Cavanaugh Consulting Group

Cerner-Siemens/SMS – Good or Bad: Another Opinion

There has been much already written about the Cerner-Siemens/SMS transaction but, having been through such acquisitions, and having a thirty-year history following and evaluating both organizations, I cannot help but add my opinions:

  • It was a good decision for Cerner and for the Siemens clients as well. Siemens has been struggling to gain acceptance of the Sorian product. Even with the best minds leading the effort, Siemens failed to achieve a winning ratio in competitive procurements. Unfortunately, I do not believe one more year would have made the difference. The reasons no longer matter. No one likes to face sunk costs but Siemens clients will sooner or later face a choice and most will opt for a market-leading product. They won’t enjoy the effort or expense, but they will be better positioned.
  • Cerner will work to bring the Siemens clients “into the family.” Part of that approach will be to continue operating the Siemens products. Cerner will assimilate the best talent, ideas and technologies from Siemens but make no mistake – Cerner does not need the Siemens products. Not even the financial system.
  • Some Siemens clients will go to Epic and others will opt for McKesson and Meditech. However, most will transition to Cerner. Cerner will do this by the transfer of customer relationships, by keeping Siemens client services personnel, by developing an expedited conversion, by providing economic incentives, and by offering a leading product.
  • The next question is when will GE clients face the same circumstance?