other organizations that would like to develop software which requires the use of the iWlz, iWmo and iJw standard. The downside of lending resources however is that they can’t be revoked easily. By lending resources it can limit the flexibility of ZorgMatch. Teaching others however has a downside as well. Knowledge can’t be transferred instantly, instead it needs to be made available which also requires an (time)investment.

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Another way to realize ZorgMatch’s strategy is by linking or lumping activities. To realize the horizontal expansion of its portfolio ZorgMatch requires knowledge currently not present within the organization. By linking activities however ZorgMatch might be able to acquire the knowledge in a different way. By linking its development activities with another organization’s designing activities it would be possible for ZorgMatch to acquire a design that would enable them to develop a solution for assessment offices or municipalities. This would however pose challenges for the parties involved. The knowledge in the design would need to be made explicit for the developers to be able to write the software. This requires more time and effort then with an in-house production. ZorgMatch could also choose to link its development activities to the development activities of another software vendor. That way ZorgMatch would write the parts of the software that require iWlz, iWmo of iJw knowledge and the partner organization would write the parts that require in-depth knowledge of the work processes of the client organization. Linking activities however poses new challenges. In order for activities to be integrated the input and output of the activities will need to be aligned. If they aren’t aligned the various activities can not be executed effectively. But aligning activities with another organization could also create a disconnect with the own organization.

ZorgMatch could also lump activities to realize its strategic ambition. Lumping activities has scaling advantages, by lumping activities ZorgMatch would be able to increase its capacity quickly. For instance, by lumping together its development activities with other software developers ZorgMatch could have access to a much larger pool of developers. Thus shortening time to market without making structural personnel changes. By lumping its designing activities it could for instance collaborate with an organization that has knowledge that ZorgMatch lacks. This way a design for a new software solution could be drafted containing knowledge currently not available to ZorgMatch. Lumping activities however requires similar work processes in order to effectively create a larger capacity. If the development team of ZorgMatch would be lumped together with the development team of another software vendor their work processes would need to be the same in order for the developers to be

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interchangeable. If the work processes aren’t the same than lumping activities will only create separate teams within one activities with each an own way of doing things. Positions

Lastly ZorgMatch could realize its strategic ambition by leaning or lobbying. Currently the organization lacks the position to be able to advise its clients or other stakeholders within the Wlz, Wmo and Jw. By leaning ZorgMatch is able to strengthen its position as opposed to industry rivals and stakeholders. Instead of providing software for the BPO partner they could lean against the BPO partner to create a proposition that is attractive to municipalities. This way the BPO partner doesn’t have to invest in IT up front and is able to focus on its core business. By leaning against other organizations ZorgMatch is able to increase the fit of the administrative processes with the IT-systems thus realizing its strategic ambition. However for such a collaboration to work ZorgMatch would have to invest in developing a solution that can (partly) be presented to potential clients. It’s safe to say that this doesn’t come without risk.

In order to reduce the costs of administrative processes ZorgMatch could also lobby for a change in the amount and type of information which is exchanged in the iWlz, iWmo and iJw thus reducing the administrative burden for stakeholders. In order to execute a successful lobby ZorgMatch will need to collaborate with one or more stakeholders of the Wlz, Wmo or Jw. Only when the coalition is big enough will it be able to have a political impact. Furthermore, the coalition will need to have a common goal. If the goals of the members aren’t aligned or, worse, opposed then the coalition has no chances of running a successful lobby. It is not necessary for the coalition to consist of the same types of organization. Municipalities could have the same goal as ZorgMatch whilst other software vendors could have opposing goals.

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VI. Conclusion & Recommendation

A. What is the strategic ambition of ZorgMatch?

ZorgMatch aims to reduce the costs of administrative processes by developing Software as a Service (SaaS) solutions that optimally support the work processes of their clients. The companies mission is to offer her clients products that allow the organizations to focus on their business rather than IT. But in some cases this requires ZorgMatch to provide its clients with products they need and not necessarily want. With the alignment between business and IT becoming increasingly important ZorgMatch envisions that software vendors will evolve into knowledge partners. ZorgMatch’s core competences can be derived from its products. Its evident that their core competences consist of the ability to implement the iWlz, iWmo and iJw standard. Furthermore, ZorgMatch has in-depth knowledge of the Wlz, Wmo and Jw and is therefore capable to support organizations in designing its processes as efficiently and effectively as possible.

The strategic ambition of ZorgMatch can be divided in a horizontal and vertical expansion of its services. A horizontal expansion enables ZorgMatch to widen its offering in the number of organizations that are involved in the care delivery from assessment to care assignment, delivery and reports. A vertical expansion enables ZorgMatch to support municipalities, healthcare providers and their BPO partners in the integration of the business and IT processes. A vertical expansion can reduce the cost of administrative processes and enhance the efficiency, but would also transform ZorgMatch from a traditional software vendor to a partner with an extensive knowledge library ensuring above industry returns and create a new market of integrated solutions for its clients.

.

B. What are the synergetic effects of collaboration?

ZorgMatch currently doesn’t have the resources, activities or position to realize the strategic ambition on its own. Collaborating with another firm is therefore beneficial if the other firm has complementary resources, activities and positions that would enable ZorgMatch to realize its strategic ambition. ZorgMatch requires knowledge regarding

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the work processes of assessment offices, municipalities or healthcare providers in order for it to realise its horizontal expansion. If the other organization has knowledge regarding these work processes the collaboration enables ZorgMatch to realize its horizontal expansion. The knowledge required could be taught to ZorgMatch or employees with the particular knowledge could be lend. But the collaboration partner could also link its activities with the development activities of ZorgMatch that way that the collaboration partner could design the solution and ZorgMatch could build it. Lastly the collaboration partner of ZorgMatch would need to have a strong position within the Wmo/Jw market or the healthcare provider market. This would enable ZorgMatch to acquire a stronger position within the desired market.

ZorgMatch in turn would provide the collaboration with knowledge regarding the iWlz, iWmo and iJw. Although the information about the information exchange standard is readily available the knowledge on how to implement and incorporate these into the work processes is scarce. Beside its knowledge ZorgMatch also has development capacity it could lend its counterpart. Development activities of the partners could also be lumped together, provided ZorgMatch collaborates with another software developer. This would enable the collaboration to increase its development capacity thus reducing its time to market. The collaboration could also link its various activities. This would enable for the collaboration to share knowledge between activities and create new value propositions. For instance, by collaborating with a BPO organization ZorgMatch could link its development activities with the BPO’s work processes design activities enabling the collaboration to develop software neither parties could have realized on their own. Furthermore, ZorgMatch could provide the collaboration a strong leaning and lobbying partner in the Wlz considering ZorgMatch currently is the market leader in back-office software for healthcare insurance companies. But for the collaboration to be able to lean against each other or lobby together it will require a common goal.

C. Should ZorgMatch collaborate?

ZorgMatch should consider collaborating with another firm. Currently ZorgMatch doesn’t have the resources, activities or position to realize its strategic ambition on its

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own. By collaborating with another firm ZorgMatch is able to acquire the missing competences that will enable it to realize its strategic ambition. Whether or not a collaboration with the proposed candidate will enable ZorgMatch to realize its strategic ambitions requires additional research into the competences of the candidate partner. However, if ZorgMatch is to collaborate with an organization that focusses entirely on municipalities it will help them with their horizontal expansion to develop solutions for municipalities and BPO organizations. Although it might limit them in the possibilities to develop solutions for healthcare providers right away, it might provide the collaboration with the competences and skills required to serve the needs of the healthcare providers. Similarly, the vertical expansion can be realized by the collaboration partners clientele on a short term and might present opportunities to develop solutions for healthcare providers on the long run. Additional research is needed to determine whether the candidate organization has the competences which will allow the collaboration to create value propositions that target ZorgMatch’s strategic ambition.

D. Recommendation

The initial plan for this research was to investigate the collaboration between ZorgMatch and the proposed oganization. However, management of the proposed organization was concerned that due to the employement at ZorgMatch an unbiased research would not be possible. Before collaborating with the proposed organization it remains important to determine the organizational fit between both companies. Furthermore, it is very important to define the terms and conditions of the proposed collaboration beforehand. The end goal of the collaboration is to create a win-win situation for both parties. Therefore, both organizations need to be clear in the gains they hope to achieve by collaborating as well as the competences, skills and knowledge they both bring to the table and are beneficial for the counterpart. Organizations will have to be willing to develop new competences, skills and knowledge to make the collaboration a success. In order for both parties to achieve their gains the strategic ambitions and goals of the individual organizations also need to be aligned. If the collaboration isn’t pursuing the same goals as the individual

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organizations then it’s likely the individual gains of the organizations will not be achieved.

The tasks and responsibilities of the collaboration partners should also be clear. If the task and responsibilities aren’t formulated beforehand the collaborating organization might find themselves spending a lot of time managing crisises. Furthermore, the collaboration partners should be compatible. If both organizations have different cultures and values the degree of freedom employees have to make decisions might vary. This could lead to difficulties in the collaboration. Beside the culture the people that work at the organizations also need to be compatible. Like any organization employees need to be able to work together to achieve the goals of the organization, or in this case the collaboration.

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VII. References

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q Cooper, L. (2000). Strategic marketing planning for radically new products. Journal of

Marketing, 64(3), 10-21.

q DiCicco-Bloom, B., & Crabtree, B. (2006). The qualitative research interview. Medical

Education, 4, 314-321.

q Endacott, R. (2005). Clinical research 4: qualitative data collection and analysis.

Intensive and Critical Care Nursing, 21, 123-127.

q Kim, W., & Mauborgne, R. (2005). Blue Ocean Strategy: How to Create Uncontested

Market Space and Make the Competition Irrelevant. Boston: Harvard Business School

Press.

q Lienden, H., & van der Poel, M. (2005). Ondernemen in de zorg. Amsterdam: Elsevier

gezondheidszorg.

q Meyer, R. (2007). Mapping the Mind of the Strategist: A Quantative Methodology for

Measuring the Strategic Beliefs of Business Executives. Rotterdam: ERIM Research

Foundation.

q Porter, M. (1985). Competitive Advantage. New York: Free Press.

q Prahalad, C., & Hamel, G. (1990). The Core Competence of the Corporation. Harvard

Business Review, 68(3), 79-91.

q van Thiel, S. (2013). Bestuurskundig onderzoek: Een methodologische inleiding.

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Appendix A: Product portfolio

A. AZR-NL

AZR-NL is the first software solution that ZorgMatch has developed. With AZR-NL ZorgMatch supports the healthcare insurance companies with the administrative processes of the Wlz. The process starts when an assessment is received digitally from the CIZ. Based on the assessment an assignment is created and sent to the healthcare provider. The healthcare provider can then send notifications when the care commences or stops. Together with the initial assessment and care assignment these notifications are then delivered to the CAK where the social contribution is calculated and collected for each individual that received care. Beside the software solution ZorgMatch also provides her clients with some data to create their own reports. These reports are not a part of the system. De main users of AZR-NL are the front-office and service desk employees of the healthcare insurance companies. AZR-NL is the largest back-office application for the administrative processes. Currently 8 healthcare insurance companies are tasked with the Wlz arrangements of 32 regions. ZorgMatch provides a back office application to 3 of the healthcare insurance companies that are responsible for 17 out of the 32 regions. The remaining market is divided into 3 home grown solutions of the remaining 5 healthcare insurance companies.

B. PGBmatch

From January 2015 onwards the administrative process regarding the personal care budget (PGB) has changed dramatically. ZorgMatch has developed a new back office application for her clients which enables them to assign care as a PGB instead of a healthcare provider. The information which is generated by AZR-NL is then used in this separate solution to send information to the National Insurance Bank (SVB). The SVB is responsible for controlling and managing payments to healthcare providers that are contracted by the client as opposed to the healthcare insurance companies and paid for with a PGB. Currently PGBmatch is only used for 1 of the 32 regions, but is expected to be used by the same clients that currently use AZR-NL.

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C. iMatch

The information exchange standard for the Wlz, Wmo and Jw follows a similar technical structure. In some of the cases it is required to be able to open and edit the messages that are exchanged between the various systems, for testing purposes for instance. ZorgMatch has developed iMatch to enable its users to open the messages in a user-friendly environment read and if necessary edit them. Currently iMatch is offered as a free service to its clients.

D. Zorg|Portaal

Zorg|Portaal was designed and created for municipalities. It is based on the same principles as in the Wlz, but adapted tot the usage by municipalities. Currently Zorg-Lokaal uses the solution to provide 10% (40 of the 393) municipalities with a BPO solution. Just like with the AZR-NL solution the administrative process starts with an assessment, followed by a care assignment and notifications of the provider when the care commences and stops. The main difference between both solutions is the contextual information of municipalities that require specific workflows that are not applicable to healthcare insurance companies. Furthermore, Zorg|Portaal also offers a manual interface for assessment offices and healthcare providers to register their assessment and notifications.